Nobody said living on a tight budget is easy, much less fun. But, by dealing with things the right way, you will be able to save while avoiding giving up laughter with friends, fun, and love. If you want to live on a tight budget you have to be aware of every penny you spend, and you must always try to get the most out of the money you have. Soon you will be able to enjoy life without worrying about a host of creditors knocking on your door.
Steps
Part 1 of 3: Respect Your Budget
Step 1. Set yourself a budget
If you want to be able to live on a tight budget, you will need to calculate exactly how much you spend and how much you earn each month. Sit at a table with all your bank statements, all bills, receipts, pay slips, and anything else you need to calculate your expenses. Doing so will help you understand how much money we're talking about, as well as how much you'll need to save.
- Estimate how much you earn each month.
- If you have other sources of income, such as money you make from doing odd jobs, or money your parents send you, take that into account too.
- Keep track of your expenses. Write down how much you spend on bills, grocery shopping, rent, gasoline, and so on. From here you will realize which expenses can be reduced and which ones are immutable (such as the rent, unless you decide to move house).
- See if you earn as much as you spend. The goal is to get to the end of the month with more income than expenses, in order to be able to put something aside every time, or at least not go into the red.
Step 2. See where you can make cuts
Now, it's time to carefully analyze all your expenses to figure out where to cut back. You can also associate each type of shopping with a different color, so you can see at a glance if the money has been spent on food, going out, clothes, and so on. See what the biggest expenses are and figure out where to cut.
- If you find that you have spent 25% of your monthly income on clothes, ask yourself in the future if you really need to go shopping. Do you really need more clothes or are you just doing it because you like shopping?
- If you find the biggest expense was going out, you can look for new ways to eat and have fun without leaving your home.
- You don't have to worry though, thinking that every time you leave the house you will end up spending a lot of money. Look for cheaper ways to enjoy the outdoors like going hiking, playing basketball, or just enjoying a nice sunny day having a nice picnic with friends. Certain activities will allow you to go out and have fun for without spending too much money.
Step 3. Plan your expenses as much as possible
Try to set a maximum monthly limit for each type of expense. Of course, if you finish your food budget before the end of the month, you won't need to starve yourself, but you should still try to spend as little as possible. Having a spending plan already can help you keep track of your spending better; While it may seem like a nuisance, if you mark every single expense you incur, it will be much easier to live within your financial means.
- There are several smartphone applications, such as Expense Manager or Expenditure, that can help you set a budget and keep track of your expenses.
- Another thing you can do is to set aside some cash to spend each month however you like. You will realize much better how much you spend if you use cash instead of swiping the card whenever the opportunity presents itself.
Step 4. Separate the desires from the needs
Another way to stick to a set budget is to be able to distinguish when you really need something from when you just think you need it. Make a list of all the things you buy regularly and see if you can eliminate any of them from your spending, or at least if you can buy them less frequently. You will find that you are managing to save money like never before without depriving yourself of the pleasures of everyday life. Here are some things to start with:
- If you eat out, avoid ordering the appetizer, and eat dessert at home.
- Do you really need a pedicure and manicure twice a month? See if you can cut your spending by only going once a month or once every two months.
- You may think you can't live without having an annual stadium pass to watch your favorite team, but you could save a lot of money if you just go to a few games a year and watch the rest from home.
- Do you really need to get drunk every time you hang out with friends? If you occasionally choose to stay sober and be the designated driver, you will be able to save all the money you usually spend on the taxi. That said, avoid driving drunk just to save some money! Another thing you can do if you know you need a taxi to get home is to try to get someone to give you a lift or take a walk to save some money.
- Do you really need to buy a magazine when you go shopping? Maybe you better read the news online or subscribe to that magazine, if you cover it so often that it makes it convenient.
Step 5. Look for ways to increase your income
Of course, one of the easiest ways to live on a tight budget is to find ways to earn a little extra so that you don't have to worry so much about not overshooting. Working an extra couple of hours a week will also help you have some extra cash to spend quickly. Here are some things you can do:
- See if you can babysit or dog sit for a few hours a week. Start by asking the neighborhood if anyone needs a hand.
- You can earn some extra cash by delivering newspapers.
- See if you can make money by tutoring neighborhood children.
- Become a mystery shooper, an Uber driver, or similar to earn a few extra euros.
- If you have a job, ask your boss if you can do more hours or do more things to get a raise.
- If you're going to be away from home for a few days, put your home on Airbnb.
Part 2 of 3: Spend Money the Smart Way
Step 1. Spend little to buy clothes
You can buy nice things without necessarily running out of all your savings. To find the items you want on a budget, you just need a little patience and foresight. Here are some shopping tips:
- Choose shops that are known for their low prices. Do not judge them before entering, you will find that you can also find a lot of nice but cheap things from them.
- Wait for the items you like to be discounted. There is no reason to buy anything at full price.
- Buy seasonal clothing at the end of the season, not at the beginning. Buy the items when they are super discounted, they will need the following year, instead of spending more to get them at the beginning of the season.
