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Would you like to learn how to live on a tight budget?
Learning how to live on a tight budget can be exhausting.
In fact, you may want to still enjoy life while reaching your financial goals.
Living on a tight budget can help you improve your money management skills and start reaching your goals a lot faster.
Budgeting can seem difficult in the very beginning but as you continue to work towards budgeting it becomes easier.
There are a lot of people who deal with financial stress and can range from student loan debt to filing for bankruptcy.
It’s very important to learn how to manage your money the right way so you can gain financial freedom.
Here are 10 best ways to live on a tight budget.
1. Pay Yourself First
To live on a tight budget you must continue to save. I know that may sound confusing but let us explain.
You don’t want to stop your savings when living on a tight budget. Actually, your savings become even more important.
Each time you get paid you should allocate a certain percentage of your paycheck to savings. This is what paying yourself first means.
As a rule of thumb, you should save 10-20% of your paycheck before you pay any bills. This can be accomplished by having a direct deposit set up with your employer into your savings account.
Most importantly, you will create a savings habit and have money in your account without even thinking about it.
This is a huge step in taking control of your money. A lack of savings is the main reason you are probably living on a tight budget in the first place.
After deciding how much money to save, then allocate the rest of your money to your other financial responsibilities.
2. Meal Prep To Live On a Tight Budget
One big spending category for a lot of people is eating out. This category can hurt a lot of people’s budgets.
Living on a tight budget will require you to get creative so you can save money to reach other financial goals.
Planning your meals can definitely feel like a lot of work. But, there are many options available that can make your life easier.
At the end of the day, you want to have delicious food while not spending a fortune.
It will take some time getting good with meal prepping but it can really help your budget in the long run.
This can be accomplished by using meal prepping services or trying the $5 Meal Plan. Their weekly meal plan is sent to you via email and is designed to help you save money while enjoying good food.
You can try their risk-free plan for 14-days by clicking here. After the 14-days, you can continue with the service by doing nothing or you can cancel anytime (it’s that easy!).
3. Pay Off Your Debt As Fast As Possible
Most people who are living paycheck to paycheck and living on a tight budget probably have a lot of debt.
In fact, to reduce the amount of financial stress you have, you should pay off your debt as fast as possible.
That includes student and car loans, credit cards, medical bills, and so on.
You should focus on your mortgage after you pay off your consumer debt. But, it’s important to be prepared for homeownership before deciding to make the biggest purchase of your life.
The day you don’t have any payments in the world is the day you reach financial freedom.
Above all, this allows you to keep money in your pocket and start increasing your savings.
The key to getting out of debt fast is by not adding any new debt. After that, you want to choose a debt payoff method that works for you.
The most popular methods are the debt snowball and the debt avalanche.
The debt snowball is where you pay off debt smallest to largest regardless of the interest rate. This method provides a little more motivation because you will see progress faster.
The debt avalanche is where you pay off your debt highest interest rate to smallest interest rate.
There’s no right or wrong approach. But, it’s important to do what works best for your personal situation.
4. Set Realistic Goals
One of the most important things you can do when living on a tight budget is set realistic goal that are specific and measurable.
Setting goals like “I want to be debt-free” won’t get the job done. You have to be exact on what you are trying to accomplish.
For example, a goal to be debt-free would be “I want to be debt-free within 2 years and pay off $2,000 per month.” This allows you to have something to work towards and hold yourself accountable.
Your goals should motivate you and drive you towards completion.
Setting goals in this fashion will keep you pushing forward when budgeting gets hard. You will be so focused that you will do whatever it takes to get the job done.
Above all, setting realistic goals will keep you on track from doing anything to further delay your financial progress.
5. Live On Less Than You Make
Living on a tight budget will require you to live on less than you make. It probably sounds like common sense but you’d be surprised how many people cannot grasp this concept.
Living on less than you make will challenge you to change your perspective with money.
It may be difficult when you first start budgeting and feel restrictive. This is why it’s so important to have a purpose behind everything you do.
