Key Resources And Money Tips For Low-Income Families

Money tips for low-income families

Amongst today's economic climate, low-income families face tremendous challenges. One of the biggest obstacles is living in fear that a minor accident or one missed day of work will plummet a family into poverty.

Financial instability is something that thousands of families face.

Statistics of low-income families

Low income is often an umbrella term, but what does it mean? In the U.S. low income is defined as the adjusted income for a family that doesn't exceed 80 percent of the area median income. In 2020, that was an annual income of less than $52,492 in the United States for a family of four.

However, the annual income for low-income can look different depending on your state. For example, in Hawaii, $93,000 was considered low-income in 2020 by the U.S. Department of Housing and Urban Development (HUD). In Alaska, for a family of four, low income is an annual salary of $32,750.

With these varying numbers, many families fall below the national median income. Thus it's essential to know the federal poverty guidelines and the guidelines in your state.

The Poor People's Campaign has estimated that over 140 million families are poor or living in poverty in America. In addition, a report showed that Black and Hispanic families would need about $26,000 more per year to make ends meet.

Working full-time, caring for a family, and trying to meet your basic needs can feel overwhelming and isolating. Fortunately, there are many strategies you can implement to help you move from low income to financial stability.

Key tips to help low-income families thrive

To improve your financial situation, you must first learn how to manage your finances. If you need help starting, here are some tips to show you how.

1. Tap into banking resources

Being unbanked or underbanked creates many financial barriers. Instead of turning to payday lenders or other unsavory sources to meet your financial needs, here are some tips on accessing banking resources without getting ripped off.

Get a secured credit card

If you don't qualify for a regular credit card but want to start building up your credit score, a secured credit card is a great first step. With a secure credit card, you put down a deposit of usually a few hundred dollars.

Once you do that, you can borrow against that amount. Often, after using the card responsibly for some time, you'll be able to upgrade to a standard credit card. A secured credit card can also help you raise your credit score enough to apply for a new card.

Open a checking account

A checking account is one of the basic tools you should have in your personal finance arsenal. Unfortunately, some low-income families are denied access to traditional checking accounts. A setback that is often due to past issues such as unpaid fees or bounced checks.

If you do not have access to a traditional checking account, consider an online checking account. These accounts usually have more requirements than standard checking accounts, such as monthly fees. However, they are often better than the alternatives like cash-checking services.

Consider alternatives like lending circles

You can also turn to non-traditional sources to access money. One such place is a lending circle.

These groups of people lend each other money at no or low cost. The group helps each other raise money for things like down payments, car loans, or debt payoffs.

A lending circle works by having each member contribute a set amount each month, for example, $50. Then there is a rotation for which member receives the pooled funds that month.

If your lending circle has ten members who each put in $50 a month, every month, one member receives $500, and the process rotates until everyone has had a turn. Many lending circles, such as Mission Asset Fund, support individuals and the community.

Get help with immigration application filing fees

Lastly, if you are an immigrant family with a low income, you will likely face additional financial challenges and hurdles. One hurdle, in particular, is the cost of applying for immigration statuses such as citizenship, a green card, and DACA, among others.

In addition to leading circles, Mission Asset Fund provides 0% interest rate loans to immigrants to help pay their USCIS application fees. Payments on these loans are reported to the credit bureaus. As a result, participants have the chance to build up their credit scores at the same time.

2. Take care of your health

We don't have anything if we don't have our health, so the saying goes. But our health is often one of the first things we let slide when our bank account is low.

While many medical expenses are unavoidable, the more you care for your health, the less you end up paying in healthcare costs over time. A family with a low income can try these tips to invest in their health.

  • Replacing meat meals with fruits and vegetables can save you around $23 per week.
  • Quit smoking a pack of cigarettes a day, and you could save around $13,000 a year.
  • Schedule regular check-ups and take care of any health issues as soon as they arise.
  • Trying to lose weight if you are overweight. According to the CDC, the annual medical cost for obesity is $173 billion per year.

Using the above strategies, you'll improve your long-term health and learn how to stay healthy on a budget.

3. Earn more money

One of the best ways to go from low-income to middle or even high-income is to make more money. Of course, that's easier said than done, but there are ways to increase your income.

Go back to school or take online education courses (at low or no cost)

Getting a college education is a huge commitment and might take away some of your current earnings. However, it can significantly expand your future opportunities. If you are not ready to go back to a traditional school, there are plenty of online educational resources that are free or low-cost.

