We can never seem to have enough money, right? Right when you start to get comfortable and have figured out how to build up your savings, BAM! Emergency and money is tight again. While I can’t eliminate financial emergencies from your life, I can teach you how to live on a budget within your own individual financial situation that will not only help you reach your savings goals but also help you feel a lot less stress when looking at your bank account.
Keep reading for a big list of 55+ ways to live on a budget when money is tight that still allow you to live your life while reaching your financial goals.
Some of the ideas you’ll find in this post are more generalized ideas that’ll help you navigate your tight budget, but most of them are new ways to handle your bank account that I have, unfortunately, had to learn through much trial and error.
I was where you are at right now about 10 years ago. I was desperate for some financial guidance because I was growing. Credit cards maxed out, bank account on red, you name it. Emergency fund? Yeah right. I had no idea how to manage my finances on a regular basis and I was skirting by in every sense of the word.
Then something clicked and things started to work out. I started actually building up a solid savings account, learned how to invest, and the biggest thing of all, learned how to live within my family’s monthly income.
Here I am 10 years later with much to share. I am here to help you reach your savings goals and your life goals. I am not like other financial coaches who want you to skip out on life in order to gain control of your finances. I believe that you do deserve a movie night every now and again. That you should buy that one thing from the grocery store that you really want this week. You should be able to live your life and live on a budget.
The KEY to Creating a Budget
Want to hear a little secret? The key to creating a budget that will actually work for you is to allow yourself room to mess up a little bit. You can’t expect yourself to go from your daily Amazon purchase spending habits to a zero-tolerance budget. That is unrealistic and odds are, you’re going to not stick to the budget because you messed up on Tuesday so why keep going anyway?
No. The key to creating a budget that sticks is to make it work with your life and goals in mind. Set aside a small budget for yourself to live a little and thank yourself for that later.
With that in mind, let’s dive into the 55+ tips for living on a budget when money is tight!
Build Your Emergency Fund
Financial anxiety is one of the worst kinds, right? It used to keep me up at night for years. I was desperate to find a fix but nothing was working until it did. Luckily for you, I kept a note of everything I did along the way and now I am here and ready to teach you how to build your emergency fund (amongst many other things). For everything from the basics of understanding your finances, to creating your monthly budget, I have covered it all. Click the button below to learn more!
Other posts you might like…
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- 27 Helpful Budgeting Books for Personal Finances
- 97 Mindset Affirmations for Saving Money in 2024
- 17 Books on Frugal Living That Are Actually Helpful
- 14 Trips in 2023 — Oh my!
How to Live on a Budget Realistically
Yep, that is right. We are going to learn how to live on a budget realistically today and this budget is going to stick this time around. Trust me, these tips really do work!
Classic Tips for Budgeting That Actually Work
Saving money on a regular basis on a budget is possible and honestly, some of the oldest advice is what works best!
Here are a few ways to manage your monthly expenses in order to actually have some money at the end of the month:
Track Your Expenses: Keep an eye on where your money is going to identify areas for potential savings. The easiest way to do this is to keep track of the times you swipe your debit card or hit “checkout” online. Check through your bank statements from the last few months and see where your money is going right now without making any changes.
Create a Realistic Budget: Make a detailed budget that aligns with your income and includes room for savings after you have taken a look at your monthly expenses. Your budget should include your fixed expenses, variable monthly expenses such as your food budget and gas (but don’t forget about some extra money for living a little), and then a fixed amount of money to go toward savings each month. Best advice? Transfer that money over to savings first thing so you aren’t tempted to spend it during the month.
Emergency Fund: Build an emergency fund to cover unexpected expenses, aiming for 3 to 6 months’ worth of living expenses. This should be the first thing you do when trying to take control of your personal finances. I cover the details of how to build an emergency fund (and so much more) in my Money Fit Challenge.
Prioritize Debt Repayment: Try to get those credit card statements down to zero after building your emergency fund up. Start with the cards with the highest interest rate and work your way down.
Cut Unnecessary Expenses: Review your spending habits and identify non-essential expenses that can be trimmed. Do you really need all of those things in your Amazon cart? Probably not.
Use Cash More Often: Using physical cash can make you more mindful of your spending, helping you stick to your budget. Extra tip: save the extra cash at the end of the month instead of letting it roll over!
Save Automatically: Set up automatic transfers to your savings account to ensure consistent savings. If you aren’t financially confident enough for that step, instead, manually transfer the money either on your first or second paycheck of the month so that it doesn’t sit in your spending account.
