5 Tips for Living on a Tight Budget
This is a guest post by Financial Wolves, a blog about making money with side hustles to help you achieve financial freedom.
We know how it feels. It’s a bummer when you have to live on a tight budget surrounded by a plethora of luxuries and attractions that you yearn for. When you’re not earning enough money to spend on the lifestyle you wish to have, every dollar you spend counts.
Nevertheless, sometimes, if you’re smart enough with your finances, you can always make the best out of your situation.
Believe it or not, living on a tight budget is not that difficult if you know exactly where to spend and how. With the tips for living on a tight budget, you can live comfortably while being frugal and conservative with your money.
Here are our tried and tested tips for living on a tight budget that might help you out.
1 – Make Your Saving Plan
Savings? That too, when living on a tight budget? Really?
Yes, that’s the trick.
Think about saving before you think about spending. When you’re living on a tight budget, your priority should be stabilizing your financial situation. That won’t happen until you save a certain amount regularly.
We know what you’re thinking. Why can’t you just save what’s left after you’re done spending? The thing is, if you take that approach, you’ll most likely end up spending more than necessary. Simply allocate a fixed percentage of your monthly income as savings and place it aside as soon as you get your paycheck.
You can even think about creating a separate account for savings. This way, you won’t be tempted to use the money. Also, do your research before choosing the bank you invest in, so that you get a steady interest rate on your savings as well.
2 – Identify the Thin Line Between Wants and Needs
We cannot overstate the importance of this point. How many times have you stepped inside a supermarket to get some eggs and milk, and ended up punching out a whole list of items at the cashier? Well, all those extra items are your wants, not your needs, and can be easily cut out of your everyday expenses.
That doesn’t mean you should sacrifice everything you want. Just make sure you don’t go overboard. For example, eating out every weekend can be reduced to once a month, while spending on expensive game tickets can be saved by watching it at home with friends. This way, you can still enjoy the things you love while staying at the limit.
Making a list is a good idea. At the start of the month, jot down the things that you cannot live without. You’ll probably list food, water, rent, debt, etc.
Now, whenever you feel like spending on something that you can live without, refer to your list. This helps put things into perspective even if you already know the facts.
3 – Create a Food Budget
According to Maslow’s Hierarchy of Needs, physiological needs come first. Food is easily the most important aspect. If you work out your food budget correctly, you can end up saving a lot and adding a little luxury to your life as well.
First of all, when you’re planning your food budget, make sure you take every cent into account. Eating out every day is expensive, cook your meals yourself.
You can refer to lots of weekly meal prep options, and once you figure out a menu, buy groceries accordingly. While compiling your menu, make sure there’s a balance of expensive and cheap ingredients. This way, you can eat like a king without spending as much.
Similarly, you can also find ways around spending a fortune on a typical candle-lit date night. The popularity of splitting the bill and ‘Netflix and chill’ has already given us a great chance to cut on our expenses in the name of romance.
Saving up some food coupons like using these stackable methods for Walmart cashback will help you save money on auto-pilot. You can use apps like Rakuten to simply get money back on routine purchases from your favorite stores.
Or, even cooking a new, different meal for your better half is a great idea to keep that spark going while keeping an eye on your budget. You can then use leftovers to use as a meal plan for the week.
4 – Invest On Enjoyment
Do you know the worst thing about saving and budgeting? One moment you’re all focused and loyal to the budget until you see something that excites you enough to give it all up. You can keep this from happening by allocating some room in your monthly budget for some fun activities.
Keep aside up to 3% or 5% of your earnings for your enjoyment. Initially, it might not seem like a lot, but you’ll be surprised at how many activities you can do if you work your way around.
For instance, many outdoor enjoyment options cost absolutely nothing. These include hiking, camping, reading, or even watching TV. It’s not necessary to spend a huge amount at the club or at the movies to have fun. Just be creative with what you can afford, and you’ll be amazed at how much fun you can have at almost no cost.
Remember, don’t let yourself get bored. Look for new things that might interest you. Search the internet or ask your friends. If you succumb to boredom, you’ll end up dreading your budget and get depressed for no reason.
5 – Think About Some Side Hustles
Don’t just sit there with what you have at hand! Grind and hustle to increase your earnings so you can fulfill your dreams. It doesn’t necessarily have to be another grueling job. It can be something you enjoy doing, like designing or writing. Look for freelance clients to earn through your hobbies.
Besides that, you can work on toning the skills you already have so you can earn more through them.
Learning more about the financial world can also help increase your income.
For example, several investment platforms let you invest in real estate crowdfunding programs to help you generate a steady, passive income through your savings.
Or, things like survey sites can help you earn quick, easy cash. They won’t break the bank for you but small wins like these add up quickly.
Final Words
Well, these are the five best tips for living on a tight budget. Living on a budget does not mean you have to restrict yourself from spending until you starve. You can live comfortably, pursue your interests and hobbies, and plan for a brighter future, all while living on a tight budget.
You just need to change your lifestyle in a few ways, and before you know it, a budget won’t feel like bondage to you anymore!
Author Bio: Financial Wolves is a blog focused on helping you make more money to achieve financial freedom. After repaying student loans, I’ve shifted my focus to make more money from side hustles, real estate, freelancing, and the online economy. Follow us on Pinterest, YouTube, Twitter, and Facebook.
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Author: Jerry
Jerry is a Business Insider Contributing Writer who is obsessed with personal finance. He believes you can improve your financial situation by applying principles taught by the financial independence community to your financial life.
If you are having trouble saving, he recommends that you join the SaverLife Savings program where you can get a $60 reward after six months (no income requirement). All you have to do is put a minimum of $20 a month into a savings account. Easy, right?
For a fun read, check out his article 10 Signs You’re a Personal Finance Addict to see if you are a personal finance nerd.
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Loved the article from start to finish. Thanks for sharing your thoughts