Before I get started on ways to save money on a tight budget I just want to say that this is not a gimmick to fix all of your issues with a magic trick. Saving money when funds are tight is not easy and I will not lie to you about that. So if you are looking for a quick fix that will not take work, well go take a look for some fake guru like Miles Beckler is always talking about on his Youtube channel.
What I am going to lay out below is the step by step plan I personally used to go from living on pennies to having a savings account. Well, I always had a savings account I just never had any money in. So, before I get into the step by step plan in you don’t have a savings account you need to set one up. Something about having a separate account helps to not only physically get your money saved but fixes your mindset.
Step 1, Make a Real Budget
When you are trying to save money on a tight budget the key is to make every dollar count. Before you are able to do that you need to know where your money is going. I have helped people get out of debt and save money, but I am always surprised that the majority of them don’t have a budget.
Why do You Need a Budget
If you don’t know how much money you have left after your needs, then how do you know how much to save. Also, you will find out where your money is going. Is a large amount of your money going to items you really don’t need and can’t afford? When you make a decision to buy something or charge something how do you know what effect that will have down the road? So many people look at them now and do things financially that hurts them down the road.
Number One Tip on Making a Budget That Works
It seems odd to say this but be honest. If you are really trying to get a grasp on your finances, then be honest about your bills and income. So many people will forget to put a few things or add income they may get on top of their normal income. Do not do this you are only lying to yourself.
How to Develop a Budget
The first thing you need to do is pull a bank statement and any credit card statements. Open a google document, excel workbook, or notebook. Split your budget based on your pay frequency. If you get paid weekly or every two weeks that is the dates you want on your budget. Next to each payday document your average paycheck if it changes. Then using your bank and credit card statements document all of your bills with the date and amounts. Also put your average amount spent on gas and grocery store spending. If you have anything left then that is your living money.
Is Your Budget Tighter Than You Thought
Most times at this step people realize a lot of things. Mainly its eye opening for why they are not saving money. It is also obvious why they are relying on debt to keep their current lifestyle going. The next step in this process is to change your circumstances.
Step 2, List Your Needs and Your Wants
I know everything your money is going to is things you felt you needed but that doesn’t make them needs. Items like cable, phones, Netflix, subscriptions, and even eating out are not needs but wants. Now take all your needs and all your income together to see if you have enough to live on. If you do then you can add some wants if you don’t then it’s time to cut deeper or add income.
Deeper Cuts
You realize you don’t have enough money for your needs, what do you do. Start calling and reading your bill owners. Can your mortgage company reduce your payments for a while, lower rent from a renter, cheaper insurance, etc. It may be surprising to you, but these people and companies would rather keep you than lose your or their source of money. Utility companies offer things like levelized billing and mortgage companies can set up things like interest only payments. Private Student loans offer things like forbearances Some of these things are short term but will give you a minute to catch your breath and get on track.
Step 3, Why are you buying brand names in the Store
You are reading this post because you need to save money, but you are still being picky with your bands of food. I won’t say everything but most generic store brands are just as good as the name brands. Some of them are even made on the same manufacturer lines. The more important thing about buying store brands is they are around 30% cheaper. So for every 100 dollars, you spend at the grocery store you will save 30 when you buy generic. The only thing I have had that I refuse to buy generic is mac and cheese. I am not sure why but that one is never any good. I have had good luck with everything else I have gotten.
Step 4, Coupons are Great for Saving Money
At one time my wife and I got really into Couponing. I remember we got so good at it the security guard in our local store would ask to see our receipt when we left so he could be amazed at the savings. I have read online that you can save 75 to 90% by using coupons. I remember being skeptical about these numbers myself but after trying I realized it was very true and very easy.
Top Things to Know about Couponing
This is a topic that has a ton of information online if you want to get into it. I won’t go over everything I learned but here are the things I did to save around 50 to 70% on my grocery bills.
- Get a Binder or a way to organize coupons. You need an easy way to find the ones you need at the store.
- Subscribe to your Sunday paper or buy one every week. This is a great source for coupons
- Buy the brand that you have coupons for and try to grab them when they are on sale for double savings.
- Check the sales pages when you are creating your grocery list. You may have to visit more than one store to grab all the savings but it’s worth it.
- Use sites like https://www.coupons.com/ to help you organize what you are going to buy with digital coupons.
- There are also coupon clipping websites that will sell you coupons in bundles.
- Buy in bulk when things are on sale. Things in the store go on sale in seasons. So if you save up multiple coupons you will find times to get things for free or close to in. When you do, buy as many as you can.