- Some large chains will refund you the difference if the price of an item you just bought drops in the following days thanks to a new discount.
- Always remember to check the quality of what you buy. It is better to buy a quality sweater, even if it is more expensive, because it will last you for years, as opposed to a cheap one that would not arrive at the end of the season.
- Learn to sew. It will help you save money because you can repair damaged garments instead of buying new ones.
- Try to consider stores that sell used clothing as well. You will be able to find cute and funny things for a fraction of the price that clothes are sold for in regular stores.
Step 2. Spend wisely when you eat or drink out
You certainly can't become a hermit just because you've decided to live on a tight budget. Sometimes you will go out to eat or have coffee with a friend, and there are ways to do it without breaking the bank. Here are some tips:
- If a friend asks you for a drink, choose a place that has good happy hour deals so you can get the most out of your money.
- If you don't have to drive and are preparing for a drinking night out with your friends, have a drink at home before you go out (preferably in company) so that you don't waste money on extravagant cocktails when you are out.
- If you go to dinner with a large enough group of people, try to make sure that the bill is separate and not divided equally. While it will be more inconvenient for everyone, at least you will avoid having to pay more than you should have.
- When you go out to eat, try to have a snack at home so you don't show up hungry at the restaurant. If you arrive at the restaurant hungry, you risk ordering too much and regretting it later.
Step 3. Spend less on watching movies
Going to the movies with friends is definitely a fun way to pass the time, even if ticket prices are skyrocketing, and you have to add parking, snacks, and drinking to it. You could end up spending as much as € 20 to see a movie. If you want to see a movie but at the same time save money, the solution is to watch it at home with friends. Here's how you can do it:
- Rebuild a movie theater in your home for you and your friends. Make the room comfortable and welcoming, and no one will regret the hall of a sad and cold cinema.
- Make some cheap popcorn and snacks to enjoy at home.
- Ask your friends to bring some DVDs or use services like Netflix so you don't have to spend money on renting a movie.
Step 4. Knowing how to shop is essential
One of the most important things to spend money wisely is to shop as efficiently as possible. There are many tricks to get the most out of the money you spend when you go shopping, without giving up on delicious meals. Here are some tips to save when you shop:
- Always carry a shopping list with you. Make sure you only buy the things that appear on the list instead of wasting money buying things that you will never eat impulsively.
- Prepare the menu for the whole week before you go shopping. It will prevent you from ending up buying too many fresh produce or too much meat - foods that would go bad if you didn't have the time to use them. If you find that to ensure that the raw materials you use are always fresh you should go shopping twice a week, do it.
- Get used to finishing everything in your pantry before adding more to it. By doing this you will avoid making the food run out of time and then having to throw it away, wasting money.
- Instead of branded products, buy branded products from the supermarket you are in. You will save more than 10% on the total expense, and you will find yourself having roughly the same products.
- Buy in bulk when you can. If you find a larger package than you usually buy of a product that you know you will be able to finish before it runs out, such as a larger bottle of oil or a larger yogurt pot, you should prefer it to the smaller counterpart if this meant spending less in the long run.
- Go grocery shopping shortly after eating. It will prevent hunger from driving you to buy anything that looks good to you!
- If you notice that something you buy is usually on sale, such as breakfast cereals, buy as many as you think you can use before they expire.
Step 5. Try to have fun in your home instead of going out
Another way to spend your money smart is to spend more time at home instead of going out to a bar or restaurant, where everything would be ten times more expensive. Here are some ways to have fun without leaving home:
- Celebrate your birthday by throwing a house party instead of going out and spending a ton of money without even realizing it. Create a playlist with your favorite songs, prepare some punch, some appetizers, and decorate your home for a party.
- Tackling an expense to buy games like Twister, Monopoly, Force Four, or Cluedo can guarantee you dozens of hours of fun. It's a one-time investment that will make staying at home a lot more fun, and it's a much better way to spend your money than spending it on things you would only "use" once, like food and drinks.
- Instead of going out, spend time at home with your sweetheart, pampering yourself with cheese, crackers, and a nice bottle of wine. Even your home can be suitable for a romantic evening, if you can create the right atmosphere.
- Invite your closest friends to your house to make cookies all together, or to make tea. It can be a fun way to pass the time and to spend money smartly, instead of the € 4 it takes to have a cup of tea in a club, you can spend 25 cents drinking it at home.
Step 6. Give up bad habits and habits
By stopping doing some of the things you do thinking about saving money, you will end up really saving it. Here are some things to limit or abandon to make it to the end of the month with more money in your pocket:
- To smoke
- Drinking too much
- To gamble
- Buy lottery tickets
- Impulsively ordering the products you see in telesales
Part 3 of 3: Learn to Save
Step 1. Use coupons
Coupons are not for old ladies, you can use them to get discounts even on products you use on a daily basis. Check the flyers you receive in the mail from various supermarkets, look for offers online, and try to take advantage of any offers on the products you regularly buy and really need. So avoid buying something using a coupon just because it is discounted and then end up never using it.
