Coping with Low Income and High Expenses

Image credit: Pedro Ribeiro Simões/Flickr

Worried about your income being suffocated by rising expenses? Do you find your stash drying up long before the next pay day? It can be saddening when you realize you don't earn enough to cover your monthly expenses.

Well, it’s very common these days to find your income being suppressed by an upsurge in expenses. The bad news is that rising expenses are here to stay, and the good news is that you can manage to strike a balance even when your income isn’t growing in the same proportion. Here are ways to go about this.

Live within your means

Don’t waste your time trying to speculate or predict the direction of the markets. You have no control over inflation rates, interest rates or tax rates. However, you can have solid control over how much you save, spend and in some cases (for the lucky ones), how much you earn. That’s your jurisdiction, so focus on it.

Pegging your expenses to a budget is a great way of guarding against living above your means.

Manage your debt

Debt; Be sure to at least trim it to your size, and If you can't eliminate it completely, then try managing it.

However, If you must borrow, borrow only for long-term investments, like real estate, funding your own business, and so on. Never borrow to purchase anything that depreciates in value, like furniture, cars or borrow to fund a vacation. The secret here is being able to convert debt into something of good value.

Borrowing to spend is a sure way of doubling your debt but when you borrow to invest in things that are likely to grow in value, you are better equipped to manage your debt. However, be watchful of what and where you invest, making bad investment decisions with borrowed money is like tightening a noose around your neck.

Try growing your income

Logically, one way to offset inflated expenses is by growing your income. When was the last time you asked for a raise? Yes, that's one thing employees find hard to request for. Since your boss doesn’t live on mars, he most likely should be aware of the rising consumer prices...So guess what? He just might be waiting for you to ask and if you don’t, he certainly won't initiate that conversation.

Getting a part-time job or running a small business (one you can manage within your means) can pave the way for increasing your income.

So Don't give up yet.  With some planning and focus on the goal, you can actually achieve getting by on a low income.