It happened again. I was at the store and I spent twice as much money as I meant to! The next day, I anxiously opened my banking account to see a balance of… -$91??? Reluctantly, I transferred some of the money from my savings account to my checking account to keep a positive balance. Too bad payday was still 5 days away.
Does this scenario sound familiar? This used to be me every month. Fortunately, I had a cash cushion in my savings account to prevent myself from going into debt, but I used to live month after month wondering why I was never saving money.
Saving money on a tight budget is hard. These tips are meant to help you identify where you can reduce your expenses, use your small budget efficiently, and save money on a tight budget!
If you are interested in my other posts regarding saving money check them out here:
17 Creative Ways to Save Money In College
The Best Money Saving Apps for Shopping
21 Essential Tips to Show You How to Save Money Every Month
20 Easy Ways to Save Money On Your Groceries
The Ultimate Guide to Save Money on a Tight Budget
Know where your money is going
1. Track expenses in Excel or Google Spreadsheets
This is critically important to anyone who wishes to save more money. I personally couldn’t save money until I started seeing where all my dollars went. I highly recommend everyone track their expenses if they want to get their finances in order.
The reason it’s so important is that many of us spend more than we realize. I definitely did! Once you start seeing how much you’re spending on things like food, entertainment, rent, bills, etc, you’ll start to see how you can reduce those costs. In fact, the very act of tracking your expenses and thinking about all of your spending may help you naturally increase how much you save!
For example, when I started tracking my expenses, I quickly realized I went to the grocery store almost every day! Once I stopped going every day, I stopped spending so much simply because I wasn’t in the store. These days, I go grocery shopping about once a week, and my monthly grocery bill has dropped a lot!
If you would like some tips for tracking your spending, check out this article where I show you how to track your expenses.
2. Use budgeting apps
So, you don’t feel like using Excel to track your expenses? That’s ok! There are plenty of apps you can use to monitor your spending. I recommend using apps after 2-3 months of manually tracking your spending, but I get it! Filling out a spreadsheet takes a lot of time! Budgeting apps are perfect for people who don’t have a lot of time.
Many banks and credit card companies have their own built-in expense tracking tools on their apps, but if you would like to use another app, check out this list by The Balance! Be careful! Some apps are paid. Do not use a paid app if you have a tight budget. The whole purpose of this article is to help you free up cash so you can increase your savings. Some people say paid apps are worth the cost because they are so effective. While that may be true, I believe that this is not necessary. You can save a huge chunk of money every month without paying for a budgeting app.
3. Save your receipts from cash purchases
Not many people make cash purchases these days, but if you find yourself using cash, that’s fine! Using cash is a great way to save money because it’s so tangible. You physically see and feel your wallet shrink as you spend. That being said, you should save the receipts you get so you can put them into your spreadsheet or budgeting app. It’s still hard earned cash! Keep track of it.
Groceries
Reducing your spending on groceries is a great way to save money. I’ve included some of my favorite money-saving tips in this article, but you want more advice on saving money on groceries, please check out my article, 20 Easy Ways to Save Money on Your Groceries. These tips will help you save money on a tight budget!
4. Look for discounted items at the grocery store
I love looking for discounted items in the grocery store. I get really excited!! For example, I like to keep my meals below $5. I feel that $5 is a pretty conservative number that’s easy for me to beat when I cook food at home. So, when I am at the grocery store, and I see a packed lunch that’s marked down for quick sale, I go ahead and buy it if it’s less than $5! It saves me time and it beats my personal meal budget.
I’ll be perfectly honest with you, there are many people in the financial independence community who are able to spend a lot less on food than me. It takes practice to reduce your grocery bills, but looking for discounted items that fall within your budget will help you save money! Just be sure to only buy what you need.
5. Reduce or stop snacking
About 1.5 years ago, I started intermittent fasting. There’s a lot of evidence that intermittent fasting plays a role in keeping weight down by reducing your average insulin levels, but that’s not what this post is about! This is about saving money.
So, before I started intermittent fasting, I ate food from the moment I woke up until the moment I fell asleep. I was under the impression that I needed six small meals a day to be healthy. Those expensive protein and snack bars were my best friends.
