In today’s economic situation, low-income families face tremendous challenges. One of the biggest obstacles is living in fear that a mild accident or a day of work will cause your family to fall into poverty. Economic instability is something thousands of families face.
Low-income household statistics
Low income is often the term umbrella, but what does that mean? In the United States, low income is usually considered a family with incomes less than 200% of the federal poverty standard.
For example, in 2025, if household income is less than $64,300 (less than 200% of the federal poverty threshold), four families are considered low-income. This follows data provided by the U.S. Department of Health and Human Services (HHS).
However, annual income that is considered low income varies from state to state. In 2025, using the same data, four Hawaiian families were classified as low-income if they earned under $73,960. In Alaska, the threshold was below $80,380 for families of the same size.
In these varying numbers, many families are below the national median income. Therefore, it is essential to know the federal poverty guidelines and your state guidelines.
The poor campaign estimates that over 140 million people are poor or in poverty in America. Additionally, the report shows that black and Hispanic families need around $26,000 a year to achieve their goals.
Working full-time, caring for your family and trying to meet your basic needs can feel overwhelming and isolated. Fortunately, there are many strategies that can be implemented to help transition from low income to financial stability.
Important tips to help low-income families thrive
To improve your financial situation, you first need to learn how to manage your finances. If you need to get started, here are some tips to show you how to do it.
1. Use banking resources
Being without a bank or at the bottom of a bank creates many financial barriers. Instead of turning to payday lenders and other unpleasant sources to meet your financial needs, here are some tips for accessing bank resources without ripping.
Get a secure credit card
If you don’t qualify for a regular credit card but want to start building your credit score, a secure credit card is a great first step. Using a secure credit card will usually reduce your deposit of several hundred dollars.
Doing so will allow you to borrow for that amount. In many cases, you will be able to upgrade to a standard credit card after using your card responsibly for a while. A secure credit card will help you increase your credit score sufficient to apply for a new card.
Open a checking account
A checking account is one of the basic tools you should have at your personal financial arsenal. Unfortunately, some low-income families are denied access to traditional checking accounts. Set-offs often result from past issues such as unpaid fees and bouncing checks.
If you don’t have access to a traditional checking account, consider an online checking account. These accounts typically have more requirements than standard checking accounts, such as monthly fees. However, it is often better than alternatives like cash checking services.
Consider alternatives like the circle you lent
You can also rely on non-traditional sources to access your money. One such place is the lending circle.
These groups of people either spend money on each other or lend them at a low cost. The group helps each other raise funds for declines, car loans, debt payments and more.
A lending circle works by having each member donate a monthly amount. For example, $50. Then there is a rotation in which members receive pooled funds that month.
If your lending circle has 10 members with $50 per month, one member will receive $500 and the process will spin until everyone has turned. Many lending circles, such as the Mission Asset Fund, support individuals and communities.
Please support the application fee for immigration applications
Finally, if you are a low-income immigrant family, you will likely face additional financial challenges and hurdles. In particular, one hurdle is the cost of applying for immigration status such as citizenship, green cards, and DACA.
In addition to the main circles, the Mission Asset Fund offers immigrants a 0% interest loan to help them pay USCIS application fees. Payments for these loans will be reported to the Credit Bureau. As a result, participants have the opportunity to build a credit score at the same time.
2. Take care of your health
Without health, there is nothing, so there are proverbs. But our health is often one of the first things we slide when our bank account is low.
Many medical expenses are inevitable, but the more health you care, the less you pay for your medical expenses over time. Low-income families can try these tips and invest in their health.
- Replace meat meals with fruits and vegetables You can save about $23 a week.
- Stop smoking A pack of cigarettes per day can save you around $13,000 a year.
- Schedule regular inspections And we take care of you as soon as you experience any health issues.
- If you’re overweight, you’re trying to lose weight. According to the CDC, annual medical expenses for obesity are $173 billion per year.
Using the above strategies, you will learn how to improve your long-term health and stay healthy on a budget.
3. Make more money
One of the best ways to go to low-to-mid-term and even high-income earners is to make more money. Of course, that’s easier than that, but there are ways to increase your income.
Return to school or take an online education course
Getting a university education is a huge commitment and may take away some of your current revenue. However, it can significantly expand future opportunities. If you’re not ready to go back to traditional schools, there are plenty of free or low-cost online educational resources.
