If you live in one of the 48 contiguous states, you’re in a one-person household, and your annual income is $11,490 or less, you’re considered to be living in poverty.
But you don’t have to be living in poverty to want to be smart with your money. Some people just want to learn how to live more frugally, cut their high spending habits in half, and save successfully (without breaking open the piggy bank on every whim).
However, if you are low-income or living in modest means, learning how to live poor is necessary. The first step to penny-wise living is being mindful of your spending and having a goal in mind for your savings.
Where Should You Cut Costs?
When you’re learning how to live poor, having a tight monthly budget is absolutely essential to your survival. You might be surprised by how much money you spend in a month. When you look at your rent, utility bills, food, and other expenses, they’ll really start to add up.
In fact, one of the first places to cut costs is within your living expenses, especially in the realm of food.
Abide by These Frugal Food Tips
Stretch your food budget by planning your meals in advance. Budgeting and planning for meals ensures that you won’t spend extra money on food for the week because you’ve already planned them and know precisely what you’ll be eating every day.
You might also consider growing your own vegetables and herbs (or regrowing vegetables such as scallions, celery, carrots, and lettuce from scraps) to save both a trip to the store and unnecessary purchases. Veggies like beans, greens, onions, peas, and peppers, along with herbs like cilantro, oregano, spearmint, and basil are some of the easiest things to grow.
If you eat meat, try to choose less expensive cuts. For example, chicken, ground beef, pork shoulder, and flat steaks (like flank or skirt steaks) are all more affordable cuts of meat that most likely won’t break the bank.
On a similar note, make sure you’re not buying brand-name foods. Purchasing store brands or generic labels can help you save, too. They’ll likely be identical to the premium brand so that you won’t miss much in terms of quality.
It can also help to limit yourself from going to the store. After all, you can’t buy very many groceries if you’re not actually at the supermarket. Limiting yourself can prevent impulsive food purchases as well. Avoid grocery shopping online at all costs, as these purchases will likely involve shipping costs.
Making a list of things you need at the grocery before you go shopping can help, too. This concept is called shopping consciously, which will help you avoid looking at and buying things that weren’t on your list (and that you don’t need). Go through your shopping list, purchase those items, and leave.
When you do make a trip to the local grocery store, make sure you’re comparing prices and buying in bulk when you can. Doing so will lower your costs, especially when you buy staples like rice and beans in bulk.
When you’re living frugally or when you don’t have much money to spend on food, make sure you’re paying attention to how much product you’re getting for your buck. The price per ounce is usually visible on the package and can help you decide what to buy since many stores sell the same product in different amounts.
Try not to purchase out-of-season fruits and vegetables, as those will be much more expensive.
Look into the Supplemental Nutrition Assistance Program (SNAP) If You’re Eligible
The U.S. Department of Agriculture’s Food and Nutrition Service provides SNAP, and it’s also funded publicly to provide food to low-income people and families. The size of the SNAP benefit is dependent on a family’s income and expense.
To find out if you’re eligible, start by looking at your gross monthly income (the income you have before any of the program deductions are applied). It should be at or below 130% of the poverty line for you to be eligible.
For example, if there are three people in your family, the poverty line for 2020 is $1,778 per month, so 130% of the poverty line would be $2,311 a month, according to the Center on Budget and Policy Priorities. Net income also must be at (or below) the poverty line.
Then, you can calculate your benefits. Families who receive benefits should spend 30% of their net income on food, and families without a net income get the maximum benefit. So if you’re a family of three and eligible for SNAP, the maximum monthly benefit you could receive is $509.
However, to calculate your total household monthly benefits, you’ll also have to include the net income for shelter deduction, shelter deduction, your net income, your family’s expected contribution toward food, and your SNAP benefit. You can learn how to calculate this correctly through the Center on Budget and Policy Priorities.
See If You’re Eligible to Apply for Women, Infants, Children (WIC) Benefits
Low-income mothers can be eligible for WIC, a program that’s publicly funded like SNAP and offered through the U.S. Department of Agriculture. WIC provides foods like:
- Juice
- Milk
- Peanut butter
- Whole wheat bread
- Cereal
- Cheese
- Eggs
- Fruits and veggies
This program can make a real difference in the lives of poor or low-income mothers and their children. Those who might be eligible can apply by contacting their local public assistance office.
