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Successfully living on a limited income is all about making the most of everything you've got. So you need to know what exactly you have available. You only want to add up the income that you know, without any doubt, that you will be receiving each month. While you get overtime, tips, or bonuses, don't account for them here -- if they all turned up empty, you need to know that you can live on your guaranteed income alone. Write this number down as "monthly income." Keep all of your receipts to get an accurate picture of your spending habits. Luckily, modern technology has made this easier than ever, as you can log-in online to see your bank and credit card activity. Most banks even break this up by type of spending as well, such as "Food/Groceries," "Gas," or "Rent." Apps like Mint, Mvelopes, and HomeBudget, sync with your financial accounts and provide graphs of your spending each week.  If you spend cash, keep the receipt and make a note of what you bought. Write this number down as "monthly expenses" Some things, like rent, are due every month no matter what. There are some expenses, like food, that change a bit but cannot be cut much shorter. But there are other expenses that, with hindsight, you realize you didn't need to spend. Putting your expenses into these categories helps you analyze places to save money. If you can, average the expenses from a few months to get a more accurate number.   Fixed Expenses: Do not change month to month, but are due every single month. Including rent, car/loan payments, etc.  Essential Expenses: These can't be avoided  -- food, transportation, utilities -- but can potentially be cut down through careful budgeting and saving.  Non-Essential Expenses: This is your entertainment, fun, and everything else fund. More often than not this is where you will be able to save the most money. This is the amount of leftover money you have. Add back in the money from "Non-Essential Expenses" to determine the amount of money you have left after essential bills are paid. Now you know exactly how much free money you can spend every month and still live and pay rent. Once you know your expenses and your income, you know how much money you should have left for entertainment, debts, and savings. Figure out what you plan to spend on each category now to see how feasible each month will be.   Entertainment: Everyone deserves to have fun, no matter how much money they make. Having low income doesn't mean you don't get to enjoy yourself. However, you need to be careful about spending your limited income. Having an "entertainment budget" will help.  Debt and Loan Payments: Debt adds up quickly, and the faster you pay it off the more money you ultimately save. You should always have an eye on paying off debt with spare money. Whenever possible, pay more than the "minimum payment." to avoid growing interest  Savings Accounts: Even low-income workers need to save -- as it is an essential safeguard in case of an emergency like a layoff or injury. You want at least three months of expenses covered, if not six. The enemies of a good personal budget are surprises. You cannot do this once and get a perfect budget, and you may find that you can spend or save more than you thought with practice. When you are living on a limited income, you need to keep an eye on your money regularly. At the end of the month, compare how you did in reality to how you planned in your budget. Find the places where there were differences and think about how you can fix it.
Figure out all of your guaranteed monthly income, and how much it adds up to. Track your expenses each month with receipts or online apps. Break your expenses down into fixed, essential, and non-essential to make sense of what you absolutely must buy. Determine how much free money you have by subtracting expenses from income. Split the rest of your money into broad categories to help you spend wisely. Repeat this record-keeping every month to find potential issues or savings before they surprise you.