We all want to make six figures working from home, but the reality is that most of us can’t, so we have to grind daily to make it work.
From time to time we all experience what is like to live with a tight budget, some of us make it through while others, unfortunately, end up accumulating more debt.
Most of the time it all boils down to having a solid game plan on how to best use your money and sticking to that plan no matter what.
To help you stretch your dollars while on a tight budget, here are 8 simple tips to make it work on a tight budget.
1. Prioritize what you spend money on
Occasionally, even people on a budget can spoil themselves with little treats or even a large splurge.
Believe me, you should definitely reward yourself every so often, but the key is to not do it all the time so that you can stay within your budget.
Make a list of all your expenses (covered below) and prioritize them based on what’s important to survive and provide for your family.
For example your mortgage, electricity, water, phones, etc. are necessary, buying meat every time you buy groceries is not. Be selective and focus on the ultimate goal, to improve your finances.
If you have money to spoil yourself when you get near the bottom of the list, then you know you can afford an extra purchase.
Just remember to include a savings account near the top of your list in case of emergencies.
2...Make a list, and stick to it
Whether you’re doing grocery shopping, school shopping, or any kind of shopping, having a list of the things you need is the first step to controlling your overspending and learning how to be responsible with your money.
I can recall the countless times I used to visit the local auto shop for the things I needed to change the oil in my truck, and I would end up with a bunch of other things that I really didn’t need.
Now, I make a list of the things I really need to complete the job, and I even use SpeedPerks coupons I get through email which ends up saving me even more money on every visit.
To make this work even better, make a list of everything you spend money on, then do the following:
- Prioritize your list from most important to least important.
- Track your current spending. The easiest way to do this is by using a tool like Mint or Personal Capital to aggregate all your spending and even easily group them by categories like food, entertainment, utilities, etc.
- Compare your current spending to your budget to see what you can cut out ($5 for a cup of coffee?), and what you need to keep.
- Set a realistic number to spend on the high priorities on the list based on current spending.
- If your total budget is still above what you have available, research ways to lower the important costs, like lowering interest rates on loans, being more energy-efficient, and buying lower-priced items.
3...Never shop hungry, sad, or angry
You may be laughing, but this is serious stuff!
We’ve all heard that you shouldn’t shop hungry, and if you’ve ever decided to hold off eating to go food shopping, you know why.
You end up buying everything you see and want to eat and end up throwing away most of it at the end.
Another to stay away from is buying when emotion is involved.
We’re most likely to spend money when there’s emotion involved, such as sadness and anger.
While you can’t always control when you need to go shopping, try to hold off on your trip if you’re having a really bad day or are just really emotional.
Never buy a product simply because it’s on sale unless you absolutely need it!
Even then, take the time to shop around for better deals, they’re always out there.
4...Make it yourself
Most things are cheaper if you make them yourself rather than buying them.
True Story: A few months ago my wife was searching online for a custom block of numbers for the front of the house. What she found online looked nice, but the prices were rediculous! Instead she decided to use her creativity, bought supplies at a few local stores, and we did it ourselves! If we bought it online: $125, our cost when we made it: $27…wow!
You can make anything from food to cleaning products to face wash. You can find creative ideas on Pinterest, Etsy, Facebook, Instagram, and many other sites.
5...Use coupons
I have to admit, coupons are not appealing to a lot of people, I was one of them for a while. But then I started using online coupon sites like RetailMeNot and it is incredible how much money I have saved over the years with online coupons.
A few years ago when I was studying for the CPA exam, I actually found active coupons for CPA exam study materials online, some of those coupons offered hundreds of dollars off!
Don’t forget the coupons you get in the mail, don’t just throw those magazines and booklets away! They actually help you save money.
If you prefer online coupons, you can sign up to get weekly coupons sent to your email inbox from any coupon website like RetailMeNot.
If you look hard enough, you can also find all kinds of freebies to try too.
6...Pay bills online (and automate them)
Paying your bills online is the ultimate timesaver for the responsible and financially-savvy consumer.
I get it, I’ve been there myself many times. You forget to send that payment in by the due date, so now that bill is costing you a lot more money with late fees.
The problem is that most people don’t realize that if you have a history of paying your bills late, it will have a negative effect on your credit score, which will ultimately reduce your credit score and cost you more money whenever you need to make a large purchase on credit.
Even if you don’t consider yourself a financially-savvy consumer, paying your bills online or automating most of your reoccurring monthly bills frees up more of your time so you can focus on other ways to cut back, and make more money.
Take for example your mortgage or rent, it’s insane how many people incur late fees for not making payments on time.
How hard can this be, is the same amount every month around the same day. Why not automate your bills so every month it withdraws the money from your bank account!
7...Find ways to save money
There’s something about struggle that forces us to be creative and find a way to make it happen.
The same goes for your personal finances, if you’re struggling to stretch your money, you can find ways to save money on a tight budget and learn how to stretch every dollar.
Sure, you can do the normal activities like researching new ways to cut energy costs and use up every last bit of what you have, but there are other things you can do (and even include the kids) that will save even more money.
For example:
- Make your own household products including soap, baby food, cleaners, and beauty products.
- Search for coupons and freebies in your local papers and online. You can even sign up for coupon freebies online.
- Grow your own vegetables and spices.
8...Have a “fun stuff” stash
Despite what many might think, consciously putting money aside for fun actually helps you reach your goals quicker.
You may think that you’re going to cut back completely and eliminate eating out, going to the movies, no vacations, etc.
The truth is that doing this is harder than you think, and frankly is not a healthy way to live your life, especially when you have a family.
Figure out how much you can afford to “blow” on fun things and put it aside. You can have a schedule, like “we can go out once a month” or you can do occasional small things and save up to a larger vacation or larger purchase.
Remember: saving is just as important as paying off debt
Imagine you’ve worked and worked and finally paid down your debt. Then you have a major accident or lose your job and are immediately back into debt and back in trouble.
Make sure to try to set aside some savings every week to keep yourself protected in case of severe problems in the future.
Nobody wants a car tire to blow or a doctor’s visit expense, but these are things that happen time and time again. The more you can keep in savings the easier it will be when life happens unexpectedly.
Making it work on a tight budget takes time, patience and staying positive. It will not improve overnight, but consistently making the right financial decisions, you will make it work and reach your financial goals.
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