Want to save some money and live a better life? Follow these tips for living on a tight budget!
Living on a tight budget doesn’t mean complete deprivation or that you won’t be able to work hard to get out of the paycheck to paycheck cycle. If your budget is tight, you can work hard in order to save a bit of money and improve your circumstances.
You just might need to get a bit creative!
As a single mom of 2 small kids, I completely understand the stress of a tight budget, but I’ve learned how to life a more frugal lifestyle and work within a tight budget so I can be a great example for my kids.
Ultimately, you want to avoid spending more than you earn. Sticking within your budget means that you can still put money away, even if it’s just a little each month, and work to get ahead bit by bit.
The main key to living on a tight budget is that you need to have a budget and create a plan for your money.
You have to make conscious money choices for yourself and your family.
If you absolutely must have something, then you need to cut your budget somewhere in order to be able to pay for it.
Does all of this sound impossible or overwhelming? It’s really not that bad!
Read along for practical, helpful tips for living on a tight budget!
(This post contains some affiliate links for your convenience which means if you make a purchase after clicking a link I will earn a small commission at no extra cost to you. Click here to read my full disclosure policy.)
How to Survive on a Tight Budget
Read these tips for living on a tight budget and start saving more money today!
Before you start anywhere, you need to set up a budget!
I find that a lot of people hate the word budget, but a budget is simply a plan for your money. That’s it!
Instead of viewing a budget as a hard, restrictive thing that takes away your fun, you need to remind yourself that you have a budget because you want to tell your money what to do.
You choose where your money goes and what you do with it.
Yes, definitely include “fun” in your money plan by budgeting in entertainment! (Just stick to that entertainment amount each month!)
A budget also isn’t set in stone.
Make a realistic budget and keep to it for a few months, then, readjust the budget after you are able to save some money and understand your cash flow better.
There are a lot of different budgeting methods out there. Here are 3 basic budget systems. Choose one to get started with:
- Zero-based – Your income minus your expenses should be zero (This does not mean that you spend every dollar, but rather you have a plan for each dollar, including savings, retirement, etc. At the end of the month, every dollar should be doing it’s job and your budget should equal 0.)
- Cash envelope – You assign a dollar amount to each category and put the cash amount in that envelope at the beginning of the month. When the envelope runs out of money, you can’t spend in that category any more. I used this system for a while when I first started budgeting and it worked well because it gave me a visual to see the cash I spent each month.
- 50/30/20 – 50% is spent on needs, 30% is spent on wants, 20% is put into savings (or paying off debt). The percentages are loose guidelines.
Keep in mind, the goal for budgeting is to avoid debt and build up your savings by seeing where your money is going and then telling it what to do for you!
Save Before Spending
I know it might sound counter-intuitative, but you should always pay yourself first each month.
By that, I mean put money directly into savings at the beginning of the month – so you don’t even “see” that money.
This will help you build up an emergency fund and also train your mind to think that you can save money and live well on a tight budget.
Automate your savings with automatic withdrawals so you don’t even think about it. Even if you can only put $5 away each month – do it! Start small and make a goal to add more soon.
Related: Frugal Tips to Save Lots of Money
Take meal planning seriously.
I don’t mean that you need to meticulously plan each and every meal and snack, but rather have a solid plan what you are going to do for meals each week (and have backup plans in case those don’t pan out – like PB&J or mac and cheese, for example).
After some trial and error, I figured out that if I plan 2 – 3 dinners per week for my kids and I, then we could manage just fine with leftovers and other simple meals.
Another easy idea is to have rotating meals – like Taco Tuesdays and Spaghetti Thursdays.
Figure out what works best for you and stick to it.
Related: Meal Planning Tips for Families
One of the hardest things about being on a tight budget is that you can feel like you won’t be able to have any fun.
And a life with super strict restrictions (and resulting boredom!) may very well make you want to rebel!
Instead of that, make a plan for entertainment. When I was first married, my husband and I each had “fun money” in our budget each month (we made it $40 per person).
This way, even though our budget was tight, if we wanted to buy something, get a coffee, or go on a cheap date, we could use our “fun money”.
Live on Less
Instead of looking at your tight budget as a sad, terrible thing, view it as a challenge!
Can you really live on less?
What can you cut down on in your budget to add more to savings.
It’s all in the mindset!
Set Financial Goals to Motivate Yourself
Set financial goals to motivate yourself to live within your means and save money, even with your tight budget!
Have real, practical, specific goals, like:
- Buy a house in 5 years.
- Pay off my credit card debt in 6 months.
- Take a vacation to Disney World in 3 years.
Then, figure out how much you need to get there, take a serious look at your budget and where you can cut costs, and go for it!
I want to pay off my credit card debt and I’m going to do that by not eating out at all for the next few months. Instead, I will plan simple meals at home and put the money I normally use to eat out towards paying off the debt!
Inspire yourself to move forward financially!
I cut out all subscriptions that I really don’t use or need.
For example, instead of cable, audio, and magazine or newspaper subscriptions, I can access basically all of these things at the local library for FREE! (Yes, I’ve binged watched TV shows by renting the series from the library.)
Your local library has a vast collection of magazine, newspapers, movies, music, CDs and more! If they don’t have it, you can probably borrow through inter-library loan. Or just read books instead of watching TV and improve your mind!
Cut Back on the Biggest Expense
For most people, the biggest expense is housing (rent or mortgage).
Look for ways to save money on this expense:
- get a roommate (or 2!)
- move to a cheaper location (even if it’s just across town)
- downsize to a smaller place
- rent out part of your place as an Airbnb (we rented an Airbnb once where the family lived in the garage-converted-to-apartment and we stayed in the main house)
Cut Back a Little Bit Everywhere
If you can’t make a large adjustment to one spending category (like housing), cut a little bit from each category. Even just $5 from each category adds up fast!
