Most people in their lives will have to live and learn to be happy, on a low income, at least for a while. Whether you’re a student, caring for a young family, retired, between jobs, or pursuing a passion on an artist’s wage, unless you were a trust fund kid, chances are that at some point you will find yourself temporarily on a low income.
Between 2004 – 2009 I was a stay at home mum and we lived on my husband’s modest wage. It wasn’t always easy but I don’t have any regrets about the way we did it. We knew where we wanted to be and we set out on the road to get there.
Here are a few thoughts on being on a low income and how you can make the best of it.
1. It’s all in your mind
Your mind creates your reality. Money doesn’t make you happy, you do. You can choose to be happy whether you have money or not.
If you believe that you don’t have enough, you won’t and there’s a good chance you’re going to feel pretty miserable about that.
If you believe that despite your low income you’re still in the top percentiles of the richest people in the world, then that’s going to considerably change how you feel about your position.
There’s great pleasure in being able to tuck a child into a warm bed with a full belly. You may not have the smartest car or the latest iPhone, but if you have the basics covered and you have learned to master your mind, you’re as rich as you choose to be.
2. Take control of your money before it takes controls of you
The worst thing in life is money stress. It’s probably the single thing people argue about most. Again, it’s all in the mind, but there are things you can do to minimise your perception of it.
It doesn’t matter how much money you have coming in, the basic principle of spending less than you earn holds true. You can’t go wrong if you separate the amount you need for your bills first and put it into a separate account. Life is so much less stressful when you automate the things that play on your mind.
With what’s left, choose an amount to save and have this come off automatically too.
Spend and fully enjoy the rest. You can’t take it with you!
3. When there’s nothing ‘left’
If after your bills there is nothing left, or worse still there isn’t enough to pay your bills. You have two choices cut back or earn more. From experience I recommend a combination of both. Cutting back is easy, you’ve heard lots of tips on that already. Earning extra money is also easy if you really need it. There are hundreds of ways to earn extra money and once you get into the right mindset it’s actually a lot of fun finding new ways to earn more.
Don’t wait until you’re in dire straits to start scrabbling around trying to pull together extra cash. Start today and diversify your income streams so you aren’t reliant on just one source of income.
4. Expect the unexpected
Even the best of plans can be derailed by ‘unexpected’ expenses like a car breaking down, or an unexpected school trip.
I’ve found it useful to expected the unexpected and save money for random things that I haven’d considered.
There are two things I do to try and minimise the stress of unforeseen circumstances;
a) I list all the bills and include those expenses that come in yearly plus a budget for christmas. Christmas comes around every year, and it’s so much more enjoyable when I’ve saved for it.
b) I try and save an amount each month into an ‘Emergency Fund’. This is for the unexpected events I may encounter. It’s also a fund you can use to capitalise on opportunities e.g. an unbeatable deal on a new car, the opportunity to stock up on an item you use a lot, or a seed fund for a new business venture.
5. ‘Get ahead’
My idea of ‘getting ahead’ is a bit different to most people’s. While many feel having the biggest house or the latest model of car is getting ahead, I see it as having more freedom to pursue what I’m most passionate about. The real currency of life is not money, but time and freedom.
Money will constantly come into and leave your life. Time only leaves us.
It’s the scarcest resource we have.
We need to trade it well for the money we need, and save plenty to spend ourselves on what we want.
There will come a time when you get back up to two full time incomes or your childcare costs reduce or your new income streams take off and you’ll have significantly more disposable income. The next step is to use that money to create time and freedom to pursue what you’re passionate about.
Clear off debt. Save for necessary car replacements so you don’t have to take out loans. Create the opportunity to get away from your daily life on a holiday or mini break. Nothing is better at helping you see where you really want to be than getting away from your day to day life.
Start making your dreams happen. Put your new income to purpose.
Don’t get drawn into better cars and bigger houses. Make a plan. Stop thinking everyone else has it sussed. They don’t. Everyone is copying everyone else and it’s dragging us all down not up.
I’m not an expert on this stuff. I just know how to be happy, and these things have helped me. I’d love to hear what has helped you.