Hey you! Do you want to save money? Pay off some bills? Or just have more control over your finances? Well, you’ve come to the right page. For the low, low cost of free.99, I’ll teach you how to live on a budget and still have fun!
Not possible? I beg to differ.
While living on a budget, I have lived my best life! By making little sacrifices and living below my means, I was later able to travel, have new adventures, and live a life without financial worries.
Living on a budget means that you’re taking control of your life and your financial future! You’re creating a spending plan based on smart decisions that will help you avoid overspending, debt, and stress.
So are you ready to learn how to live a fabulous life on a budget? Let’s get started!
1. Create A Budget
If you’ve read any of my other posts, you’re probably tired of hearing this over and over and over again. But… Make a budget!!! It can really help you so much.
When you create a budget, you can figure out where you are spending all of your money. And with that, you can see where you need to STOP spending so much money!
Seeing your spending habits written down and how they total up can be eye-opening. Spending a dollar here and there doesn’t always seem like a lot while you’re doing it. But believe me, it can wreck your budget.
2. Pay Yourself First
One of the most important things you should be doing as an adult is saving money! Life is full of surprises and you never know when something could happen. If you suddenly had to pay $500 to fix your car, could you afford it?
Fret not! You can live on a budget and save money as well.
Once you have your budget laid out, you can decide where to cut back spending. This is the money that you will now be able to save. Pay yourself first by putting that money aside before you do anything else.
Set a goal and try to save as much as you can. Once you reach that goal, you can be less strict and have more fun. For instance, my husband and I made a goal for an emergency fund. Once we reached that amount, we started putting less money towards it and started saving for a travel fund as well.
3. Separate Your Money Into Different Bank Accounts
Now that you’ve set up your spending plan, you don’t want to make the mistake of spending more than you should. To avoid that, I like to separate my money into different bank accounts.
The first thing we do after every paycheck is to separate the money for our savings and bills into a 2nd account. From that account, the bills are put on auto-pay. The trick is that we don’t use the bank card connected to this account otherwise.
Other everyday spending comes out of what is left in the 1st account. This means we’ll never be short on money needed for bills. Also, we’ve prioritized saving by deciding the amount we want to save first, rather than trying to save what we can after having fun.
4. Get Your Household On The Same Page
Did I forget to mention that teamwork makes the dream work? If everyone is not on the same page when it comes to living a more frugal lifestyle, it will be hard to succeed.
Abraham Lincoln said, “A house divided against itself, cannot stand.”
That’s not only true for our country, but our finances as well. How can you successfully save money if one person insists on saving and the other wants to spend? Learning how to budget as a couple will reduce the arguments, headaches, and stress.
Everyone in the family, even the children, should understand the plan and the goals to work on it together.
5. Lower Your Expenses
When you’re living on a tight budget, the best thing you can do is to loosen it. To do this, find ways to lower your monthly expenses.
Think of the things you’re paying for but don’t really need. Do you need Hulu, Netflix, AND cable? Should you really have that prime membership at this time?
These are what you can cut out to have more flexibility with your wallet. See how many things you can cut down on like eating out, utilities, etc.
I have a post with great ways to lower your monthly expenses that you can check out by clicking here.
6. Start Living Frugally
Now it’s time to turn that plan into a reality. Take accountability for your spending habits and stick to the limits you’ve set.
Training yourself to spend less money has a lot to do with your money mindset. It will determine how you make financial decisions. With a frugal mindset, you won’t jump at the first price you get.
The car dealership wants to charge $100 to change your vehicle’s tail light? With a little bit of searching, you might find a small auto repair shop down the road that will do it for $50. Better yet, you could buy the bulb for $10 and look up a video to do it yourself.
This is the way people who save more money think. We try to find things for the best prices, even if that means not getting brand name products.
7. Comparison Shop
As with the tail light bulb example, when making purchases, compare the prices at different locations. Shop around for the best deals before buying a new car, buying furniture, or even when grocery shopping.
To get the best deals, I do my grocery shopping at 3 different stores. I might even go to a 4th store if they have the item I want on sale.
Another great tip is to compare the different prices per unit on the products you’re looking at. Most stores will have it displayed on the shelf label. Sometimes an item might be more expensive than the other, but a lower price per unit means you’ll be getting more bang for your buck!
8. Don’t Try To Keep Up With The Joneses
Popular culture has convinced us that we have to spend money and live lavishly to be “cool’. All our favorite celebrities are living in big homes, driving flashy cars, and showing off fancy clothes and jewelry.
