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10 Ways to Save Money on a Tight Budget

Personal Finance
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Woman shopping for groceries in order to save money on a tight budget

It can be challenging to start saving money if your monthly income isn't much more than your monthly expenses. But if you can afford to, it's good to have something set aside for unexpected costs that may come up.

Cutting back on expenses doesn't have to be painful. Sometimes, even small changes to your habits can make a big difference. Here are 10 creative ways to save money on a tight budget.

1. Plan Meals Ahead

The average American household spends an average of $7,869 on food per year, which includes $3,424 on dining out, the Bureau of Labor Statistics reports. One easy way to trim food costs is to plan meals ahead of time. When you have ingredients and recipes on hand, you might be less tempted to visit the drive-through. You could use free time on the weekends to come up with dinner ideas for the week and then make a grocery list.

2. Use Coupons

The idea of clipping coupons may seem outdated and unrealistic, but now there are convenient digital options. Your grocery store may have a coupon app that applies your savings when you check out or a browser plug-in that automatically applies a discount to your online shopping order.

3. Clean Out Your Closet

Decluttering will not only help you feel more organized, but it can also be an opportunity to boost your income. By having a yard sale or selling clothes or other items online, you may find that your trash is someone else's treasure. Consider donating anything you don't sell. In some cases, you may be entitled to claim a tax deduction for your donations.

4. Cancel Recurring Subscriptions

Whether it's a meal delivery service, beauty box, entertainment streaming or wine club, subscription services can throw off your budget. What seems like a small cost of $10 or $20 each month can really start to add up over time. Take some time to carefully review your subscriptions and cancel anything you don't use.

5. Negotiate With Utility Companies

Cell phones, internet and cable can eat up a large portion of your paycheck. But these bills are often negotiable. Don't be afraid to call your providers and ask for a cheaper plan. In many cases, there may be promotional offers or rebates you qualify for, but you'd never know if you didn't ask.

6. Visit the Library

Libraries aren't just for books. Many local libraries offer free special events and classes, discounted museum admission and personal development workshops. If you have kids, the library can be a great source of free entertainment.

7. Pick Up a Side Job

A side job could help you earn extra money outside of your full-time job. You can then save or use this money to help pay down debt. Whether you become a ride-share driver, a pet sitter or a freelance consultant, keep in mind that your income will most likely have to be reported to the IRS, so it's important to keep good records.

8. Start an Emergency Fund

If you're on a tight budget and slowly building your savings, the last thing you want is to have to dip into what you've set aside because of an unexpected expense. In order to keep what you've saved for the long term, consider building up an emergency fund. It's a common best practice to save at least six months of your salary or more to cover the cost of an unexpected job loss, medical bills, car repairs or other emergency.

9. Pay Down Credit Card Debt

Paying the minimum on your credit card might be easier to maintain in the short term, especially when you're short on cash. But tackling credit card debt can help free up money and you'll likely end up paying less interest over time.

For example, if you paid $25 each month toward a credit card with a $3,000 balance and a 17% APR, it would take you over 10 years to pay it off and you'd pay $2,241.14 in interest. But by doubling your monthly payment to $50 per month, you could pay off the entire balance in less than seven years and reduce your total interest payments to $1,797.89. That could help open up more room to start saving money.

10. Make Saving Automatic

Automatic savings plans are a great way to save money on a tight budget. You can schedule recurring deposits from a linked checking account or through direct deposit if your employer offers it. Even modest amounts such as $10 to $20 per month could earn interest and add up over time.

If you haven't already, you might also consider starting a retirement plan to save up for after you've stopped earning money in a full-time career. This is distinct from saving for emergency expenses, as this money is intended to make up a portion of the funds available to you specifically in retirement, but it could be helpful to start sooner rather than later.

These strategies are just some of the ways to save money on a tight budget. Once you start cutting costs, you may realize you are able to save even more money than you originally expected.

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Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.