How To Spend Money When You Have A Tight Budget

Covering your monthly payments is difficult enough if you live paycheck to paycheck. Are you putting money aside?

That can be tough to comprehend. Even if you have some money left over at the end of the month, it may appear to be insufficient to make a significant difference in your savings account.

However, disregarding this extra money can be a costly mistake in the long run. Although your current ability to save money may appear tiny, saving is a long-term plan that adds up every little bit.

Even $25 a month can add up to $300 per year and $3,000 over a ten-year period. And if you put that money in an interest-bearing account, the return may be substantially higher.

Furthermore, if your income improves, you can raise your contributions to accelerate your savings, building on the initial gains you made when you could only set aside tiny sums.

But it all starts with developing excellent habits, which involve contributing whatever you can afford, even if you’re on a limited budget. To get you started, here are three money-saving behaviors.

Make a List

We all have regular income and costs, and keeping track of what you spend versus what you make is the first step to developing a healthy relationship with money that many people overlook.

Create a weekly list, so you know which groceries you need to buy (and thus which you don’t), and find a technique to organize your spending for the rest of the month that works for you. There’s nothing like a decent, simple spreadsheet for budgeting and tracking your spending.

Whatever method you use to keep track of your finances and plan for the month ahead, make it a habit to check in with your spending once a week to ensure you’re on track for the month.

You’ll also need to set out some extended planning time once a month to set things up for the month ahead and consider your long-term financial goals (for example, you could get ahead in saving for retirement).

If you find that you are consistently overspending in one area of your budget, you can adjust your budget to allow for a larger amount in that category and less in other areas if you find you aren’t spending as much as you planned.

A financial plan will not fix all of your problems, but it will assist. After all, it’s preferable to know what you’re up against than to bury your head in the sand and hope your problems will go away.


The average credit card interest rate is more than 16 percent, which means you may save a lot of money if you consolidate your credit card debt with a zero percent APR credit card or a personal loan.

Balance transfer credit cards allow you to avoid interest for up to 21 months if you pay a balance transfer fee (typically three percent or five percent) upfront.

With that at zero percent interest, you could pay off your debt faster by making the same payments you do now, and every cent you paid would go directly toward the principal.

Personal installment loans can also help with debt consolidation because lenders provide personal loans with fixed interest rates as low as 5.99 percent.

Compare personal loan rates from various lenders to ensure you get the best deal.

Cancel Subscriptions

One of the simplest methods to save money is to cancel your cable or satellite TV service and replace it with a cheaper one. Subscriptions are one of the most unseen expenses that may quickly build up. Americans spend an average of $273 every month on subscriptions.

Many of the leading pay-TV companies boosted their 2020 pricing. And it’s now relatively simple to receive an extensive range of entertainment alternatives from a streaming service for as little as $30 per month —although $50 or more is typical.

So, read over your statements and determine which ones you can eliminate. For example, cut cable and replace it with a cable substitute. Be harsh since every dollar counts when you’re strapped for cash.

When you’re trying to save money, you may have already eliminated all of the extra expenses from your budget. The next stage could be to save $5 to $10 for each budget category and set that money aside.

Dropping two or three things from your grocery list will often save you another $5 per week. You can save more than $10 on your monthly gas expense if you consolidate trips, take public transportation, or walk wherever possible.

Similarly, you may alter your thermostat to reduce your heating and cooling bills.

Bottom Line

Living on a shoestring budget doesn’t have to be a chore. Having said that, there are some significant advantages to being frugal with your money.

There is one certainty. You will be able to save money and build wealth if you can manage your money in such a way that you spend less than you earn and put some of that money into a savings or pension account before you have time to spend it.

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