Do you think it’s possible to truly feel financially empowered while you’re living on a small income? Does more money equal more power over your own life? I would argue that it’s never that cut and dry. The breakthrough in my financial story wasn’t the day I doubled my income. It was the first big shift in my mindset.
Broke Vs. Poor
“Being broke is a temporary situation. Being poor is a state of mind.” – Mike Todd
When my husband and I agreed to transition from a dual-income to a single-income family shortly before our second child was born, we lived on $36,000 for the next year. Sure we were glowing with adoration for our newest bundle, we were out of debt, we had an emergency fund, and we were glad to have one parent at home full-time with the children, but living each month on $1,600 to $1,800 wasn’t rosy.
There were stressful moments, tough decisions (like living without a second car for several months instead of spending the money on repairs), disagreements, fears, moments of discontent, and wondering if things would ever change.
My husband and I had an ongoing joke, asking each other whether we were broke or poor that day. It always brought a laugh, but deep down, it represented much more serious questions: “Are we still in control of our financial future or not? Do we believe we have the power to make this better? Will we ever be like our friends and have our own garage and cars that work and enough money leftover to put toward something fun?”
Keeping each other accountable in that way helped my husband and I to cling to our plan – to our hope. Sometimes it boosted my confidence or renewed my strength. Sometimes, it just made me want to run out and buy a lottery ticket.
That wasn’t what solved our problem, thankfully.
Mind Vs. Wallet
My husband tried his best to make more money at his job. We both worked on the side with jobs that ranged from repairing guitars to babysitting to being paid to fill out surveys. Eventually, he landed a new position at work that nearly doubled his income.
My point in telling you this is that mentally understanding that “having a small income is temporary” doesn’t do much good without action steps to change that income.
Many people, however, stop there.
They keep trying to out-earn their small income. It’s a very important step in the process, but a far more crucial step that we discovered was targeting your mind first, then your wallet. When you feel hope that your situation will change, your attitude is affected. When you feel a victory amidst your small-income challenges each week, it resonates.
Financial empowerment was the fuel that drove us toward a better future. It made our days brighter, our conversations less toxic, our time with our children more enjoyable, and our resolve stronger.
Here is what it looked like for us.
5 Practical Ways to Feel Financially Empowered with a Small Income
If you’re currently living with a small income and could really use a pick me up, know that you’re not alone. I know how powerful these five techniques were in my life because I remember what life felt like without them.
After you read through this list – and I encourage you to read each suggestion – choose ONE that spoke to you. Sit down with your spouse or accountability partner and make a plan to implement it this month. It may feel silly at first, but it definitely beats spinning your wheels or approaching a burn out.
I once coached a single mom who was financially struggling amidst a recent divorce. She was faced with the prospect of dropping cable from her bill. To her, it was embarrassing that she “couldn’t afford cable” when so many of her friends could.
I challenged this young mom to think of the opportunity cost that came with cancelling cable. Yes, it was disappointing to cancel the service, but the trade-off was a roof, warm meals, and a bed for her son.
2) Set achievable short-term goals.
This sounds so unoriginal, but remember that we’re after financial empowerment, not re-inventing the wheel. There is something electric about saving money in an envelope in your sock drawer every week or automatically in a savings account, and then buying something you really want with that money. Perhaps it’s paying back a friend or paying off your smallest credit card or committing to do a budget this week or saving $200 for emergencies this month.
Marathons are remarkable achievements, but there is still power in lacing up the tennis shoes, leaving your busy world behind, and hitting the pavement that first time.
So it is with financial goal setting – especially on a small income.
It can be counter-intuitive to financially reward yourself for accomplishments that center on being strict or frugal. When my husband and I hustled out of $22K in debt our first year of marriage, we celebrated paying off that final bill by purchasing smart phones (after downgrading ours for the last year in order to pay off debt faster).
Financial empowerment isn’t about overspending or tight-wadding yourself into therapy. It’s about being intentional with your money when you give, save, and spend.
Intentionally spending a set sum of money in celebration of a completed financial hurdle is one more way to feel less like a victim and more like your situation is temporary.
4) Surround yourself with financially empowered people.
I’m not asking you to break ties with the first person who blames the economy for their money problems, but simply have your radar up. Negativity spreads. The good news is that positivity does, too. If you intentionally seek out people who are financially empowered, who focus on the plan and less on what they don’t have, who want to know about your goals more than how the world has done you wrong, then you’ll focus more on your own plans, goals, and ambitions rather than your losses.
In my experience, calling a credit card my “Emergency Fund” is much less empowering than when I deposit money each month into a savings account designated with the same title. Which one is harder to build and maintain? The latter. But if financial empowerment is what you’re after, then it’s a tremendous place to begin.
Quick Tip: Establish a minimum balance of your own making and do whatever must be done to never let the account get below that number. If you’re earning a small income, then you may want to make it $500 at first. Perhaps you prefer $1,000. If you have an irregular income or a large family, you may want to make it $2,000. The goal is to discipline yourself to grow the account with your own established boundaries rather than what a credit card makes available or what the bank requires as a minimum balance.
Your Turn: Which of these five opportunities for financial empowerment on a small income resonated with you most? Share in the comments below!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.