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Are you looking for ways to live on a budget?
Living on a budget can help you have better money management skills.
You can save to build an emergency fund or for retirement, pay off debt, and go on your next vacation.
Budgets are great because you have a clear understanding of where you spend your money and how much you earn each month.
A detailed monthly budget will help you easily allocate money to your spending categories. In fact, you will be able to figure out what areas of your spending need adjustments and which areas you’re doing well with.
However, what if you’re struggling to budget and it’s not working for you?
The average person deals with a lot of financial stress. Many have student loans, car and credit card debt, and many other debts such as medical, personal, and more.
It’s important to understand the basics of budgeting to live on a budget.
Here are our seven best ways to live on a budget.
Automate your savings
It’s important to save money when you’re living on a tight budget. You don’t want savings to be your last focus when it comes to your money.
Saving should be your number one priority for your budget each month.
To clarify, you don’t have to save a lot each month. But, the key is to consistently save money. It can even be as low as $25 per month but it’s all about saving an amount that allows you flexibility within your budget.
We have taken the action of automating our savings each paycheck.
Meaning, before we even see our money, an automatic transfer to our savings has already happened.
This is accomplished by having a portion of your check withdrawn and transferred to your savings or investing account.
Above all, this allows you to be consistent with your savings and you don’t even have to think about it. It just happens automatically.
In fact, it’s more effective when the manual action to save money is removed. People tend to save more when it’s automated.
Most importantly, the lack of savings is probably the main reason you’re on a tight budget now.
It’s critical to find ways to consistently save so you have more money in case an emergency happens.
Saving money will allow you to build an emergency fund for life’s unexpected events.
Ultimately, you don’t want to have an emergency happen and you have no money to take care of the emergency.
This will create financial stress and you will continue living on a tight budget.
Saving money can be hard but it’s important to get started and create a new habit.
It will allow you to live on a budget because you know you have to save money each month.
Plan your meals
Eating out is one category that hurts a lot of people’s budgets.
When you are living on a budget you must find ways to save money and planning your meals is a great way to save.
You may feel like you’re planning your meals but you need to know exactly how much you’re spending on food.
Ultimately, this means you need to plan out what meals you’re going to eat for the week and create a grocery list so you know exactly what they will cost.
Above all, this will help you stay within your grocery budget and not overspend.
To be honest, it’s not easy to plan your meals. It takes some effort to create a good routine.
You can save hundreds of dollars by not eating out as much while eating healthier as well.
Pay off debt to live on a budget
Most people are struggling financially because they have a lot of debt.
Having a lot of debt will eat at your budget each month leaving you with nothing to live on.
Living on a budget is a good idea so you can pay off your debt as fast as possible. Above all, it reduces the amount of financial stress you may experience.
Debt requires you to pay someone else and make them wealthy instead of paying yourself each month and making yourself wealthy.
The day we realized we had $460,000 of debt, it was very scary. We decided it was time to get control of our money and help others do the same.
Paying off debt requires a mindset shift and understanding being debt-free is the fastest path to building wealth.
The longer your money is tied up with debt the longer it will take you to reach your financial goals.
Find ways to increase your income so that money can be used to pay off debt even faster.
Just imagine living life without having to make payments to someone else. You will be able to live life with financial freedom and on your terms.
Taking an online money management course is a great way to learn how to pay off debt fast and manage money the right way. Check out our course Find Your Money Master Plan to learn the blueprint we used to change our financial picture in less than 4 years.
Reduce expenses to live on a budget
One of our key secrets to living on a budget is by reducing expenses.
This won’t make you wealthy but it will give you room in your budget to put money towards other financial goals.
Ultimately, it’s all about spending your money on things you care about and not wasting money on things you don’t care about.
You may feel like your life is restricting by reducing expenses but it’s only for a short period of time.
Once you pay off debt or find additional streams of income, it will give you more room to enjoy life.
The whole point of living on a budget is to take control of your money. You get to tell your money what to do by having control of your budget.
But, you won’t be able to reduce expenses if you don’t live on a budget. Meaning, you won’t know where your money is going each month so you will continue to struggle financially.
If you’re going to be successful with money, it takes understanding how to spend wisely.
On the other hand, we do believe in enjoying life even when living on a budget. You should plan for “fun money” to do things you enjoy each month.
However, this should be a small amount and shouldn’t hurt your overall budget.
If you plan for “fun money” and you’re still struggling financially, you will have to decrease how much money you’re allocating to that category.
The approach to reducing expenses for us was a gamechanger. You will be surprised how effective you will become with money once you start getting very detailed on your expenses.
Use money saving apps
It’s a good idea to use money-saving apps when you’re learning how to live on a budget.
Above all, it’s an easy way to save money when you make purchases.
Some of our favorite money-saving apps are:
Start a side hustle to increase your income
Increasing your income will allow you to have more money to save. Having additional streams of income will give you more options with your money.
There are many ways to increase your income such as: asking for a raise at work, getting a higher-paying job, or starting a side hustle.
You can start a side hustle online pretty easily nowadays. The increase in remote work has created a lot more options.
Ultimately, you should no longer have one stream of income with the number of options available for you today.
To live with financial freedom, you must create more income today.
Most importantly, if one stream of income is taken away or decreases, your other streams of income can help you financially even during a tough financial period.
This is why it’s so important to find ways to add more income so you create financial security in your life.
A great option is starting a blog. Blogging can be a business and create more income for you. You can get started in less than 15 minutes using our step-by-step guide.
Related reading: Work from Home Jobs: 10 Best Ways to Make Money
Buy used cars instead of new
Certainly, everyone likes to have that nice new car. However, that nice new car can create financial stress in your budget.
Just because someone will loan you money for a new car doesn’t mean you can afford it.
When you’re living on a budget you should always buy used cars instead of new ones.
New cars depreciate the second you drive them off the lot. You want to be in the business of buying appreciating assets and not depreciating assets.
However, if you can afford to pay cash for the new car and it doesn’t hurt your budget then go for it.
But, if you’re struggling financially you need a used car just to get you by until you increase your income and can afford a new car.
It’s nothing wrong with buying used until you hit your other financial goals. It’s a temporary sacrifice so you can drive what you want later.
Final words - live on a budget
Living on a budget is all about making smart money decisions. You don’t want to continue spending money on things you don’t value or paying unnecessary interest on credit cards, car loans, student loans, etc.
You can reach your financial goals a lot faster by living on a budget. The path to wealth starts with getting control of your money so you can live with financial freedom in the future.
Do you think budgeting is helpful?