How To Live On A Tight Budget? 21 Things You Need To Do

Some people can't afford to overspend even one dollar and need to be aware of how they disburse their money. It can be difficult sometimes to follow a budget – how about a tight budget?

Maybe you are on a tight budget because your salary is too low, you have too many expenses, you have a lot of debt, you overspend on things you don't need, or you are just living your best life without being conscious about your finances.

Either way, it's possible to live on a tight budget and improve your situation if you follow some of the following tips. So let's find out how to live on a tight budget.

How To Live On A Tight Budget?

To pull this off, you must start a budget, use a suitable method, and review and update it monthly. Set financial goals, find the cheapest foods and places to groceries shop, and find new ways to make extra money. Always save before you spend, stop impulsive purchases, cancel unnecessary subscriptions, cut down on essential bills, pay debt as fast as possible and stop relying on credit cards.

How To Live On A Tight Budget

You should also find free entertainment, purchase second-hand products, cook at home, take meals to work, don't waste food, and have coffee at home. Don't forget to embrace discounts and promotions and use money-saving apps.

1 – Start A Budget

If you live with a low income and have too many expenses, you should start a budget and understand where your money goes. Creating a budget will give you a clear picture of your finances and allow you to know exactly how much money you make, where you spend it, and what you can save on.

80 20 rule budget example 1

Some people feel like they live on a tight budget because their money disappears fast and they don't know why. They may spend too much on groceries, or dish out too much on coffee and eating out at work than you should. Some people have multiple entertainment subscriptions that they don't use. Some quick and cheap purchases during the day also don't help, and a budget will identify all those costs allowing you to cut them and improve your finances.

Starting a budget has its advantages and disadvantages, but one thing is for sure, money management can't be avoided. You don't want to end up in debt.

2 – Use The Right Budget Method

Now, just because you decided to start budgeting your money doesn't mean you can use any budgeting method. Instead, you need to pick the most suitable one according to your needs. That's why you should learn all the personal budget types (which take a few minutes) and select the best one.

Best Budgeting Methods When Living On A Tight Budget

For example, if you live on a tight budget, you shouldn't choose the 60/30/10 rule budget because you can't save 60% of your income. The 50/40/10 and the 30/30/30/10 rule budget would not be a good fit either.

The 50/30/20 and 80/20 budget can be a good fit if you make some adjustments, but it might not be easy to save 20% of your salary if you live on a tight budget. Try extreme budgeting if you want to cut everything that is not necessary and save as much as you can.

3 – Review And Update Your Budget Monthly

Reviewing and updating your budget every month is necessary for identifying new opportunities for saving money and ensuring you are not spending more money than you should. In addition, it's essential to understand what you are doing right and wrong.

Why you need to evaluate a Budget

When reviewing your budget, you may understand that you need to try a different budgeting method, spend less money in some personal budget categories, or decide to cut some expenses that are not required anymore. It becomes easier over time to make adjustments since you have a better baseline budget and a better understanding of how you spend money.

4 – Set Financial Goals

Remember, budgeting is only worth it with clear financial goals. Without a motivation behind your actions to cut expenses and save money, why would you stick to a budget?

Examples of financial goals:

  • Buy a house
  • Pay debt
  • Invest your money
  • Build good credit
  • Save for retirement
  • Save for college
  • Set an emergency fund
  • Buy a brand new car in cash
  • Save for holidays
Budgeting On A Tight Budget Helps You Achieve Your Financial Goals

Since you know that financial goals increase your motivation to stick with your budget, especially when you really need it, you also must make them specific and have a time frame. For example, if you want to spend less money eating out, your financial goal could be “spending less than $100 eating out during January”. Then you need to find ways of doing it and stick with what you planned.

Whatever your financial goal is, ensure you make a plan for it, understanding how you can achieve it, how long it will take you, and how much money you will need.

