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An area local hospital recently asked me to share budgeting tips for low-income families. Below is an excerpt of my discussion.

No one likes to hear the word budget. When we think of a budget we feel restricted and limited. Nobody wants to be tied down and confined—especially when it comes to our money. Most of us hold the position that it’s my money and I’m going to do as I please. The reality is money is finite. There is a limited amount of money that each of us possesses. Our ability to spend money as we please is limited by the amount of money that we have—not a budget.

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A budget in its truest form will serve as a blue print of how our money will be spent taking into consideration our needs, goals, and desires. As C.E. Hoover put it, “a budget is telling your money where to go instead of wondering where it went.”

A more formal definition of a budget would be a plan for spending, saving, and investing money.

The importance of making a budget and sticking to it is to save for future goals while meeting present obligations.

Are you living from paycheck to paycheck? Are you struggling to make ends meet? Do you have too much month left at the end of your money? If you answer yes to any of the questions, you are in serious need of a budget—a spending, saving, and investing plan. As the saying goes, nobody plans to fail, they just fail to plan.

Money problems are symptoms of a deeper problem. As a financial consultant it’s my job to identify the core problem(s). It could be a number of things ranging from bad money management, too much debt, and/or not enough income. Money problems can also stem from character and emotional shortfalls such as pride, greed, lust, envy, anger and laziness.

Given the fact that the topic of our discussion is about budgeting tips for low-income families, we’ve already isolated and defined one of the problems—Low Income. I would submit that based on low income and poverty level thresholds, many that see themselves as low income could truly be labeled as poor. The term “low-income individual” means an individual whose family’s taxable income for the preceding year did not exceed 150 percent of the poverty level amount. For example, a family of four is considered to meet the poverty level if their household income is $18,850 and lower. A family of four is considered to be low income if their household income is $28,275 and lower ($18,850 * 1.5 percent). The threshold for poverty level and low-income families varies depending on your family size and income.

I grew up in a household whose income level categorized us as poor. I know first hand how it feels when you’re utilities are shut off, when there’s no food in the house, when there’s no money to celebrate birthdays and holidays, and when you can’t afford the latest fads and trends. Everything in this world has a price. It is extremely difficult to make it day to day when there’s little to no money available. None to less we have to make the best of what we have while at the same time we have to be working diligently to better ourselves and our economic outlook.

I understand that many of you are currently receiving Social Security Disability Income and/or Supplemental Security Income. If Social Security of any kind is your sole source of income, there’s a good probability that you’re categorized as poor or low-income. For those of you who have severe disabilities that will limit you from engaging in any form of gainful employment, it’s going to be a tough road—monetarily speaking. I encourage you to seek out and take advantage of every program, discount and incentive that is available to you. Don’t worry about what others may think.

There are some people who will look down on you. SO WHAT! It is a duty upon any decent human being to “look out for” not “look down to” the needy. If you are a victim of a disability who also happens to have a low-income or considered poor, you certainly meet the description of the needy. Considering the fact that 96 percent of Americans retire or die broke with no savings, these same people who walk around with their nose in the air today will one day learn first hand what it feels like to be in need. I still however caution low-income and poor families that it remains your responsibility to properly manage what you have.

Growing up in a community where 85-90-percent of the population was the recipient of some form of government program, I’m fully aware that there are people who in an effort to beat the system limit themselves from reaching their full potential. There are some people out there currently classified as poor or low-income with various talents who are able-bodied workers whose sole mission in life is to figure out a way to get on or stay on social security or some other government program. This is insane! Who in their right mind would go into poverty on purpose? Now that I think about it, there could be a mental disability (joking). Below are budgeting tips for low-income families.

Develop skills and talents to increase income

Take advantage of incentives, discounts, and programs available to low-income families

Cover basic necessities first such as food, clothing, shelter, and affordable transportation before you do anything else

Stop playing the lottery and purchasing all of its merchandises such as dream books and lucky candles—it may benefit older Pennsylvanians but it’s a tax on the poor, which include many older Pennsylvanians. Things that make you go hmmmmm.

Stay away from payday loan companies, rent-to-own companies, tote the note companies, and local loan sharks, etc. As a low- income person, you want discounts. You don’t want to pay up to 500 percent more than market value

Stay away from the so-called easy money that involves drugs, sex, violence, and theft. It only leads to death or jail

(Damon Carr is the owner of ACE Financial. He can be reached at 412-856-1183.)

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