5 Ways to Save Money on a Tight Budget for Beginners
March 21, 2022 by Daniel Azzoli
For a lot of people, saving money might be low on their list of priorities. But why? It’s not as though the importance of saving isn’t obvious to most people. After all, how else are you expected to buy a new car, save up for a house, or even put together an emergency fund to give you a hand in times of need?
The truth is, for anyone who is simply trying to make ends meet, the thought of having enough money to be able to put some of it away might feel more like a dream than a possible reality. Once they’ve accounted for food, rent, utilities, and other essential expenses, there may not be much left over.
But even if this sounds like the situation you’re in, you don’t need to give up hope! While it won’t happen overnight, getting to a place with your finances where you can actually start to save money may be within your reach if you incorporate the right personal budgeting tips on a consistent basis. It may not always be smooth sailing and you’ll likely go through some ups and downs, but if you stick with it, you can put yourself in a position to boost your savings.
To help you get started, here are five simple budgeting tips for beginners that we hope can give you a hand on your journey to start saving!
1. Start with a Budget
Trying to find ways of saving money without a financial framework in place is going to be a tough proposition. Because of this, the first thing you should do is implement some sort of budgeting system. You’ll need to start by researching different budgeting methods to figure out which one might work best for your situation, but once you do, you’ll need to commit fully to implementing it properly.
One of the main things a budget is going to help you with is keeping track of your spending and identifying problem areas. While it might seem like the act of budgeting is going to restrict your spending at first, by learning more about your spending habits and gaining more control over your finances, you can start working towards a higher level of financial freedom.
For example, let’s say that you’ve decided to work within some type of monthly budget. The first thing you might do is make a list of your upcoming monthly expenses as well as your income for the month. You’ll probably put down items like groceries, utilities, rent, debt payments, and more. If you want a bigger sample size to work with, you can pull out your bank statements for the previous six months, see how much you’ve spent each month, and take the average. Once you know how much you generally spend, what you’re spending your money on, and how much money you have coming in, you can start to identify problem areas. This can help you to cut down your spending, save money, and ultimately have more money stowed away in the long run.
2. Spend Less Money on Food
One of the best personal budgeting tips we can give you is to pay more attention to how much you spend on food. And if you’re looking for some low-hanging fruit when it comes to saving money, a simple place to start is to eat out less, or not eat out at all for a certain period of time if you can. As convenient as takeout can be at the end of a long day, these expenses can pile up much more easily than you might think. While it might seem fairly obvious that being smart with your grocery list and making most of your meals at home is going to be cheaper, it’s a lot easier said than done. But if you can really commit to this practice, it can be a simple way of saving money.
Having said that, what do you do if you don’t know where to start? Well, it all begins by planning out your meals for the upcoming week. Look at what’s going to be on sale at your local grocery store and plan your meals around that. You should also focus on eliminating any and all food waste. If you’re lacking ideas for meals, there are all sorts of useful budget meal planning resources online to draw inspiration from!
3. Start an Emergency Fund
It might seem strange to put something like this on a list of tips on budgeting. After all, how are you supposed to build an emergency fund if you’re having trouble saving money in the first place? Well, while it might not be easy to put together – or even possible in the early stages – an emergency fund can save you a lot of money down the road. We’ll explain how.
The main point of an emergency fund is to help you handle any emergency expenses that may come your way. This could be anything from issues with your car, medical emergencies, or essential home repairs.
So, how does this help you save money in the long run? Imagine you get hit with an unexpected expense and can’t pay for it out of pocket. You end up putting the expense on your credit card, but aren’t able to pay it back on time, so interest starts to build up. This is a fast track to ending up in a dangerous cycle of debt.
With an emergency fund in place, you can take care of your emergency expense and continue your efforts to save money. While it’s not always easy, try to incorporate contributions to this fund into your budget, even if it’s only in small amounts. You can take a look here to learn more about building an emergency fund.
4. Spend Less on Transportation
It’s no secret that owning and operating a car can be a pricey venture. Even if you rarely run into any mechanical issues, just dealing with basic maintenance and gas can be hard to do on a tight budget. So, one way you may be able to save some money is by taking public transportation when possible, or even walking/biking if you’re travelling a reasonable distance.
We understand that there are certain times and situations where driving is your only option. But even in these situations, there may be other options worth exploring. For example, let’s say you need to drive your kids to school everyday, or drive to work. In these instances, see if you can set up a carpool with other parents or co-workers.
5. Cancel Unused Subscriptions
If you use subscription services in a savvy way, they can be a great way to save money. For example, there’s no sense in renting two movies for ten dollars when you can have hundreds of movies at your fingertips for the same price every month.
But the truth is, their relatively low cost can entice you to sign up for more services than you know what to do with. So, to avoid this trap, take some time to review every subscription service that you’re signed up for, and take stock of what you use versus which services are gathering dust. If there are ones you don’t use, cancel them and put that money to better use.
Review Your Budget Consistently
While these personal budgeting tips can help you find ways to save money on a tight budget, it’s important to remember that budgeting is an ongoing and dynamic process. What works for you now may not be as effective four months down the road if certain aspects of your financial profile start to change. Maybe you get a new job and start to earn more money, or maybe you lose your job and the opposite happens. Whatever the case may be, it’s important to regularly review your budget to make sure it’s still tailored to your situation.
Another thing to keep in mind is that while you want to make sure your budget is doing its job, you also don’t want it to be too restrictive. If you find that the financial constraints you’ve put on yourself to help reign in your spending are so tight that it’s leading to general unhappiness, it’s worth going over your budget to see if you can shift things around. If you’ve had to cut out Friday night dinners with friends, maybe you can find room in your budget to cut back in certain areas to free up money to occasionally indulge in the things that make you happy.
Use These Personal Budgeting Tips to Help you Save Money
We understand that getting your finances to a place where you’re able to save money on a regular basis is easier said than done. There’s no magic wand you can wave or switch you can flip that’s going to get you on track without any hiccups. Saving money can be challenging, especially when money is already tight. But with some useful tips on budgeting in hand and a willingness to put in the work, you can turn things around!