Are you having trouble keeping your monthly spending under control?
Are you looking for ways to improve your spending when living on a budget!?
Well, you’re in the right place!
When living on a budget, you need to manage your emotions and track your spending. This means creating a budget either on paper or on a spreadsheet.
Once you’re able to contain your emotions and define your needs and wants, you can start to make savings goals and shoot for getting out of debt and paying for large expenses like a house, wedding, or vacation!
Here are 9 ways to improve your spending habits when living on a budget:
- Track Your Expenses
- Make Savings Goals
- Cancel Unused and Unnecessary Subscriptions
- Delete Any Delivery Apps
- Learn to Meal Prep
- Find Free Fun
- Wait Before Making Online Purchases
- Ditch Your Credit Cards or Cut Them Up
- Live a Minimalist Lifestyle
About Me: My name is Miguel and I’m a simple living and budget spreadsheet expert! I’ve been decluttering my life since 2018 and love everything simple living related. I aim to help you learn how to live a simple life, become intentional with your spending, and manage your money right!
Disclosure: This post may contain affiliate links, which means I’ll receive a commission if you purchase through my links, at no extra cost to you. Please read the full disclosure for more information.
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- Frugal Minimalism: 6 Powerful Ways Simple Living Can Save You Money
- Minimalist Finance: 9 Ways to Improve Your Personal Finances
- 10 Best Books on Budgeting to Master Your Finances
9 Ways to Improve Your Spending Habits When Living on a Budget
1. Track Your Expenses
My favorite tip hands down when it comes to improving your spending habits and living on a tight budget would be to track every expense!
This may seem overwhelming at first or even unnecessary, but when you give this a try, it will change your financial life!
In addition to tracking your expenses, you’ll be tasked with tracking your income as well.
This way you know literally everything there is to know about how much you’re making and spending each month and each year etc.
So how are we going to track our expenses and reap the benefits of living on a budget?
In the next section, we’ll show ya how to implement a budget to track your expenses.
Create a Budget
If you’re currently planning on living on a budget I highly encourage you to track your expenses using an Excel or Google Sheets spreadsheet.
We now offer budget spreadsheets in our shop to help you with all of your budgeting needs!
I currently use the Simple Annual Budget Spreadsheet, however, you may find that budgeting by individual months works better for you.
In that case, we have created a monthly budget spreadsheet and will add it to the store soon!
Living on a Tight Budget
Now if you’re someone living on a tight budget or a couple living on a budget, don’t worry!
As I’ve stated, when you start to track your expenses and see where you’re money is going, you are better equipped to create a budget that will keep your finances in line.
Now, what do I mean by this?…
I mean that once you know where your money is going, you can properly plan on where you’d like to cut back and find areas where you can save more.
This can materialize in different forms:
- Reducing your eating out spending
- Allocating more money each month toward debt payments
- Creating savings goals for long-term plans (wedding, family vacation, new house, etc.)
No matter what benefit you gather from managing your money when living on a tight budget, you’ll be able to finally start being intentional with your money and actually make a plan each month on where your money should be going.
Living on an Extreme Budget
When it comes to living on an extreme budget, you really don’t have much wiggle room to afford yourself too many luxuries.
In this situation, it’s best to cut out any and all expenses (temporarily) that don’t help you to improve your situation.
This means reducing your spending on wants and creating goals to pay off debt.
Here are some ways you can cut expenses when living on an extreme budget:
- Delete any subscriptions (yes Netflix and the others)
- Absolutely no needless or impulse shopping
- No eating out (if you do, make it once a month)
- Cut up your credit cards if you’re in serious credit card debt
- Delete your shopping apps
- Limit your trips to Starbucks lol
Living on Low-Income Tips
Living on a low income can be very challenging, especially when you have various other responsibilities like rent/mortgage and a family to take care of.
In this scenario, I highly advise tracking your expenses each month because every dollar counts!
