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How to Feel Financially Empowered on a Small Income

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.

feel financially empowered on a small incomeThere 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.

small income - cut cable1) Focus on opportunity costs rather than what you don’t have.

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.

celebrate victories small income3) Celebrate victories. 

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.

small income emergency fund5) Establish a buffer that doesn’t involve debt. 

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!

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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.


  1. All good advice. #4 though is probably the hardest for most people though. We all have that friend that’s just “waiting” for the lottery to pay off. Or no matter what financial state your sister/brother-n-law is in, its always one payday away from disaster and how they’ll never get ahead because (insert excuse here)…
    There is a book I read once (don’t remember who wrote it) but a short story in it was this: guy played football in high school. He kept screwing up and the coach would get pissed. One day he screwed up again and coach grabbed him by the helmet and led him to his area/position on the field. He told him, this is your area. No one gets passed it. You have to own this patch of land. No body gets passed it. You do whatever it takes. Own it!
    This translates into life/finances/etc. Thats where a lot of negativity (in my mind) comes into play. They are not owning their position and allowing things to get thru that shouldn’t.

    • That is a great analogy, Whiskey. You summed the entire process up perfectly in two words: Own it. You’re right that we’ll always have people in our life who struggle with negativity. When I’m owning my decisions, mistakes, victories, and consequences, I think it makes it easier to spot negativity out in “the wild” and to not let it get me down. Thanks for your insights!

  2. Another great article, Laura!

    I really like number 5. Years ago, the credit card was our emergency fund. Boy! That didn’t work out the way I expected.

    We spent years paying off our CC debt, and I swore them off.

    I have a credit card again, but it’s a cash back card and I have it Debitized, paying off the monthly balance each month. I don’t ever plan to carry a balance into the next month.

    We’re also renting our old house and all the funds go into our old bank. That money never mingles with our current accounts. The balance in the savings account keeps growing, so there’s a bit of emergency money, but it’s not our primary E-Fund.

    Thanks again for sharing your story and ideas!

    • I’m seeing terrific personal finance articles in your future here, Keith! My first emergency fund was also my credit card. Yeah…didn’t go so hot for me, either. I love that you guys rent your old house and designate those funds somewhere specific. That’s what we hope to do in a few years.

      Thanks for reading!

  3. This is great advice. My wife and I live on my income alone (enlisted military). We have been able to pay off all our debt, create an emergency fund, and now we give and invest heavily each month. I’ve always believed that it’s more about how you spend your money, rather than how much you make. I know of several military Officers who make 3x my income and can barely pay their bills.

    Frugality is important, but for us, it’s more about simply not buying stuff…

    -We’ve had the same 32″ TV for 10 years. We cut the cable and we don’t subscribe to any streaming services.
    -We rarely buy new clothes for ourselves or our kids. We get free clothes and mostly keep what we have. And the kids are totally fine with that.
    -We’ve had the same vehicle since 2008, and we don’t plan on getting rid of it until we run it into the ground.

    Those are just a few of the things that we do differently from the majority. It’s not about restriction – we just don’t want new things. We are happy with what we have, and we have taught our children to appreciate what they have, and not constantly be asking for new things. We read, we spend time together as a family and we travel a lot! We go on multiple vacations very year, since we don’t spend much money elsewhere. Any time our kids ask for something and we tell them that we don’t need to spend the money in that area, we remind them how much they love the vacations that we are able to take because of our spending habits. And then our kids ultimately decide that they would rather go on vacations than have whatever toy they’re eyeing that will forget about two weeks after it was bought anyways.

    It’s our life and we love it. Some people wouldn’t be able to do it, but we love it. We still buy plenty of presents and other random things for our kids, but they know we are meticulous with our money.

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