11 Unique Ways to Create a Budget When Broke

how to create a budget when broke

Do you really need a budget when broke or with no money? I honestly believe everyone should budget their money. It does not matter whether you are broke, have little or low income. You should find time and learn how to create a budget when broke or when you have no money.

A few years ago, I was flat broke and had a lot of financial challenges. I wanted to get out debt, create financial stability and build wealth.

It was a period when I had little money. In fact, most of the time I was broke and did not have enough cash to meet all my needs.

However, it is during this time that I learned how to create a budget when a person is broke. It takes a great deal of discipline and focus to make it work.

In this article, I want to share with you ideas and strategies you can use to create a budget when you are broke.

It is about learning how to budget when you do not have enough money. That is the skill you should have in managing your personal finances in general.

How to Create a Budget When Broke

In simple terms, this is how you can create a budget when broke. Follow these ideas and steps;

  1. Understand your spending habits
  2. Eliminate unnecessary spending
  3. Negotiate your bills
  4. Start an emergency fund
  5. Track your budget every month
  6. Adjust your expenses.
  7. Write down your plans
  8. Think of ways to generate more income
  9. How can I save money when am broke
  10. Talk to your financial advisor
  11. Leverage technology in budgeting.

In the section below, let us discuss these ideas and strategies of budgeting when broke further.

11 Ways to Create a Budget when Broke

To be able to manage your personal finances well, it is important you learn how to create a budget, even when you are earning little income.

Here are eleven ways and tips to help you create a budget when broke;

  1. Understand your spending habits

You should take time and analyze how you spend your money. This means you should track your expenses.

Knowing each and every item you spend money on will help when it comes to creating your budget.

  1. Eliminate unnecessary spending

Once you have tracked and listed all your expenses over a period of time, you should find this step easy.

You will be able to remove or eliminate any unnecessary spending. Doing this allows you to increase your disposable income.

  1. Negotiate your bills

A budget is basically an estimation of your income and expenses. One of the things you are possibly spending money on includes your monthly bills.

It is possible to negotiate for your bills. You can have some of your bills reduced. You should take advantage of any opportunity to negotiate your bills lower.

  1. Start an emergency fund

I know you are broke and you might find this idea very difficult to execute. However hear me out.

Having an emergency fund is a big part of managing your personal finances. You should make sure you save about $1000 for emergencies to start with.

Given that you have little money right now, you should start small. Start setting aside small amount of money aside as your emergency fund.

  1. Track your budget every month

Budget is a live document. It changes from month to month and this is normal.

That is why you should track your budget over a period of time, and keep adjusting it to reflect your current situation.

  1. Adjust your expenses.

As mentioned above, I have found in my own life that budgeting is a continuous process. Life happens and situation changes.

In this regard, you should always adjust your budget to capture your current expenses.

For example, you could move houses or secure a mortgage. Your budget should capture your monthly mortgage payments and other expenses associated with your new situation.

  1. Write down your plans

Writing down your plans is one of the most powerful ways to help you reach your financial goals.

You should look at your numbers and make a plan. Having your budget written down is important.

  1. Think of ways to generate more income

Being broke means you do not have enough money to cover your needs. It is not a very good situation.

I have been broke before and I did not like the feeling of helplessness that I was in.

That is why you should think of ways to generate extra income. You will need to come up with multiple passive income ideas that will help you increase your income.

More income allows you to have more money in your budget to work with.

  1. Save money when broke

Being broke does not mean you cannot save money. It just means you need to prioritize your finances differently.

Your budget is going to help you allocate some cash to your saving goals.

The idea is for you to start small, and set aside little money every month to go to your savings. It could be $5 $10 or $50 every month and as you continue to do this, you will be surprised at the savings you will build over time.

The key is for you to start saving.

  1. Talk to your financial advisor

If you find it tough to create a budget when you are broke, you should consider talking to your financial advisor.

Seeking budgeting advice from experts is a good idea. You will get information and options that you might not have been aware of before.

This is going to help you to create a budget when broke or with low income

  1. Leverage technology in budgeting.

In today’s world, technology is playing a very big role on how we work, earn money and interact with people.

In creating your budget, you should find ways to leverage technology. You should use the many platforms and apps available to help you create a budget that works for you.

There are several budgeting apps that you can consider and I would propose you find the one that works best for you.

Why Budgeting is Important

There are many reasons why people create budgets. You are interested in learning how to do it when you do not have money because you believe it is important.

You want to get manage your personal finances. Budgeting is a key cog in helping you build your long term financial stability and freedom.

7 Reasons Why Budgeting is Important When You Are Broke

I would like to share with you seven reasons why I think budgeting is important to you right now.

  1. A budget keeps you focused.

When you budget, you become focused. You are able to know or estimate your income and also your expenses.

  1. Helps you manage your spending.

Your expenses play a significant role in your personal finances. When you list down the things you spend money on, you will improve your ability to spend your spending.

  1. Improves your overall happiness.

Not having enough money to settle your bills or buy the basic need is very stressful. I am sure you do not want that kind of life.

Having a budget as part of your financial planning will help you to improve your happiness. This is because you will understand your true financial situation.

  1. You are able to prepare for emergencies.

One of the aspects of budgeting is allocating some money for emergencies.

You should set aside some money to form an emergency fund. This is cash that can cover your living expenses for about three to six months.

  1. Makes you understand your financial priorities.

When you sit down and list your income, and your expenses, you get a clearer picture of the important things in your life.

You get to understand where your cash goes. The things you spend most cash on.

The list allows you to eliminate the unnecessary expenses, and focuses your priorities.

  1. Budget helps you plan better.

Another reason budgeting is important is in helping you plan your finances better.

You are going to manage your personal finances better if you can budget. This includes your household budget.

  1. Allow you to save and invest

The three key elements of growing your wealth include making money, saving part of it and investing.

Budgeting helps you to allocate your finances into all the three components.

This means that you can be able to save money, and build your assets through investing.


In conclusion, I have found that budgeting improves my financial position. It is an integral part of creating and building wealth in the long term.

If you study the wealthy people, you will realize that they make budgeting a central pillar of their personal financial management.

You can learn from them and follow their best financial practices.

The good news is that you can learn how to create a budget when broke or when you have little money.

You might actually be broke because you have not created a budget. That is why it is important for you to create a budget today, even if you have little money.

No matter your current situation, you can create a workable budget

The idea is to help you achieve financial freedom and stop being broke

Related: 21 Tips on How to Manage Your Money Wisely