Living on a lower income? These 4 money management strategies will help you to cope better. Living on a lower income could be exhausting and unsustainable. While some lower-paying jobs may be rewarding and they can help you build up valuable transferable skills and experience, there’s no reason for you to explore or know of these 4 money management strategies that can help you to cope until you find a better paying job.
Living on a lower income can be the source of significant financial hardships within your daily life. Difficulties related to this can arise even if you’re working in a steady job, but more specifically the additional stress can stem from experiencing being underpaid. Knowing that you’re living on a lower income can cause career downsides, making it hard for you to enjoy what you’re doing and thereby making it difficult for you to accomplish your objective goals or do great value-adding work in your workplace.
Lower-income is often determined by the location you live in, as certain cities or towns have a higher cost of living than others. More often than not, it can mean having less than needed to afford renting an apartment, buying groceries, paying your bills and other common expenses. However, there are strategies you can use to not only manage your money while being underpaid but also to put yourself in a better position to get a salary boost and get a leg up at your job.
Living on a lower income? These are the 4 money management strategies that will help you:
1. Reallocate Your Budget
If you are living on a lower income and your budget is tight, take some time to re-analyze where you’re allocating your money, to ensure mandatory payments are handled in full and on time every month. This may involve making vital adjustments to have all of your necessities covered. Making this change can be especially important if you live on a lower income, as a tight budget can make it harder to cover important expenses such as rent and groceries.
Thankfully, a properly created budget can come with a lot of wiggle room to allow you to have enough money to cover all of your bills while still leaving you with room for additional savings. To properly organize your budget, find out which expense is hurting your ability to cover major expenses. For example, if an overview of your budget shows you’re losing money to excessive credit card debt, you should prioritize paying it off as soon as possible using debt management strategies. Similarly, if other costs, such as socialization or dining out are causing a strain on your budget, finding ways to cut back on these spending habits could be what you need to fix it.
2. Streamline Your Paychecks
If you’re finding that living under a lower income is hindering your ability to meet bill payments on time each month, it’s important to take steps early on to ensure you’re getting your paychecks on time. If you haven’t already done this, talk to your company’s HR department and set up a direct deposit with them.
Direct deposit can help prevent things like lost checks and late payments, as all of your money will be going directly to your bank account. For even quicker access, you have a few options. Certain payday advance apps allow you to take out small loans in an emergency. You can also find certain digital banking platforms that allow you to get paid up to two days earlier. Each has its advantage, so look into comparisons between the two and see which one is right for you. Always ensure that you read the fine prints of any agreement that you enter into.
Another way you can use the payroll process to better manage your money is by splitting your deposit into different accounts. If you’ve organized your budget and realize you’ll have extra money left over in savings, you can have a small amount of money deposited into your savings each paycheck.
Infographic: Living on a Lower Income? 4 Money Management Strategies
3. Take Overtime Shifts
If your job offers it, taking overtime shifts can be a great way to earn extra money. Overtime pay is one and a half times more than your regular pay rate per hour, so you’re earning more than you would during normal work hours. This will allow you to have more money every month to help you maintain your budget and pay your bills on time.
Another added benefit is that you’ll be showing your employers how much extra time and effort you’re putting into the job, giving them more reason to believe you are eligible for a pay raise. Reach out to your manager and discuss the options available to you to work overtime. If you do end up taking on extra hours, make sure to track the hours you work. This can help not only if there’s been a mistake when handling your overtime pay, but it allows you to have a full idea of how much overtime you’ve worked when applying for a higher position or asking for a raise.
If you are on a lower income and you’ve been at your job for a long time, and still feeling like you aren’t earning enough to cover necessities, you can look for ways to negotiate a higher salary with your manager or HR department. While it might be stressful to do, taking the time to meet with a manager and discuss a raise could end up being fruitful.
Take the time to read up on how to, and how not to ask for a raise. It’s also important to know what your company’s policies are on raises and promotions, such as who to discuss this with and what the process is for requesting one. Even if this doesn’t end with you getting a raise, it gives you experience negotiating with your employer and potentially will give you the ability to get a raise down the line.
Finally, if after taking these measures to improve your financial situation, you still feel as though living under a lower income is impacting your ability to make bill payments on time, it may be a good idea to start hunting for other jobs or looking into small side hustles you can do on the side. This can give you leveraging power to find the best job for you that comes with the best pay and benefits or make additional cash on the side to be able to pay for your expenses consistently.
Managing money while living on a lower income can be a stressful situation, but with the right financial planning in place, there are many ways one can reduce stress and leave themselves in a better situation financially. It takes time, effort, and lots of career development to work, but it can be done, and the benefits will be well worth it in the end.