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I have never made more than 50K in a year.
But yet, I have crushed AMAZING financial goals, even on a smaller income. I paid off $15,000 on (roughly) a $30,000 income.
Recently, I have been sitting with the thoughts that a lot of people are saying “Because I budget, I can spend money, enjoy life and vacations, AND pay off debt/save money/invest.”
Some part inside of me resisted this idea so hard. The more I analyzed it, the more I realized it was the product of two different thoughts..
One, because I am a very all or nothing person. If I have a goal, I want to go balls to the wall and crush my goal as fast as I can so I can move onto the next goal.
But two, because I have never made enough income to feel like “doing it all” was productive. When you have $150 left over after bills, spreading it four ways can feel really defeating.
It can feel like you aren’t making any progress.
But ultimately, it can feel incredibly frustrating to take forever to cross a goal off your list.
Here are things that have helped us tremendously on a smaller income:
1) We live in an extremely low cost of living area.
I can’t write this blog post without acknowledging that living in Nebraska isn’t a HUGE part of the reason we have been able to live on less and crush financial goals. It was a HUGE privilege to be born here and not move here by choice. But ultimately, this is one of the biggest ways that we live on a smaller income.
Nebraska has made multiple “top cheapest places to live” lists. According to this article from Movoto, Nebraska is 11% cheaper than the national average for cost of living.
There are a lot of things to not like about Nebraska– and most people have said they probably can’t identify it on a map. But because both of our families are here and the cost of living is good. We will probably stay.
2) Budget your smaller income
This seems like a painfully obvious one from a Budget Blogger, but our budget is absolutely essential to survival on a smaller income. Having a budget is telling your money where to go. It is tracking your spending to know HOW much you are actually spending on food. It is a mindset of gratitude and abundance. There are so many aspects to budgeting, but it is absolutely essential to living on a smaller income.
If you haven’t started your budgeting journey and need help..
I have a ton of free resources on my blog, including my free budget workbook.
I have my printable workbooks in my shop!
The Savvy Budget E Course is HERE! I worked to put together alll of the resources I had into one course!! It has videos that lead you step by step tips to start your budget! Get your Savvy Budget Basics Course!
3) Have a list of VERY specific goals and focus on ONE at a time.
I think the biggest mistake I see people make is that they try to do it all.
They have a list of 5 things to buy. 10 debts to pay off. 3 vacations to save for. 2 savings goals.
And you now have $15 a month to put to each goal.
How incredibly defeating because you are going to be working on ALL of those goals for a really long time. Psychologically- we need quick wins. We need that dopamine rush of hitting a goal, no matter how big or small.
Your goal could be to focus on buying one thing, then paying off one debt, then a vacation then another debt. Listing your goals in order of priority and size can be extremely beneficial to crushing that small goal quickly.
4) Take FULL advantage of “bonus” or unplanned money
Tax return- to goals!
Stimulus check- to goals!
Birthday Christmas money- to goals!
Like I said in number 3, your goals don’t need to be ALL debt and saving goals, but using this lump sum money can help you crush your goals faster.
We paid for a good portion of our $6,000 wedding in 2021 with our tax return. We crushed some debt goals with our last stimulus checks in 2021. This year our tax return went straight to savings goals.
5) Lowering your monthly expenses
One of the biggest things you can do is lowering your monthly expenses. Look for the best rate for insurance. Find a cheaper phone and internet plan. Check out a few grocery stores to find which one has the best deals. A smaller income doesn’t have to mean cutting out all the joys in life like coffee and restaurants. If you can save $50 on your phone, you can use that for things you truly love.
Lowering expenses where you can is so important. Here is 25 tips to lowering your food budget. Ultimately, there is no wrong way to lower expenses and save money. There are tons of things you can do and a few quick google searches will give you tons of ideas.
We have spent a lot of time doing No Spend Months (quarterly) as a way to reel in our spending and help us hit our goals.
6) No Spend Months
No Spend Months are a period of time that you allow yourself to say no and cut out any excess spending. I cut out EVERYTHING. No Restaurants. No extra coffee stops. Not ordering pizza when you don’t feel like cooking.
This challenge is designed to get you to think about where your money is going. It has helped me b
e a lot more intentional with each purchase during a month. It is a great time to analyze your habits and focus on things that you don’t love spending money on.
This challenge does not include bills. When I say that I didn’t spend any money all month, guys. My bills are still getting paid. Money is still going to debt/savings. I am just not using any of my normal “spending” money. I am budgeting for less things than normal.
I like to use No Spend Challenges as a way to focus on building other habits that help cut spending. When you are not spending excess money, you get in the habit of cooking food to take later. You stop shopping and can spend the month doing other things. It is also a great time to focus on gratitude for all of the thing that you already have instead of your to buy list!
7) Side hustles
Looking for ways to increase your income is a great way to hit your goals too. There is really only so much money saving you can do when you just don’t make enough to cover expenses.
Increasing your income can help you make huge strides towards your goals. Things like babysitting or pet sitting/walking, Doordash, Ubereats or Instacart, sales and starting your own blog.
My biggest advice is to look inside of you. What are your skills you already have? What are you passionate about? -And how can you create an income based on that. If you are passionate about reading, there are ways to make money as a book reviewer or you could start a website about reviewing books and monetize your website.
There are thousands of possibilities when it comes to the internet and making money in 2022.
8) Be careful for marketing traps.
I talked about this on my blog post about kids toys under 1. It is so easy for the marketing world around us to make us think that we need all of these things. We need the fanciest car set and stroller, and new phone and whatever else. This new thing will “change your life.” But in reality, there are tons of things that we likely don’t need or could do the same task with something we already own. We are careful with purchases that seem rushed or “MUST have!”
We TRY to always use a 24-48 hour time period after we put something in our Amazon cart before we actually check out. Giving us that time to really think about it and try to live without it has been super helpful for us to not purchase a bunch of things we will just have to get rid of later.
It can be done on a smaller income.
As I was doing our taxes, I realized that we made roughly $41,000 last year. We cash flowed a wedding and still put money towards debt.
In all of the excitement of being an entrepreneur, I had forgotten why I started this page. When I was looking for people like me who were budgeting, I didn’t see anyone. I didn’t see many people without professional jobs. Who were doing gig work and bartending to make money.
I have had lots of temporary government jobs through the military, but never that amounted to more than $50,000. Yet I saw people making $3,000 to debt and investments consistently every month, while I was living off of it.
This is absolutely not a “must be nice” mentality, it is 100% to show that it can be done. Obvious disclaimer: every area has a very different cost of living. and $50,000 is VERY different in Nebraska than in New York.
My goal this year is to hit 6 figures as an entrepreneur, but wherever I land, I am already on track to make more than I ever have.
My two main takeaways from this…
I hope that if you are reading this, and you feel overwhelmed because you have a smaller income.. I hope you know that being intentional can do big things for your goals. And increasing your income can help, but so can having a budget to plan ahead.
My other hope is that if you are reading this and you are young. If you are in high school, or college, or at the very beginning of your career, know that you don’t need to wait until you are making “big money” to start taking control of your finances. I bought a house as a bartender primarily due to taking control of my finances and being extra intentional with my income that I did have. I hope that you read this and know that you don’t have to wait until you are at that “big girl job” to start crushing your money goals.
