How to Save Money on A Tight Budget

It’s easy to get caught in the trap of having no money left at the end of the month. I faced that situation for years while I was paying off debt.

If you regularly encounter a similar situation, there is a way out. You can save money on a tight budget and pursue financial stability. The basics of saving money comes down to one simple step – starting.

Even $20 a month will make a difference. If that amount seems impossible, this guide shares the top ways to save money on a limited income.

How to Save Money on a Limited Budget

Do you struggle to make ends meet each month? Here are some money-saving tips you can implement to improve your finances.

1. Cut the Cord on Cable

The average cable bill is over $200 per month. If you’re living paycheck-to-paycheck and are paying close to that amount each month, canceling your cable contract is the easiest way to start saving money.

Live TV streaming services help you replace cable, and many of them carry local channels, sports, and popular lifestyle networks.

You can cut the cord and easily save at least $100 per month. That’s money you can use to quickly grow your savings account or put towards other needs without sacrificing your favorite shows.

Here are the top streaming services that provide live TV. Many of them offer free trials. If you don’t know which to pick, try our free quiz to determine which is best for your needs.

2. Lower Your Auto Insurance Rates

One of the best ways to save money on a tight budget is to comparison shop for car insurance. If it has been over a year since you compared rates, you’re likely overlooking an opportunity for savings.

*Related: Need to save money on tires? Check out our guide on the best tire deals online to save big money.*

You want to research rates every six to 12 months, which fits many policies. It can be overwhelming to call different insurers to inquire about rates, but don’t let that hold you back.

The Zebra is a terrific resource to use if you don’t want to go through the hassle of doing the work. You provide them with your information, and they give you quotes from multiple carriers within minutes.

The site researches rates from several dozen insurance companies and can often save you hundreds of dollars a year. That’s money you can put towards other areas of your budget.

3. Kill Bank Fees

Banks love to charge fees. Reports indicate the average American pays over $300 a year in bank fees. These can include any of the following:

• Overdraft fees
• Minimum account balance fees
• Monthly maintenance or service fees
• Insufficient funds
• Out-of-network ATM

If you have been charged any of those fees over the last year, you should try to find a bank that works for you instead of bleeding you dry. This can be important when you are trying to save money on a tight budget.

Chime® is one potential solution. It is a mobile-first that offers lots of money management tools, but with no monthly fees and access to over 60,000 fee-free ATMs*.

They offer many perks, such as round-ups that automatically round up debit card purchases and transfer the money to your savings account.

Read our review of Chime to learn more.

A second option is to open a free account through SaveBetter.com. You can put money in high-yield savings accounts, CD’s, or money market accounts in multiple banks all from one account.

4. Cancel Unused Subscriptions

Unused memberships and subscriptions can be a giant money drain. You may love the gym, but if it has been over a year since you’ve gone, you’re wasting money.

The same idea is true with subscriptions you no longer use. Getting rid of either is a simple way to save money every month to put towards other needs.

Rocket Money is an easy-to-use resource that helps you eliminate these expenses. They analyze your spending to find services you don’t use and cancel them for you.

They also negotiate on your behalf with service providers. Rocket Money is free to use. However, if they secure savings for you, they keep 40 percent of the amount saved.

Sure, you could make the calls yourself. But, if you’re not going to put in the effort, the service will do the work for you.

Read our Rocket Money review to learn more.

5. Make Money on the Side

A lot of advice on how to save money focuses solely on cutting expenses. Analyzing your spending habits is an excellent way to grow your savings account, but you can only cut so much.

When you’re struggling to save more money, earning money on the side can be a good option. You should devote earnings to your savings goals and not on needless spending.

If you pair that with reduced spending, you will be amazed at how quickly you can increase your savings.

DoorDash is one awesome possibility to earn money on the side, and often viewed as the best delivery app to work for. You work on your own schedule, delivering food from restaurants to customers.

DoorDash drivers can get paid $23 per hour while on a delivery. Pay is released weekly.

6. Automate Your Savings

Paying yourself first is a key tenet to get rich, but it’s easy to forget when you have a small income. Automating your savings is a fantastic way to avoid overlooking this strategy.

Most banks let you establish automatic transfers weekly, bi-weekly, or monthly into your savings account. You can even have your employer transfer money into your savings account each pay period.

This is a great way to build an emergency fund or other savings goals. CIT Bank is a good option to do this with.

*Related: Do you want to save a lot of money this year? Read our guide on how to save $10,000 in a year to beef up your savings account.*

They have a $100 minimum account balance requirement and allow you to establish transfers at whatever interval you like.

7. Switch to a Cheaper Cell Phone Plan

The average cell phone bill is roughly $120 per month, according to recent reports. If you’re spending near that amount, you’re overlooking an easy way to save money monthly.

Opting for a no-contract carrier lets you get coverage from major providers like Verizon for a fraction of the cost. Tello is one such option.

The carrier has flexible plans starting at just $10 per month. If you’re on Wi-Fi a lot they’re a good carrier to use to save money without sacrificing quality.

Read our review of the best cheap cell phone plans to see how Tello compares against other top no-contract carriers.

8. Start a Budget

Budgeting can be divisive as many people think it means you can’t enjoy life. That is a myth. Budgeting helps you track your money and identifies where you might be overspending.