Cook at Home: Eating out frequently can drain your budget. Cooking at home is often healthier and more cost-effective. This is where the tried and true meal plan comes into play. They aren’t kidding, a meal plan can easily save you hundreds of dollars each month!
Negotiate Bills: Regularly review and negotiate bills, such as cable, internet, or insurance, to ensure you’re getting the best rates. Yeah, I didn’t know I could do that either!
Invest Wisely: Explore investment options that align with your financial goals, considering long-term growth. To learn more about investment opportunities, check out my free investing class.
Use Apps for Budgeting: Leverage budgeting apps like Mint or YNAB to automate tracking and categorizing expenses.
Regularly Review and Adjust: Periodically assess your budget to accommodate changes in income, expenses, or financial goals. This is very important!
Explore Additional Income Streams: Consider side hustles or part-time gigs to supplement your primary income source. Blogging is one of the ways I make extra cash!
Buy Generic Brands: Opting for generic brands instead of name brands can often save you money without sacrificing quality.
Plan Meals in Advance: Planning meals ahead of time can help you save on groceries and reduce the temptation of eating out.
Compare Prices: Before making a purchase, compare prices from different retailers or online platforms to get the best deals.
Limit Credit Card Usage: Minimize credit card debt by using credit cards sparingly and paying off the balance each month when you are able to. Learn how to properly read your credit report here.
Audit Subscriptions: Regularly review and cancel subscriptions you no longer use or need, whether it’s streaming services, magazines, or memberships. This is a big money suck that many of us don’t even know about!
Shop During Sales: Time your purchases to coincide with sales events to take advantage of discounts and promotions. I try to time my purchases with typical big savings events. For example, I purchase most all of my Christmas gifts during the Black Friday and Cyber Monday sales and stock up on life things during Amazon Prime Days. You can learn how to plan for other big expenses in my Money Fit Challenge as well!
Take Advantage of Employer Benefits: Explore benefits offered by your employer, such as retirement plans, health savings accounts, or employee discounts. Do not miss out on those!
Take Advantage of “Extra” Income: Make sure you are using things like your tax refund or holiday bonus in ways that help you further reach your goals. Maybe that means making an extra car payment or two or paying a bill for the entire year (which often gets you a discount). Always take a look at your goals before spending any amount of money that comes to you unexpectedly.
Creative Budgeting Tips for Beginners
Now, if you are looking for some of the easiest ideas for living on a budget that you haven’t read or thought about before, this list covers them all!
Keep reading for some creative budgeting tips that’ll help you buy new clothes while also work on paying off your outstanding debt.
Money Jars with Labels: Label jars for specific expenses like “Fun,” “Groceries,” or “Savings,” and physically allocate money into each jar to visualize your budget.
DIY Vision Board: Create a vision board with images representing your financial goals. Display it prominently to stay motivated.
Theme Nights: Plan budget-friendly theme nights for meals, like “Mexican Monday” or “Italian Friday,” to simplify grocery shopping and cooking.
Treasure Map Savings: Draw a treasure map for your financial goals. As you hit milestones, mark them with “X” and celebrate your progress.
Cash-Only Challenges: Choose a week to go cash-only for your discretionary spending. It adds a tactile element to transactions, making you more mindful.
Coupon Art: Turn coupon clipping into an art project. Create a collage with your saved coupons to visually see your budget-saving achievements.
Financial Challenges: Engage in money challenges like the “No-Spend Weekend” or the “30-Day Savings Challenge” to inject a sense of adventure into your budgeting journey.
Personal Finance Games: Explore board games or apps that simulate financial scenarios, making learning about budgeting enjoyable.
DIY Gifts: Embrace the joy of giving by creating personalized, budget-friendly gifts instead of buying expensive ones.
Head to the Library: Your local library is a gold mine! Whether it is books for your own leisurely reading, books for your kids, or books on educational matters such as cookbooks or “How to hike”, the library has almost everything you need.
Budgeting Bingo: Create a budgeting bingo card with tasks like “Cook a Meal at Home” or “Negotiate a Bill.” Cross them off as you accomplish each task.
Thrifting Adventures: Turn thrift store shopping into a treasure hunt. Challenge yourself to find unique items within a set budget. This would be a fun cheap date idea!
Financial Affirmations: Write positive financial affirmations and place them where you’ll see them daily to foster a healthy money mindset.
Sell and Splurge: Sell unused items and use the proceeds for a guilt-free splurge on something you’ve been wanting.
Budgeting Playlist: Create a playlist for budgeting sessions to make the process more enjoyable. Jam out while you organize your finances.
Financial Journaling: Keep a budgeting journal where you document your financial goals, challenges, and achievements.
