Basic Budget Plan for Low Income Family
A budget is a snapshot of income and expenses and helps families make financial decisions and set priorities. Setting priorities is even more important for low income families, who have to assure that they have the basic necessities to live before they purchase nonessential goods and services.
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Basic Budget
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A budget consists of a list of all monthly income and all monthly expenses. Income includes wages, tips, child support, and food stamp benefits, if applicable. Expenses include rent/mortgage, food, water/utilities, vehicle expenses, clothing, telephone, and any other regular expenses, such as cable, entertainment, and eating out. The budget is only as useful as it is complete. Free blank budget forms are available online. Alternatively, simple budgets are easy to create.
Essentials
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The essentials include shelter, food and clothing. Most families would add electricity, water and transportation, if no public transportation is available. Income to cover these expenses should be allocated first.
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Conveniences
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A telephone is not essential to life, but it is a very important convenience, not only for safety in the event of an emergency, but also to communicate with employers and others. Other convenience items include internet access, cable, and entertainment. These nonessential conveniences should follow essentials on your budget.
Adjustments
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When the budget is complete, the income should equal or preferably exceed the expenses. If expenses exceed income, adjustments must be made; either the income must increase or the expenses must decrease.
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References
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