Step 5, Get Rid of the Clutter
One person’s junk is another’s treasure. Let’s face it there are things in your house that you can do without. This can be clothes you don’t wear, TVs you don’t watch, or other things that haven’t been touched in a few years. It’s time to get everything that you can get rid of together and start selling it. This can be on eBay or in a yard sale. The key is to let it go and then use the money to reduce your bills. If you can pay off a credit card or loan to increase what’s left every month then it’s well worth it.
Step 6, Use Debt as a Tool, Don’t be Used as a Tool
Speaking about paying off debt there is another way I have used debt to increase my income. This one takes a high level of control on your part. You pick a card that you have or that you can get which pays you a reward for the money you spend. A lot of cards pay a 1% return or higher. I use a credit card like this to pay for everything I can weekly. Then on payday, I pay it off. This is where the control comes on your part. This plan doesn’t work if you just max out the card. The goal is to always pay it off and never pay them interest. Then in the end you are being paid to spend the same amount of money you were spending anyway. I am able to add between $50 and $100 dollars to my savings every week just for changing what I use to live on. On the other hand, if you don’t pay it off you are going to cost yourself more in interest than you make in rewards. Credit cards are not stupid so don’t let them make you a tool.
Step 7, Make More Money With Side Hustles
Besides couponing, calling my bill holders to reduce them, eating in, letting go of brand loyalty Side Hustles have been my number one way to save money on a tight budget. If you need more money the easiest thing to do is make more money. I have made money on the side in so many different ways. If you need any ideas go to my side hustle category HERE and read the blogs I have written. You can also sign up on our mailing list to stay up to date on new items I will post weekly. The one thing to remember about side hustles is that people are lazy, especially when they are older and have more money. I guess lazy isn’t the right word but when you get to the point that it is cheaper to get someone else to do it then spend your own time on it well you outsource.
A Few Side Hustles I Have Used to Increase My Income:
- Lawn Care– I ended up building a grass cutting service that made around $2,000 per month extra. I started with a push lawnmower and one ladies yard who was always complaining about cutting her grass. From that one yard and word of mouth I ended up creating a business that I was able to pass on to my 18 year old son who supports himself well with while he is in college.
- Social Media Management– Small companies are very wiling to pay a freelancer to manage their social media accounts. There are many sites out there to help you find clients and the work is very simple. My first client was a trade that I did for my little girls to get free dance school lessons. In the end I was able to expand to 10+ paying clients from that one free one. Now I try to keep my clients down to 4 which is easy to handle and pays me anywhere from 200 to 500 per month per client. I know marketers who charge much more but I feel my price is reasonable.
These two links will explain a little about social media management and a service you can use to find work.
- HandyMan– While I was cutting grass I started to pick up many handy man type jobs. These jobs were not consistent but would seem to find me when I could use the funds.
Struggling to save money
If you are struggling to save money I have one last suggestion for you. You need to find someone who has been where you are and ask them how they were able to turn their life around. I know it’s hard but most people love to help others, especially when they see the dedication in trying to better your circumstances.
For me I would tell you was able to turn the corner when I started making and keeping a budget but that wouldn’t be the full story. For me putting together a budget just showed me that I needed more money to live the lifestyle I wanted to live.
So I took the next step and found ways to increase my income. I found side hustles and took 2nd jobs to ensure my family got the life I wanted them to have. This isn’t the way everyone wants to do it. Some people would rather cut back and live on less, instead of giving up and work life balance.
Realistic Ways to Save Money
For the question of what are some realistic ways to save money the answer is a lot like why you maybe struggling to save money. I have no idea for you what is a realistic way to save money.
Usually there is some thing you are spending money on that you can reduce or give up. For other people they have cut back on everything they can and just need more income.
So take a step back and look at your own situation. Can you reduce any cost if not do you have time to go make a little extra money. Whatever works for you go for it. I remember spending about six months eating Roman Noodles for lunch and dinner. I didn’t have a way to increase my income and the only thing I spent money on that I could reduce was food. So that is what I did.
Conclusion
Don’t let your current situation define your future. There are ways to save money on a tight budget. The first key is to understand where you are with a budget so you know how much income needs to increase or bills need to decrease. Once you understand where you are and where you want to be I have listed a few steps that helped me get to a much better situation. At one point in my life I can remember counting change trying to figure out how I was going to replace my hot water heater. Now if something goes out in my home I can afford to fix it that day and it won’t hurt me at all. I would have to put it back in my savings but I wouldn’t be eating eggs for every meal because of it. If you need more ideas please subscribe to my blog newsletter and I will put more content and ideas together for you.
