Living Well

How to stay on budget on a low income

Before I start writing this post I have to say that I live in Greece. This is the country that the last 8 years is struggling to go out of debt, and citizens are the ones who are helping the country to survive, through their austerity.  Salaries are very low to the point someone from America cannot even imagine, though taxes are very high, plus taxes are applied to anything you can imagine, on the electricity bill, on the internet, social name it. The government is trying to collect money from everywhere.

The only way to survive (unless you are very rich) is to be prepared and have a plan. And of course, have a job.

Every month I used to  spend every penny of my salary, and nothing was left for an emergency. I remember that every time I was at the Mall for the movies I would find the chance to do some shopping.

"This dress will cost me only 15 euros ! 15 euros won't make me rich! I need that dress!"

Do I really need that dress??

That's when I realized that I have to start saving! Save for an emergency, save for traveling... Or I won't travel again? No way.


I made my research online trying to find books about budgeting and pieces of advice from experts who have financial stability.

And I won't pretend to be an expert since I started using those tips only 3 months ago, but I already have some savings in my account, and I wanted to share with other people those tips that helped me save some money for a rainy day...

I am listing  my references at the end of this post.

Tip 1: Budget rule 50/20/30

This system is the most effective for beginners  who are starting out in life and never knew anything about budgeting. Using this simple rule you can save some money without losing the quality of your life.  You do not need a high income to follow this budget rule. The key concept  is to divide your monthly payment into three sections:




50% Necessities

Every month you can spend 50% of your salary on necessities like utility bills, rent, groceries, transportation cost etc. Those expenses are nearly the same for everyone.

20% Savings

Dedicate 20% of your salary towards savings. Having an emergency fund will help you get out of debt quicker, or fix your broken car while you don't have any money left!

20% is the minimum amount of money that you should save every single month.

30%  Personal

You also have 30% of your salary to spend on the so-called luxuries! From this money you can go shopping, cinema, save for traveling, take dance classes ... you name what makes you have fun!


Tip 2: Dave Ramsey's Envelope System

The key concept of this system is to divide your money into more detailed categories than the 50/20/30 system. These categories are becoming envelopes and each envelope contains the cash dedicated for a certain use. For example,  if you spend 100$ per month on gasoline, put this cash into the 'Gasoline" envelope. Create  different envelopes for all your monthly standard expenses. Warning! When the money in the envelope is finished, it really is! You can't steal from another envelope! That means when 'shopping cash' is finished, you can't steal from 'gasoline' envelope. Don't spend any money from other envelopes until you get the next paycheck. You can use regular envelopes, or make your own.

If you like elegant, polished purses check out Ramsey's complete Envelope System.



Tip 3: Write down your expenses

Even if someone doesn't want to adopt the above budgeting habits, this simple tip can help you cut excessive spending and will help you manage your money. To do this you don't need any fancy app for your smartphone, and you don't have to do in on an excel spreadsheet. You just need a pen and a paper. From the first day of each money write down every dollar you spend, and at the end of the month, you will be surprised! The first time I did this, I was shocked because I was spending much more than I expected!  The next  month I spent less, not because I was making a big effort to cut my expenses, but because I was writing down every euro I spent. For me, the number of the monthly expenses shouldn't be that shocking again!

Keeping track of your expenses will give you the feeling of control over your money.


Tip 4: Dave Ramsey's Baby Steps

It's obviously that I have read at least some of his books. Mr. Ramsey suggests that one step at a time will help you take control of your money.

The 1st step is to create an emergency fund. Let's say that you follow the 50/20/30 rule, the emergency fund can be your savings. Save for this unexpected event in life! Life is full of surprises...

The 2nd step is to pay off all your debts but the house. Smallest debt balances are your priorities. Pay the higher interest rate debts first as long as the have a similar payoff.

The 3rd step is to save for  3 to 6 months covered expenses in your savings account. On this step, you are prepared for unexpected situations (like a job loss).  You are also protected to never be in debt again.

The 4th step is to invest 15% of your monthly salary for retirement. The money you were using before to pay off debt will now be your future.

The 5th step is to start saving for your children college tuition. Start saving from now for your children is better than worry about that after their school graduation.

The 6th step is to pay off your home the earliest you can. Life is much easier without a mortgage loan.

The 7th and the last step is to finally build wealth and give! When you don't have all the above responsibilities anymore in your life you can finally give to those who need!

You can now be very generous and you will finally be able to help others without feeling that you certainly need your money back. Be generous.

stay on budget on a low income


If you have any other tips that helped you save money and have financial security leave a comment !



NOTE: This post contains some affiliate links. That means that if you order an item from this post I will receive a small commission at no additional cost to you

Check out Dave Ramsey Best sellers !

References :



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