These include Harvard University's courses and Coursera, which can give you the skills you need to advance in your career or start a new one.

If you do want to go to school to earn a degree, there is financial aid available to low-income families for this, too. Some of the most popular forms of aid include federal, state, and college-specific grants and private scholarships.

Ask for more money

Another way to make more money? Ask for it. Negotiating with your current employer for a raise is one of the fastest ways to boost your income. Chances are you're overdue for a raise.

Start a side hustle

Lastly, starting a side hustle is another way to boost your income. While not every family with low income has the time to devote to a side hustle, you should consider one if you have some flexibility in your schedule.

A side hustle is one of the best ways to go from low-income to middle-income and beyond. Remember that you want to be intentional about saving part of any raise or extra income you earn.

Resources for low-income families

Making improvements on your own will benefit you. But sometimes, you need a little help from outside sources. Fortunately, the U.S. government offers many resources to help low-income families.

Health Resources

The cost of health insurance may seem out of reach, but some resources can fit within your budget. Here are the three main programs for healthcare coverage.


Medicaid is a combined federal and state program that provides basic health coverage to low-income families and individuals. Eligibility for Medicaid is based on the federal poverty level, which, for a family of four in 2023, is $30,000.

Individual states determine who is covered (some states expand coverage beyond the federal guidelines), so you should refer to your state's Medicaid program. Be sure to check your eligibility before applying.

The Children's Health Insurance Program (CHIP)

CHIP is another federal and state joint partnership that provides health insurance coverage to children and pregnant women.

CHIP generally covers uninsured children whose families cannot afford private health insurance but don't qualify for Medicaid because their income is too high.

While eligibility is based on income, every state has eligibility and coverage guidelines, so you should refer to your state's program for more information.


Medicare is a federal government program that provides health insurance for people with disabilities and those aged 65 and older.

Eligibility is not based on income level, and any low-income families are eligible for Medicare (as well as Medicaid). If you qualify for both programs, you can apply for Medicaid to cover the services that Medicare doesn't.

Leverage resources for low-income families to save on food

If you're like most families, your grocery budget is a massive part of your monthly spending. However, you can shrink your monthly food expenses by taking a hard look at your grocery spending and leveraging cheap (yet healthy) meals.

Sometimes, you can even cut your budget by half! In addition to cutting back on your groceries, creating a monthly meal planner can help you prepare delicious meals and slash your budget.

While cutting back on groceries and meal planning will save you plenty, sometimes it's not enough. Food insecurity is a major problem that many needy families face. Fortunately, resources are available to you from both the government and private organizations.

The Supplemental Nutrition Assistance Program (SNAP)

SNAP, sometimes called food stamps, helps millions of Americans in need access to groceries and healthy food. In 2020, SNAP was so popular that the government increased its spending on the program by 50%, and 44 million people, up 20% from the prior year, accessed the program.

A family with low income can access SNAP benefits if their monthly net income falls at or below the poverty level. An eligible family of four can receive up to $782 a month. If you are one of the millions of Americans looking to access SNAP benefits, you can apply for them in your state.

Remember that each state has its application process, and you can find more information in the SNAP state directory.

In Illinois, to determine a family's eligibility for SNAP, they use an income that is 200 percent of the federal poverty line instead of the average 138 percent. So you may have greater accessibility depending on your state.

USDA Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)

If you are pregnant, a new mother, or have an infant or child up to the age of five, you may be eligible to access WIC benefits.

WIC is administered by the states and provides nutrition and breastfeeding services, supplemental healthy foods, education, health care referrals, and other resources to help support your family.

You can check your eligibility and apply for WIC benefits on their state's page.

School meals

Public schools provide millions of children with free meals every day. But what happens when schools are closed, like during the pandemic?

Luckily, the government now allows these free meals to be picked up and taken home. The USDA has an online tool to find a nearby site to pick up meals for your family.

Food banks

The government is one of many places to turn to for help when struggling to feed your family. Local food pantries and meal programs across the country provide help for low-income families with no questions asked. Feed America has an online list to find food banks in your area.

Other community organizations

If you're struggling to feed your family, you can find help in your neighborhood. One such local organization, Lasagna Love, connects volunteers who prepare home-cooked lasagna meals with low-income families.

Families can sign up for a meal, which will be delivered to their home by a volunteer, "Lasagna Mama" or "Lasagna Papa."