5 – Check The Cheapest Places To Groceries Shop

After the mortgage/rent, people spend most of their budget on groceries. According to the U.S. Department of Agriculturea single male between the ages of 19-50 years old will, on average, spend anywhere from $355 to $540 for food per month. A single female aged between 19-50 years old is expected to spend, on average, anywhere between $305 to $480 for food per month.

It's never easy to make a family budget, but the average family, including two adults and two children between the age of nine to elevenwill be looking to spend anywhere between $940 to $1,440 monthly.

Anyone living on a tight budget must find the cheapest supermarkets, food warehouses, or other places where groceries are more affordable. Why would you buy meat at Place X if Place Y sells it at the same quality for less money? Check this list of the best places to grocery shop on a budget if you are looking to save on food.

6 – Check The Best Foods To Buy On A Budget

Next you must undestand the best foods to buy on a budget. Food is a necessity that cannot be avoided in our budgets. The best way is to create a budget-friendly grocery plan you are keen to stick and commit to and, most significantly, enjoy.

Best Foods To Buy On A Budget

When buying food on a budget, that are four things you can do to ensure you are purchasing them at the best price possible:

  • Buying in bulk or opting out of non-branded products
  • Checking personalized offers and vouchers given as a reward for shopping with specific supermarkets and brands.
  • Purchasing products where the date is coming close since retailers will usually discount those items to sell them before they need to throw them out
  • Checking the seasonability of a product, since some are more expensive when off-season due to lower availability and higher cost of getting them on the shelves.

7 – Find Ways To Make Extra Money

Trying to make more money when you live on a tight budget is always a great idea, but its not always easy to take action. After all, you can only stretch your money till a certain point, and sometimes you can't cut any more expenses.

Some ways you can make more money without having to find a second job are:

  • Become a tutor online
  • Take surveys
  • Teach a language you know well
  • Get cash back from apps
  • Advertise on your car
  • Do jobs for people
  • Use your skills to make money
  • Do babysitting
  • Start an online business

I could give you hundreds of ideas to make more money and improve your income. Be creative and think about anything you already do for free or something you know well that people would pay for you to help them.

8 – Stop Impulsive Purchases

How to live on a tight budget? Pulling the plug on impulsive purchases can be one of the first steps. Don't worry. We all have been there. The immediate and sudden feeling of having to purchase something you have just seen without any pre-shopping intention. Buying something spontaneously without any hesitation can be a big problem, especially when you don't have enough money.

Stop Impulsive Purchases On A Tight Budget

Buying something impulsive becomes a problem when you do it regularly, and that's why you should always wait a few days if it's a small purchase or a longer if it's a big one. It also helps to remember your financial goals and think you need to make that purchase, what is the actual cost of it, what you gain with that purchase, for how long it will make you happy, and if you already have something that brings you the same joy or has the same function.

9 – Save Before You Spend

Did you know that if you budget your money correctly every month and save it straightaway when you receive it, you will probably not spend it? On the other hand, if you decide to hold what you have on your account at the end of the month, you will not only save a lot less but probably not save any money at all.

Every single month, when I receive my salary from the different online businesses I have, I transfer the amount I planned to save straight away to a separate savings account. You should do the same because it's too tempting to check your balance and see that you still have some money left, and buy that jacket you wanted or go out for dinner.

You can set up an automated payment into your savings account from the day you get paid to ensure you follow your budget and reach your financial goals. You can also try the reverse budget rule, which means you will allocate your money to your financial goals first and then allocate the rest to your expenses.

10 – Cut Down On Essential Bills

Savings on essential bills is easier than you think, and you can adopt some strategies to ensure you pay less for mobile, internet, water, electricity, gas, etc. You don't even need to be super creative. Sometimes you just need to make smarter decisions, like paying your bills on time and avoiding falling behind payments, which can lead to debt and affect your credit rating.

