17 Money Management Skills You Need As A Low Income Earner

The term “Money Management” is synonymous with financial management, which can be described as having full control of how money or finance is allocated and spent on necessities and non-necessities.

Many small business owners, and even sole traders, bloggers and freelancers, hire an accountant to keep track of their invoices and receipts. The accountant then files their tax return at the end of the tax year.

It’s not uncommon for people that don’t earn enough to pay taxes to hire an accountant because they are overwhelmed by what they need to do.

All the numbers and deadlines can be worrisome and you could get it wrong by facing an expensive fine. You might have also been stressing out about dealing with complicated accounts and finance. Hence, you might be better off getting help. 

For bigger businesses, an accountant can be crucial. Even if your business is small & you can afford to hire an accountant to look over your books, it can be worth it to save you time and reduce your stress levels.

But, in truth, you, even those with no experience at all, can still manage accounts while your business is small. This article will highlight some money management skills one can apply even as a non-accountant or in the absence of one. This applies to all categories of people.

Here are some tips to help you to brave your own accounts. 

17 Money Management Skills You Need As A Low Income Earner

1. Good financial Planning

A good plan when followed meticulously will lead to success in that project. Even Jesus Christ recognized the importance of planning when he stated that someone cannot start building a house without counting the cost of the items. He emphasized the importance of planning for anything that wants to be completed.

Some uncompleted buildings are as a result of poor planning. Likewise, some abandoned projects are a result of wastage of resources, overprized and underprized labour and building materials. When making a plan, a list of materials and estimates should be made. The real market value of the materials should also be used to compare prices.

Good financial planning is also important in other areas such as marriage, travelling, schooling/studying etc.

One who has mastered the art of making a good plan and sticking to it to the very end is bound to minimize wastages.

2. Budgeting

After making a good plan, what’s next? A plan goes alongside a budget. Better still, a plan can be tailored to a budget and if the plan is more than the budget, the plan can be reorganized to fit the budget.

Budgeting is a good skill you should have. It involves prioritizing knowing what’s important over what’s not. If the important items in a budget have been met and there is still extra cash, the cash can be saved.

3. Saving

17 Money Management Skills You Need As A Low Income Earner

What is one of the best ways of preventing overspending? The answer is having a saving attitude. What people usually consider as free money is usually spent unnecessarily on things that have little or no value to them.

It’s wise to have a small piggy bank or bank account where such money can be saved which will increase over a long period of time. Profit and extra gains of your business can be saved too or reinvested.

4. Investing or owning an investment

Investing in a good business is one of the ways you can manage money. A good business will surely yield good returns and you can also invest in stocks, shares, land and properties.

Invest in things whose value tends to increase over the years. If you get stuck, ask for help. Free financial advice to build your money management skills is always available.

You might have a friend or family member that’s happy to take a look for you. You just have to ask. 

5. Developing a financial risk assessment ability

This is a skill one should have when dealing with number 4 above. It would be unwise to invest in a company that is about to fold up or a country with financial, political and economic crises.

In businesses, there are bound to be profits and losses. Knowing what to invest in, where to invest, when and how to invest can save you a lot of financial troubles.

6. Differentiating Needs from Wants

17 Money Management Skills You Need As A Low Income Earner

This is very important. There are things you want but don’t actually need. Some things only provide temporal satisfaction that the more you get them, the more you get addicted to it.

Why do you want a car when you can’t afford it comfortably? Hey, why do you want more clothes when there are many new ones in your wardrobe? Why do you need a new smartphone when your current one is faultless and fully operational? 

It will take all of your savings and more savings to maintain wants. Wants are never enough and they play a huge role in money mismanagement. Much of your income should be channelled into needs and not wants. Being able to differentiate wants from needs is very important.

7. Identifying Liabilities

Liabilities always attract costs. For instance, the cost of buying data subscription just to watch comic videos on YouTube, browse pages on Instagram or post pictures on Facebook or Twitter can all be considered as liabilities. To be able to make profits from data consumption, one has to become a content creator or channel the data into something productive.

Because data subscription is quite expensive, it takes a lot to use regularly and if doesn’t produce profits, it will lead to money mismanagement. However, in the meantime, you could use lite versions of apps, use data saving platforms and avoid data-consuming websites.

8. Do an Insurance

Insuring your assets is a way to get back your money when you lose it. Not insuring this asset is a risk you shouldn’t take.

Insuring your house, car or other properties guarantees that you won’t be so afraid or be at a loss in case anything happens to them. In times when car theft, fire disasters and other unpredictable events happen, insurance should be a priority.

You may also need a home warranty to protect your appliances and systems in case of malfunctions or breakdowns. It will provide you with financial security and assurance, knowing you are protected against unexpected repair or replacement costs.

9. Develop a Do-it-yourself Mindset

17 Money Management Skills You Need As A Low Income Earner

The internet is a nice platform to learn stuff and do by yourself. For example, learning how to paint, fix a light bulb, fix a broken wall socket, grow your own vegetables is something you can get online.