Organizations like this are both a good resource for those in need and a good reminder that there are people out there willing to help you get back on your feet

Housing vouchers and subsidies

Many working families struggle to pay rent. With housing often being one of the most significant expenses, it's best to live where the rent is low and partially covered. The government has programs similar to house hacking that help low-income families lower their cost of living.

The Housing Choice Voucher Program

According to., this program allows individuals and struggling families to find housing instead of living in subsidiary housing.

Within the program, you can locate an apartment, townhouse, or even your current residence and work with a Public Housing Agent {PHA) to see if your chosen place meets their requirements. If so, your PHA will agree to pay part of your rent, and you will cover the difference.

Public housing

Another option to pay a lower cost of rent is public housing. With this type of housing, HUD administers federal aid to local housing agencies (H.A) to manage specific apartments and single-family houses for low-income families and individuals.

These housing options allow rent amounts to be determined by a family's annual gross income and not the landlord. Therefore you will often pay less for rent than in other places.

Childcare resources for low-income families

Having a child in preschool can seem like a luxury for families with younger children since yearly tuition can be in the four figures.

Fortunately, state and local governments offer many childcare assistance programs. Here are some that may help you and your family.

Childcare discounts for employees

Some childcare centers offer discounts to the employees of businesses near their centers. Search for daycares near your work and ask about their employee discounts. There are even sibling discounts for families who enroll more than one child in a childcare facility.

Employer-sponsored dependent care flexible spending account

Similar to setting aside money for retirement, you can set assigned money specifically for childcare assistance. The employer-sponsored dependent care flexible spending account is not taxed, meaning you can take home more money and pay less in taxes.


Scholarships are another source of financial help for low-income families. Some scholarships can cover part or all of the tuition costs. Ask your current or prospective centers about scholarship opportunities they may have available.

State and government-funded programs

Government-funded programs, such as Head Start, offer quality childcare to low-income families at little to no cost. These programs are available across the United States and help childcare become more accessible.

Help with paying bills for low-income families

Although there are programs to help with larger bills such as rent and medical expenses, there are still many out-of-pocket costs to consider.

Electricity bills and phone bills eat away at your income as well. The good news is there are programs to help with those expenses.

Low-Income Home Energy Assistance Program (LIHEAP)

If you are a family with a low income and need assistance with home energy costs, you might be eligible for LIHEAP. This program helps low-income families pay for heating and cooling, other home energy costs, and related repairs.

The best part is if you are eligible for a government benefit program such as SNAP, you may be automatically eligible for LIHEAP.

Federal support for paying phone bills

The Federal Communications Commission has created Lifeline to help families get discounted landline or cell phone services. Some participants are even eligible for a new phone.

Eligibility for this program is possible if you receive Medicaid, participate in Headstart or SNAP, or receive a federal veteran pension.

You may also apply if you live on tribal land or tribal housing, have supplemental security income, or receive federal public housing assistance.

Receive a discount on your internet bill

With the Affordable Connectivity Program, low-income households and individuals can receive a discount of up to $30 a month towards their internet bill.

Some requirements for eligible candidates include being a part of other government support programs such as SNAP, WIC, SSS, and many more.

Applications can be sent online or through the mail, and once accepted, you can apply the discount to your internet bill.

Opportunities for credits and further assistance for low-income families

Between worrying about how you will pay the next month's rent and whether you are saving enough for your kid's college, you might let some of these tax credits and government assistance slip through the cracks. Don't let that happen – here are some to be aware of.

Earned Income Tax Credit (EITC)

The EITC is a tax credit that reduces or eliminates taxes paid by families with low income. Your family might be eligible for up to a $7,430 tax refund, according to the IRS, (depending on family size).

The key is you must claim this credit on your tax return to get it, so many people miss out on the money. Check your eligibility to claim this credit on this year's taxes.

Child and dependent care credit

If you work and need to pay for childcare, this credit helps you offset childcare costs (or the costs to care for a dependent with disabilities).

Always be sure to speak with a tax professional to ensure you accurately take advantage of all the credits and deductions available to you.

Educate yourself, make a plan, and tap into available resources

Help for low-income families is out there, but you must take the first step to receive that help. You can start to move your family in the right direction by educating yourself and being proactive about your finances.

Remember to follow the tips here that apply to you and your family. By implementing financial strategies such as increasing your income, taking advantage of lending circles, and focusing on your health, you will see a big difference in your finances.

In addition, taking advantage of government resources can be a short-term solution when providing for your family. Remember that you can rise above your financial struggles!

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