May 28th, 2007 in Featured, Money

How to Live on a Tight Budget

Do you go out to eat at least once a week? Do you frequent the movie theater? Are you are Starbucks addict? If so, you are spending thousands of dollars a year on the little things. Just think of the money you would save if you just cut a few corners each day. Now think about what your savings account would look like if you put that money in a high-interest bank account.

How much you save actually has very little to do with the income you receive. In fact, the amount in your savings account actually has much more to do with how you spend your money. Here are just a few “small” ways that will allow you to save a lot of money in the long run.

Entertainment is the first expense that seems to be talked about when it comes to living on a budget. We like to do things in our free time and we like to go out to eat or to concerts on the weekends. But when money is tight, we need to be a bit more creative in how we entertain ourselves.

Look at your city’s newspaper or entertainment guide regularly to see what free events are in town. You will be surprised at how many free things there are to do when you take the time to look for them.
Head to your local museum or library. These are free places to relax and spend some time away from your house. And they often offer a number of free programs and events.
Go for a walk in a park. Many local public parks offer walking trails, tennis courts, and other equipment free of charge. The whole family is sure to love a day at the park.
Have a movie night at home. Instead of spending money on going to the movies, why not take out some of your favorite movies that you own and watch them at home? You can pop some popcorn and have all night movies marathons.
No Cable TV. According to research performed by Nielsen Co, the average American watches more than 4 hours of television every day. That’s 2 months in front of the television every year! Trade in the TV for quality activities like spending time with family and reading and you will save about $50 per month.

Gas prices have gone through the roof. Here are some simply ways you can save on gas.

Search for the lowest gas prices online at GasBuddy.
Save up to $100 a year on gas by keeping your engine tuned and your tires inflated to their proper pressure.
Avoid driving as much as possible. When traveling short distances, you can walk or even ride a bike. This will save you hundreds of dollars and probably get you in the best shape of your life.

Gifts and holidays are another source of worry for those living on a tight budget, but they don’t have to be. Though it may seem like you need money in order to show someone you love them at the holidays or on their birthday, this isn’t the case.

Create freebie coupons. Mark some index cards with free help or favors that you will provide whenever they need it, whether it’s a backrub or mowing their lawn, your time and your help is more valuable than anything that comes with a bow.
Look at online auction sites or garage sales for gifts. While it can be tricky to find nice gifts that are cheap, these two places are often a lot more helpful than you might think.

Grocery costs are another major expense for many families. Fortunately, there are also a number of ways to save on food and groceries.

First, you should always pack your lunch for work. Not only will you save a ton of money, but it’s also a lot healthier.
Skip the Starbucks. Many people don’t realize how their coffee expenses can add up. A single latte can cost up to $4. This means that a Starbucks addict ends up spending about $1,000 just in coffee. Start making your coffee at home and your wallet will thank you for it.
Buy in bulk. There are a number of stores that allow you to save by buying in bulk. Sam’s Club is one of the most well-known examples.
Look for coupons. Coupons can save you a ton of money. However, you have to be careful. Even with coupons, you might not be getting the best buy. Comparison shopping is key.
Look for generic products. Often times, the only difference is the packaging.

Living on a tighter budget simply requires you to add a bit of creativity to your financial planning and daily expenses. There are plenty of ways to live life on the ‘cheap’ without feeling like you’re pinching every penny.

If you know of any other frugal tips, please feel free to add them in the comments.

Kim Roach is a productivity junkie who blogs regularly at The Optimized Life. Read her articles on 50 EssentialGTD Resources, How to Have a 46 Hour Day, Do You Need a Braindump, What They Don’t Teach You in School, and Free Yourself From the Inbox.

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Kate says on May 28th, 2007 at 10:27 am

I expect people will balk at the no cable TV, but I recently replaced my cable subscription ($80/month) with a Netflix subscription ($20/month) and an HD antenna (one time expense of $65). This has not felt like a hardship, I spend more time with my friends, and I certainly have better things to do with $60/month!
Kirk says on May 28th, 2007 at 11:26 am

I second the “dump cable for Netflix” suggestion. All of the decent TV shows are released on DVD, so you’re covered there. And as long as Netflix is on topic I highly recommend getting separate queues for each couple/family member. Two-at-a-time works great for us —
Alex says on May 28th, 2007 at 11:31 am

OMG, I can’t believe cable costs 80$/month in the US. In France it cost like 30$/month with 20MB ADSL internet and free phone. In Romania it costs like 3$/month.

Sure, there’s no HBO included, but still, this is one huge difference…
Kirk says on May 28th, 2007 at 11:33 am

oops - accidentally put a tag bracket in there…
meant to say “less than $15/month”
Owyn says on May 28th, 2007 at 3:24 pm

Cook in bulk and freeze for later.

