5 Tips To Budgeting When You’re Broke

Budgeting when your broke can be a challenge, but with the right steps, it can be done. When you’re struggling to save coins, a normal budget won’t work. There are extra steps you need to take to stretch your limited dollars as far as possible, and of course, you’ll need to adjust for your unique personal situation. In fact, if you budget right, you can even start taking steps toward getting yourself out of a financially dire situation so that someday, you won’t have to be broke while you budget.

Budgeting when you’re broke isn’t easy, but it can be done. Read on to learn the best tricks to do it safely and comfortably. Ready to learn how to make great financial choices when you don’t have much to work with? Let’s get started!

1. Start With an Assessment

Before making your budget, you’ll need to step back and do a thorough, honest assessment of your financial situation.

You’ll have to assess your income and expenses, to find out a way to make your expenses stay below your income. There are a few steps to doing this.

Categorise Expenses

Take a look at what your expenses have been over the past few months. Look at receipts or bank statements to get an accurate picture.

Then, separate your expenses into needs and wants. You might even create a hierarchy of expenses in order of importance.

Don’t forget to add in your debts to this categorizing project.

Find Issues

There will probably be some problem areas that become apparent when you categorize things this way.

Are there any bad habits that you can avoid, such as a restaurant or shopping habit that’s not essential? If you find places where you can cut back in this step, the rest of your budgeting becomes much easier.

2. Reduce Spending

Now, you need to put that information into action to actually reduce your spending. Look at what you organized into the “wants” column, or what is at the bottom of the hierarchy of importance for your expenses. This doesn’t mean you have to cut back on every single “want.” Your budget should have a bit of wiggle room for fun expenses, otherwise it won’t be sustainable. However, when money’s really tight and paying bills has become a challenge, you need to be able to find ways to cut back. Maybe there’s a television service you can cancel, or a phone plan you can switch to that uses less data. You can also look at your “needs” column and see if you can find any ways to reduce your bills. You might be able to save on energy expenses at home or see if you qualify for a reduction in your car insurance payments. Other ways to reduce spending? Find the cheaper grocery stores and use coupons. Buy secondhand clothes and necessities as often as possible. Learn to make your own cleaning supplies.

Get Creative

Strategic meal planning – which means grocery shopping to make your dollar stretch as far as possible – is one of the best ways to save money. So is learning to do or make things yourself. If you have an Internet connection, there are countless things you can teach yourself to do, from home improvement projects to car maintenance. The more you can learn to do yourself, the less you’ll need to pay for. (Yes, that includes cooking!) If you’re really strapped for cash, you may need to look into ways to save on rent, since that’s likely your biggest expense each month. Consider moving to a cheaper part of town, or living with more roommates.

3. Figure Out Goals

Of course, this budget is meant to be temporary. You shouldn’t have to be budgeting when you’re broke forever. In order to change things for the future, you’ll need to come up with some goals and a strategy for how to reach them. One of your goals should be to build up your savings. This is something you’ll need to do before you start tackling debt. If you don’t have an emergency fund, you could end up in a much worse financial situation when something unexpected happens. Having an emergency savings account will allow you to stick to your budget long-term, even if a setback happens. So focus on getting those savings, and then you can turn to paying off debt.

When you need to pay off debt, you’ll need a repayment plan. Either pick the smallest debts first, so you can pay them off faster and feel inspired to keep chipping away at the big ones. Or you can focus on the debts with the highest interest rates first, which can be more daunting but save you money long-term.

It doesn’t hurt to call your credit card company and see if you can get lower interest rates. A Bankrate survey found that 56 percent of people who called and asked got a positive response.

If you fall behind on bills, don’t be scared to ask for a payment plan or extension. Often, people are more willing to work with you if you get on a plan than if you simply make late payments.

4. Make Your Plan

Now, you need to put real (and realistic) numbers on paper so your budget is completely mapped out. It’s important to stay realistic, so your budget will last. Don’t try to take extreme measures or cut out all fun expenses, even though you’re budgeting when you’re broke. Once you have a budget you can stick to for the foreseeable future, you can focus on making changes in the long term. Maybe you can ask for a raise or look for a job that pays more or find a freelance gig as a second income stream.

5. Automate everything

Making decisions is exhausting. For real – psychological research shows people make worse decisions when their willpower has been tested. It’s a phenomenon known as decision fatigue, and it could be undermining your savings goals.

The fix? Automation. Decide how much money you’re going to save, and set up a direct deposit on the day you get paid. That way, you don’t have to make any decisions or make any mental calculations. You’ll save without even thinking about it.

Final Thoughts on Budgeting When You Are Broke

Budgeting when you’re broke is much more challenging since you don’t have much to begin with, but it’s also that much more important. Budgeting skills will be useful for the rest of your life, no matter what your income is. If you hone them now, you’ll know that you’ll always know how to manage your money effectively, so don’t wait. There are always ways to get out of a tight spot. If you’ve made your budget and you’re still struggling, consider a loan to get you through difficult times. Contact us today – we can help.


Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.


Ordered by the Federal Court of Australia

The Federal Court of Australia has found that Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) have breached the law by engaging in unlicensed credit activity and charging prohibited fees.

In the period from July 2022 to 3 October 2023, over 100,000 consumers have been lent a total of $34 million, and charged fees of over $70 million, under the ‘No Upfront Charge Loan Model’ operated by BSF Solutions and Cigno Australia. At no time has either BSF Solutions or Cigno Australia held an Australian Credit Licence.

The Court also found that Mark Swanepoel (director of Cigno Australia) and Brenton James Harrison (director of BSF Solutions) were involved in these breaches of the law.

With effect from 24 May 2024, the Court has granted permanent injunctions preventing Cigno Australia and BSF Solutions from:

  • demanding, receiving or accepting fees or charges, including amounts of loan principal, from consumers in relation to credit provided under the ‘No Upfront Charge Model’; and
  • engaging in further credit activity pursuant to the ‘No Upfront Charge Loan Model’, including by entering into new agreements with consumers, for so long as they do not hold an Australian Credit Licence.

Cigno Australia was ordered by the Court to, by 5th July 2024, send written communications to consumers who between July 2022 and December 2022 entered into agreements with Cigno Australia and BSF Solutions under the ‘No Upfront Charge Loan Model’.

The Court will later determine whether (among other things) Cigno Australia and Mark Swanepoel ought to pay a pecuniary penalty in respect of this conduct, and whether Mark Swanepoel should be restrained from carrying on a business engaging in credit activity.

Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison intend to appeal the decision of the Court and have filed an application for leave to appeal. If the appeal is successful, some or all of the orders of the Federal Court of Australia may be set aside.

Where can you get more information?

Where to go for further support

You can access legal advice in your state at: Free legal advice – Moneysmart.gov.au.

If you are experiencing trouble with debt, or money worries in general, contact:

  • the National Debt Helpline on 1800 007 007 or online chat (9:30am to 4.30pm, Monday to Friday).

If you need someone to talk to, contact:

  • Lifeline on 13 11 14 (24 hours) or their crisis support online chat or
  • Beyond Blue on 1300 22 46 36 (24 hours) or their webchat