How To Budget Money On Low Income For A Family of Five (2024)

How to Live on One Low Income – Have you ever wondered what it takes to live on just one very low income? I’ll share my secrets to what it took so that you can save money, too!

My family of six lives on one income.

We always have, and we aren’t planning on changing that.At one point, we lived on$17,000 a year. Despite living below the poverty line, we were able to save up to buy a house, paid off 2 cars, and still managed to build a savings account.

It wasn’t easy but we made it work.

When we had our first son, my husband and I knew that it would be best for the family if I stayed home with the baby. As he grew, we knew that homeschooling was the best option for us, which only further solidified our need to survive off of just one income: my husband’s.

I need to tell you about my husband.

He’s a rockstar. If he were paid based on how hard he works, he’d be a millionaire. But that’s just not how it works.

Back when he only made $17,000, he worked for a company that built stages for rock stars. He worked hard every day, and he got paid almost nothing.

Despite the work being tough, the weather conditions being extreme, and the pay being awful, he went to work every day without fail to support our family.

I want to talk about the dark times. The times of the $650 paycheck every. other. week.

Times were tough. But we still survived, and eventually thrived, for 4 years. Some shudder at the thought of only making $17,000, but that’s the reality of what our lives were. We didn’t know anything other than making a low income.

Obvious answers to this situation would have been for me to get a job and for my husband to work more. But that didn’t happen (if I had a brain, I would have started these side hustles YEARS ago!). This is what we did to survive as a family of four on one low income of $17,000.

How To Budget Money On Low Income

Prioritize.

What NEEDS to happen? Do you need a new car, or is this one doing just fine and you’d like a new car? Or even smaller: do you need the full price, brand name products or can you go for the generic or maybe even make it yourself (which I’ll address later on).

We learned pretty quickly that if we wanted to splurge, we’d need to plan ahead for it. But if splurging meant that our grocery budget would take a hit, we would opt for a night of frozen pizza and Netflix.

Make a budget for your family, and stick to it. Find out where exactly you can make cuts in your expenses and what needs to stay in your budget.

Live below your means.

If you always live like you’re broke, you’ll have money left over in the end. Even if you CAN afford to go out to a nice dinner tonight, save that money for when you really need it. Even if you CAN get a new, expensive car, opt for the used car that gets you more bang for your buck. Always spend as if you were making much less than your actual income.

If my husband ever worked overtime, I’d immediately take the extra income and put it into a savings account. Even if he only worked a little overtime each month, it all added up. And slowly we started building a savings account.

We were able to do things like fix a problem with our car without putting it on a credit card. We were even able to save up enough for a down payment on a house from this savings account. When you act as though every little cent counts, you truly start to appreciate everything.

Shop ONLY discount.

I learned very quickly that I can get much more for $20 at Goodwill than I can at a department store. If I only have $20 to spend on clothes for 3 people, I have to make every cent count. I love my second-hand stores. I’ll only get clothes there. I only shop at Goodwill or Salvation Army on their half off Wednesdays, to really help stretch the budget!

I love our discount grocers. My family doesn’t go food shopping anywhere else. Canned goods are between $.25-.50 for brand names, organic veggies 2 for $1 (or less!), and almost anything else you could buy at the grocery store, you can get for almost nothing at a discount grocer. If you Google “discount grocer” in your area, hopefully, you’ll find some to try out. This is the only way that I can afford my $75 a week grocery budget!

Second-hand stores and thrift stores aren’t just for clothes, either. There are even scratch and dent stores for appliances that give you a deep discount just for a scratch that you can’t even see!

We redid part of our kitchen this year and installed a dishwasher. We got a brand new stainless steel GE dishwasher, that would have been $900, for $200 because it had a scratch on the inside of the handle. I don’t mind the tiny scratch (that you can’t see unless you’re looking for it)! Especially if it’s saving me $700!

Rethink “necessities.”