These include Harvard University courses and Coursera. This will allow you to provide the skills you need to advance your career and start a new career.
If you want to go to school to earn your degree, there is financial aid available to low-income families as well. Some of the most popular aid formats include federal, state and university-specific grants and private scholarships.
Please seek more money
What is another way to make more money? Ask for that. Negotiating for a salary increase with your current employer is one of the fastest ways to increase your income. You may be late due to a salary increase.
Starting the side hustle
Finally, starting side hustles is another way to increase your income. Not all low-income families have time to focus on side hustles, but if you have some flexibility in your schedule, you should consider it.
Side hustles are one of the best ways to go from low to middle to farther. Don’t forget you want to intentionally save some of your salary increases or extra income.
Resources for low-income families
Being able to improve yourself will benefit you. But sometimes, you need a little help from external sources. Fortunately, the US government provides many resources to support low-income families.
Health resources
Health insurance costs may seem out of reach, but some resources can fit within your budget. The three main programs in Healthcare Coverage are:
Medicaid
Medicaid is a combined federal and state program that provides basic health insurance to low-income families and individuals. Medicaid eligibility is $25,820 for a family of four in 2024.
Individual states determine who is covered (some states extend coverage beyond federal guidelines). Therefore, you should refer to your state Medicaid program. Be sure to check eligibility before applying.
Children’s Health Insurance Program (Tip)
Tip is another federal and state joint partnership that provides health insurance coverage to children and pregnant women.
Tips generally cover uninsured children whose families cannot afford private health insurance but are not eligible for Medicaid because they earn too much.
Eligibility is based on income, but all states have eligibility and compensation guidelines, so you should refer to the state’s programs for more information.
Medicare
Medicare is a federal government program that provides health insurance to people with disabilities and those over the age of 65.
Low-income families are eligible for Medicare (and Medicaid) because eligibility is not based on income level. If you are eligible for both programs, you can apply for Medicaid to cover services that Medicare does not.
Use low-income families to save food
If you’re the same as most families, your grocery budget is a large part of your monthly expenses. However, by looking at grocery spending strictly and taking advantage of cheap (still healthy) diets, you can reduce your monthly food expenses.
Sometimes you can cut your budget in half! In addition to cutting back on groceries, creating a monthly meal planner will help you prepare delicious meals and cut your budget.
Reducing your groceries and meal planning can save you a lot, but sometimes it’s not enough. Food insecurity is a major problem faced by many poor families. Fortunately, resources are available from both governmental and private organizations.
Supplementary Nutrition Support Program (SNAP)
Snaps, sometimes called food stamps, help millions of Americans who need to take advantage of groceries and healthy foods. In 2020, SNAP was so popular that the government increased spending on the program by 50%, with 44 million people visiting the program, an increase of 20% from the previous year.
Low-income families have access to the benefits of SNAP if their monthly net income drops below poverty levels. Four eligible families can receive up to $782 a month. If you are one of the millions of Americans trying to access the benefits of snaps, you can apply to them in your state.
Each state has an application process and you can find more information in the SNAP State directory.
In Illinois, they use 200% of the federal poverty line income, rather than an average of 138% to determine whether a family member is eligible for SNAP. Therefore, you may have greater accessibility by your state.
USDA Special Supplementary Nutrition Program (WIC) for Women, Infants and Children
If you are pregnant, have a new mother, or have an infant or child up to the age of five, you may be eligible to access the benefits of WIC.
WIC is managed by the state and supports families with nutrition and breastfeeding services, supplementary health foods, education, healthcare referrals, and other resources.
You can check your eligibility and apply for WIC benefits on your state page.
School meals
Public schools offer free meals to millions of children every day. But what happens when schools close during the pandemic?
Luckily, the government is now allowing these free meals to be picked up and brought home. USDA has an online tool to find nearby sites to pick up meals for your family.
Food Bank
Government is one of many places to ask for help when you struggle to feed your family. Local food pantry and meal programs across the country provide help to low-income families who don’t have questions. Feed America has an online listing to find food banks in your area.
If you are struggling to feed your family, you can find help in your neighborhood. One such local organization, Lasagna Love connects volunteers preparing homemade lasagna meals with low-income families.
Families can sign up for meals. Meals are delivered to your home by volunteers, “Lasagna Mama” or “Lasagna Daddy.”