You may receive coupons for spending a certain amount at the same supermarket. Make sure you keep them all and use them before they expire
Step 2. Don't waste money on electricity
Another way to cut costs is to spend less on electricity. Here are some tips to save on your bill:
- Minimize the number of lights on. Turn on the light only in the room you are actually using.
- Turn off the TV if you are not watching it. Instead of leaving it on idle for hours or watching it out of the corner of your eye as you dine, focus on one thing at a time and leave it on only if you really care what they're broadcasting.
- Some appliances will cost you money even when they're not in use, just by having the plug plugged into an outlet. If you really want to save money, when you're done using an appliance or any other electrical device, unplug it.
- Some energy companies have differentiated rates for peak and off peak hours, you can take advantage of them to save when you use appliances such as dishwashers and washing machines. Find out to find out if it is convenient with your company to use certain appliances during off-peak hours, which are usually those at night.
- Avoid keeping your heating on full. Using an extra blanket during the night or wearing a few extra clothes during the day will save you a lot of money each month.
- If you really want to save on bills and rent, consider looking for a roommate to split the costs.
Step 3. Eat at home as often as possible
One of the main ways people waste money is by eating out too often. You can save hundreds of euros a month by eating at home instead of eating out when you feel too tired to cook. While you shouldn't avoid hanging out with people for the sole purpose of avoiding eating out, there are ways to make eating at home a better and cheaper alternative.
- If your friends suggest that you go out for dinner, offer to cook something for everyone at your house, or tell them you'd rather go out for a drink. You can be honest that you do it to save money.
- Make sure your weekly home-cooked menu contains varied and tasty dishes so that the prospect of eating at home doesn't scare you.
- Make sure you always have some cheap meals ready in the freezer. They'll be great for when you're too tired to cook, and they'll keep you from spending too much money when deciding to order food.
- Make coffee at your home. Buying special coffees every day at the bar or in a coffee shop would end up costing you more than € 20 a week. There are better ways to spend that money.
- Consider gardening. It can be a relaxing hobby while helping you save on fruits and vegetables.
- Remember that you can spend a romantic evening at home too, with the help of a bottle of wine and a home-cooked dinner. There will be no need to go out and end up spending over € 100 just because it is a date.
Step 4. Learn to say no
One of the easiest ways to live on a tight budget is to learn to say no to things that would cost you a lot of money. This doesn't mean that you will have to stop having fun out of the blue, but it does mean that you will have to learn when to turn down certain offers, whether they are weekends out with friends or your sweetheart who wants a glitzy gift exchange for Christmas.
- Try to be comfortable with telling people that you are trying to save and that if you refuse their offers it is not because you would not want to spend time with them. You could also suggest cheaper alternatives for spending time together.
- There is no need to reject everything. If you are dying to go to a concert in your city with your friends, tell them you will be there, but then give up on other outings with friends if that means spending more money.
Step 5. Exercise without spending money
Countless people spend money on courses and gym passes that end up unused. If you want to save money without giving up on exercise, here are some tips for you:
- Run outdoors instead of running to the gym. If it's too cold, look for an alternative type of exercise you can do indoors.
- If you love yoga but can't afford to pay for a class, look for donation classes in your area. Some yoga centers organize at least one such class a week, and you can attend them while paying only what you can afford. Alternatively, you can do yoga on your own in your home.
- Invest in exercise videos. Even if buying them will make you spend a few euros, you can use them countless times directly at your home, and they will save you a lot of money. Plus, it will be a more fun way to train than attending classes in the cramped room of some gym.
Step 6. Save on transportation
One of the ways to live on a tight budget is to save money on transportation. There are many ways to do this, regardless of what your preferred mode of transport currently is. Here are some suggestions:
- Walk or cycle as often as possible instead of using the car or taking the bus. If you feel like you don't have time to walk or cycle, replace one of your weekly workouts with walking or cycling to one of the places you need to go.
- If you drive, try to figure out if you can carpooling and therefore have passengers to contribute to the gasoline expense.
- Check all the distributors in your area to see which one has the lowest prices. Saving even a few cents per liter will save you an acceptable amount in the long run.
- Use public transport as often as possible instead of driving. While you may feel like you're spending more on tickets, you won't be spending money on gas and tolls. Plus, it's a great way to respect the environment!
Advice
- Reuse your leftover food. If there's anything left over from dinner the night before, take the leftovers as lunch to work or school.
- Some libraries allow you to rent CDs and DVDs for free. If you enjoy watching movies, TV shows, documentaries, or listening to music, check your local library to see if they also offer this type of service.
- Consider going to the food bank or caritas if you need help buying food.
- If you don't want to give up satellite or cable TV but don't have a public library near you, Netflix is a great alternative if it's available in your country.
Warnings
- Don't be limited to cloning cards for satellite TV or doing other illegal actions since when you get caught you will have to pay a fine or face even worse consequences.
- Satellite TV, landline phones, and internet connections are very expensive. Cut back on these things too, if necessary.
