Tips to Surviving on a Small Income

2006-11-19

Many people in America live on a small income, especially recent college graduates and newly married couples. Here are a few tips to help you stretch your income to meet your needs.

Establish a housing budget
When searching for an apartment or house to rent, before you start looking in the paper, you need to set a housing budget that you can comfortably live with. Your housing budget should be no more than 30% of your individual income (or combined income if married). Search online services and newspaper For Rent ads. Try to avoid apartment finder services as they are generally paid commissions by the owner to find tenants. By dealing with the owner directly, you can negotiate a better rate or a better place.

Cooking at home
You can save a considerable amount of money by cooking meals at home and bagging lunch. Buying groceries in bulk once a month from Sam’s Club or Costco rather than weekly from a traditional grocery store will also save you about 15% overall. Add this to the savings of cooking at home and bagging lunch, you could slash your food bill by 30 to 40%.

Buy used verses new
Buy buying used or slightly dinged items (i.e. car, furniture, appliances, etc.) over new ones. Buying used items doesn’t mean you are buying junk. Many appliance stores provide used appliances that are slightly used. You can also get new items with scratches or dings at big discounts from stores like Lowe’s or Home Depot. You can save 30% or more by buying a used car over a new car. With many new cars having 50,000 to 100,000 mile warranties, buy a car with 12,000 to 20,000 miles where the factory warranty transfers to the new owner. Shop around penny pincher newspapers and classifieds for moving sales for deals on furniture. Many furniture items can purchased in like new condition.

Cut your electric bill
Many don’t realize that consumer electronic items like computers, printers, DVD players, and stereos continue to draw power while they are turned off. By unplugging these items after you’re finished using them can cut your electric bill some. Or you can purchase a Smart Strip Power Strip ($31 at www.smarthomeusa.com) and plug your electronics into it. The strip ceases drawing power when these electronics are turned off.

Control your thermostat
If you own your home, you may what to consider installing a digital programmable thermostat to adjust the temperature and save energy while you are away or asleep. These units cost between $10 and $20, but will save you around 10% to 20% on your electric bill.

Avoid debt and save each pay period
Pay cash whenever possible and avoid debt whenever possible. Imagine for a minute if you saved every dollar you spent on credit card debt into a stock or mutual fund. The saving part is not the issue; it’s the spending part that hits people hard. Live within your means and save every dollar you can.

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