How to Live Cheaply on an Income
Many people learn to live with an income that's at or just beyond the federal poverty guidelines. Whether you're a family of four and rely only on one income, recently took a pay cut or live in an area where the cost of living is relatively high, there are lots of steps you can take to cut your expenses and live below your means. The secret to doing so successfully lies in identifying what you actually need and foregoing or sacrificing a few of your more expensive wants.
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Instructions
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Track your spending habits. Write down every purchase or transaction you make through the week and month in a spending journal. Sort the purchases into categories, such as "transportation," "eating out" and "entertainment."
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Develop a budget. Write down your monthly take-home pay and expenses you must pay, such as housing, utilities, food, transportation. Look closely at your spending journal and decide where you must cut spending. For example, money being spent on "entertainment" or "eating out" may not always be necessary. Build savings into your budget so you can start building an emergency fund or have extra for unplanned expenses.
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Evaluate the expenses you pay for Internet, cable and cell phones. Look for lower-cost alternatives. For example, you can usually save money by switching to prepaid cell phones instead of contract plans with major carriers. Choose a standard cable package over digital cable with channels and features you may not watch or need. Select an Internet package that offers slower -- instead of faster or "turbo" -- speeds.
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Look for cheaper housing options. If you're single, for example, find a roommate to share an apartment and expenses. Look for apartment communities that offer rent-restricted units to low-income tenants or communities that offer free amenities, such as Internet or paid utilities. Consider finding a tenant tocontribute to the mortgage payment if you have the extra room in your house.
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Adopt new grocery shopping and meal-planning habits. Learn to make or grow food items, such as bread, cereal, crackers, fruit and vegetables. Cut manufacturer and store coupons to lower your grocery bill. Substitute generic brands for name-brands. Purchase cheaper cuts of meat for some meals, such as round or chuck roast instead of sirloin or rib roast. Plan your meals ahead of time instead of shopping when you're hungry or eating out.
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Save on your clothing budget. Buy clothes only from discounted sale racks at the mall or clothing store. Ask the store clerk when sale racks get setup so you can plan your trip. Thrift shop clothes can sometimes be of far higher quality than what you can afford at the mall. Look for nonsynthetics, meaning 100 percent cotton or wool, to get the best value. High-end winter coats are often available for extremely reasonable prices, but look early in the season.
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Make a list of low-cost entertainment options. For example, go to museums, zoos and state parks that may have little or no admission fees. Take trips to the library instead of buying books, magazines, newspapers and CDs. Look for dollar movie rental options, such as "Redbox," when you want to enjoy a movie instead of going to the theater.
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Turn belongings into cash when you no longer need them. Sell clothes than no longer fit instead of throwing them out. Toys, furniture and appliances can all be sold through classified ad websites, in newspapers or by posting fliers on bulletin boards. Likewise, search classifieds and garage sales to save money on items you need, such as home furnishings and clothes.
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Look for extra income opportunities. Take on a part-time job if your schedule allows for it. Offer friends and families babysitting, house cleaning or chore services in return for cash. Turn your personal talents, skills, hobbies and passions into a second-income. For example, perhaps you're excellent at woodworking; you can make and sell furniture. Other ideas include tutoring, teaching computer or cooking skills, becoming a personal trainer or coach and substitute teaching for an elementary or high school, depending on your qualifications.
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References
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