Remember to Check Out Local Food Banks
Food banks are organizations that are often run by churches or shelters for the homeless and give food to people in need. Try calling churches near you to see if they offer things like soup kitchens or weekly spaghetti dinners.
The Feeding America website — a national network of food banks — can also help locate the nearest feed bank to you by allowing users to enter their zip code or state.
Always Rent as Opposed to Owning
Today, there are rental companies for just about everything: baby products, jewelry, clothing, and handbags or purses. You’ll be able to borrow these items for an allotted time at a specific price instead of paying an exuberant amount once.
Consider Applying for Public Housing
Public housing is an option that gives low-income individuals affordable housing opportunities. To qualify, you’ll have to first contact your local public housing agency (PHA) to see if you’re eligible.
Pay Attention to Available Coupons
Why not save money on things you already know you’re going to buy? Free coupon apps like SavingStar, Inc., and Honey can help you save here and there. It’s also smart to stock up on non-perishable food items like pasta, canned fish, peanut butter, and rice when they’re on sale since they’ll stay fresh for extended periods of time.
Loyalty programs are similar and can provide you with even more coupons. For example, stores like Kroger and Target have applications that offer digital coupons. You can also enter a phone number when you checkout for even more savings. Drugstores like Walgreens also let you collect digital points when you check out with your free loyalty card.
Enjoy Entertainment (When It’s Free)
Whether you’re hoping for an inexpensive date night or a fun family activity, take advantage of any and all free entertainment. Check out a nearby park or museum, go on a bike ride, or host a game night for your family.
The local library can also be a convenient place with regards to free entertainment. Explore all the books, films, comics, magazines, and CDs your library has to offer.
Hone-In on Your Inner DIY Attitude
When you’re learning how to live poor, embracing the concept of DIY or do-it-yourself activities is crucial. Believe it or not, you can actually make your own hygiene products like deodorant with everyday kitchen items like coconut oil, baking soda, and arrowroot starch.
Even cleaning products such as stain remover and window cleaner can be made at home with a few ingredients.
If you have a sewing kit with a needle and thread, you can often repair your own clothes when they rip or tear from age.
When dealing with broken household items, you can rely on YouTube tutorials to repair these objects instead of spending a fortune on a handyman.
But DIY doesn’t have to mean complicated. Even merely washing your car yourself instead of relying on that expensive local car wash could help save some cash. Consider working out at home instead of joining (and paying monthly) for a gym membership. Things, like ironing your dress shirts and doing your basic yard work (like mowing the lawn yourself), can cut costs.
Get Rid of Your Monthly Subscriptions
Subscriptions like Netflix, Amazon Prime, Spotify, Hulu, and PlayStationNow can be monthly money suckers. Ditching these payments can really help you cut down on costs you don’t rely on to survive.
Buy Used Items Whenever You Can
When it’s possible, purchase used goods. You can potentially buy designer clothes, electronics, jewelry, furniture, or a nice car second hand, so long as you shop smart.
When it’s time to get new clothes, try looking at places like Goodwill, The Salvation Army, or other thrift or consignment shops before you purchase an item of clothing from a retail store. Pawn Shops often offer jewelry and furniture. Make sure you’re also browsing online sales groups, too, such as on Facebook.
Live without a Car If Possible
Although cars are often useful for getting to work, they’re usually gas-guzzling money suckers. The cost of having a car is often more than people realize, and if you can live without one, it’ll be worth it.
Travel during the Off-Season or Don’t Travel at All
Travelling can be incredibly expensive, especially if you’re considered low-income or poor. However, traveling in the off-season can be an option for some as it’s typically less money and less crowded. For example, visiting Europe in the winter months or Hawaii in the fall, according to U.S. News.
Prioritize Your Health
When you’re poor or low-income, staying healthy is a must. When you’re sick, you’ll probably have to take a few days off work, which could put you severely behind in your finances, and it might even require a trip to the doctor (something that could end up being extremely expensive).
