Do I Really Need a Budget If I Don’t Have Any Money?
Written by
Jake Safane
Edited by
Molly Sullivan
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If you’re not earning much money or are in debt that you can’t seem to get out of, it might feel pointless to budget. You might be thinking, “Why stress about where each dollar goes when I know I’ll end up in the red no matter what?”
But while this type of thinking is understandable and common, that doesn’t mean you should avoid budgeting.
“It’s important to remember that budgeting isn’t just about how much money you make. It’s about managing the money you have effectively,” said Allison Sanka, accredited financial counselor (AFC) and financial coach at Journey Financial Wellness.
“By budgeting, you can gain a better understanding of your spending habits, find areas where you can reduce expenses, and prioritize your financial goals. It’s a tool that empowers you to take control of your finances, regardless of your income level,” she said.
Here’s a closer look into why you should have a budget no matter your income.
Take Control of Your Money
While it might be uncomfortable to dig into your finances, taking a close look at your income and spending, along with other areas like debt and investments, can put you on a better financial path.
If you don’t know how much income you need to support your desired lifestyle, for example, then getting a new job might not turn your situation around. Or maybe the problem isn’t your income as much as interest payments on debt eating into your paycheck every month.
“When it comes to budgeting on a low income or during financially challenging times, it’s easy to feel discouraged and overwhelmed. Changing financial habits requires patience and persistence,” Sanka said. “But budgeting isn’t just about the numbers; it’s about understanding how cash flows in and out of your account, and empowers you with knowledge about earning and spending so you can take control of your financial situation.”
For example, if you start budgeting and see that you don’t have as much money for groceries as you’d like, you might realize that you can cut back on food delivery. Or, maybe your car payment is too high, and you need to sell your car and get a more affordable vehicle.
“Your budget, or spending plan, helps you understand your spending habits, take control of your money — instead of it controlling you — identify areas where you can cut back, and prioritize how you spend and save your money. Even small adjustments can make a big difference over time,” Sanka said.
Making the Numbers Work
While budgeting tends to be important for all incomes, it can be harder to make the numbers work when you don’t have much to work with in the first place. But there are solutions.
“To make budgeting easier to follow when there’s little wiggle room, there are always workarounds. First, trimming back on ‘wants’ is the first line of defense. For example, I recommend reviewing statements for subscriptions and expenses that aren’t being used,” Sanka said.
For other purchases that you feel like you need to make, like clothes or furniture, see if you can save money such as by secondhand shopping.
“Instead of buying new, I love tapping into Buy Nothing groups on Facebook to see what my neighbors might be able to lend, share, or give for free,” Sanka said.
But that doesn’t mean you can never treat yourself.
“Depriving yourself completely of things you enjoy never works in the long run, so cutting back on food delivery, or going from daily coffee runs to Monday and Friday only, makes it a special treat without cutting it out entirely,” Sanka said.
Lastly, if you’re struggling to budget because you feel like you don’t have any money, you may need to get the income side of the equation up. Having the clarity of a budget can help you see how much extra income to strive for, and you don’t necessarily need to get a new full-time job.
“There are many creative and fun side hustles you can pick up to earn a little money to fill the gap. Start by looking at what you have that you can sell to generate cash,” Sanka said. “If you’re looking for work to bring in income, think about what you like to do and skills that you already have that others might pay for. For example, if a client loves animals, I suggest doing pet walking or pet sitting. Or, if you have a skill you can teach, create a course and teach it online.”
Following these steps isn’t easy if you’re financially struggling, but if you want to turn things around, budgeting can help.
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