When I think of how to live on one low income, this is what it all comes down to. Before you buy anything, ask yourself if you’ll be glad you bought it tomorrow. If the answer is no, then you don’t need it.

Even things that I considered necessities are getting a second thought; do I really need those paper towels or can I get by using the rags that I made from old towels? Do I really need the super ultra stain fighter detergent for $15 for a month’s supply, or can I try to make my own for $12 for the whole year?

You can even rethink the diapers that you use! If I had been thinking at the time, I would’ve also cloth diapered my sons from the beginning. I always thought that the problem with cloth diapers is that start-up is so expensive. But it doesn’t have to be: I cloth diapered my youngest 2 sons for 2 years now paying $279 for all of the diapering supplies.

Hand-me-downs will be your way to upgrade.

Is your brother getting rid of his TV and upgrading just because he wants the newest model? Offer him some money for the perfectly good last year’s model. You’ll be saving a lot of money getting “new” things this way.

So much of our furniture and electronics are hand-me-downs that we’d never have gotten if we had to pay for them ourselves. I’m not ashamed to say that. Each time someone has offered us an “old” phone or TV, I have no shame in accepting it and offering some money in return. I would never have gotten a MacBook Pro because of how expensive they are, but my brother had bought one, hated it, and couldn’t return it. So he gave it to me. (PS – it’s 5 years old at this point and is still kicking!)

I know that other people swear by Craigslist for deeply discounted items around the house. If accepting family and friends’ offers for their second-hand stuff is just not something you want to do, Craigslist is a great second option.

Save like crazy!

Automatically have 10% of your paycheck put into a savings account. That way, the money is saved, but you don’t see it in your account so you’re not missing it.

It was a great trick I played on myself weekly. I knew that there was money being taken out each week, but it still looked like we only had what was in the checking account. This trick really worked for both my husband and myself. On top of everything that we were saving by living differently, we were also amassing a nice-sized savings account without even trying.

Make your own EVERYTHING.

When you stop buying premade things and start to make them yourself, you not only know exactly what you and your family are eating, but it also saves money. It does require more work, but is it really worth $10 for a pizza from the frozen food section when you can make it yourself for less than $4?

Making my own detergent saved me SO much money! Laundry used to be my second biggest expense after food. My husband works a dirty job, and well… kids are messy. So it wasn’t uncommon to have to do a load of laundry every day. It also wasn’t uncommon to need to wash my husband’s work clothes multiple times. I went from spending close to $30 or more a month on supplies for laundry to not needing to buy detergent for a whole year when I made my own.

Here are some other things you can make at home and save money:

2-ingredient laundry detergent (I pay $20 or so and it lasts the whole year!)
Natural toothpaste
Household cleaners
Your own iced coffee (or even regular coffee)
The entire menu of Starbucks can be made at home.

Which takes us to another point…

Stop going out!

“You didn’t eat lunch and now you’re hungry when you’re out? Too bad. No stopping for take-out here.” I’ve said this many, many times to my husband. Yes, it’s harsh. But when you think about spending more than $6 on a sandwich that you can make at home for like $.25, it’s too hard to make that work on a tight budget.

Change your habits.

If you’re trying to save money, start by looking at your daily routine. What expenses can you cut out from your budget? Do you swing by Starbucks for your vanilla latte every morning? Do you get expensive microbrews to have with dinner every night? Maybe you go out for lunch every day at work? (I’m going to go there because I went there with my husband, too…) Or do you smoke or indulge in any equally bad and expensive habit?

Nothing forces you to realize how expensive these habits can be like having to budget out the expense each week or month. My husband used to smoke (and he’s quit since then), but it was really eye-opening when he realized that he needed more than $30 a week on his habit.

That was money that could have been spent in other places or even gotten saved, but it was going to fund his addiction. But for us, it wasn’t JUST the actual money on cigarettes. It was the additional bills from his health insurance (which more than doubled because he was a smoker) and his life insurance (which quadrupled). So at the end of the month, we were looking at not just $100 for cigarettes, but also $200 for health insurance for just him, and $75 in life insurance.

