In times like these, knowing how to live on a budget, for many folks, has never been more important. The simple fact is that issues like inflation are hitting peoples’ wallets and bank accounts far more than in decades past.
However, unlike in previous years, several strategies are available to people to help them maximize their paycheck, stretch their monthly budgets, and still live comfortable, happy lives.
Here are some financial and lifestyle tips and tricks to help you live within a tight budget and still enjoy the good life, even if you are on an irregular income!
1. Track Your Spending
There are a lot of expenses to keep track of every month. Groceries, credit card repayments, rent, utilities, car payments, health insurance, and other necessities can start to rack up if they aren’t being monitored. Our take-home pay can only cover so much! Therefore, you must keep track of any fluctuations in these amounts.
As these are reoccurring expenses and often automatically deducted from accounts or cards, any increases in their amount often go unnoticed – until it’s too late. So, keep track of your spending on a spreadsheet, calendar, money app, or a trusty pen and notebook, because it can be tough to know how to live on a budget when you are constantly being thrown financial curveballs like these.
2. Pay Down Debt
Credit card debt is one of the most common forms of debt in the Western world. There is something very tempting about paying for something and worrying about the bill later, right? Unfortunately, it’s a slippery slope that millions of people fall for daily.
Of course, plenty of other debts should be paid down as soon as possible. Learning to live on a budget is rooted in good money habits, so clear those debts.
3. Pay With Cash or Debit
Switching to a debit card or good old-fashioned cash and away from a credit card is an ideal way to create better spending habits. If you are on a strict budget, this switch is fundamental.
Spending from a debit card (or cash) is using your money, whereas using a credit card is using someone else’s – with interest and even late fees. Interest often devastates many people’s financial situations (and credit scores), so use your debit card and cash regularly.
4. Plan Large Purchases To Avoid Impulse Spending
We all have moments of weakness where we cave and then splurge on an impulse purchase. How often have we just bitten the bullet on entertainment, vacations, movie nights, Amazon, or expensive dinners out?
While rewarding ourselves sometimes is good, constantly making large purchases and impulse spending can start to mount up and is the easiest way to accrue big-time debt.
5. Live Within Your Means
While we tend to be bombarded with imagery on Instagram of people living the high life, the fact is that most people can’t afford to live like that – yet they pursue it constantly. A key to living on a budget is to live within your means!
If you are trying to make ends meet, then chances are browsing social media accounts filled with flashy cars, sun-drenched resorts, and designer clothes is doing you more harm than good. While it’s fine to aspire to reach these heights, living like this is terrible when you don’t have the paycheck to cover it.
6. Shop Around for Large Bills
No matter what budget category you fall into, there will always be large expenses to cover. These bills can be unexpected, but it’s still important to shop around to get what you need at the best price, even in these times of panic. While finding coupons for a new car is next to impossible, it’s still worth seeing where you could get a good deal, even if it means going to the dealership in the next town over.
7. Make More Money
The truth is that having a “side hustle” is no longer something only young people do. Many people have a side hustle as it helps supplement their main income or lets them enjoy some of the finer things in life without losing all their hard-earned beans.
The freelancer industry is booming, and it is a great way for people to do what they love outside of work hours and get paid for it. In fact, plenty of folks have been so good at their fun side hustles that they turned it into their main job!
8. Live Frugally
For many people learning how to live on a budget, the term “living frugally” is often misunderstood as a zero-based budget. Living frugally is more about being smart with your money and the money coming in.
An example of living frugally might be something as simple as buying your favorite soda or snacks in bulk rather than each time you shop. It may mean relying on your current Netflix subscription or other free entertainment options rather than a weekly trip to the cinema.
Remember, even your local library can save you money on book purchases! Another tip is to go to a vintage store for a new outfit instead of shopping online or taking on a DIY home project. Plenty of options are available to you to still have fun but keep your budget manageable.
9. Be Happy With What You Have
Many people spend too much time focusing on what they don’t have or what they think they need. But the happiest people are often the ones who are simply content with their current situation.
Sure, upgrades to the latest products and tech are great, but if what you have now works great and the difference to the upgrade is marginal, why spend the money and blow your budget?
10. Save Up for Expenses
If you know a large expense is on the horizon, then start saving for it yesterday! Putting expenses, especially large ones, on a credit card or taking out a loan is a surefire way to build up your debt and be on a tight budget for much longer than anyone would like.
11. Enjoy Life!
Have you ever heard the saying that “money isn’t everything” or that “money can’t buy you happiness”? Well, it’s the truth! Life is meant to be enjoyed, and you don’t need to have millions of dollars on hand to do so. Being happy is a far greater reward than a large bank account. And sometimes the free things in life are the best!
How To Live on a Budget
So, there you have it. Eleven easy-to-follow financial, lifestyle, and budgeting tips that anyone can learn and use to live on a budget.
They aren’t a guaranteed template for financial success, but they have been proven to help many folks facing financial hardship.
Even if your circumstances are prosperous and you have plenty of extra money, having a budgeting system in place for unexpected expenses may be lifesaving. It’s an excellent habit to get into, especially to teach and model to kids.
Read More:
Robyn Goldfarb
Hi! I am a millennial mom with a passion for personal finance. I have always been “into” personal finance but got inspired to start my blog after a period of extended unemployment. That experience really changed the way I viewed my relationship with money and the importance of accessible personal finance education.