This is one of the more honest objections to budgeting. If your income barely covers fixed costs, a spreadsheet does not create money that does not exist. Telling a family on a low income to budget more carefully can feel dismissive of the actual problem.
What budgeting cannot do
It cannot substitute for adequate income. Families in genuine financial hardship often face structural issues that personal finance tools do not address: housing costs that consume 45% or more of take-home pay, childcare costs that rival a second mortgage, or irregular work that makes any forward planning unreliable.
Presenting budgeting as a solution to poverty-level income is a category error. The problem is not behaviour. The problem is the gap between income and the cost of living.
What it can do, within those limits
For families where income is low but not at crisis level, having visibility over spending does sometimes reveal genuine slack. Not always. But sometimes. A family spending 180 euros a month on subscriptions they have stopped using is a real scenario, not a hypothetical.
The more useful function of budgeting on a tight income is reducing anxiety. Research published in the Journal of Economic Psychology found that households with a clear picture of their finances reported lower stress even when their financial position had not improved. Knowing where you stand, even when the answer is uncomfortable, tends to feel better than uncertainty.
The honest starting point
Before deciding whether to budget, it is worth separating two questions: is there a spending problem, or is there an income problem? The answer shapes what kind of action is actually useful.