Couple working together on a budget at home.

Ways To Save Money On A Tight Budget

Jamie Johnson4-minute read
March 23, 2022

For most people, few things cause more stress than money issues. When money is tight, it can be hard to make decisions for your family. Your options feel limited, and it’s easy to feel overwhelmed and out of control.

If you’re going through a season where money is tight, there are simple changes you can make to improve your financial situation. That way, you can free up some room in your budget and began to build your savings.

What Does It Mean When Money Is Tight?

When money is tight, that means you’re having a hard time meeting your ongoing financial responsibilities. There’s a shortfall between your income and your monthly spending.

Many different factors can cause a tight budget. It can be caused by a job loss, an unplanned expense, overspending, a lack of a proper budget or some combination of several of these.

When unexpected financial emergencies arise, it’s easy to become overwhelmed. But the best thing you can do is stay calm and evaluate your current financial situation. This will help you come up with a plan to get yourself back on track.

How Do You Survive Tight Money?

Worrying will never help your financial situation improve, but ignoring it won’t get you the results you want, either. Your best bet is to come up with a plan for how to move forward. Here are three steps that will help you get back on track when money is tight.

1. Create A Budget

The best way to get your finances under control is by creating a budget. You’ll start by figuring out how much income you have coming in every month. Doing this will help you understand what you have to work with.

If your income is irregular, look at how much you’ve earned over the past year. Set your income based on the lowest amount you’ve received in a given month. If you make more, you can put that money toward savings or your budget next month.

Next, you’re going to write down all of your bills and everything you spend money on each month. This includes your mortgage or rent, your credit cards, grocery bills, and things like eating out or buying clothes.

2. Cut Your Unnecessary Expenses

Look for any areas in your budget where you can cut your expenses. Finding ways to save is the best way to free up room in your monthly budget.

Could you make your lunch instead of eating out during your workday? Could you cut out your monthly cable bill and switch to Netflix instead? Finding coupons and looking for deals can cut down on your monthly grocery bill.

And don’t overlook the small, unnecessary purchases you make every month, either. The $9.99 you’re spending on Spotify may seem insignificant, but these small purchases can add up quickly.

3. Track Your Spending And Adjust As Needed

Unfortunately, you can’t just set up a budget and forget about it. You have to continue to track your spending daily and catch yourself when you’re getting off track. Tracking your spending is the best way to learn how to budget money better.

If you’re concerned that you won’t stick with your budget, you might give the envelope system a try. The way this system works is that you create an envelope for every item on your budget.

Then you take out that money in cash and fill each envelope with the budgeted amount. You can also just do this for areas where you tend to overspend, like at the grocery store.

How Can I Save Money And Not Touch It?

Once you have more wiggle room in your budget, you’ll want to start focusing on building up your emergency fund. But many people can fall into the habit of building up their savings, only to find reasons to spend it months later.

Obviously, this is not an effective strategy for growing your savings. Here are three ways you can make sure that you’re saving your money and not touching it.

1. Set A Realistic Savings Goal

If you’re having a hard time leaving your savings alone, then your savings goal may be too aggressive. Saving money is essential, but you shouldn’t be putting so much in savings that it puts a strain on your monthly budget.

Spend some time coming up with a realistic savings goal. The goal is to build the habit of saving money every month, so if all you can do is $100, then start there.

2. Automate Your Savings

Saving money is going to be much harder for you if you have to think about it every month. Not only will you have to make the choice to transfer the money to savings, but looking at your savings account will increase your temptation to spend the money.

Your best bet is to set up an automatic transfer to savings every month. In time, you won’t even think about the money you have sitting in savings.

3. Set Up Your Savings Account At A Different Bank

One of the biggest mistakes many people make is that they set up their savings account and their checking account at the same bank. Then, every time they log into their online banking account, they see how much money is sitting in savings.

It’s always a good idea to set up your savings account at a different bank. That way, if you need the money for a genuine financial emergency, you have access to it. But it forces you to take the time to think about whether you need to spend that money or not.

Bottom Line

When money is tight, it can feel stressful, but there are ways you can improve your finances. The first place to start is to create a budget and look for easy ways to save money. Once you feel good about your monthly budget, you can focus on increasing your savings.

Did you know that RocketHQSM has more personal finance articles just like this one? Learn more on our Personal Finance Learning Center about how to live on a budget, pay down debt and meet your financial goals. 

Jamie Johnson

Jamie Johnson is a Kansas City-based freelance writer who writes about a variety of personal finance topics, including loans, building credit, and paying down debt. She currently writes for clients like the U.S. Chamber of Commerce, Business Insider, and Bankrate.