Living on a low-income tips:
- Give the 50/30/20 budget a try
- Tackle high-interest debt and get out of debt asap!
- Create savings goals and start small
- Find ways to make extra income (weekend job, side hustle, switch careers, etc.)
2. Make Savings Goals
Next, you’ll want to start implementing those savings goals that we mentioned in the last section…
Decide How Much You Can Save Each Month
One major factor that impacts your savings goals is determining how much you can save each month in the first place!
This can be done if you know your monthly expenses.
You can follow the simple math below to find out how much $$$ you’ll have left over to save:
Gross Monthly Income – Monthly Expenses = Net Income
With your Net income, you can determine how much you have left over to allocate to savings:
Example 1: $3,500 (Gross Monthly Income) – $2,000 (Monthly Expenses) = $1,500 (Net Income)
$1,500 (Net Income) – $750 (Savings) = $750 ($ leftover)
In this example, you would have $1,500 left over to allocate toward savings.
If you chose to save $750 for the month, that would leave you with $750 left over!
That other $750 can be used for any needs that arise and can carry over into next month when your next paychecks hit your bank account.
Not bad for saving a good portion of your monthly income!
Now, this is just an example, and on a practical level, your paychecks will most likely be bi-weekly, so no worries…In this case, it will look a little like this:
Example 2 (Bi-Weekly): $1,750 (Gross Bi-Weekly Income) – $1,000 (Bi-Weekly Expenses) = $750 (Net Income)
$750 (Net Income) – $350 (Savings) = $350 ($ leftover)
Note: The bi-weekly expenses obviously won’t be half in all cases because rent/mortgage itself may be $1,500-$2,000 due at the end of the month but for the sake of the example its cut in half 🙂
Use A Budget Spreadsheet to Plan Your Savings
When it comes to making these savings goals, our budget sheet not only makes all of these calculations for you but also, enables you to create savings goals in the budget section (see below)
3. Cancel Unused and Unnecessary Subscriptions
This is a pretty easy living-on-a-budget tip that you can do immediately to save some money and reduce your spending!
Cancel Your Unused Streaming Services
Now this doesn’t mean you need to get rid of all of your streaming services…if you use them…lol
I would recommend going through your streaming services and assessing which ones you use consistently and which ones you haven’t touched in a month or so…
Once you’ve determined which ones to cancel, go ahead and cancel those thangs!
Unless of course you can’t find any unnecessary ones and you use them all or have none lolll
Cancel Other Unnecessary Entertainment or Luxury
Another way to improve your spending habits when living on a budget is to cancel any other luxury type of subscriptions or services that you may have.
This may include:
- Meal prep delivery services like Hello Fresh
- Dash Pass from Doordash
- Magazine subscriptions
- Spa or massage subscriptions
- Sports League passes/ subscriptions
4. Delete Any Delivery Apps
Now when it comes to delivery apps like Doordash, I’m guilty of using it even when I’m living on a budget, however, by deleting it you’re at least making an intention to limit this type of spending behavior!
Learn to Cook at Home
Even if deleting your delivery apps is challenging (trust me, I’ve had trouble re-downloading them, sigh) you’ll at least save more and set the intention to save and make healthy meals.
Learning to cook most of your meals at home has tons of benefits!
Here are a few:
- It’s Healthier
- It Saves money
- It helps you to reach your desired physique and fitness goals
5. Learn to Meal Prep
One of the challenges of ordering food delivery is the fact that:
- It’s convenient
- Saves time
- Food is super tasty
- It’s really flippin easy
- You don’t even need to see or speak to the delivery driver
One skill we need to master to get out of this type of spending cycle is meal prepping.
Meal prepping is a powerful way to make healthy at-home meals, that save money and allow for that convenience.
It’s a WIN all across the board!
Pick 3-4 Meals You Enjoy
Now the first step towards meal prepping and cooking your food at home is to come up with a practical strategy…
My advice is to pick 3-4 simple meals that you enjoy and replicate easily.