But the truth is that trying to Keep Up With the Joneses will bring you nothing but empty pockets and loads of debt. But sure, you’ll look really nice while you’re on the way to filing bankruptcy.
Some of these celebrities that we admire are actually in financial trouble as well. If you value being debt-free, unfollow the Joneses.
9. Buy Groceries Once Per Month
If you’re like me, every time you go to the store, you end up putting things in your cart that you didn’t go for. When you’re making multiple trips to the grocery store per month, this is bad!
I used to go shopping every week, sometimes more than that if I forgot something; my wallet wept. In an effort to stick to our grocery budget, I started to create a list of every single thing that we buy on a monthly basis. Our meals are also planned out so that we know what ingredients will be needed.
Every month, we do our shopping based on that list. Then about mid-month, we’ll take another trip to buy the fresh foods that wouldn’t last a whole month. Reducing the number of times we go to the store has really improved our grocery budget.
10. Fastrack Your Debt Payoff
Once you have built up an emergency fund. It’s time to focus on paying off debt. Woo hoo! When you take that debt out of your life, your monthly budget will be even lower and flexible.
In order to get rid of your debt fast, you’ll have to pay more than the minimum payment every month. This will reduce the amount of time it takes to pay it off and the amount of interest you’ll pay.
To tackle debt, you can use either the Debt Avalanche or Debt Snowball method.
For more information: 10 Best Ways To Pay Off Debt Fast
11. Stop Using Credit Cards
If you have debt, the worst thing to do is create more by using a credit card.
You’re overspending if you have to rely on your credit card to cover your monthly expenses. You have to get into the mindset of only buying what you can afford. Instead of using a credit card, only use your debit card and/ or cash.
Once you have control of your finances, you can start to use your credit card again. It’s a great way to improve your credit, and you will not get any interest charges if you pay the full balance every month.
12. Find Cheap Ways To Have Fun
Even if you are living on an extreme budget, you can still get out and have fun. There are many cheap sources of entertainment and free ways to have fun as a family. Sometimes it just takes a bit of creativity!
These are just a few among many things to do on a budget:
- Picnic in the park
- Beach day
- Movie night with popcorn
- Boardgame competition
- Free local events
I also make great use of my local library. They have plenty of resources available to check out for free. You can even download from their online collection straight to your device. I’m talking about books, movies, music albums, television shows, and more. Did I mention it’s all free?
13. Try DIY Projects
Is there anything you’re paying for that you’d be able to do yourself? There are heaps of money to be saved with do-it-yourself projects.
I love to transform cheap dollar tree decorations into things that look way more expensive. It’s also easy to refurbish inexpensive furniture from the thrift store into pieces that will look amazing in your home.
There are so many DIY projects that can be taken on to save more money while on a budget. From DIY laundry detergent to homemade yogurt, or updating your home; the possibilities are endless.
14. Take It One Day At A Time
Patience is one of the important traits needed when learning how to live financially comfortably. Realize that you won’t be able to get everything that you want then and there. If it’s not in the budget, you’ll have to save the money allocated to that category until you can afford it.
That means, no more putting things you can’t afford on credit!
When my husband and I got a new place, it was several months until our home was fully furnished. Why? Because we bought what we could afford as we could afford it. Sure, I could have used our savings for it. Or I could have put all the furniture on a credit card.
But where would that leave us if an emergency situation happened? Both options led to possibly creating debt.
15. Keep Track Of Your Spending
Don’t forget to keep track of how much you are spending!
If you’ve already spent $40 out of the $50 in your budget for entertainment and it’s only halfway through the month, it’s time to slow your roll! Keep track so you don’t blow through your budget before the end of the month.
I prefer to track my spending by totaling up my receipts and checking my bank account online. However, there are other ways to keep track such as using apps like Mint, using the cash envelope system, or creating an excel spreadsheet.
16. Review Your Monthly Progress
At the end of the month, review your progress. Look at what has been working well for you and what has not.
If you have overspent, try to figure out why. Are there any adjustments that you can make? Are there any other not-so-frequent expenses that you forgot to add?
It’s in this review process that I realized my family had to make fewer shopping trips in order to stick to the grocery budget. We had to take accountability for our spending habits and figure out ways to make our budget work around them.
17. Challenge Yourself To Spend Less
It might seem hard, learning how to live on a budget isn’t comfortable at first. But, soon you will be a pro at it!
But it doesn’t have to stop there! Can you spend even less money every month? Maybe you’ll decide to ditch your car completely and start riding a bicycle everywhere. Or maybe you work from home and have found it easier to move from a big expensive city to a small town.
Challenge yourself to find creative new ways to save money, and please share them with me as well.