Follow these tips to remain healthy (and avoid a costly doctor’s appointment):
- Eat well-balanced and nutritious meals every day (think grains, fruits, and veggies)
- Wash your hands often
- Avoid alcohol
- Get enough vitamin D
- Make sure you’re getting enough sleep and exercise
Consider Shopping for New Insurance
If you haven’t explored other home and auto insurance options in a few years, it might be time to do so. You could potentially hundreds or thousands of dollars just by keeping your options open and exploring new coverage alternatives.
Settle into the Low-Income Lifestyle
If you’re new to the low-income lifestyle, you’ll need time to settle into your new way of living — one void of money-sucking vacations and weekend trips, eating dinner out, fancy cars, the latest technology, and other unnecessary expenses. Luckily, there are a few ways you can ease your transition into a low-income lifestyle if you’re not yet used to it.
Try Spending More Time with Friends and Family
As you settle into a more low-income lifestyle, make sure you’re spending adequate time with your friends and family — the people who mean the most to you. Being with these people will make you feel good because having a reliable social support system can lessen your stress.
You’re less likely to experience anxiety, worry, or depression when you have a strong support system: friends and family who love you.
Find Something Positive to Look Forward to Every Day
It’s essential to remain positive even if your situation looks dire or is out of your control. It can help to imagine yourself in 5-10 years. Where will you be living, and what will you be doing? Try to look forward to one encouraging thing each day. It could be meeting a friend, walking your dog, or taking your child to the library.
Sharing these optimistic visions and thoughts with a friend or family member can help your positivity last.
Know Your Financial Limits
Although this can be easier said than done, make sure you’re living within your means. Surviving on a limited income can be a challenge, but it’ll be easier if you have a plan. Try making a household budget where you calculate your household income and total expenses.
If the costs are more than the income, try to cut some of those costs or look for a way to increase your revenue a bit.
Recognize the Things You Can and Can’t Change
Unfortunately, those who live in poverty rate themselves low in terms of self-efficacy often, according to a 2015 study. Self-efficacy is a person’s judgment of themselves surrounding how well they can deal with potential situations. So how do you deal with this?
It helps to take a deep breath and accept the things you can’t change. Realize that your situation — living in poverty — is temporary. If you have a negative thought, like “I’ll be poor forever,” channel those thoughts by thinking the positive opposite. Forgive yourself with positive self-talk.
Don’t Rely Too Heavily on One Job
If you can help it, don’t rely on a single income stream. Though working multiple jobs can be stressful, full-time jobs are rare and risky when it’s your only source of income. If you’re let go or fired from one, you’ll still have another source of income to fall back on. Try to request more hours if you need them and can take them on.
Always Be Looking for Better Work
Even when you have a good job that you love, keep your eyes peeled for better work opportunities that pay more money. Never feel bad about leaving a job for your well-being and financial interests.
Don’t Worry about What-Ifs
Dwelling on things in the past or letting yourself be consumed by something you didn’t do right will effectively distract yourself from living your life. To live successfully as a poor or lower-income individual, you’re going to have to focus on the here and now.
How to Save Money Successfully
Saving is critical when learning how to live poor, and it can be difficult at first. You’ll have to retrain your brain to be thinking of areas within which you can be cutting costs and even setting some funds aside, just in case.
Plan, Plan, Plan
When you’re struggling financially, it can be hard to look ahead in the future since the present can be overwhelming. If you’re consumed with anxiety about paying the rent and bills, try managing your time and planning for the future as often as you can.
Even if things seem really dim, remember there’s always tomorrow. Tomorrow you can start fresh and begin planning for those brighter days.
Only Buy Things When the Time Is Right
When is the right time to make a purchase? Usually, sale cycles will allow those on a strict budget to buy products when the prices are lower. For example, fitness gear is generally cheaper in January, and the weeks leading up to Black Friday are often the perfect time to buy electronics, according to U.S. News.
Open a Savings Account
Consider opening a savings account that will only be used for emergencies. You might try setting aside $20 every week to go toward this emergency fund, but every little bit helps. Once the money is in the savings account, don’t touch it unless there’s a real emergency that would require you to use the money.