Check Out Free Events: Join local Facebook groups in order to find out what free things might be going on around you. I am sure you will be surprised at how much you can do with your family or spouse for free!
Reward Jars: Set up a jar for small rewards. Whenever you achieve a budgeting goal, treat yourself with an activity or small purchase from the jar.
DIY Spa Day: Instead of an expensive spa day, create a DIY spa experience at home using budget-friendly products.
Investment Tree: Draw a tree representing your investments. As they grow, so does your financial tree.
Library Adventures: Challenge yourself to read books, watch movies, or listen to audiobooks from the library, saving on entertainment costs.
Shop Your Pantry Challenge: Create meals using only ingredients you have at home, encouraging creativity in the kitchen and saving on groceries. Use ChatGPT to help you come up with recipes using the random ingredients you find.
Invest in Learning: Allocate a budget for online courses or workshops to invest in personal and professional development. This is a great use of your fun money that keeps on giving! Duolingo is a fun one.
Fitness on a Budget: Explore free or low-cost fitness options like hiking, biking, or home workouts instead of an expensive gym membership. YouTube is an amazing place for this.
DIY Decor: Refresh your living space by creating your own decor using affordable materials or repurposing existing items.
Mindful Spending Meditation: Practice mindful meditation before making a purchase, ensuring that it aligns with your values and budget.
Upcycling Challenge: Give old items a new life through upcycling projects. It’s eco-friendly and budget-friendly.
Plant Parenthood: Grow your own herbs or vegetables at home. It’s a cost-effective way to have fresh produce and a rewarding hobby.
Virtual Travel Fund: Create a “virtual travel fund” where you save money for future travel experiences. Use photos, maps, and travel quotes to visualize your destinations.
Plan Cheap Dates: There are so many dates you can do both at home and out and about for free! Here are some awesome budget-friendly date night ideas.
Best Advice for Living on a Budget
Okay, so we have the ideas down, but what about some advice? Living on a budget is a lot harder at the end of the day than it needs to be if you aren’t looking at the bigger picture.
Here is some of my best advice for living on a budget:
Prioritize Needs Over Wants: Distinguish between essential needs and discretionary wants. Focus on meeting your basic needs first before indulging in non-essential expenses.
Set Clear and Attainable Goals: Define short-term and long-term financial goals. Having clear objectives provides motivation and helps guide your spending decisions.
Build and Follow a Realistic Budget: Create a detailed budget that reflects your income, fixed expenses, and discretionary spending. Be honest about your financial situation and adjust as needed.
Emergency Fund is Non-Negotiable: Allocate a portion of your income to an emergency fund. This safety net can prevent financial setbacks when unexpected expenses arise.
Shop Smart and Compare Prices: Be a savvy shopper by comparing prices, looking for discounts, and considering generic brands. Planning your purchases can help you make informed and cost-effective decisions.
Constantly Look for Savings: Regularly review your bills and subscriptions. Negotiate where possible, and don’t hesitate to switch to more cost-effective alternatives. Small savings can add up over time.
FAQs About Living on a Budget
Check out all your income sources, sort expenses into needs and wants, and set achievable short-term and long-term goals. Allocate a portion for your emergency fund, give your budget regular check-ups, and stay flexible to adapt to life’s twists. Keep the positivity flowing with mindful spending, debt repayment focus, and automated savings.
Consider your budget as your own financial roadmap. Begin by noting down all incoming cash, be it from your primary job or any side hustles. Then, outline your essential payments like rent, utilities, and loan commitments—they’re your fixed expenses. Afterward, add a touch of enjoyment with expenses for groceries, dining out, and entertainment, finding that sweet spot between needs and wants. And of course, remember your savings goals.
Sticking to a budget is like having a money superhero by your side. First off, make it realistic and flexible—think of it as your financial sidekick, not a strict rulebook. Track your spending and celebrate the small wins, like staying on budget for a week. Be mindful of your goals; they’re the guiding stars. If you slip up, no worries—adjust, learn, and get back on track. It’s a journey, not a race, so enjoy the ride with your budget as your trusty companion, cheering you on to financial success!
The 50/30/20 budgeting rule is like a financial roadmap. Break down your income: 50% for essentials like rent and groceries, 30% for the fun stuff (think dinners out or streaming binges), and stash away 20% for savings—be it for emergencies or exciting future plans. It’s a simple way to balance your spending, making sure both necessities and treats get their fair share.
With that, I think you should have everything you need in order to gain control of your finances and start on a path that’ll help you be more prepared for unexpected expenses.