When your income is low to moderate, finances are more difficult to manage. Every dollar counts. In order to maintain good financial health when you are on a low-to-moderate income, you must live within your means, stay on a budget, lower your food costs and lower your entertainment costs.
Live Within Your Means
When you live within your means, your home, your car and your lifestyle are suited to your income level. If you earn $32,000 per year, your taxes are approximately $4,000 if you are married filing jointly, according to the IRS tax table. With a $28,000 per year income after taxes, your monthly income is $2,333. Your rent or mortgage, bills and car must reflect this amount. You can afford no more than a $700 rent or mortgage and no more than $250 per month for your car and insurance. The remaining portion of your income will cover your other bills and expenses.
Stay on a Budget
When you have limited resources, you must allocate them carefully. Develop a budget and stick to it. If you earn $2,333 per month after taxes and your bills and expenses -- i.e., your rent, car insurance, utilities and other bills -- all add up to $1,233, you only have $1,000 per month to purchase groceries, gas and everything else. Give yourself (and your family) an allowance: a daily allowance, a weekly allowance and a monthly allowance. For example, if you have $300 per month to spend, that means you only have $70 per week to spend and $10 per day to spend. If at all possible, do not use a credit card; this only places you in debt and adds on more bills later.
Lower Your Food Costs
Try to spend less than $500 per month on groceries. If you go to the grocery store twice a month, on the first of each month and the 15th of each month, and spend $175 each trip, you then have $150 left over out of the $500 allotted to buy supplemental groceries between trips. If you purchase generic brands and take the time to look for the "on sale" items, you will reduce your grocery expense. Also, avoid eating out at restaurants; if you want to go out to eat with your family, have a picnic at the park.
Lower Your Entertainment Costs
Entertainment activities, such as going to the movies and going to the amusement park, are expensive. When you have a low income, these are not things that you can take your family to do on a regular basis. If you want to go to the amusement park, you have to plan in advance so that you can save up the funds. Some more cost-effective entertainment activities you can do with your family are going to the national or state park, going to the beach for the day or renting movies. The National Park Service has free entrance days throughout the year at all of their locations and more than 393 national parks never charge an entrance fee.