I know from personal experience that when you’re living on a tight budget, saving money feels damn near impossible. Every dime is going toward paying your bills, and there’s little to nothing left at the end of the month.
I was at the point where I had nothing in savings, and every unexpected expense ended up going on a credit card.
Eventually, I figured out that even making small changes in my monthly spending could make a huge impact, and I was able to start saving more money than I thought possible.
In this post, I’m sharing all of the changes I made to help me actually start saving money and tips that you can start using today to save money on a tight budget.
There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.
Pay yourself first
Regardless of how much extra income you’re able to set aside in savings, you have to take that important step of actually sticking to your savings goals.
First of all, I always keep my savings in a separate savings account. That way, I don’t have the option of impulsively swiping my debit card to use some of that savings.
But the most important thing that I do is to pay myself first — and by myself, I mean my savings account. On the same day every month, I have an automatic transfer to move money from my checking account into my savings account.
I do it at the beginning of the month, so I don’t have the opportunity to spend it on something else first. And because it’s automatic, I never have to remind myself to save.
You see, I found that for years I always told myself I would save whatever I had left at the end of every month. Yet, at the end of every month, there’d be nothing left to put in savings.
Paying your savings account first is the absolute best way to make sure it gets done every month. The rest of the advice on this list doesn’t mean much without this one!
Read More: How to Pay Yourself First and Finally Start Saving Money
Review your budget
If you haven’t reviewed your budget in a while (or you don’t have a budget), now is the time to fix this. It’s easy to set a budget for yourself and forget about it, but you’ve gotta keep reviewing it to make sure it still fits your life.
Things change, and people go through different seasons of life. I’ve gone through seasons of life where I was driving a lot for work and had to budget more for gas. I’ve also gone through seasons where I spent little on gas but a lot more on eating out.
I do this just about every month. As I’m budgeting out my income for the month, I ask myself whether my current budget really makes the most sense for where I’m at in life right now. If the answer is no, I change it up.
I do all of my budgeting in the app You Need a Budget. This app is hands-down the best I’ve used for setting up a budget and actually being able to stick to it.
Not sure where to get started with your budget? Head over to my guide on starting a monthly budget.
Save your extra paychecks
For my entire career in politics, I got paid on the first day of every month. I loved getting paid monthly because I could pay all my bills and budget for the entire month at once. Then I knew right away how much I had for the rest of the month.
Then I got married, and my husband gets paid biweekly. At first, it seemed inconvenient — It would have been nice to stick to my once-per-month budget.
Then I realized that people who get paid biweekly have two months every year where they get paid three times instead of two — Then I started to come around to it.
We plan our budget under the assumption that my husband gets two paychecks per month. So during those lucky months when he gets three, we’re able to send them directly to savings.
If you get paid biweekly, take a look at a calendar and figure out what months you’re going to get three paychecks. Then make a plan to save that money or use it to pay off debt!
Set up sinking funds
You know those months where everything is going according to plan and your budget is right on track — and then something unexpected pops up? Maybe it’s a medical bill or a car repair you weren’t planning for.
Those expenses are the worst because there’s no way to know when they’re coming, and you hate to use your emergency fund for them (especially if you’re just getting yours started).
I struggled with this for years, and then I learned about something that seriously changed the game in my budgeting practice.
Sinking funds are when you set aside a certain amount of money every month for expenses you know you’re going to have, but you aren’t sure when. I have sinking funds for irregular spending categories such as medical bills, car maintenance, and pet expenses.
I also use a sinking fund for Christmas. Rather than go into a state of panic when November rolls around, and I realize how much money I’m about to drop on Christmas, I put some aside every month so I know we’ll have plenty when Christmas rolls around.
Track every dollar you spend
Have you ever made it to the end of the month and wondered where the heck all your money went? Sometimes we don’t realize just how much we’re spending until we make it to the end of the month and there’s no money left.
The single biggest way I was able to get a handle on my spending was to start tracking it. I remember the first time I sat down and figured out how much I was actually spending — I was shocked at how much money was going toward eating out!
I track all of my spending in my You Need a Budget app. The app connects to my bank accounts and automatically pulls all of my transactions. Before YNAB, I used to just track all of my transactions in an excel spreadsheet, which also worked great!
Separate wants vs. needs
One of the biggest problems run into when cutting their spending is that they aren’t able to separate needs from wants. I’ve been there — I could easily convince myself that eating out was a “need” because, hey, you gotta eat.
If you’re really going to cut your spending, you need to get really honest with yourself about what counts as a need and what counts as a want.
Try a 50/30/20 budget
One of the most effective budgeting methods I’ve found, especially for those living on a tight budget, is the 50/30/20 budget.
This budgeting system directs you to spend 50% of your take-home pay on necessities like housing, utilities, transportation, and groceries.
The next 30% of your budget goes towards wants — This is anything you want to spend your money on but don’t have to.
The final 20% of your budget goes toward debt and savings. This would be expenses like student loans, credit cards, retirement accounts, and your emergency fund.
One of the most eye-opening things about using this budget is realizing just how much you’re spending on housing. In parts of the country where housing is expensive, you might have to spend more of your pay on rent or your mortgage. But using this budget might also be a sign it’s time to change your housing situation.
Refinance your student loan
Brandon and I had a lot of student loan debt when we got married — Like, a combined six-figures. Most of that debt was in the form of federal loans with fairly low interest rates. But a bit of it was a private loan with a 14% interest (painful, I know).
One of the best money decisions we made to help save money every month was to refinance that loan.