Reduce your essential bills when living on a tight budget

For example, most of my friends are convinced they need to pay for unlimited mobile data when they don't spend that much data monthly. They could opt out for a cheaper payment plan. I pay four times less than one of my best friends, and we use about the same monthly data. Do you know what's even worse? We have the same phone provider, so he is just giving money away!

You can also reduce your essential bills by switching providers and negotiating your current terms with suppliers. For example, your water bill can be reduced if you spend less time in the shower. Your electricity bill can be reduced if you use the washing machine during the most suitable hours. You can save on gas if you don't drive your car to the supermarket, which is ten minutes' walking distance. Remember, you always have a solution.

11 – Cancel Unnecessary Subscriptions

We live in a world where we can have almost everything we want online, so adding another unnecessary subscription to our bank account is straightforward. Ten dollars for a tv subscription, another $6 for a music subscription, another $8 for a delivery subscription, and when you realize you are spending $50 monthly for things you don't even need.

When you live on a strict budget, you must cut everything unnecessary and save as much money as possible. Do you need five different tv subscriptions or multiple ones that you don't even use? I only have one subscription, Netflix, because I like to watch something before I go to bed. Believe me when I say you don't need more than one; you really don't.

12 – Stop Relying On Credit Cards

Using a credit card is a must if you want to take advantage of incentives like cash back or reward points. Some people even advise you to use your credit card as a debit card to ensure you get as many rewards and cashback as possible. However, you must be careful if you are on a tight budget.

Certain credit cards offer a much higher limit than you can pay, which makes you spend more than you should and end up in debt. The rule is if you can't pay the balance of your credit card bill in full each month, don't use it or be careful.

13 – Pay Your Debt As Fast As Possible

Do you want to know how to live on a tight budget and save money? Paying your debt as fast as possible. You need to understand that debt costs you money every month due to the interest payments and lost savings and investment opportunities. You can't save or invest any money that goes to debt repayments.

Pay Your Debt As Fast As Possible

One of the first financial goals you should create to ensure you stop living on such a tight budget is to make additional debt repayments and get rid of the smaller ones first. If every month you spend $400 in debt payments, that's a lot of money you could use for something else, right?

14 – Find Free Entertainment

We have this idea that we need to spend money to have fun, but we have many free things to do and save that money. Unfortunately, entertainment can be expensive in some cities, and someone on a tight budget needs to be creative to ensure they can have fun and not spend any money on it.

These are some of the things you can do for free:

  • Walk in the park
  • Free museums
  • Community events
  • Movie nights
  • Game nights
  • Going to the beach

You can also check Eventbrite, which was built to allow people to create, share and find new things to do, many of them for free. From sports events to music festivals, conferences, etc.

15 – Purchase Second Hand Products

Buying something second-hand can be a fantastic choice for your tight budget and an environmentally conscious decision. If you can purchase something that is high quality and looks new for less than half the price, why wouldn't you do it? You may not have a choice if you are on a tight budget.

Some things you should definitely purchase in second hand:

  • Books
  • Fashion clothes
  • Fitness equipment
  • Holiday items
  • Cars
  • Board games
  • Jewelry
  • Home decor items

Some things you buy lose their value immediately from the moment you buy them and walk out of the store. Cars, laptops, and phones are some of the most popular items that see their value decreases quickly. For example, a vehicle can drop in value between 15-35% in the first year and up to 50% or more over three years. So if you are on a tight budget, save money and buy some things second-hand.

16 – Plan Your Meals At Home

When you plan your meals at home, you will reduce your grocery bill since you only purchase what you need, not what you think you will use. It's also a great way not to waste food. I always learned with my mom to have a shopping list because that way, you only buy what is necessary.

Plan Your Meals At Home If You Are On A Tight Budget

Preparing meals will help keep your wallet fat, but also help slim you down. It can be great for those on a diet. Let's not even talk about the lower stress levels since you don't need to decide on a daily basis what you want to eat. It also allows you more time to prepare meals, which benefits your tight budget. Sometimes we say we don't have time to cook and just go for a takeaway, spending money we don't have.

