13 Ways to Save Money on a Tight Budget

If you’re living on a tight budget, saving money can feel impossible. However, there are several ways you can cut expenses and stretch your dollars further. Whether you’re trying to pay off debt, save for a big purchase, or simply make ends meet, here are some ways to save money on a tight budget. 

1. Create a budget plan 

Creating a budget is the first and most important step toward saving money on a tight budget. It helps you track your expenses, identify unnecessary discretionary spending, and prioritize your financial goals.  

As you create your monthly budget, make saving a priority. Put down the amount you want to save each month before listing your rent or mortgage, before the car payment and streaming services, and even before the amount you plan to spend on groceries.

This way, instead of saving only if there’s money left at the end of the month, you’ll do it consistently.  

2. Make your coffee and tea at home 

A box of high-quality green or English breakfast tea costs about $6 for 50 bags. That’s 50 cups of tea for the equivalent of just two from a coffee shop. Making your own coffee and tea at home could easily save you hundreds of dollars each month—that’s money that can be saved.

Getting into the habit of making your hot morning beverages at home instead of paying for them through the drive-thru is one of the first ways you can save money on a budget. 

3. Try microsaving 

Using a round-up savings tool can be a clever way to save money on a tight budget without even realizing it. Often called microsaving, it involves rounding your purchases up to the nearest whole dollar and having the spare change swept into your savings account. 

While a few third-party savings apps have round-up programs, such as Acorns and Qapital, banks like Ally Bank and Bank of America also include them in their service offerings. 

4. Cut back on energy usage 

Reducing energy usage is one of the easiest and most effective ways to save money on your monthly bills. Simple actions like turning off lights when you leave a room or unplugging electronics when not in use can add up over time and could make a big difference in your energy bill. 

5. Shop around for insurance 

Most experts recommend shopping around for insurance at least once a year to ensure you’re still getting the best deal. Whether it’s car, home, or health insurance, research different insurance companies online and request quotes from a few of them.  

Look into any discounts or special offers that may be available–and don’t be afraid to negotiate with providers to try and get a better rate or coverage package that works for you. 

6. Adjust the temperature 

Small tweaks to your home’s temperature can dramatically reduce your utility bill. According to the U.S. Department of Energy, you can save as much as 10% yearly on heating and cooling by simply turning your thermostat back 7 to 10° for eight hours a day from its normal setting. 

7. Refinance your debt 

If you’re struggling to make ends meet due to debt, refinancing those debts can get you some much-needed relief. Refinancing involves taking out a new loan to pay off your existing debt, usually at a lower interest rate.  

This can help you save money in the long run and make your monthly payments more manageable. One way to refinance or consolidate debts is with a personal loan through Prosper

8. Use cashback apps 

Cashback apps can be a great way to stretch your budget further and earn rewards for purchases you were already planning to make. Most cashback apps allow you to earn money back on your purchases, either in the form of cash or gift cards, simply by using the app to shop at participating stores.  

There are a variety of cashback apps available, such as Rakuten, Ibotta, and Dosh, and they each have unique features and rewards.

For example, Rakuten offers cashback on purchases made through its app, as well as exclusive deals and discounts. In contrast, Ibotta offers cashback on grocery purchases, and Dosh offers cashback on travel and hotel bookings. 

9. Consider your streams 

One of the ways to learn how to live on a budget and save money is to consider your stream subscriptions. 86% of people now pay for more than one streaming service each month, according to a Forbes Home survey 

Evaluate what you actually watch and which streaming services can be canceled or at least paused while you focus on your financial goals, such as building up an emergency fund or paying off your credit card debt. 

10. Save your tax refund 

If you’re getting a tax refund this year, make a plan to put it directly into a high-yield savings account. Even if you need to use some of it to pay down debt or buy a new car, ensure it goes into savings first.  

This is because simply seeing that account balance rise, and feeling the emotional satisfaction of having money saved, may just be the momentum for a continued commitment to making saving money a part of your everyday life. 

11. Increase your income 

If your expenses are about as low as they can go, and you’re still struggling to make ends meet, it may be time to look for ways to increase your income. This can be done in several ways, depending on your skills, interests, and resources. 

One approach is to look for ways to earn extra money on the side. This might include picking up a part-time job, starting a small business, or freelancing in your area of expertise.  

Another option is to consider ways to boost your earning potential in your current job. This could involve investing in education or training to develop new skills, networking with colleagues or industry professionals, or taking on additional responsibilities to demonstrate your value to your employer. 

12. Research government programs 

In addition to finding ways to increase your income, it’s also worth exploring government programs that can help alleviate financial strain. Depending on your circumstances, there may be various federal or state programs that can provide financial assistance or other types of support. 

For example, if you’re struggling to pay for basic needs like food or housing, you may be eligible for programs like SNAP (Supplemental Nutrition Assistance Program) or Section 8 housing. If you’re unemployed or underemployed, you may be able to receive benefits through programs like unemployment insurance or job training programs. 

13. Improve your financial literacy 

Finally, improving your financial literacy can be a valuable investment in your financial future, especially when you’re on a tight budget. This can include reading personal finance books or articles (like this one!), attending financial education workshops, or even listening to podcasts.  

The benefits of improving your financial literacy are endless. Not only can it help you understand financial concepts like budgeting, saving, and investing, but it can also help you develop the habits you need to better manage your savings and achieve your financial goals.  

Summary of ways to save money on a tight budget 

Every penny counts when you’re trying to save money on a tight budget. Following the tips outlined in this article, you can lower costs on everything from groceries to entertainment.

Remember, even small changes can add up over time. So pick a few items from this list that feel the easiest to implement, and get started. 

Written by Cassidy Horton | Edited by Rose Wheeler

Cassidy Horton is a finance writer who’s passionate about helping people find financial freedom. With an MBA and a bachelor’s in public relations, her work has been published over a thousand times online by finance brands like Forbes Advisor, The Balance, PayPal, and more. Cassidy is also the founder of Money Hungry Freelancers, a platform that helps freelancers ditch their financial stress.

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