Budgeting When You Don’t Make Enough Money: How to Make Ends Meet on a Tight Budget

When you barely make ends meet, budgeting can feel very defeating. Here are tips on how to budget when you don’t make enough money.

In this post, I lay out five specific steps for you to take to make ends meet on a tight budget. The first step is to get to the point where you can live within your paycheck. Living paycheck to paycheck is better than digging yourself deeper into debt each month. Once you can pay all of your expenses with the income you bring in, you then can begin taking small steps toward reaching extra financial goals.

Having a Plan

I’ve always been a very simple, practical girl, but I was never good with money. As soon as it entered my possession as a child, it would slip back out and into the hands of a cashier at some store or restaurant. From a young age, I formed unhealthy ideas about money, so going into adulthood and marriage, it’s no wonder I didn’t have much financial success. I just assumed that after graduating college and getting a job, all my debt would be paid off quickly. I assumed that everything would work out and be wonderful.

However, things didn’t go according to plan, and that is because I didn’t have a plan. I didn’t have discipline. And I didn’t have a true understanding of how to handle money or exercise self-control.

I started my debt-free journey five years ago, but I am just starting to unearth the layers of my unhealthy relationship with money and rebuild my foundation. The past several years, I’ve had to face the hard truth: be lazy about your money and you will be broke.

How We Fix It

If you want to get out of debt, build a savings account, save money for retirement, be able to take a vacation, or just not worry about having enough money to buy groceries, you have the power to make a change. Let me tell you what you have to do:

Work. Hard.

No one accidentally grows a savings account. No one accidentally gets into debt. People with true financial success work hard to earn it and work hard to keep it. They don’t wait to see if things will work out in the end; they make a PLAN.

You aren’t guaranteed to make an exorbitant amount of money and completely transform your lifestyle by working a plan, but you are able to do what you can with what you can control. It is sometimes slow and painful progress. But it’s better than spiraling deeper into debt.

Changing Your Scarcity Mindset

Gaining awareness of your true financial situation may make budgeting an anxiety-inducing event. You know you need to budget, but hate facing the numbers that just don’t add up. What will you have to sacrifice this month to make ends meet? Or how much will you have to put on the credit card?

It can be very straining to live on a tight budget in which you never have extra wiggle room. Sometimes, you really just want to buy your kids some cool new shoes or get yourself a manicure. It’s tough when you have to tell someone “no” because you don’t have any money.

I want to challenge you to change your scarcity mindset. It’s easy to stay there, but constantly thinking you don’t make enough money is a gloomy way to live.

Let me share with you a simple method to budget a low income effectively.

How to Budget When You Don’t Make Enough Money

Following these guidelines, you can start to find ways in which you can control and improve your money situation. Here are the five steps to budgeting when you don’t make enough money:

1. Grab a notebook and pen.

Draw a line down the middle of the paper. Visualization of this plan will help you see what you can and can’t control.

2. Make a list of what NEEDS to be paid this month.

First, make a list of your needs on the left side of the paper. List the expenses that take care of your Four Walls (food, utilities, shelter, transportation). Then, list any bills that are due this month, including minimum debt payments. Add up the total of these expenses.

3. Make a list of wants.

On the right side of the paper, make a list of extra things that you do not need this month, but you would like. Include realistic things that you might be able to fit in the budget. And then include unrealistic things that you absolutely know you can’t fit into the budget this month.

Some examples include putting an extra $100 towards your credit card debt, a haircut, a present for a birthday party you were invited to (more realistic things), shopping money to spend at Target, tickets to a show or concert, and a family vacation (more unrealistic things). Be sure to include those extra financial goals that you want to tackle, but don’t necessarily have the money to do right now.

Allowing yourself to uncover the things you really wish you could afford will help you grieve them and move on. Some months, I get this crazy desire to go on a family trip when it’s completely impossible financially. Instead of throwing myself a pity party or scheming up a way to make it happen, I just let myself recognize that desire and feel sad about it for a moment.

4. Fit all of your essential bills in your budget.

If you don’t make enough money to pay for the “Needs”, figure out a way to either decrease the expenses or increase your income. The goal is to get all of your monthly bills to fit into your budget.

There is value in practicing both decreasing your expenses and increasing your income for a short period of time. In my financial situation, I feel like we’ve cut our budget down to the bare bones. If you’re feeling desperate, that’s probably a sign that you need to stop cutting and start increasing. You can only scrimp and save so much.

Now, if you do everything you can, and you still can’t fit all the “Needs” into the budget this month, you may have to go late on some payments. But next month, you do everything you can to fit your living expenses and minimum debt payments within your paycheck.

5. Make a plan for what to do with extra money.

Once all of your essentials fit into your monthly budget, figure out a plan for any extra money. Look at your list of “Wants” and decide which goal to tackle first, even if it’s just $10 at a time. Also, if you can at all manage it, set aside a little fun money in the budget (more on this later).

Budget Every Paycheck

Now that I’ve laid out the steps on how to budget when you don’t make enough money, you need to start budgeting very intentionally so you don’t end up in this place again. Create a zero-based budget to make a plan for every dollar every time you get paid.

Living Paycheck to Paycheck Tips

I hope doing this simple exercise helps relieve some of your financial anxieties.

We have to stop stressing about things that are out of our control and focus on what we CAN accomplish! Change your mindset to think positively about what you are able to afford and learn to practice contentment.

Hopefully, living paycheck to paycheck is a temporary situation. Making more income in the future to get out of the paycheck-to-paycheck cycle is the goal, but sometimes, we are stuck in a situation longer than we’d like. Here are a couple more tips on living paycheck to paycheck while you are working towards changing what you can control:

Don’t Compare Your Journey with Others

It’s so easy to compare our financial situations to those online who seem to be making big moves. If you follow the financial community on social media, it feels like all you see is people throwing thousands of dollars toward their goals every month, reaching debt freedom in a matter of months, being able to afford everything they want. That is why I wanted to share a bit about my own financial struggle and shed some light on the reality of many families.

My husband and I don’t make enough money to pay off all of our debt quickly, but we can take a small step each month.

Only paying the minimum payment might not seem like a huge accomplishment compared to that financial influencer on Instagram, but if that’s what you can manage, then that’s fabulous. Gaining acceptance of what you can afford is the first step in feeling peace.

Include Fun Money in the Budget

While I have talked about the value of working hard towards your goals, I recognize that living with a very strict budget can set you up for failure. Assess your budget realistically and set aside a little fun money, too, no matter how tight your budget is.

If you have a financial mess to clean up, don’t go overboard in this budget category, but as long as you’re living within your means, you can have a taste of fun money, too!

How to Make Ends Meet on a Tight Budget

I hope these tips and guidelines empowers you to make a change. Accept what you can’t control, and work hard to change what you can. If you don’t make enough money, how can you change that? Working hard every day will help you make ends meet on a tight budget…and eventually claw your way OUT of living paycheck to paycheck.

“Whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ.” Colossians 3:23-24

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