I won’t lie to you, it took me years to figure out how to make a budget for me and my family while we had a low income (not to mention, on a Soldier’s pay). Once I had everything down on a sheet of notebook paper, it took me even longer to learn how to live within the confines of our budget. Going over budget was not an option, because there was no extra money. Creating a budget is the easy part, but making sure you don’t go over is anything but easy. Living on a low income might mean making sacrifices such as no wining and dining, opting to dine in instead. Here’s how you can create a budget even if you have a low income.

Step 1: Gather your Supplies

Grab some paper, a pen, and a calculator. You’re more than welcome to use an excel document or something else, but for now we’re going to keep things simple and easy. After all what could be simpler than paper and a pen? After you’ve gotten the hang of budgeting, feel free to use budgeting apps or online documents, but for now stick with your paper.

Step 2: Add all of your Regular Monthly Expenses and Subtract from your Net Income

If you’re new to budgeting, then start by gathering up any bills, receipts, and credit card statements you have from the last three months. Add up the totals, if it is a bill that may vary, such as utilities, take an average and write it down on your paper. Next, add up all of your take-home income. This total should include any regular paychecks as well as anything from recurring side jobs to child support.

Step 3: Divide into Categories

Take a look at your list of spending and divide these items into categories. After you’ve added your totals, write them down on your sheet of paper. You should focus on grouping similar items into categories, while also keeping track of your totals. For example, your landline and cell phones can be under one category, but if your cell phone bill varies based on your usage you will need to adjust your budget to compensate.

Step 4: Itemize your Budget by Importance

List the most important items in your budget first. These should be only the things that are needed to survive such as rent/mortgage, food, utilities, transportation, etc. These should be paid first each and every month. Here is an example of my budget categories:

• Mortgage/Rent
• Electric/Gas
• Water/Sewer/Trash
• Food
• Fuel
• Auto Insurance
• Phone(s)
• Internet
• Clothing
• Entertainment

Step 5: Trim the Fat

Now that you’ve organized your budget you need to evaluate your spending and income. If your total expenses are more than your income you either need to make more money, or trim the fat. If you are unsure of what categories to trim to give yourself some wiggle room, start by analyzing your entertainment or clothing sections, next see if you can lower your food budget, and so on.
Even if you don’t bring in a lot of money, you still need to have a budget. Budgeting is a crucial part of a healthy financial future, and one your family can’t afford to be without.