You can also learn about life hacks that transform things considered as waste into things that are useful. Carrying out paid services yourself is one way to sharpen your money management skills instead of employing other people’s services.

10. Cook your meals

Sometimes, you may find yourself patronizing roadside vendors, fast food joints and restaurants. The meals they offer are usually small and expensive or sometimes so poorly cooked that you might suffer from food poisoning.

To save your head, cook your meals that will guarantee satisfaction and be cheaper to prepare. Another way to manage money is to avoid excessive cooking especially when you don’t have a good storage system.

Growing some of the things you buy from the market also helps you manage money such as vegetables, tomatoes and pepper. They can be grown in your backyard and are safer without pesticides in them.

11. Pay bills on time

17 Money Management Skills You Need As A Low Income Earner

As humans, bills are one aspect of our life that we cannot avoid. When you pile up bills and refuse to settle them, they accumulate into huge sums of money that may be hard to pay up.

In some cases, these bills lead to serious financial implications with private or government establishments which might further lead to lawsuits, disconnection or business failure.

However, it is also important to cut down on bills such as internet bills. Electricity bills can also be saved by using power-saving light bulbs or turning off electrical appliances when not in use.

12. Sell items you no longer need

When you have an item in excess or unusable to you but still has value, it will be wise not to just throw it away. You could give it out as a gift or sell it. As some people don’t mind buying goods at a cheap price or resell when the demand for the goods increase or supply drops.

Which means you can recover some of the money you used in purchasing it. 

13. Keep a financial record

This will help you keep track of how well or poor you spend money. It will remind you of the things you have spent money on, things that are yielding profits, things you need to cut down and vice versa.

You might also keep receipts of items purchased as a sort of financial record to help you maintain a good budget.

The key to managing your accounts is organization. You don’t need expensive equipment. Money management is as simple as ABC. Just a folder for receipts, or even a folder for photos on your desktop, and a simple spreadsheet to record your earnings.

Don’t try to overcomplicate things. Organize things and keep it simple. Being organised in dealing with money will help you to avoid excessive wastage and overspending.

14. Patronize fairly used/second-hand shops

17 Money Management Skills You Need As A Low Income Earner

Some shops are known for dealing with second hand or fairly used goods with almost the same qualities with those found in shops and boutiques. Some of which are as good as new with warranty, fully operational with a non-negotiable price. Others are cheaper, some of what we call “bend down select”.

However, it is wise to ask for receipts when buying second-hand goods like electronics, vehicles and mobile phones as some could be stolen items that can attract embarrassing situations.

15. Set Aside Time Each Day

Spend a little time each day, or at the end of the week to fill in your spreadsheet and file receipts and invoices.

If you earn from a variety of different sources or have a lot of clients, you might find it easier to fill things in as soon as money or invoices come in.

You could also spend ten minutes before you leave the office at the end of the day with your accounts. If you receive payments once a week, do it then. 

We all work in different ways and earn money in different ways. By all means, read about what would work for your system. Seek advice from people with similar systems and ask for help, but if you’ve got a system that works, stick with it.

Make changes only when they are necessary and commit to whatever you decide. Make time for admin and accounts, whatever else happens.

16. Manage more than one source of income

17 Money Management Skills You Need As A Low Income Earner

This is a very wise thing to do. Sometimes, it’s hard to manage money coming from a single source on a monthly basis.

Bills pile up daily from different angles and you’re forced to wait till the end of the month to settle them. This is very detrimental if you’re not maintaining another source of income.

With multiple streams of income, you can care about acquiring assets, buy stocks and shares, going on vacation or work on your career growth.

17. Take a Course

If you are really struggling or it all looks like a different language, or you just want to gain a greater understanding of finance and accounting, why not take a course. This could help you both now and in the future, and even give you greater career options as you move forward. 

As a taxpayer, don’t make the mistake of waiting until the day before the deadline to file your tax return. Do it as soon as you can. Then, you’ve got longer to pay it, but also take time to make corrections and updates if you realize you have made a mistake. 


The ability to do something or anything well with precision is considered as a skill which cuts across different skills. An adage says “whatever is worth doing at all is worth doing well”.

In this age where people spend a large part of their income on the latest gadgets and fashion to keep in touch with the latest style and trends, you should try not to end up spending above your earning power. Don’t forget that new things never stay new. Hence, these money management skills will enable you to keep to your budget and not get overwhelmed.

With this skill, you will be able to stand out in a static or dynamic environment. You will also be able to differentiate what will help you and your business in the long run.

The need to have money management skill as a high or low-income earner is quite important. It cannot be overemphasized. I hope this helps you to start something!

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Post Author: Abimbola Joseph

Abimbola Joseph is a creative content developer who derives pleasure in encouraging individuals to be the best they can be in all relevant facets of life. She believes that we all have a better version of ourselves which can be leveraged to impact others and make the world a better place. Connect with me on Instagram @abimbolajoe.

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