I recently came across a quote by Warren Buffet that says. “ don’t save what’s left after spending, but spend what’s left after saving”. Sounds easy, right? Not quite, especially for those on a tight budget. Let’s be real, saving money on a tight budget is by far hard and near impossible. But it is important to set aside some savings for the future, no matter how much income or expenses are.
A recent survey found that 62% of Americans have less than $1,000 dollars in their savings if they need it for an emergency. While most people would like to set aside money each month, a tight budget can make it an insurmountable task . To help me overcome the challenges of saving, I keep my financial goals front and center at all times, and for me, that is my number one reason.
When you’re already on a tight budget, it’s not easy to find additional ways to save money. Let take a look at seven practical ways to start saving regularly even on a tight budget.
1. Pay Yourself First
Paying yourself is a great strategy, and a way to save regularly. No matter how little you might earn or how much extra you manage to save up, always pay yourself first. You should try to set aside at least 10% of your monthly income into your savings. Do this at the start of the month, that way you won’t be tempted to spend that money on anything.
2. Cut Monthly Subscriptions
Do you really need six streaming services or a gym membership you never use? A few years ago one of the biggest budget busters was our cable services, now we have more streaming services than we need. Trust me a few subscriptions can add up. \
Spending $16 for Netflix here, $10 for Spotify there, $10 more for that new platform everyone’s talking about, and before you know it, you’ve racked up $100 or more in monthly costs. If that portion of your budget has gone a touch out of control, It’s time to go through those you really use.
3. Your Cell Phone Plan
It is no secret that cell phone bills can be pretty expensive. But does it really have to be with all the cellular providers and all the plans available? Shop around to see what is available at a price that fits into your budget. Whether it’s for more minutes, more data, or for an overall better phone service package. Give your service provider a call and ask. Worst case scenario, you can ask to cancel. There is a lot of competition out there, they could just have a special retention offer available to keep your business.
4. Look At Your Food Bill
Another way to save money is to change the way you eat. Eating out often is a big budget buster. One of the best things you can do is to stop or greatly cut back on eating out and add that extra money to savings. I pack leftovers most days for lunch at work. The overall cost of dining out tends to rise faster than the cost of groceries.
The average household spends most of its food budget on groceries ($4,363 / 5.9% PTI), but it also spends a decent amount of money going out to eat ($3,365 / 4.5% PTI). The takeaway for most households? You might spend more money going out to eat than you realize because on average Americans spend almost half their food budget at restaurants.
5. Negotiate Your Bills
When you’re on a tight budget, understanding where every penny goes is key, just blindly paying the bills without considering the cost can cause money anxiety. While some things, like your rent or mortgage, maybe non-negotiable, you might be able to get a better deal on some of your other bills, including:
- Cell Phone services
- Car insurance
- Homeowners or renters insurance
Go over your bills and consider what you would possibly be ready to reduce without getting rid of it completely.
6. Stop Using Your Credit Cards
A sure-fire way to saving money is to avoid credit card usage. When you are living on a tight budget, one of the worst things you can do is complicate your finances. And spending money on credit cards is one of the easiest ways to do just that.
7. Get a Side Hustle
There’s only so much you can save when you’re barely making ends meet as your savings is your income minus your expenses. When you are living on a budget, there comes a point when you just need to make more money. All you have to do is get creative. If you have a marketable skill that people are willing to pay for, why not start a side hustle?
Many Ways to Save Money
There are several ways to save regularly. Believe it or not, there are even more ways to save money that aren’t included on this list above. It is important to monitor your spending, be aware of utility costs, and keep your grocery bills in check, but the most important aspect of saving money is knowing your why.
Knowing why you want to save money and what your financial goals are you’re more likely to be willing to follow all the other tips. So today, take some time to evaluate your life, where you’ve been, and where you’re headed. Why is saving money important to you? What’s your reason? Then, use that reason to fuel your motivation to start following the other tips on this list for a more financially secure life!