Then I started intermittent fasting and I realized that I don’t need to snack constantly to keep my metabolism up. As a result, I’ve saved tons of money on groceries because I no longer eat as many expensive snacks. I eat 1-2 large meals per day. Perhaps a handful of grapes or berries in between meals if I need something small. I’ve lost weight, and I’ve saved money!
Weight loss companies don’t like talking about fasting because they can’t make money by telling people not to eat. Instead, they make money by telling you when and what to eat. However, if you are interested in fasting, please talk with your doctor first. There are certain medications and disease states where fasting may be dangerous. Please find out if this is safe for you before trying this approach.
6. Skip meat in some of your meals
Meat is expensive. My most expensive meals tend to be meat-based. While I love eating some delicious steak, I like throwing in meatless meals too! You can try things like lentil soups, or simple salads. Save the meat for later. Besides, trading meat for vegetables helps you get important micronutrients that help your immune system. Healthy, meatless food can help you save on your groceries, and it may also help you save on medical expenses in the future.
7. Buy generic products
Do you like Cheerios? Me too. How about off-brand Cheerios? You know, the kind that’s $2 cheaper and looks and tastes exactly the same as the brand name. Generic or store brand products are often cheaper than the brand name. They are cheaper because the grocery chain buys the product at a discounted rate and gets permission to sell it at a lower cost. This helps shoppers like you save money on a tight budget. Don’t be afraid to try generic products.
8. Use cashback apps
Cashback apps are so simple to use. In many cases, all you need to do is submit a photo of your receipt. Lately, I’ve been using the Ibotta app to save money on groceries. Check out #3 on my article about saving money on groceries for more amazing apps that you can start trying today. Let me know if you have tried any of these apps or if you have suggestions for other apps that people can try!
9. Grow your own produce
Maybe you don’t live on a farm, but you can still grow some produce. Even small things like herbs can be easily grown indoors for many people. My partner often uses basil in his cooking. Last week, he noticed that the price of 6-10 basil leaves was $4 while the price of an entire basil plant was $6. Guess what he bought? The plant! Now we have a gorgeous plant that will provide basil for the upcoming months. All it needs is some water and sunlight.
Consider buying something like that for your own kitchen or yard.
Transportation
10. Get rid of that car with the high monthly payment
Did you buy too much car for your budget? If your car is worth more than 50% of your annual pre-tax income, it’s probably preventing you from reaching your personal finance goals. Think of how much money you could save every month if you didn’t have a car payment? Or if your car payment was significantly less. If the car broke down, can you afford to fix or replace the parts? The last thing I want is for you to have trouble paying your monthly car payment in addition to fixing that car. If your car is too expensive and your monthly payment is too high, please consider trading it for a more affordable option.
11. Buy a used vehicle
You probably already know, but cars depreciate as soon as you drive them off the lot. In the first 4-5 years of owning a car, it may depreciate by 40%! That means, if you bought a new car for $30,000, 4 years later that same car will be valued at $18,000.
Are 4-year-old cars bad? No! Plenty of people drive cars that are 4 years old or older! Let someone else eat the cost of depreciation and buy their used car. If you select the car carefully, I’m sure you will find a great car for much less than a comparable new car.
12. Or Get Rid of Your Car Entirely
Okay, I know this option may sound a little extreme, but hear me out! Some people spend lots of money every year on car insurance, fuel, maintenance, highway tolls, license plate tabs, parking, and car payments. Imagine getting rid of all of those payments. How much money could you save?
I realize this isn’t a great option for a lot of people, but if you live in a large city with good public transportation, access to ride sharing apps, and options for inexpensive commutes to work, this may be the perfect option for you.
13. Use alternative transportation
The obvious mode of transportation I refer to here is public transit like buses or trains, but there are other options too! Biking and walking to work are great options to get exercise and save money on car expenses. I like to walk to work when the weather is nice. It wakes me up in the morning and helps me relieve stress after a long day. I also don’t need to pay the $12 parking fee. If you live too far from work to walk, biking may also be a great option for you.
On days with poor weather, I commute with my coworker. Our organization provides free parking to commuters and since she has to drive to work due to her living situation, she likes to pick me up to take advantage of free parking. If your company charges for parking or if you live too far from work to walk or bike, look into ride-sharing or commuting options that will help you save money on a tight budget!