As time goes by, try to increase the amount of money you put in your savings account every week until you have enough money to cover at least three months’ worth of living expenses. Why? This will act as your safety net. It can facilitate making financial decisions since you can rest a little easier knowing you have money in your emergency fund if need be.
Consolidate Debt to Make It Easier on Yourself
When you pay interest on debt that has accumulated, it can be tough to afford the things you want or need. Combining high-interest credit cards could save you hundreds of dollars if you consolidate them into one with a low (or better yet, 0%) APR card, according to U.S. News.
If you have high-interest student loans, try refinancing your debt. Keep in mind that if you refinance federal student loans to private investments, you could lose access to some of the available “loan forgiveness” programs and repayment options.
Consider Opening a Credit Union Account
Investing your money in banks isn’t always a good idea if you’re poor or low-income. On the contrary, credit unions can be a more feasible option with fewer fees, increased savings, and decreased loan rates than banks. Credit unions can also be less likely to have a lower minimum account balance requirements.
Never Cash Checks at a Check Cashing Service
Check cashing services might sound like a good idea since they allow you to get cash instantly. However, these places also take a cut out of your check. Over time, this will leave you with less and less income. Nasdaq, an American stock exchange, suggests rarely using check-cashing services for this reason.
Don’t Fall Victim to Overdraft Fees
When you’re using automatic debit services that the bank provides, you’re more likely to rack up late fees and charges, especially when your finances are fluctuating. Cancel electronic payments for things like utility bills and rent to avoid the potential of an overdraft fee (and to give you more financial control).
Avoid Using Credit Cards at All Costs
Credit cards aren’t a good idea if you’re poor or low-income. They create debt, and the first step is to nip that in the bud. Falling back or relying on your credit cards in times of financial need is never a smart plan as it accumulates debt.
Consider Living Frugally, Even If You’re Not Poor
Even if you’re not considered poor or low-income, you might still consider living a more frugal life to cut spending and save where you can. There are a whole host of reasons you might transition to a low-income lifestyle.
You Can Have Little to No Debt
If you follow saving techniques and practice excellent saving skills, you can pay off your credit balance each statement period if you’re using credit cards. Of course, this is easier said than done but entirely possible. Debt does not have to be a permanent part of your lifestyle, and it certainly doesn’t have to lead to your financial ruin.
Getting Exercise Could Become a Bit Easier
If you’re not dependent on a car, you might have the opportunity to get a little more exercise. Walking or riding your bike for transportation will not only save you money but also promote more daily physical activity than if you were to drive everywhere.
You’ll Have More Empathy toward People in Poverty
Even if you’re not impoverished yourself, living a frugal lifestyle will likely make you more empathetic to lower-income populations. Once you see where many people have to make drastic cuts in spending, you’ll get a firsthand look at some of the real struggles that poor people have to face daily.
You Can Take the Opportunity to Reduce your Environmental Footprint
Consumption ultimately leads to unsustainable practices, like supporting the fast-fashion industry by buying clothes from popular retail brands. You can also decrease your own contribution to pollution by not driving a car and utilizing other options, such as carpooling, walking, biking, or taking the bus.
Eating Healthier Might Be a Better Option
If you stay within your budget for food, you’ll most likely eat out less and avoid fast food drive-thrus by making your meals at home. This can facilitate eating healthier, especially if you do your best to plan what you want to eat and when.
You’ll Appreciate the Things You Do Have
Although you’ll likely have to make some sacrifices to keep your spending in check, it can increase your gratitude for what you do have, such as good friends, family, food to eat, and a roof over your head.
Living as a low-income or poor individual is never easy. However, with the right resources, learning how to live poor is easier than ever.
You might not even be stretched for money, but rather looking to save wherever you can. Being fiscally responsible is a great choice.
The most important things to remember are cutting costs and saving money where you can. Those two aspects of living are crucial when you’re financially unstable and can be the line between survival and financial ruin.
Even when things get dire, it’s critical to remember that no situation is temporary. Do your best to use the resources available to you and do what you can to build up a little financial security for yourself.