Having a reason why you are living on a tight budget will keep your mindset on the right things. You go from playing defense to playing offense.
Also, the more progress you make the more aggressive you will become with trying to squeeze your budget because you have an ultimate goal in mind.
This approach is a gamechanger for wealthy people. They figured out that you must live on less than you make to build wealth.
Living on less than you make allows you to use your income wisely and invest in appreciating assets.
You will be surprised how much progress you will make once you fully grasp this concept.
6. Increase Your Income With a Side Hustle
When you are living on a tight budget it’s important to try and increase your income. Having additional streams of income can really help your budget.
There are many ways to increase your income and a popular way is by finding a side hustle.
A side hustle is a side job a person takes in addition to their primary job. You can even start your own business as a side hustle.
To give yourself more room in your budget you must find more income as soon as possible.
After the Covid-19 pandemic, generating more income has become even more important.
Many people loss their jobs and income during the pandemic and it really impacted their budget.
This is a huge reason why you must focus on increasing your income so you can live with financial freedom.
Some great options to side hustles include: virtual assistant, freelance work, social media management, and so on.
Side hustles can be done from home or remotely. A work-from-home job has become more popular due to the flexibility it can provide.
7. Eliminate Unnecessary Subscriptions
If you take time to review your budget, you probably have expenses you can cut. A common expense people waste money on are unnecessary subscriptions.
Companies are taking advantage of people who have their subscription plan and forget to cancel them.
A lot of people start a free trial and never cancel the plan so they are being charged monthly for a service they rarely or never use.
When signing up for a trial be sure to cancel the plan before you get charged a monthly fee especially if you no longer want to use the service.
This is an easy way to waste money and while living on a tight budget it’s important to use every dollar wisely.
A great service to help with canceling your unnecessary services is Trim. Trim does all the work by negotiating your bills, canceling old subscriptions, and more.
You can start a 14-day free trial to see if you like the service but be sure to cancel if you no longer wish you use it.
Trim only makes money if they save you money so it’s a pretty good service to use and requires minimal effort.
8. Find a Cheaper Cell Phone Plan
The price of a cell phone plan has gradually increased over the years. Many people are paying well over $100 a month for their cell phone plan.
You can save money by switching providers and it will help while living on a tight budget.
Here are some great options that are below $50 a month:
- Tello. This service is an extension of T-Mobile’s network. You can choose a custom plan with unlimited calls, texts, and 1 GB of data for $10. It’s a solid choice for someone looking to use an old or unlocked phone and save money.
- Xfinity Mobile. Comcast subscribers can take advantage of Xfinity Mobile, which is an extension of Verizon’s network. Plans are around $45 per month.
- Lyca Mobile. For frequent international callers who need a good amount of data should check out Lyca Mobile.
- US Mobile. If you don’t use much LTE data then US Mobile is a good choice. You can create a custom plan that works for you. Plans start at $10 a month.
9. Start Using Money Saving Apps
Money saving apps can help you live life more comfortably when living on a tight budget.
When you make purchases you can use apps to help you easily save money.
Some of our favorite money-saving apps are:
You should download and use all of these apps to help you free up some cash.
10. Start a Blog
This is our favorite way to increase income while living on a tight budget. Starting a blog can be lucrative and give you more options for your money.
Starting a blog is exactly how we generated more income to pay off debt fast. We highly recommend starting a blog because it’s fun and allows you to be creative while making money.
If you really want to start a blog, we have created a free online course that takes you step-by-step on what it takes to get started.
You will learn how to start a blogging business, choose a blog, familiarize yourself with your blogging platform, design a logo, create your first blog post, and learn how to make money your blog.
So, there are our 10 best ways to live on a tight budget. We know it will take time to implement all of these tips but choose 2 or 3 and work your way through the list.
We really hope these tips help you along your financial journey.
What other tips help you live on a tight budget?
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About the Author
Neiko & Alexis Johnson
Neiko & Alexis are personal finance experts and founders of Secret to Finance. They learned how to get out of debt and pay off $240,000 in 27 months. Read more.