(I’m not trying to lecture here, I swear! This is a big picture thing that really changed our thinking once we realized that it wasn’t JUST the cigarettes that are costing us big time.)

Make your own snacks.

My husband and sons would snack all day, every day if I let them. But buying pre-packaged snacks (even single-serve pretzels) really adds up quickly, and you wind up spending a lot on packaging instead of the actual food.

Instead, we went to our bulk food store and bought bulk pretzels for $.20 a pound. We even found an alternative to Cheese-Its and Annie’s Cheddar Bunnies called Cheddar Quacku*ms (hilarious, right?!). Instead of paying $4 for a box of the Annie’s Cheddar Bunnies, we got these for $.40 per pound. Not bad, right?

Plan ahead for road trips.

We livean hour and a half to 3 hours away from both of our families, so road trips are a multiple-times-a-month occurrence for us. Road trips killed us while we were trying to save money. But planning ahead and making out own food and drinks helped us A LOT.

We’re big coffee drinkers, so halfway through any road trip, we would be hankering for some of those sinfully delicious Starbucks Frappuccinos at the gas station. Those things are more than $2.50 EACH. For 4 of them, that’s $10 that we could spend somewhere more important… like gas! So we started making our own coffee just like Starbucks to bring in the car. We each made gigantic thermoses of iced coffee just the way we liked it so we never had to make a pit stop.

If you are like me (read: like my husband), you walk into the grocery store and no matter what you had for breakfast, you’re suddenly hungry for everything. Which leads to impulse buys, which are unnecessary. When you’re living on one very low income, planning for everything is so crucial. I learned (not early enough) that I need to bring snacks with me wherever I go. Not just for my kids, but for my husband. I always had a baggie of peanuts or almonds in my diaper bag just for adult hunger issues.

Find more road trip money savers here!

Look to cut corners on bills.

Do you really need that smartphone?

We both got rid of ours for a while because the data plans each month more than doubled our phone bills. When we finally got smartphones, we both got “hand-me-downs” from family who had upgraded. Our phones work perfectly fine! Are they the newest things? Nope. They’re a generation old. But they work for us.

I have friends who swear up-and-down about Republic Wireless and their $20/month unlimited talk and text phone plan with data. The catch is that you need to connect to wifi as often as possible to keep your data in check. But if you’re a homebody like me,

Do you really need cable?

We didn’t. Especially not for $130 a month! We got rid of cable once we realized that we didn’t actually need it and that we could still watch plenty of shows from Netflix and Hulu.

Plus, on Amazon Prime (which you can get for free for 30 days) you can get subscriptions to HBO, STARZ and more for $15/month and, unlike with cable, you can cancel them anytime you want! We did this to watch Game of Thrones this past year – started the subscription at the beginning of the season and then canceled it right after the show aired (which was LIVE, by the way – none of that waiting 24 hours).

Check your thermostat.

In the winter, keep the heat on 68 (or lower, if you’re brave) and in the summer keep it no cooler than 72. Both of these temperatures are the tried-and-true most efficient for your electric and gas bills when you’re trying to save money. The best way to do this is by getting a programmable thermostat and finding ways to winterize your home.

Accept that this is where you are.

This was the biggest factor for us. We had to stop trying to live above our means and just accept that we didn’t have the money to spend like other people did. By accepting this, we were finally able to stop working against ourselves and reach our goal.

If you’re constantly looking for the next, bigger, better thing, life is going to be hard. The sooner that you accept this as your life, the better. Once you’re content right where you are, you can actually start to enjoy this life that you live.

It is possible to survive and thrive off of a low income. Above all else, the most important factor is to plan. Every penny needs to have a plan. The more planful you are with your money, it won’t matter how much or how little you make.

Here are some more resources to help you save money and live on one low income:

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