Track Every Dollar
It might seem a bit tedious, but if you track every dollar spent for a few months you will probably be surprised to see where your money actually goes!
Then, you can make serious adjustments to your spending to save more money.
Analyze your Monthly Bills
Repeat monthly expenses (food, gas, etc.) make a large part of your budget.
Find what you can cut out completely (or lower the overall expense).
- eliminate subscriptions?
- get rid of a membership?
- switch providers (cell, streaming, etc.)?
Use cash for most of your regular spending (food, clothing, entertainment). The cash envelope system I mentioned before works well for this.
Cash gives you a visible limit on your spending (as opposed to using a card where you can’t “see” your money or balance easily), and this helps you to become more aware of your spending habits.
Put Unexpected Money into Savings
Whenever you receive unexpected money, don’t spend it, put it into savings!
Unexpected money can come from:
- tax refunds
- stimulus checks
- a raise at work
If you get a raise at work, don’t increase your monthly expenses to match! Instead, continue to live as you have been and put that extra money into an investment account.
Health & Wellness
Take care of your health by eating well and exercising, so you can avoid hefty medical bills and other medical expenses due to poor health.
If you are worried about groceries, here’s what you can do to eat well on a tight budget:
Save on Groceries
There are many tips to help you save money on groceries each month.
- plan your meals
- use cashback grocery apps like Ibotta
- cut coupons from grocery saving ads
- portion control – eat smaller portions and don’t snack all day
- shop at set times each month – don’t just go to the grocery store whenever on a whim
- stick to your shopping list (and don’t leave home without it!)
- cut back on meat (which can be very expensive)
- buy frozen or canned fruits, beans, and vegetables
- cook bigger batches and freeze portions for quick, easy meals later
- have a pantry clean out at the end of the month (get creative and use up those items left in your pantry at the end of the month!)
- avoid eating out (which is more expensive than making your own meals at home)
If you do plan to include eating out in your budget, then try:
- saving up and eating out only once per month at a fancier restaurant, instead of several times a week with fast food takeout. You’ll appreciate a fancier meal once a month, more than regular fast food meals.
- eat out for lunch (which tends to be cheaper than the dinner hour)
Negotiate Bills and Look Out for Fees
Never be afraid to try and negotiate bills and ask for discounts or comparable prices for services like:
- cell phone
- insurance (car, home, renters)
Keep an eye out for late fees. Definitely avoid those!
Always Check for Discounts
Before buying anything (tickets, theater, etc.), always check for any discounts you may qualify for (i.e. student, senior, veteran).
Clothes, Fashion, & Beauty
- shop out of season – at the end of each season think about what you might need next year and buy it during the end-of-season clearance sales
- instead of buying an entire new trendy outfit, choose a few new accessories to spice up your wardrobe
- try shopping for clothes at garage sales and thrift shops in posh areas of your city
- search eBay or Craiglist for top quality used brand name clothes
- get an inexpensive haircut or color at a local salon school
- schedule a massage at a massage school
- have a manicure party at home with friends
Wants vs. Needs
One big area that a lot of people seem to struggle with is understanding wants vs. needs.
If you know what is truly a need in your life, then you can actually start to cut out (or cut down) on some wants.
One way to get a good idea of your needs is to have a no spend month.
If you have never tried this, for one month you simply just spend money on your basic necessities (i.e. shelter, food, transportation to work, etc.).
Doing this can help you focus on just your needs and give you a good idea on what you spend on wants.
Some thoughts to get you started:
- you need shelter, but you don’t need a mansion to live in
- you need food to eat, but you don’t need 5-star gourmet meals every night (or to eat out at 5-star restaurants)
- you need transportation to get to work, but you don’t need the most expensive car available.
You get the idea…
Shop with Apps
I love using the Honey extension while shopping, it automatically searches for coupon codes and I can set an alert to get an email if the item goes on sale.
Sometimes simply buying the cheapest item available isn’t the best idea, particularly if it is so cheap it might break soon.
Actively evaluate if you want to spend a little more to get a better quality item that will last longer. Do your research before buying.
If you are living on a tight budget, debt can feel crushing.
Do whatever you can to pay of debt. Make it a priority and pay it off as fast as possible.
Then, avoid debt in the future! Don’t use credit cards. Having high interest debt (i.e. credit cards) can require a lot of your money each month.
If you need to fix or do something, instead of paying someone to do it or buying another one, take the opportunity to learn how to do it yourself.
There are a ton of free tutorials on YouTube for all kinds of things. You can do it yourself and learn a new skill and be proud of yourself (while saving money too!).
Save on Travel
Travel can be fun and exciting, but doesn’t have to break the bank.
You don’t need to have exotic, faraway vacations to take a break and enjoy time with your family.
- taking several shorter trips per year that are closer to home than long, extended vacations far away
- a “staycation” – where you stay home and explore local areas and activities that you don’t normally have time for
- renting an Airbnb instead of a hotel – cheaper and cozier!
- pack food and eat out of your hotel
- travel to places during non-peak times
Increase your Income
If you are living on a tight budget, then try to find a way to increase your income.
- ask for a raise
- look for a better paying job
- add a side hustle, some examples:
- graphic design
- delivery driving
Related: Side Hustle Ideas
Finally, find ways to give back to your community.
If you can’t donate money, you can give your time and talents as a volunteer. Be rich in your spirit and share the wealth (of knowledge or time!) that you do have.
Final thoughts on living well on a tight budget
As you can see, with a little bit of work on your budget and some careful consideration of your spending you certainly can live well on a tight budget and still have some fun! What other tips do you have?