how to be financially stable with low income
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Welcome to Finance And I Some links on this page are affiliate links which means that, if you choose to make a purchase, I may earn a small commission at no extra cost to you. I greatly appreciate your support!

According the World Bank, between 75 million – 95 million people live with less than $1.9 daily. If you barely escape this sad statistics. Or you barely survive, “head above water”, how can you break free from the unpleasant cycle? How can you be financially stable with a low income?

Let’s talk 7 practical steps:

1. Buy on a budget

2. Modesty is golden

3. Pay with physical cash.

4. Investment in personal development

5. Pay off debts.

6. Increase your savings

7. Create multiple income streams

According to a 2018 report the Pew Research center finds that nearly 29% of Americans falls in the “lower class” ‘Econo-sphere’. Alright, I coined that up. However, in a study published in about 85% of Africans live on less than $5.5 per day.

The key is understanding the difference between a plan and a budget.

The difference is the location of the information.

While a plan is a mental indication of things to buy, and maybe how to buy them, a budget is a written plan. It contains:

  • What to buy
  • Where to buy
  • Means of transportation
  • Possible alternatives, and
  • Miscellaneous

Let’s take an example. Yvette is going shopping. She plans on buying a bottle of milk. She’ll purchase brand ‘ABC’ for $37.50 and use the extra money to buy shampoo for her dog. This is the plan.

On getting to the store, she sees a wig. She had wanted it some time ago. Now, here it is. ‘Alright, I’ll buy the wig and the milk,’ she says. ‘The dog shampoo can stay for now.’ She buys the wig first and heads to the milk section. But wait! What if milk price has increased with just $5? Now she has to leave the milk for another day.

She leaves home to buy milk and shampoo but returns with none. This exemplifies the importance of buying with a budget; you purchase only written items. You purchase on a scale of preference, item numbers 1-5. If the price increases beyond expectation, you buy items 1-3, In that order. Items 5 and 6 wait for another day.

This is budgeting.

Ditch flight, take a ride.


Why fly when you can take a ride!

The advent of social media is a blessing for some who’s harnessed it wealth creation opportunities and living off it. On the other side of the spectrum are those who view these platforms as merely a means to socialize and while away important time. Social media has resulted in the death of modesty, were celebrities, influencers and even everyday folks showcase wealth and newly acquired gadgets. This ‘show-off’ culture can lead one to try to ‘meet up’ what’s trending and hence live beyond ones means. Learning to live within one’s means is huge leap to achieving the coveted financial freedom.

Pay With Cash


Studies have shown the relationship between using cash and spending more.

Let’s call it common sense. At the end of a busy day, Mat stops by a shop to get items for his kids. He learnt that price has gone up some 70%, from $200 to $340. Well, its fine, ‘I can spend any amount for my family’. He brings out his wallet, counts 68 pieces of $5 note, then it dawns on him he’s about to spend 17% of his $2000 salary for a single gift. Now he chooses to buy less quantity of said item, or look for a cheaper equivalent or simple plan to buy something different.

The above scenario will be different if he were to punch some digit on his bank app or some POS machine.

Develop your mind


One vital clue to earning a living is having something to sell. Be it goods or services.

When a person ‘invests’ in learning, he’s in effect stocking himself with ‘goods’ that can be traded in the form of service.

While the term ‘invest’ can be a little scary to someone with very little finance, note that one can invest not only money but time and other resources to acquire skills.

The internet has made acquiring skills easy for the everyday man, and a number of these can be learnt free.

With Edx and other organizations offering professional exchange courses freely, personal development is no more a luxury that can be owned only by the rich.



What is the effect of debt on finance? It can be compared to the possibility of a 19th century American Slave owning a house or other property while a slave of his master. Evidently everything he owns belongs to his master… until he’s free.

An ancient proverb once said ‘a debtor is a slave the lender.’ This is eternal truth.

Paying off debts creates an environment to save and/or invest. You regain your self-worth.

Bank loans comes with interest, which increases with time. The longer you hold from paying off, the higher the interest.

Debt puts a lid on and monetary progress you’ll ever make… until you pay back.

Paying off your debt is a first step to freedom.



One vital technique to increase savings is the 50/30/20 rule. For simplicity, it states that 50% of your income should be used to care for your needs, allocate 30% to your wants and 20% should be saved. This is the golden rule of finance.

It is important to note that your financial strength is not measure in terms of how much you earn, but how much you have in instore, in terms of money and property.

Learning the frugal life is an important skill that can rise your financial capacity.

how to be financially stable with low income


Avoid reliance on a single source of income. Invest in diversified business models. In the event of economic disasters, you will have fall back plan. You should have a second or A third source of income.

If, for example, you earn a salary, using parts of your savings to open a side business, is a life saver, should you lose the job.

It cannot be over emphasized that no single income stream has 100% success rate. Political, or economic events can disrupt a once profitable source of income. It is important therefore, that diversify.


1Buy on a budget
2Modesty is golden
3Buy with physical cash
4Invest in personal development
5Pay off debts
6Increase your savings
7Diversify your source of income

At first glance, raising your financial status can seem daunting, especially when you barely earn enough to care for basic needs. But the principles above transcend economic strata.

Why not try them for 8 weeks. After that, reassess your financial standing and decide if you can set this as a long term goal.

Did we miss any important point? Kindly drop them in the comment below.

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