You can obviously adjust this if it fits your needs and want to add more meals to add variety.
Use Kitchen Tools That Make Cooking Faster
When it comes to meal prepping and making food, we want the element of speed and convenience.
With this in mind, it’s best to use kitchen essentials that will help us to cook more efficiently…Here are some examples:
- Air fryer
- Meal prep containers
- Instant pot
- Rice cooker
Commit to Grocery Shopping Regularly and Avoid Eating Out
To fully commit to meal prepping and cooking meals at home, you need to commit to grocery shopping regularly.
When living on a budget this is vital!!
Next: Limit your money spent on eating out.
Now, you don’t need to cut out eating out entirely but don’t make it regular, make it occasional/special occasions.
Example: Date night or special family event. This is good for creating a budget for couples living together.
6. Find Free Fun
One of the biggest ways to overspend can often come in the form of fun activities that we enjoy with our friends and family.
There is absolutely nothing wrong with enjoying time and going to events with your friends, but we need to be smart if we’re living on a budget.
So when you’re living on a tight budget, ya need to find some ways to save and or find cheaper alternatives.
Or when living on an extreme budget…you can opt for free fun activities!
Here is a list of Free fun alternatives:
- Game Night
- Tailgate
- Hiking
- Beach Day
- Home Movie Night
- Spend Time at the Park
If you’re really serious about sticking to your budget, give some of these a try if it’s your cup of tea and save that extra $$$.
7. Wait Before Making Online Purchases
This is one of the most powerful shopping and financial tips you can apply to a bad online shopping habit.
The key thing we want to put a halt to is our impulsivity.
The weapon we use for this in the online shopping world is…drumroll…
Waiting…
I know it seems super exciting, but hear me out…
Below are some methods I use to contact impulsive online shopping.
- Keep Items in Your Shopping Cart
- Wait 1-2 Weeks Before Making a Purchase
These methods help to put some space between yourself and your emotions.
And like I’ve mentioned before on this site when I made the choice to save items in my cart and wait, oftentimes I would change the item or even remove it entirely.
I was essentially planning to buy something I eventually didn’t want anymore.
Now you can imagine how that looks when you actually impulse buy things like this regularly…
These items are destined to collect dust if there isn’t any real need or use for them.
So just be careful with online shopping and give it some time before making online purchases if you can.
8. Ditch Your Credit Cards or Cut Them Up
When living on a tight budget, irresponsible credit card usage can destroy your personal or family finances!
Credit card debt is one of the worst debts you could ever have due to the easy usability and high-interest rates…
If you find that you’re in some bad credit card debt, this debt is one of the first you’d want to tackle on a debt repayment plan.
To combat this type of credit card misuse, cut up your credit cards or temporarily sideline them and use your debit cards primarily.
9. Live a Minimalist Lifestyle
When it comes to simplifying and embracing a minimalist approach to life, you don’t need to be extreme or get rid of everything…
You should live a simple life and craft a lifestyle that fits your needs!
Living a minimalist lifestyle can help you to live on a budget and really prioritize purchases that you need and allow you to embrace frugal minimalism.
This will save you money in the long run and allow you to spend money on the experiences and things you really enjoy!
Benefits of Improving Your Spending & Living on a Budget
There are tons of benefits to living on a budget and learning how to manage your money!
Here are a few of my favorites!
1. More Money Left Over For Extra Savings
This extra money that you now have left over can be used for any savings goals that you may have!
This could be many things like:
- Family vacation
- Wedding
- New car
- Retirement
2. More Money Left to Do What You Want
These extra savings gives you a chance to actually do what YOU want with your time.
This could be:
- Gift for kids/family
- A new experience for yourself or your family
- Concerts
- Sporting events
3. Pay Off Debt Faster
Paying off debt faster has to be one of the best reasons for living on a budget!
