How to budget money on low income

How to budget money on low income

Home > Budgeting > Salary budgeting > How to budget on low income

How to budget money on low income

Learning how to budget on a low income can be tricky, especially as it can seem as though any added expense will throw the budget off. However, with careful management, there are ways to build a budget that works without making too many compromises. Here we take a look at how to live on a budget and start saving for the future.

Know your budget

First things first, you’ll need to get a clear idea of where your money is being spent. For starters, work out how much money you’re earning each month or week. Next, make a list of all the bills you pay each month. This might include but not be limited to:

  • Rent/mortgage
  • Gas and/or electricity
  • Water
  • Council tax

It’s best to start with these basics, as they’re the ones that generally can’t be avoided or changed in the short term. Next, go through all of your added expenses, such as:


Financial repayments

Membership fees

Subscription services


There might be others we haven’t included here, so the best thing to do is go back through the last few months worth of bank statements and have a look at all the payments going out of your account.

You should also consider other expenses like food shops. These might be a little harder to work out if they tend to change from week to week. To start off, try looking at how much you’ve spent on each shop and then work out the average cost.

Prioritise the bills

The first step of putting your budget into action is to make your bills your number one priority. When you get paid, put aside enough money to cover your bills until your next payday. In order to make your bill payments, you might have to cut costs elsewhere, so use the information from your budget to see where you could save money in the future.

By doing this, you can make sure that you won’t miss these important payments and incur charges for missed payments from your providers. Additionally, by making payments on time, you can improve your credit score.

Look for support

To boost your weekly or monthly income, you should check that you’re getting all the support you can in terms of benefits and other payments. The benefits calculator from entitledto is a great tool that will tell you which benefits you’re owed in just a few minutes.

All you’ll need to use the tool is information on your income, living situation, and any benefits you’re already receiving. You might also be asked information on your partner’s circumstances and if you act as a carer for anyone. Once you’ve found out the level of benefits you’re eligible to receive, you can start making your claim.

For more information on how to apply for Universal Credit, take a look at our blog:

Applying for Universal Credit

Use your current account

Making full use of your current account is a great way to help with budgeting as the month goes on. By paying with your card (or at least keeping track of when you’ve withdrawn money), you can keep a close eye on how much you’ve got left to spend until payday.

Furthermore, with the thinkmoney Current Account, your bills will automatically be kept to one side, so once your account is set up, there’s no need to worry whether or not you’re eating into your bills budget.

Look into other forms of financing

In certain circumstances, you can get a budgeting loan to help pay for specific purchases. Budgeting loans are essentially an additional form of Universal Credit, and they can be used to pay for:

  • Furniture and household equipment
  • Clothing (including footwear)
  • Advance payments on rent if you’re moving house
  • Moving expenses
  • Improvements to and maintenance of accommodation (including security)
  • Essential travel expenses (e.g. commuting to a new job)
  • Maternity or funeral costs

It’s important to note that unlike other forms of Universal Credit, budgeting loans need to be repaid in full, although there won’t be any interest to pay on them. You could be eligible for a budgeting loan if you’ve been on certain types of benefits for over six months.

If you aren’t eligible for a budgeting loan, there are still other financing options available. While you shouldn’t start budgeting by getting yourself into more debt, if you’re confident that your low income will be only a temporary change, then a small loan could be a good way to ease the strain. To find a loan that’ll suit your needs, visit our Loans Marketplace.