How to Budget on a Fixed Income


Living on a fixed income can be tough but trying to keep your expenses down and budget for every dollar you have might seem to be even harder. But if you know how to budget on a fixed income – you could definitely try and ease the financial pressure you might be experiencing.




It’s always been difficult for me to stick to my budget because there isn’t a month that goes by that I don’t have to dip into for some kind of added expense.


You should not be discouraged or stay away from budgeting for any other reason.


In this article, you will not only find out how budgeting could help ease your financial pressure when living on a fixed income – but you will also find the right budgeting techniques that could help improve your situation!


Why is Budgeting Important?


People often think that more money is better – but there are numerous stories of lottery winners going broke (or even becoming homeless) not long after winning the lottery.


I am trying to say that it is not about the amount of money – but it is a lot more about the financial knowledge and the way you handle the money.


Budgeting is important because it is a plan for the way you will spend your money. Without it, you will be spending your money in various different ways without knowing whether you will have enough to cover your most important monthly expenses.




You would not try achieving your dream without a written plan, right? And you would not start a business without a business plan, right?


And I know that many of you might have tried budgeting before but just could not see its benefits – believe me, you should give it a try again.


If budgeting made you feel overwhelmed – then you definitely complicated it more than it is.


That is why, in this post, you will learn how to properly budget, and how to properly handle your money. The goal is to make living on a fixed income a bit easier than it is.


After this step, you should not stop there. You can also try and repay your debt (if you have any) in a more efficient way. And even after that, you can start and generate a second stream income to really ease the financial pressure you might be feeling right now.


So, let us jump right into it!


Do you Need to Budget Differently When Living on a Fixed Income?


While many people think that you should budget differently when living on a fixed income – it is not really true.


budget-logsBudgeting is simply budgeting and even though there are a couple of different techniques you can try out – it all comes down to building healthy habits so you can control your income/expenses well.


If you did not budget ever before and or if you are only to begin budgeting again – I highly recommend you start with the basics and then see if any budgeting technique might suit your financial situation better.


Therefore, I will explain the simplest budgeting way to keep your fixed income situation in control but also learn how to keep your expenses down (if possible).


Know Your Expenses


Living on a fixed income is hard for two reasons. The income oftentimes is not really great (or is not nearly enough) and the second reason is that the expenses can outweigh the fixed income easily.


With no other source of income – this is the tough situation many of us find themselves in. But will budgeting help? Yes, it will!


And the first step to approach budgeting is to know your expenses. Why expenses? Because they are one of the main reasons why fixed income is not enough for many people.




I highly recommend you put down all expenses (biggest ones first) and do not forget to write down your debt as well.


Once you have all your expenses written down – write your fixed-income next to it.


See the difference between them and find out how much money exactly are you missing.


The next step is to try and see if there is any way you can cut the expenses down. A great way to do this is to cut down subscriptions or “luxury” things that you might not need so badly.


When these things add up – they could relieve some of the financial pressure before you take budgeting to another level.


Therefore, let me show you how to budget on a fixed income!


Zero-Sum Budgeting Technique


This is a type of a budgeting technique that is remarkably effective for everyone who is trying to repay their debt in an efficient and quicker way.


However, I found out that this technique is very ideal for everyone who is living on a fixed income. Why?


You will see in a second when I explain in detail how this technique works.




Zero-sum is a budgeting technique where all expenses are justified in each new period. Zero-sum name is specific because with this budgeting technique – you start with the zero bases.


This means that you will spend every dollar of your fixed-income by taking care of your expenses, and if there is anything left over – you will either save it or invest it.


For example, if your monthly fixed income is $1500 – you will have a list of including bills, living expenses, and debt.


If there is any money left – you will want to include investment or savings as well. This technique is really suitable because even the little money you might have leftover at the end of the month can be used for a much greater purpose in the long run.


Therefore, the zero-sum budgeting technique really gives you the reason to put it all down on paper – and even then, see how you will justify the expenses (in a good way).




Switching from using a debit/credit card to cash is also another great way to try and keep your expenses down. However, budgeting will help you always have an eye on your income/expenses table so this in itself will stop you from overspending.




Many people do not know how to budget on a fixed income – and yet it is actually quite simple. But you need to act and start keeping the table for your income and expenses.


Remember, it is all about the cash flow (which is not great when living on a fixed income) and the expenses you have.


If you are dealing with debt – I even wrote a post on how to get out of debt on a fixed income (it is possible!) I highly recommend giving it a read!


What is your biggest expense?


If you have any questions or need any help with the creation of your monthly budget – feel free to leave a comment down below!


All the best,


Founder/Creator: Living On Lean Means ?

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