If you’re shopping for a loan to refinance your student loans, I recommend Credible. You can see rates from more than a dozen different lenders to find the best loan for your situation.
We were able to go from a rate of more than 14% to less than 5%. That changed alone saved us thousands of dollars in interest. If you have private student loans with a high interest rate, refinancing could do the same for you.
Analyze your biggest money leaks
It’s probably safe to say that we’ve all got a money leak or two, which is the splurge item that you tend to spend a bit too much money on. For Brandon and me, those money leaks are food and concert tickets.
Once you can identify your money leaks, you can start to address them. For us, this meant making several changes.
First, we cut back on eating and drinking out. We also started cooking budget meals at home, and making cocktails at home on the nights we felt tempted to go out. Finally, this meant restricting ourselves to one concert per month.
Everyone’s money leaks will look a little different. The key is figuring out what yours are and finding a way to cut down your spending while still allowing yourself the occasional splurge.
Rethink your car payment
Car payments suck. In a perfect world, no one would ever have a payment for their car, and we’d all simply buy cars we can afford. Unfortunately, most of us have been at a point in our lives where that’s not possible.
When I bought my first car with a car payment, I was married to my first husband. I got the car in the divorce, but I also got the car payment. While I powered through it for a few months, it eventually became clear that I couldn’t keep up with the payment.
I refinanced my car loan and ended up with a much lower monthly payment and a lower interest rate, which was a nice perk.
Your car payment is a low-hanging fruit way of saving money every month. Whether it’s refinancing your loan or buying a car you can afford without a monthly payment, figure out what works for your life right now.
Negotiate your bills
For most of us, it would never occur to us to try to negotiate our monthly bills. But it turns out that you totally can.
There’s even an entire market of apps you can use to negotiate your bills on your behalf. Apps like Truebill, Trim, and Billshark all help you figure out where you’re spending too much money and negotiate lower payments.
Cut your utility use
Your utility bill is one that you can’t get rid of — But there are definitely things you can do to lower it every month.
First, consider changing the temperature on your thermostat. If you can stand your house a little warmer in the summer and a little cooler in the winter, you can save yourself a heck of a lot of money. We cut our bill in half in the months we don’t regulate the temperature in our apartment!
You can also reduce your bill by using a programmable thermostat. Turn down the heat or AC while you’re at work, and have it automatically turn back on before you come home.
You can also do little things like using energy-efficient utilities and simply using less electricity.
Use cash-back apps
Cash-backs apps aren’t going to get you rich, but they will help you to save a little money here and there. And that’s exactly what you’re working toward when you’re on a tight budget.
A few of my favorite cash-back apps are Ibotta and Fetch Rewards, which give you cash back for scanning your grocery receipts. Another favorite is Rakuten, which gives you cash back for online purchases.
Unfollow and unsubscribe
Don’t get me wrong – I love Instagram as much as the next person. But I also know that when you see influencers sharing so many gorgeous clothes and products, it can be hard to resist doing a little shopping.
Similarly, it can be hard to resist spending money when you get an email from your favorite clothing store saying they’re having a huge sale (which they seem to be having nearly every day).
If you find yourself having a hard time passing up deals when you see them on Instagram and in your emails, it might be time to unfollow and unsubscribe from anything that convinces you to spend money you don’t have.
Tackle high-interest debt
One of the most frustrating things for me when I started my money journey is that I kept reading finance advice that told me to aggressively pay off debt.
If I don’t even have the wiggle room to put money into savings, how on earth am I going to put extra money toward debt?
Then I started paying attention to how much I was paying being charged in interest every month on my credit cards. And I realized just how right they were.
Paying off high-interest debt is one of the best things you can do to put more money in your pocket every month and, more importantly, save you a lot of freaking money in the long run.
Trust me, I know how hard it is to put extra money toward debt when you’re just scraping by. But if you do everything else on this list, I promise you’ll have some money to spare!
Read More: How to Pay Off Credit Card Debt Fast
Avoid unnecessary fees
A 2019 survey from Chime Bank found that the average American spends $329 per year on banking fees. I don’t know about you, but that sounds wild to me.
Those fees include overdraft fees, account fees, fees to redeem rewards, fees to receive paper statements, and fees for account inactivity.
Try going through your bank account for the past few months and try to spot any fees your bank has charged you. If you find any, it’s time to either switch banks or change your behavior.
If it’s the case that the fees you’re paying are a result of overdraft fees, try to figure out why that’s happening. Is it that you’re not paying attention to your balance or that emergencies are popping up that you have to pay for? What backup plan can you put into place instead of swiping your card when there’s no money in your account?
If the fees aren’t a result of your behavior and it’s just that you have a fee-happy bank, it’s time to switch banks! There are plenty out there that don’t charge these ridiculous fees.
Start a side hustle
Listen, I can share all the advice in the world about how you can save money every month. But at the end of the day, there’s only so much you can cut.
Rather than relying solely on cutting expenses to help me save more money, my favorite way to do it has been by increasing my income through side hustles.
Today I run my business full-time, but for years I worked a full-time job while I worked on my blog and wrote freelance articles on the side.
If you’re interested in using a side hustle to increase your income, feel free to check out my list of 11 ways you can make an extra $1,000 per month.
When you’re on a tight budget, saving even the smallest amount seems like an impossible task. Trust me, I’ve been there myself.
But since I started going all-in on my personal finance, I’ve learned so many legit ways to save money every month, even when there’s not a lot of wiggle room in the budget.
If you’re on a tight budget, I hope you’ll give a few of these tips a shot to help you start putting money away to help you build an emergency fund or pay off debt.