12 Reasons Why Personal Finance Is Important For Low Income Earners

Are you a rich Paul that spends all his money on useless liabilities or Are you Mary that prioritize the importance of finance even as a low income earner?

Are you a low income earner without prior knowledge of personal finance?

In this article, we will be covering basics of personal finance and how a low income earner can start saving more money.


What is finance? Finance can be defined as the art of managing money in order to achieve appropriate financial objective.

Personal finance on the other hand is the management of money for personal objective.

A larger percentage of the world are still financially ignorant, they have attached little to no value on personal finance.

Developing a rich mindset by attaching some importance to personal finance can make anyone rich.

Rich people are not ignorant about their finance, they may have trouble with other areas of their lives but they pay close attention towards their finance.

Although there are few exceptions that stumble on larger inheritance or lottery winners, statistics have shown that 70% of them end up bankrupt after few years of winning a lottery.

Why were they unable to manage their money?  I’m sure their failure in managing the large sum of finance is because of little to no knowledge about personal finance.

Having more money with no financial literacy is still going to make you poor in the nearest future. So, if you want to be rich for a very long time, you need to be financially educated.

These type of education that will make you rich are not taught in schools, you need to go on self-discovery journey. The question again is why are people not learning about personal finance?

These is linked with several reasons despite having tons of cheap to free resources online that educates people about personal finance.

A lot of people have a mind of scarcity due to the way they grow up, I was also wondering why I generally do not like spending, simply because of fear of financial success, where another paycheck is coming from and how hard I have to work for it.

Unknowingly to me, this is largely associated with lack of financial education. 


  • When you are thinking about personal finance, you need to know how much you are willing to earn over a certain period of time.
  • How much money you want to spend and save daily, weekly or monthly. How much money you want to invest, where to invest and when to invest.
  • You need to start listening to people with financial education, they are the only one that can give you financial tips. Determine to apply these tips to your financial education and you will learn very fast.
  • Be confident in your abilities to make good decision about finance. Take the needed action to boost your financial state. Work on yourself and your mind in order to take risks.
  • Get proper understanding about how to manage your money by creating clear distinction between wants and needs. Identify the things you need for three to six months upfront, create a budget for these needs in order not to spend more within the time frame.
  • Aim to maintain great credit score in your finance, this is generally important for your financial health to easily achieve other financial milestones in future.

Related:  How to create your first budget as a low income earner.

Beginners guide on how to save money on a low income budget.

10 Financial mistakes for low income earners.


1. Personal finance is important for saving and investing: As a low income earner, you need to start sighting value in whatever amount you are earning.

When you are conscious of the state of your personal finance and how it can be transformed to help you build generational wealth for you and your family is an indication that you value what you are earning.

This act will help you to start attaching some importance to your finance and start getting desired result.   

2. Personal finance can help you manage your money now and in the future: Adequate knowledge about personal finance will help you learn the basics of managing your money which is usually not appealing to many low income earners.

You shouldn’t let the thought of earning a low income stops you from saving or growing your income. Instead be opened to timely opportunities that always presents itself.

3. Personal finance helps you grow your financial literacy mindset: Without financial literacy for both high and low income earners, our finances are still going to be in jeopardy.

A lot of battle we won in life is linked to developing a positive mindset. Constant improvement on our minds about how to coordinate your personal finance will in turn help you grow your financial independence mindset.

It also helps in putting you above all others that haven’t been taking their time to start learning how to transform their financial state to better one.

Having a positive outlook towards our personal finance with our minds is not an exception.

4. Personal finance helps you achieve financial goals quickly: Reaching your financial goals with some familiarity to your personal finance, makes achieving financial milestones becomes easier, compared with no prior knowledge to start with.

It also helps to start learning how to spend less by spending money on skillset or experiences and not exotic items.

5. Have in-depth knowledge about Finance: Without an in-depth knowledge about finance, money becomes a worthless tool.

Knowledge about managing money creates an insatiable learning about finance that has the power to arm you with greater amount of knowledge in the field of finance.

Personal finance gives you an in-depth knowledge about your financial situation. Gives you a clarification of how much money you need to meet your goals in life.

Maybe you must have enrolled in a course or a paid YouTube video lessons which summarizes what personal finance entails.

6. Helps to understand the company you intend to invest in: As a novice in the world of investment, you are bound to make a lot of mistakes.

The ability to understand the components of good investment, when you see or hear about one is linked to your knowledge or experience about finance.

Personal finance helps you invest in businesses that you understand, you have the upper hand to invest with facts and figures of the company of your choice.

7. Personal finance helps you prioritize the time you need to invest to earn more money: Personal finance helps you to identify your starting point whenever you want to start investing, where you are heading with your finance and the time frame it will take to arrive at your financial freedom’s desired outcome.

These can also be quickly achieved by mapping out a structured plan which can be saving every week rather than saving every month.

8. Personal finance helps you take advantage of compound interest rates: Nobody wakes up one day to start enjoying the benefits of compound interest without sacrificing some time to invest.

Personal finance empowers you with the needed training to start investing as soon as possible to enjoy the power of compounding interest.

Think about the 150 dollars flower vase you purchased and have dumped it somewhere in your house or your 70 dollars hand chain you probably wore once and you have no need of it again.

Just think of the future value of every of your income you intend to spend and how they become in the next few years if invested with compound interest.

9. Personal finance helps you to make decisions based on statistics and facts: With adequate personal finance knowledge, you will be able to make informed decisions on your investments based on the information you have gathered from the company, the marketing insights and how well their products have been performing.

Test the marketing insights based on statistics and data provided by the company. Then do a thorough check on their statement of accounts, review the results and make a decision on your investments.

10. Helps you identify few great companies to invest: Personal finance helps you pay attention to some crucial things when you want to invest. You will learn to study the business and not the price of the stock you want to invest your money on.

Helps you check if the company you are willing to invest in is profitable, the needed research you need to embark on if you really love to own some shares in the company.

11. Helps spend your money like the rich: To spend your money like the rich, you need to start taking a proper look at your spending habits.

Personal finance education helps you learn how to manage and spend your money like the rich.

12. Helps build your knowledge about financial planning: Personal finance helps your knowledge about the things your money can do for you which is to spend, save and invest.

Personal finance will help you master the important use of money as a low income earner in order to earn more.

In conclusion, in case you haven’t been managing your 2000 dollars monthly income, don’t fool yourself by saying when you have more money or start earning more money, you will be able to manage your income.

Someone that has failed woefully in managing small amount of money is not likely to be able to manage huge amount of money.

But if you start seeing reasons to the importance of personal finance as a low income earner, you are likely to start increasing your income.

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16 thoughts on “12 Reasons Why Personal Finance Is Important For Low Income Earners”

  1. Great read! Personal finance is sooooo important! This really should be something taught at school so that people know and understand. Everyone should know these details! Thanks for sharing!

  2. As a finance blogger, I agree with all your points. We need our personal finances in order to live a stress free life and to overcome challenges. Great article and well written.

  3. These are good points to draw attention to the importance of personal finance. There are no good long-term outcomes for spending more than you make. Everyone should use a budget to prevent that and to have a plan for their money which includes allocations for saving and investing. If your income is low, then you should consider budgeting for ways to gain additional training or experience to get a better job or start your own business.

  4. such great tips and very timely article! this is our reality everyone should learn this. Im struggling to be consistent and to invest more for my future. thanks for this serving as a reminder.

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