Remind that both organizations like this are good resources for those in need, and that there are people out there who will help you get back to your feet.
Housing vouchers and subsidies
Many working families struggle to pay rent. As housing is often one of the most important costs, it is best to live in a place where rent is low and partially covered. The government has similar programs to house hacking that help low-income families cut their living costs.
Housing Selection Voucher Program
According to. HUD.GOV, this program allows individuals and struggling families to find a home rather than reside in a subsidiary.
Within the program, you can find an apartment, townhouse, or current residence and work with a public housing agent (PHA) to see if your chosen location meets your requirements. If so, your PHA agrees to pay a portion of your rent and you will cover the difference.
Public housing
Another option to pay lower rent is public housing. With this type of housing, HUD manages federal aid to local housing agencies (HAs) and manages specific apartments and detached homes for low-income families and individuals.
These housing options allow the landlord to determine rent based on the family’s gross annual income, not the landlord. Therefore, in many cases, the rent is lower than elsewhere.
Childcare resources for low-income families
Having children in kindergarten can look like a luxury for families with younger children, as the annual tuition fees can be four people.
Fortunately, state and local governments offer many childcare support programs. Here are some that may help you and your family.
Employee childcare discounts
Some childcare centers offer discounts to employees at businesses near the center. Search for daycare near work and ask about employee discounts. Families who register multiple children in childcare facilities also offer sibling discounts.
Just like putting money aside for retirement, you can set up money allocated exclusively for childcare support. Employer-sponsored dependent care flexible spending accounts are not taxed. This means you can take more money back and pay less taxes.
scholarship
Scholarships are another source of financial support for low-income families. Some scholarships can cover some or all of the tuition fees. Ask the current or future centre about available scholarship opportunities.
State and government-funded programs
Government-funded programs such as Head Start provide almost unprecedented quality childcare for low-income families. These programs are available throughout the US and help make childcare more accessible.
Help low-income families pay their bills
There are programs that help with large bills like rent and medical bills, but there are still many out-of-pocket expenses to consider.
Electricity and phone bills also eat your income. The good news is that there are programs that help with those costs.
Low-Income Home Energy Assistance Program (LIHEAP)
If you are a low-income family and need assistance with housing energy costs, you may be eligible for Liheap. The program will help low-income families pay for heating and cooling, other home energy costs, and related repairs.
The best part is that if you are eligible for a government benefit program such as SNAP, your Liheap qualification may be automatically qualifying.
Federal support for phone bill payments
The Federal Communications Commission has created a lifeline to help families get discounted landline or cell phone services. Some participants are even eligible for a new phone call.
Eligibility for this program is possible if you receive Medicaid, participate in Head Start or Snap, or receive a federal veteran pension.
You can also apply if you live in tribal land or tribal housing, have supplemental security income, or receive federal public housing assistance.
Get discounts on your internet bill
Affordable connectivity programs allow low-income households and individuals to receive a discount of up to $30 a month on internet bills.
Eligible candidate requirements include being part of other government assistance programs, such as SNAP, WIC, and SSS.
The application can be sent online or via mail, and once accepted, you can apply a discount to your internet invoice.
Credit opportunities and further support for low-income families
Worrying about how you will pay your rent for next month and whether you are saving enough for your child’s college, and some of these tax credits and government support may be able to slip through the cracks. Don’t let that happen – here are some things you need to know.
Earned Income Tax Deduction (EITC)
EITC is a tax credit that reduces or eliminates the taxes paid by low-income families. According to the IRS, your family may qualify for a tax refund of up to $7,430 (depending on the size of the family).
The important thing is that you must request this credit on your tax return. That’s why many people are missing out on money. Please check your eligibility to claim this credit with taxes this year.
Child and Dependency Care Credits
If you are working and need to pay for childcare, this credit will help offset childcare costs (or costs for care of dependency for people with disabilities).
Always talk to a tax professional and make use of all available credits and deductions accurately.
Educate yourself, plan and take advantage of the resources available
There is help for low-income families out there, but you need to take the first step to get that help. By educating yourself and being proactive about your finances, you can start moving your family in the right direction.
Don’t forget to follow the tips that apply to you and your family. There are significant differences in finances by implementing financial strategies such as increasing income, using circle lending and focusing on health.
Furthermore, using government resources can be a short-term solution when providing them to families. Don’t forget that you can surpass your financial struggle!