Budgeting for Low Income
- 1). Make a list of everything you spend money on. For at least a month, carry around a pocket-sized notebook and make an entry every time you buy something or pay for a service. Make sure that the list is complete and includes even the smallest expenditures.
- 2). Gather statements for all your credit accounts, including credit cards, mortgages and auto loans. Also get a copy of your apartment lease agreement if applicable, along with a copy of your most recent pay stub.
- 3). Make an appointment with a nonprofit credit counselor such as those affiliated with Consumer Credit Counseling Service. Find a government-approved counselor in your area by checking the website for the U.S. Department of Housing and Urban Development (see Resource section). Tell the counselor you would like help creating a household budget.
- 4). Show the counselor your list of usual monthly expenses as gathered from your journal entries. Have an open discussion about your spending habits and how you can cut back.
- 5). Discuss all of your debts with the counselor. Ask the counselor to review your credit card agreements, apartment lease, the interest rate on your auto loan and more. Ask the counselor for an honest assessment of your level of debt and lifestyle based on your low income. Are you spending too much on housing? Are you paying exorbitant interest rates on your credit cards? Should your mortgage be refinanced? Are you spending too much on insurance?
- 6). Create a budget with the help of the counselor. Also schedule follow-up sessions as needed, to work with the counselor on related issues, such as negotiating with lenders for lower interest rates or advice on downsizing by finding cheaper housing or transportation.
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