13 Ways to Save Money on a Tight Budget

If you’re one of the many Americans living paycheck to paycheck since COVID-19 struck, you likely haven’t thought much about saving for the future over the past 12 months. And you may be wondering how to live on a budget and save money at the same time. Believe it or not, there are many ways to save money on a tight budget without impacting your ability to pay your bills or put food on the table. 

Every donut lover knows the value of a baker’s dozen, so grab a cup of coffee (brewed at home to save money, of course) and sit down to discover 13 deliciously simple ways to save money on a small income.

1. Save First, Spend Second

As you make, revisit and revise your monthly budget (and yes, you should have a monthly budget — here’s how to budget and save money on a small income), first put down the amount you want to save each month. Do this 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’re making saving a priority. By adjusting your spending accordingly, you’ll be more likely to actually save money each and every month. 

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. Take the Pantry Challenge

At least one day each week, go without spending any money on food or beverages by using only what’s already in your pantry (and freezer/fridge) to prepare breakfast, lunch, dinner, snacks and dessert for you and your loved ones. Not only will this challenge free up money to be saved instead of spent, it will help you become resourceful and self-sufficient in the kitchen, and potentially eliminate food waste, all of which could have positive long-term impacts on your budget. 

4. Round-up Savings

One of the clever technological tricks to saving money without realizing it or feeling its impact in your checking account is to take advantage of round-up savings. Often called microsaving, your purchases are rounded-up to the nearest whole dollar and, whether through a third-party savings app (note: beware of monthly fees for these services) or through your own bank, like Bank of America’s Keep the Change Savings Program, watch as that spare change is deposited directly into a savings account. Rounding up is one of the simplest ways to save money on a tight budget. 

5. Lose Your Loyalty

Being brand loyal can cost you extra money at the grocery store. Instead of paying top dollar for your favorite brands each week, only buy them when they’re on sale. During non-sale weeks, buy what is discounted. You’ll save money and may just find new favorites in the process!

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 percent per year on heating and cooling by simply turning your thermostat back 7 to 10° for eight hours a day from its normal setting. So put on a sweater and your favorite fuzzy socks, and invest in a programmable thermostat, because this is how to live on a budget and save money every month!

7. Make the Movie/Game an At-Home Event

If you have a sizable flatscreen TV at home, it’s likely that watching a new movie, concert or your favorite team’s game from the comfort of home will actually be more enjoyable than lining up to get into a theater, stadium or arena (once we’re able to do so again). One thing’s for sure, it’ll certainly be cheaper! You’ll pay no parking fees, buy no overpriced drinks and food, and of course, no expensive tickets are required. Pop some popcorn, prepare a cheese and cracker board, and put out a hummus and veggies platter, because enjoying movies, concert streams and sporting events at home is one of the easiest ways to save money on a tight budget.

8. Choose Filtered Over Bottled Water

Not only will this decision help save the environment, it’ll also save you money. A simple pitcher with replaceable filters and a reusable bottle will go a long way toward keeping your beverage costs down from month to month. Additionally, consider drinking more water and less soda to become healthier physically and financially!

9. Get Thrifty

Local thrift stores are overflowing with barely used jeans, cute sweaters, comfy shorts, gently worn sneakers, like-new accessories and so much more. Starting to buy some of your own, but especially your still-growing kids’, clothes and shoes secondhand for 25–50% of the cost of purchasing them new is sound advice for budgeting on a low income.

10. Make Saving a Weekly Challenge

PNC Bank suggests that if you’re looking for ways to save money on a tight budget, make saving a challenge by slowly increasing (or decreasing) the amount you put away each week. For example, put $1 in savings during the first week of January. The second week, make it $2, and so on. Doing this for 52 weeks straight will result in a whopping $1,378 saved! Or, if you want to start strong, reverse the challenge by putting $52 into savings the first week of the year, followed by $51, $50, $49 etc. This method will free up money at the end of the year when you’ll likely be doing some holiday shopping.

11. Use Cashback Apps

When you’re trying to figure out how to live on a budget and save money at the same time, you should check to see if stores participate with a cashback app or service, like Rakuten, before buying anything online. It may only be 1% or 2% back on your $25 purchase (although depending on the store and the day, it could be upward of 10–15%) but just like putting nickels, dimes and quarters into a piggy bank, your cashback savings will grow steadily. Every three months, when you get a check (or Paypal), that could be a substantial amount of money to put away into your savings account. 

12. Consider Your Streams

Once upon a time, consumers wished they could pay for an a la carte cable TV package to save money and only have the channels they wanted to watch. That day arrived, sort of, but chances are you’re paying more to watch TV than ever before. This is because most people now pay for four streaming services each month, with 38% of Americans using five or more according to a Los Angeles Times report. And all that could be in addition to a cable package so many wanted to be rid of in the first place! 

The result is likely a personal budget straining to cope with the costs of television in 2021, and a lack of money being saved. One of the ways to learn how to live on a budget and save money is to consider your streams. Really think about what you actually watch and which streaming services can be canceled or at least paused while you build up an emergency savings fund, which could have been one of your financial New Year’s resolutions.

13. Save Your Tax Refund

Finally, if you’re getting a tax refund this year, make a plan to put it directly into savings. Even if you’ll need to use some of it to pay down debt or buy a new car, make sure 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 impetus for a continued commitment to making saving money a part of your everyday life.

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