17 – Take Food To Work

For as long as I can remember, I always took food to work (and before that, even to university for many different reasons). It saves you money, and my budget was tighter than tight when I was a student. Did you know you can save, on average, $100 monthly if you prepare your meals, cook, and take food to work?

Not only does bringing your food save you time because you don't need to stand in line with the rest of your coworkers, but it also gives you more time to relax and enjoy your food. In addition, if you are picky with food or follow a diet, you can cook what you need and not choose something that doesn't fit your current lifestyle.

18 – Don't Waste Food

Do you value your money, time, effort, and resources? If so, do not waste food. You spent money buying products to make your food, spent time cooking, and put effort into making a meal. Why would you waste all that?

Let's not even talk about the food you buy and don't touch it because time has passed and it's no longer suitable to consume. This is why preparing your meals is critical, because it prevents you from wasting food. Every dollar counts when you live on a tight budget, so why waste money on food you will never eat?

19 – Have A Coffee At Home

If you are a coffee lover, you know you can't face a day without one. However, if you are on a tight budget, you understand the importance of saving money, and having one or two coffees every day is costly, especially if you love Starbucks. After all, saving as much as possible is fundamental if you live paycheck to paycheck. That's why you should make and have coffee at home.

How much it costs to make coffee at home vs taking it outside
This information is merely informative and depends from person to person.

If you check the image above, you can see how much you can save if you have your coffee at home. If you don't have a coffee machine, you may need to invest some money before seeing a return on your investment. However, you can buy a kettle to boil water and make your coffee with a minimum acquisition. You can buy a coffee machine or coffee outside the house when your finances improve.

20 – Embrace Discounts And Promotions

When you have to count your money to see if you can survive one more month, discounts and promotions are your best friends. Not only should you shop for discounted items, but keep an eye on promotions that can help you reduce your groceries bill. In addition, some products have an extended expiration date, and you can keep them at home, saving loads of money at that precise moment.

Just be careful with discounts and promotions. Sometimes we buy something that is cheaper or has a big bargain that we don't need or will not use in the specific time frame we should. So stick with your shopping list and purchase products that are on discount or have a promotion that you need and will use.

21 – Use Money Saving Apps

These days you have many money-saving apps that let you check the prices of products and compare them between retailers where you can purchase them for a better price. Some apps even allow you to earn some cash back.

For general shopping, I would advise some apps like IBottaQuidco, and Honey. For savings on groceries, you can try Fetch or Ibotta. Don't forget to check any discount codes or coupons online.

Common Questions About How To Live On A Tight Budget

These are the most common questions about how to live on a tight budget.

How Do You Stay On A Tight Budget?

The easiest way to stay on a tight budget is to be realistic about your financial situation, make a plan and follow the budget. That's why creating financial goals is so important, because you have the motivation to stick with your budget.

How Do You Live Alone On A Tight Budget?

Living alone on a tight budget can be challenging. I have been there. You need to plan in detail where you will spend your money and stick with that budget no matter what. If you spend money, you are not counting, it can be even more difficult to survive that month, and you may end up in debt.

Ways To Save Money On A Tight Budget?

To save money on a tight budget, you need to transfer cash to a separate savings account the moment you receive your salary and not touch that money. You can also save money in many different ways that I mentioned above, like planning your meals, knowing what food to buy, what groceries shops are cheaper, cutting unnecessary subscriptions, etc.


Whether you live on a tight budget because your income barely matches your expenses or want to achieve a specific financial goal, starting a realistic budget with practical financial goals can be the difference between failing or succeeding.

I have provided you with 21 ideas to help you save money and make the most from your salary if you live in a difficult situation. Remember that having a good budgeting template can help you save time and better understand your finances.

Michael launched Wealth of Geeks to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.