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Figuring out how to save money on a tight budget can feel impossible. You save money when you have extra right?
And, if you are on a tight budget and a low income, extra is just not something you have, making it extremely difficult to put away money for your savings.
But, saving is important for your future. And, believe it or not, saving money can actually help you start to make more money. And with more money, then you don’t have the issue of a tight budget!
Because, if you save enough money, you can start a business or a money-making side-hustle. Or you can save enough for a down payment on a house and stop wasting money on rent.
The point is, saving money on a tight budget, even on a low income is a necessity for your financial health and your future. And, even when you are on a limited budget, you can still find ways to save money.
The MEaning of a tight budget
What exactly is a tight budget? Sometimes it is even referred to as a shoestring budget. According to Merriam Webster, here is the actual definition of a tight budget:
: involving a relatively small amount of money for planned spending. And here is the example they give of it in a sentence:
She started her business on a small/tight/shoestring budget and could not afford to overspend.
Basically a tight budget means you have very little extra money!
9 ways to save money on a tight budget
If you have a fixed, low income and a limited budget, there are still ways to save money. Try these 7 best tactics for saving money on a tight budget.
1. Review Your Budget
The first step in finding ways to save money is to take a hard look at your current, albeit tight, budget. And if you don’t have a budget sheet you need one like the one below!
You may simply have too much allocated for certain parts of your budget. Ahem, entertainment! While going out to eat or having drinks is fun, it might be robbing your future from you. And it could be preventing you from saving money like you need to.
Just say no now, long enough to increase your savings in order to make more. And, someday, maybe you can go out to eat as much as you want.
In any case, review each line of your budget and see if there is a place where you can find extra funds to push to your savings account. Read this guide for tips on exactly how much you should save each month.
2. Track every penny you spend
One possible issue with not finding ways to save money on a tight budget is that what you are spending is getting away from you.
You might drop $4 on a latte without thinking, or spend extra at the grocery store without even realizing it. If you are struggling to save money, this could be a factor.
It is easy to ignore small expenses, to spend and forget and then at the end of the month you wonder where the heck all your money went!
If you are on a tight budget, with not a lot of income you need to be extra vigilant. Track every penny of the money that you spend. It can help you find ways to save more, even on a small budget.
It will not only help you understand where you could find money to save, but could also help you spend less in general.
Before you buy anything, ask yourself if you really need it.
Chances are you don’t, and if you track everything, and spend less pennies every day, at the end of the month that adds up to dollars.
Dollars you can save.
3. Make lifestyle changes to save more money
One easy way of saving money on a tight budget is to change your lifestyle in order to free up more funds.
You might be living in a two bedroom apartment but you only use one. Yes, it’s nice to have a whole second closet (that’s the size of a bedroom).
But you won’t get ahead if you aren’t using every asset you have. So rent out the second bedroom, even if just for a few months. You can pocket several hundred extra dollars for your savings account.
If your car payment each month is a lot, consider selling the car and buying something less expensive.
If your budget is just too tight to find money to save, make changes to free up money for savings.
If you are really strict, you can save as much as $5,000 in 6 months!
4. Find ways to make extra money
If finding a way to save money on a limited budget seems impossible, then try a different tactic. Like finding ways to make extra money!
It is certainly much easier to save money when you have more of it on hand. It might even be fun to find a new way to make extra income.
There are a ton of ways to make extra income. Take an extra part-time job, turn your favorite hobby into a side hustle, or start an online business. There is no limit to the options to make extra cash to save.
If your budget is too tight to save, try increasing your budget by bringing in more income!
5. Reduce your utility bills
This is a tried and true way to find money to save on a low income. Most people just pay their utility bills without looking at them.
But the truth is, you can absolutely reduce your utility bills without sacrificing comfort. Change your thermostat every day when you go to work. You don’t want to pay to keep an empty house comfortable!
In the winter, layer your clothing to keep warm instead of just relying on the heater. Check seals on your windows and doors to make sure you aren’t cooling or heating your home inefficiently.
Purchase smart plugs to help control electricity use or a smart thermostat for your HVAC. Turn off all your lights when not in use.
6. Look for hidden charges
Examine all your bills for any hidden extra charges. Or subscriptions you don’t need. A lot of times when you sign up for a free trial, once the first week or month is up they start charging you.
You may be getting charged for something you don’t need or use. Make sure to find hidden charges and cancel them. Your budget could be tight from unnecessary expenses.
7. Negotiate your bills
Another way to save money on a tight budget is to find more money by negotiating your bills.
A lot of service providers like cable tv will offer serious discounts to new customers. You can either switch to a new one to save a lot, or call up your existing provider and ask them to lower your bill.
They will likely work with you to avoid the loss of a customer, especially if you tell them about their competitor’s offer.
Find ways to save by bundling services such as internet and t.v. Review every bill you pay, and call them up to see if you can save more money!
8. Try a No Spend Challenge
If you really want to find a good way to save money try a no-spend challenge. It can be for a set amount of time like 2 weeks, or 30 days.
You just have to spend no extra money on anything beyond the basic necessities that you need. At the end of the challenge you should have some money to deposit in your savings account!
9. Wear sweaters
One of the best ways to save money on a tight budget is to lower your utility use. Layer up with sweaters in the winter so you don’t have to use the heater as much. Close doors to rooms you don’t use and maybe even invest in a space heater.
In the summer, use fans and open the windows on some days to really save.!
Saving on a tight budget
If you are living on a tight budget, you can still find ways to save money. Don’t give up, and adopt these best ways of saving to help yourself.
Next Smart Money Posts:
10 Practical Ways to Build a Better Home Budget
5 Ways to Save For a Downpayment on a House
Why You Should Stop Buying Starbucks® and Start Saving For Your Dream Instead
21 Free Printable Budget Worksheets
How Much a Year Do You Make From $18 an Hour?
How Much is $15 an Hour Per Year?
Here are my favorite budgeting and saving apps:
Rakuten for cash back on shopping. Use this link to make a $30 welcome bonus.
iBotta for special offers and cash back on groceries.
Acorns which takes your spare change from purchases and invests it for you to help you make even more money.
Personal Capital for money management. Get a money dashboard, free analysis and personalized wealth advice.