When you can pay off debt and pay it faster, you’ll be able to release the stress that debt brings along with allowing yourself to take more risks…
These types of risks could potentially be:
- Changing careers
- Starting a business
- Starting a blog
Any of these risks are possible when you aren’t tethered to restricting debt.
This ultimately brings you closer to financial freedom and living on your terms!
4. Come Close to Financial Freedom
As I just mentioned above, when we eliminate debt we come closer to financial freedom!
Financial freedom allows you to live the life you want either by yourself or with your family…
This means you have your finances to the point that you have enough savings and assets that allow you to make decisions regardless of money.
These types of decisions could be:
- Quitting your job
- Retiring early
- Buying an investment property
- Taking nicer vacations
In my eyes, financial freedom is all about freedom of time.
Freedom of time to do whatever you’d like whenever you’d like.
I often tell my fiance that my version of success is being able to wake up on a Tuesday (or any random weekday) and just go outside for a walk or board a plane headed to a travel destination at 1 pm and still be able to support your wife and family.
This type of lifestyle is possible if you can manage your money wisely and build up enough assets (rental properties, businesses, investments, etc.) to be able to quit your job
Orrrrr……
You can start an online business like a blog and attempt to make full-time income which will give you the freedom to make your own schedule.
This makes Financial freedom worth fighting for!!
FAQs For Living on a Budget
What is the 50/30/20 Rule?
The 50/30/20 rule is a budgeting rule or guideline that you can apply to your personal finances.
This budget allows you to allocate your money by percentage into three main categories:
- 50% for Needs: This category is mainly for essential expenses including rent, mortgage, food, transportation, etc.
- 30% for Wants: This Category is for your non-essential items like dining out, movies, entertainment, shopping, etc.
- 20% for Savings or Debt repayment: This Category is meant for your savings goals and any sort of debts that you may have like student loans, credit card debt, retirement, investments, etc.
How do You Live off a Tight Budget?
Living on a tight budget can be very challenging, but not impossible.
Here are some of the steps to take when living on a tight budget:
- Create an emergency fund
- Start a side hustle
- Work a second job on the weekend
- Cut unnecessary expenses
- Create a budget
- Cook at home
- Avoid debt
- Limit your spending on entertainment and fun
- Sell items on eBay
- Avoid impulse spending
- Prioritize your savings goals
- Delete any shopping or food delivery apps
How to Make a Monthly Budget?
To make a monthly budget, first, create different categories for expenses…This can look like this:
- Housing
- Auto
- Food
- Insurance
- Kids
- Entertainment
- Savings
Next: Either write down or use a spreadsheet to enter all of the values and subcategories that you may have. Once you know how much your monthly expenses are, you can start to plan out and budget how much money needs to go to each category.
Furthermore, a monthly budget can be made in a variety of ways, but my number one way of budgeting involves using a spreadsheet.
This is because your info is not only saved to be checked in the future, but it’s just way easier!
The equations are already done for you and you can simply add in your expenses and visually see where all of your money is going.
Create your own budget spreadsheet on Excel or Google Sheets or you can check out our premade simple budget spreadsheets that will make your budgeting easier 🙂
Live Within Your Means Meaning:
When it comes to living within your means, really the only thing you need to do is spend less than you make…
While this seems easier said than done, you just need to be aware of your spending habits and live a lifestyle that isn’t inflated and is slightly less than you make.
Challenges You May Face When Living on a Budget
The main challenge you’re gonna face when it comes to living on a budget will be controlling your wants and emotions.
This manifests as:
- Overspending
- Impulse spending
- Not finding your pain points (where you have trouble cutting back)
9 Ways to Improve Your Spending Habits When Living on a Budget
About Me: My name is Miguel and I’m a simple living and budget spreadsheet expert! I’ve been decluttering my life since 2018 and love everything simple living related. I aim to help you learn how to live a simple life, become intentional with your spending, and manage your money right!