Ways To Save Money On A Really Tight Budget

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Inculcating the habit of saving money is essential as it has long-term benefits. There are a number of ways to save money, but you need to begin by setting yourself a budget. It’s the ideal way to bring a degree of discipline into how you save money, especially if you’re on a really tight budget.

In simple terms, budgeting involves calculating all your monthly expenses, matching that against your monthly income and then tightening up on certain expenses to save more money. Monthly expenses can be broken into three broad categories.

  1. Fixed Expenses: Rent, mortgage, auto loan payments, insurance, child’s school/tuition fees, medical expenses, etc.
  2. Essential Expenses: Food, gas, utilities, etc.
  3. Non-Essential Expenses: Entertainment, eating out, etc.

There are no short-term fixes to reduce fixed expenses. Over a period of time you should try to settle your debts and either eliminate or bring that part of the fixed expenses down. In regards to essential expenses, there are certain ways to reduce expenses such as using coupons, avoiding the use of credit cards as the interest continues to stack up, managing utilities more efficiently to lower your bills, etc. While in the non-essential expenses category there a number of ways to save money, including allocating a fixed amount for it at the start of the month and strictly maintaining expenses within that limit.

Budgeting also provides you a clear picture about the amount of money left at the end of the month that can be saved. You might need it for some unexpected expenses, so that needs to be factored in as well. So, here are some ways that you can save money if you’re on a tight budget.

Automate Savings

If you wait till the end of the month to decide how much to save, then the chances are you will save next to nothing. Instead every month on pay day transfer a pre-decided fixed amount from your checking account into your savings account. A number of banks allow you to set up an automated system to do the same. In case you don’t have a fixed income every month, you can transfer a fixed percentage of your income into the savings account in lieu of a fixed amount. What this does is force you to manage your expenses with the money that’s left. However, in order for this method to be successful, you have be strict and disciplined about not dipping into your savings account.

Look for Better Deals

When you’re on a tight budget, expenses such as phone bills, electricity and gas bills, etc. can really eat into the money in hand. However, unlike fixed expenses such as your rent or monthly insurance premium or auto loan installment, it’s possible to negotiate a better deal. You have to make time to call up the customer service departments of the respective companies to find out if they can offer a lower rate and search online for better deals.

There’s always a better phone plan out there. If the service provider you’re signed up with can’t provide one, then transfer to another service provider. In case of electricity and gas bills, some states regulate the companies that provide these services and the chances of a competitive rate is hard to come by. However, if you live in a state that doesn’t regulate these sectors, then there’s likely to be more competition between the companies and thereby better deals on offer for you.

Switch from Traditional Cable to Online TV

People end up paying as much as $100 per month for traditional cable television service in the United States. We look at the number of channels on offer, which in some packages are over 300, and falsely think that it’s a good deal – $0.33 per channel. However, if you pause a minute and think about it, you will realize that there are only about 15-20 channels that the family as a whole watches regularly. So, effectively you’re paying $5 per channel per month.

You should cut the cord and shift to streaming services such as Netflix and Hulu. The Hulu premium plan costs $11.99 per month, allows you to create six different profiles and also allows you to put the account on hold for up to 12 weeks if you won’t be using it for reasons such as travel, exams, etc. Hulu also has a Live TV option priced at just $39.99 with all major channels on board. Similarly, Netflix provides various plans ranging from $7.99 to $13.99 with high definition content and child lock support. If you are particularly interested in live sporting action, then all the major sporting leagues in the United States such as MLB, NFL and NBA have online streaming options as well at competitive rates. You will end up saving at least $50-60 per month by switching to online options.

You Need a Grocery Strategy

A big chunk of monthly expenses go towards buying groceries and other food items. The obvious strategy, while on a tight budget, is to buy in bulk. However, that’s not necessarily the ideal option for all food items. It doesn’t make sense to buy perishable items in bulk, because a part of it will get wasted. So, you can buy cereals in bulk, but not milk or meat.

It’s also important to create a list of the items that you need before reaching the store. This will ensure that you don’t have to visit the store again after a few days, which will help you save on fuel costs. Plus, without a shopping list you are more likely to pick up certain items impulsively and further bloat your grocery bill.

You should also consider reducing the number of days the family eats meat. So, instead of meat on all seven days, have it four or five days a week and on remaining days cook a vegetarian meal. You will end up saving $30-40 per week by simply removing meat off the table twice a week. And it’s healthy too.

Cut down on Eating Out

If you have kids or if your work keeps you out till late, then the chances are you end up eating out quite often. But every visit to a restaurant eats into your budget. The occasional family dinner to celebrate a special day or a day out with friends and family is unavoidable, but while on a tight budget too many episodes of eating out need to be cut down. You can compensate by cooking new dishes at home or creating a better ambience that prevents dinner at home from feeling like a chore.

When you do go out to eat, opt for a restaurant that offers a buffet spread or combo meals instead of one that only offers an à la carte menu. Also, avoid drinking out as it ends up costing a lot more than the food and burning a real big hole in your pocket. And check for discounts and deals being offered by restaurants and diners in your part of the city and plan your eat outs to coincide with these.

Entertainment and Activities Expenses Need to Be Controlled

Movie nights for the family need to curtailed. The cost of tickets, snacks during the movie, post movie dinner and fuel cost for the trip add up to a lot of money, and you can’t afford it multiple times in a month while on tight budget. Netflix and Hulu become great options here as well. So, you can stay at home and yet have a movie night. You should also opt for group deals from daily deal sites. They offer a wide variety of deals, including fun activities for the entire family, at considerably discounted prices. However, do read the fine print carefully.

Save on Regular Transportation

In the long run, it would make sense to have a car that’s more fuel efficient as it will help you save a lot of money. However, if you’re on a tight budget, it’s going to be very difficult to sell your current car and buy one that’s more fuel efficient. Keep this option in mind and work towards it. In the meantime, try and use the public transport system as much as possible. If cycling to work is a viable option then don’t think twice. It will not only save you money, but also provide you with excellent exercise.


Planning is the key to managing your finances efficiently. When you’re on a tight budget, it becomes doubly important. In order to create a plan, you need to have a clear understanding of all the expenses you make every month. It will help you identify the unnecessary or unimportant or avoidable expenses that have been burdening you every month. It goes without saying that working within a tight budget means that you will have to make certain adjustments and compromises. Kids will find it the hardest to make these adjustments, but once you get them on board they can be really understanding. And don’t forget to treat yourselves every once in a while. That’s important too.

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