14. Fuel apps
My favorite fuel app is Gas Buddy. It provides a cute little map that shows you gas stations near your location. It also lists the price of fuel at each location so you can quickly decide where to go. This takes the guesswork out of finding the most affordable gas station.
Additionally, many grocery chains also offer discounts on gas if you shop at their stores. This is another great money-saving tool to keep in mind. Be aware that some of these fuel points expire if you don’t use them.
15. Buy a reliable economy car
If your goal is to save money on a tight budget, you simply don’t have the cash for a luxury car. Maybe in the future when you have more disposable income, but not right now. I recommend buying a used, reliable car that will safely get you from point A to point B. No one else will care what kind of car you drive. So, make the best financial decision for yourself.
16. Drive sensibly
The faster you drive, the more fuel you use. Additionally, you also use more fuel when you brake or accelerate too quickly. Be careful when you drive! Stay within the speed limit and brake and accelerate slowly. This will save hundreds of dollars in fuel every year. It’s also much gentler on your car.
17. Take care of your car
The Balance has an excellent list of how much money you can save annually by taking care of your car. Check it out here! Essentially, performing all the appropriate maintenance on your car will help you save money year after year because you will prevent your car from becoming inefficient. Small things like inflating and rotating your tires, will save you hundreds of dollars every year. Take advantage of these simple tips to save money on all kinds of car-related issues and save money on a tight budget.
Bills
18. Adjust your thermostat
During the winter, keep your home a few degrees cooler than is comfortable. For example, set your thermostat to 68 instead of 72. If you have a thermostat that can be set to automatically change temperatures, adjust them to be cooler in the evening when everyone is asleep in their warm beds and warmer during the day when everyone is moving about the home. Keeping my home a little bit cooler than comfortable has helped me save lots of money on my utility bill. Besides, I love cuddling in blankets.
19. Cooldown your hot water heater
Look into reducing the temperature of the water in your hot water heater. Consider adjusting the temperature from 140 to 120 degrees Fahrenheit. This may make a big difference in your monthly utility bills and help you save money on a tight budget. I highly encourage you to look into it.
20. Wash clothes in cold water
Coldwater helps you in two ways! First, it allows you to save money on heating water. Second, it preserves the colors of your clothes! Try washing your clothes in cold water next time you do laundry!
I also like hang drying my clothes for similar reasons. Hang drying is much gentler so your clothing will last much longer. You also benefit by saving on your monthly energy bill.
21. Shop around
Shopping around can instantly free up money in your monthly budget. It’s good practice to shop for new car insurance about 1-2 times per year. It’s also a good idea to shop around for a new cell phone plan if you haven’t done so recently. Check out this article where I talk about how you can save $2000 right now!
Rent/Mortgage
22. Move to a cheaper area
Let’s face it, some areas are simply more expensive than others. If you live in an expensive area of town, consider moving. Most people spend more money on living expenses than any other category in their budget. There’s nothing wrong with moving to a cheaper area.
In fact, many people are leaving California because the cost of living is too high. It costs 1.5 times more to live in California than in the rest of the country. Here is an interesting article detailing why a couple recently moved away from Sacramento. It’s okay to move away from a city or a state that doesn’t make sense financially.
23. Get a roommate
A roommate can help significantly reduce your living expenses. The more roommates you can have, the less you need to pay for your living expenses. Some people even figure out how to live for free by subletting parts of their apartments or turning their home into a rental property. Living with others is excellent for reducing your expenses and increasing your savings!!
24. Negotiate your rent
Is your lease expiring soon? If you have been a good tenant, consider asking your landlord to give you a discount on rent if you sign another lease. This strategy can help lock in a great deal for you and ensure your landlord has a reliable tenant. It never hurts to ask!
25. Offer to be a property manager
Another way to reduce your rent is to offer to be a property manager for your landlord. Property managers collect rents and fix toilets and things for their tenants. If you have a landlord that has maintenance staff, then you wouldn’t need to worry about fixing anything for your tenants. Some property managers are able to live in their homes for great prices! Again, it doesn’t hurt to ask.
Saving money on a tight budget is hard, but as you can see from all these tips, it is definitely doable! Pick a few of these tips to work on immediately to start seeing money-saving results right away! If you feel there is something I should add to this article, please let me know! Good luck with saving money and let me know how it goes by either sending me an email or writing a comment!