*Related: Mobile budgeting apps like Mint are a great way to stay on top of your finances. Read our guide on the best Mint.com alternatives to identify the top options.

In essence, budgeting gives you the freedom to spend money in line with your goals. It helps give every dollar a purpose, which is helpful when you’re aiming to save money on a tight budget.

Read our guide on how to make a budget to learn where to start.

9. Get Rebates at the Grocery Store

Grocery shopping is something we all must do, but it’s helpful to stretch your budget at the store. While couponing takes time, you can still cut your grocery bill with a shopping app like Ibotta.

Ibotta works with hundreds of national chains to help you get rebates on your spending. Simply take a picture of your receipt after shopping, and the app identifies available rebates.

You can cash out via PayPal or gift card after reaching $20 in your account. The app also gives you a $5 bonus after your first receipt submission.

10. Save Money When Shopping Online

Shopping online is an easy way to avoid the store and find deals. However, nothing is worse than looking for a coupon code only to find none that work.

Capital One Shopping is a helpful browser extension that searches for active discount codes when you are shopping online. If the extension finds one, it gets applied to your purchase and reduces the cost.

If you don’t want to use the extension, you can save by shopping at online dollar stores to cut costs. Read our review of the best online dollar stores to identify the top one for you.

11. Establish Goals

Creating and following goals are essential parts of saving money on any level of income. However, goals can present a unique challenge when your earnings are limited.

It may feel like your efforts will be fruitless, leading you to inaction. Nevertheless, goals are an excellent way to counteract that emotion, especially if you make them visual.

For example, if you want to save for a vacation, find pictures of your dream destination. Use that to motivate you to reduce your spending and know that each dollar saved takes you one step closer to that goal.

12. Insource as Much as You Can

If you are struggling to save money on a tight budget, you want to reduce spending on things you can do yourself. This helps you increase savings, and you may learn something new along the way.

Common examples include:

• Cleaning your house
• Cooking more meals at home
• Cutting your own hair
• Oil changes on your car

Don’t be afraid to look for other activities you can insource. While this will help you in the short term, it will show you that you’re capable of saving loads of money in the long run.

13. Avoid Credit Cards

Credit cards are a helpful tool to manage your money. However, when they are not used wisely, they can destroy your budget.

It’s tempting to use a credit card to pay for a need or simply buy something you want.

Doing this once might be inconsequential, but you will incur interest when you don’t have the funds to repay the purchase. If you do this repeatedly, you will end up in debt.

The situation becomes worse as it can impact your credit score. This can cost you when you have a legitimate need to borrow funds.

How Can I Save Money When Struggling?

While saving money when you are struggling financially can be a challenge, it is possible. The feeling may be overwhelming, especially if you’re often in a financial bind, but don’t let that stop you from taking action to save.

Here is how you can save money when struggling:

• Look at your finances for the past month to see your spending
• Identify which of those expenses were needless
• Cut those costs and identify other expenses you can live without
• Ask a friend or family member to keep you accountable

It may feel impossible to reverse course, but it’s doable. Just take one step at a time.

If you can combine the above steps with earning extra income, that will catapult your efforts.

How Can I Save the Most Money on a Budget?

You can increase your savings by following a budget that’s aligned with your goals. Budgeting is personal, so it pays to adjust it to your needs and wishes.

It’s vital to know where each dollar goes to ensure you stay on track. Tiller is a helpful resource that works with Google Sheets to help you track your spending.

There are various budgeting methods you can follow, but the 50/30/20 budget is a good method to structure your budget. This is how it works:

• Spend 50 percent of your budget on needs like housing and food
• Spend 30 percent of your budget on discretionary spending
• Allocate the remaining 20 percent to savings

For example, if your paycheck is $5,000 per month after taxes, you would spend $2,500 on the first category, $1,500 on the second, and the remaining $1,000 for savings.

Again, you want to personalize this and focus on saving as much as possible. Doing so helps you build wealth and avoid unnecessary spending.

How Can I Save $1,000 Fast?

It is possible to save $1,000 relatively quickly depending on your income. First, you want to examine your budget and cut everything you can temporarily live without.

Next, you want to supplement your income with a side gig to shorten the time it takes to amass the $1,000. The two combined will help you reach your goal, but keep in mind it may not be sustainable over time.

If you can, use the $1,000 to start an emergency fund so you are covered if you encounter future unexpected expenses.

Bottom Line

It may feel impossible to budget when broke. It’s essential not to let that feeling hold you back. The most important step is to take action.

Starting will build the confidence necessary to continue. As you learn better financial habits, look for other ways to reduce needless spending. The above list merely scratches the surface of opportunities to save.

By pairing your efforts with a goal, you will help ensure success in the long run.

Why do you think it’s easy to rationalize not saving when on a lower income? What’s your favorite way to save money?

*Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.

Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

*Capital One Shopping compensates us when you sign up for Capital One Shopping using the links provided.

*Actual earnings may differ and depend on factors like number of deliveries completed, time of day, location, and expenses. Hourly pay is calculated using average Dasher payouts while on a delivery (from the time you accept an order until the time you drop it off) over a 90 day period and includes compensation from peak pay, tips, and other incentives.