Tips for Living on a Reduced Income


Living on a low income is a reality for many Canadians. Whether it be due to health, or retirement with little in the way of savings, job loss, or loss of an income earner in the household, when the going gets tough, the tough get going.

You still need to live below your means

While harder, it’s important to aim to spend less money than what comes in the door, even though what comes in the door may not feel like much. Emergencies happen to everyone, and you’ll still want to build up an emergency fund by running a surplus and building up that rainy-day reserve. Because it will indeed rain.

You have to be relentless with your budget

Every dollar you spend needs to be accounted for, and you need to decide if every expense can be reduced or eliminated. It is a great idea to add up all your expenses for the last few months and prioritize them. Low priority items need to be put on the chopping block.

Park your credit cards

When possible, all spending should be done in cash or debit. If and when you run out of money before the end of the month, you have to resist relying on debt and instead double down on pinching your pennies.

Get crafty

You can greatly reduce expenses by making your own cleaning supplies, and buying basic food ingredients instead of buying pre-packaged or processed foods. Just as you plan your budget, you need to plan your meals, too.

Frugality and Creativity

Defaulting to second hand purchases through online sites where people are unloading countless items every day, and only buying retail goods and services when there are blowout sales are great ways to maximize the money you spend. Vacationing during off-seasons can save big bucks, and you might not have to compromise too much on weather if you can aim for the period around the transition from off-season prices to regular prices. If thinking about a cruise, you might find good deals on “repositioning cruises”. When a particular cruise ship operates in one area of the world during summer, but another area during winter, they offer the amenities of the ship while it’s relocating from one region to the next during spring and fall, for example. These repositioning cruises can offer juicy savings.

Get a roommate or rent out a room

Sharing the housing costs with a roommate can do wonders for your budget, but care must be taken in finding the right roommate. Alternatively, you might be able to become a landlord and rent out part of your home. Make sure to check the regulations in your jurisdiction about offering a rental.

Make sure you are claiming all the benefits that may be available to you

There may be various tax credits, deductions, and benefits that could save you some money. Make sure to inquire about all the programs that may be available to you. Examples are assistance from the government towards home and vehicle modifications, extra assistance with prescription medication costs, benefit payments to help with the costs associated with raising children, and more. Even if you don’t owe any tax, you may want to file a tax return anyway. You may be leaving some benefits on the table otherwise.

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