I usually take one day a month to cook large amounts of freezable dinners, sauces, etc. I shop early in the morning to find what is available for day old produce that I can use (e.g. I got 4lb of “fresh” mushrooms for $2.00 that I then used in sauces and lasagna).

Package the cooked items in stackable freezer safe plastic containers and you then have portion sized meals available any time.

Buying in bulk also applies to meat. Watch for specials on boneless beef or pork roasts and cut them up for steaks / chops. Save the small chunks of meat from trimming fat for use in stews. Wrap each slice in plastic and then store them in the same stackable containers (typically about 3 per container).

Cooking this way is efficient in time and usually healthier. Commercial frozen meals are typically very high in salt.
james igoe says on May 28th, 2007 at 3:30 pm

I was unemployed for about a year, and wound up eating through my severance and 401K, although I am currently back to earning a fairly high income. My own austerity steps were actually life enhancing, and fit with where I wanted to head with my life.

Find free events (easy if you are living urban):

Around Manhattan (NY) there are always free programs, many of high quality. There are galleries, art shows, and seminars/talks at the local universities. To make it easier, there is a web-based company, Club FreeTime, that provides a consolidated listing of all the free events for $20 per year.

Focus on free media:

For electronic entertainment, I foused on the scads of free content on the web, but primarily from NPR/PBS and streaming radio. Since I already had a very nice multi-channel sound system, I also used alot of FM and cable TV. Cable may sound expensive, but you can opt for the lowest end service wih internet access ($50 per month), and for someone in my profession, internet access is a necessity.

Share an apartment:

I was single at the time, and sharing space can significantly reduce costs, as well as increase one’s quality of life. Of the 2 shares I’ve been part of, one had a huge 50″ TV, and we split the costs of cable and utilities. Even the less good share involved significant reduction in cost, as well as bartering of expertise; I put in the internet access for the apartment, another did work on the walls, etc.

Read:

For one with academic apsirations, or simply someone that can enjoy the time alone, books are cheap, and particularly so if you can tolerate the library.

Buy / Sell Used:

I’ve used eBay and Craigslist to sell all manner of things, covering furniture, books, DVD’s, and electronics. I’m not so much of a buyer, but there are many good deals in the ’secondary’ market.
Deacon says on May 28th, 2007 at 4:23 pm

$80 for cable? Mine costs $20, about half as much as my internet connection. But even at $80 a month, if you’re watching 4 hours a day that works out to 120 hours a month, or 67¢ per hour. To get the same value from buying a DVD you’d have to watch it 15 times. Unless you can fill that time with things that cost less, getting rid of cable won’t save you money.
stever says on May 28th, 2007 at 6:39 pm

we have an old desktop computer that uses RSS feeds to automatically download TV torrents — instead of the crappy, commercial filled episodes of LOST at 7:00pm, we can get a widescreen, commercial free one by 6:00pm :)
Toni says on May 29th, 2007 at 12:26 am

One of the ways I save money is use internet coupons. the best site i have found is dealtaker.com. they have the deals, coupons and free stuff all in one place. has saved me tons of money and gas :)
razwan says on May 29th, 2007 at 10:29 pm

I cant handle this, me just a typical spender in town. I wish i can control my money
Tony says on January 1st, 2008 at 8:21 am

I created a website that lists ebay items that are still wrapped. They make great
‘re-gifts’.

http://www.stillwrapped.com/
Andrea says on February 24th, 2008 at 2:14 pm

I found that you can save money on your cellphone plan. If you pay the fee for unlimited texting and pay for less minutes you can save a good bit of money on your cell.
Gabrielle H says on July 28th, 2008 at 9:20 pm

In Australia, television is free. Though that does explain why the production values on local programs are so low…
Grayson Peddie says on September 7th, 2008 at 5:49 am

I know this blog is quite old, but I found this website, so here I go:

Currently, I am subscribed to cable TV service that I no longer watch basic channels — only locals. That’s typically 2 to 5 channels, which is fine for me.

I currently have no DSL services available in my apartment, so I’m stuck paying $57.77 for HSI/cable. That’s $42.95 for Internet and $10 for cable, plus tax. Why would I want to watch TV, which is very mindless for me. I do currently have antenna, but I watch very little. Can’t get NBC, because they broadcast in channel 2 (remapped to channel 40, subchannel 1).

If Verizon DSL is available in my area, I’d be 100% happy to drop cable and HSI completely, although my mom insists I keep cable since she wanted to watch TV in my apartment. My mom and dad lives in my apartment when it comes to going to school/work and that parent bought a house in Altha for NO reason while I live in Tallahassee. :(

So now, I’m stuck with Comcr@$h (err…Comcast — please excuse my harsh word)…

My zip code: 32304
broke says on September 22nd, 2008 at 1:12 am

i have no debt, cars are paid off, no cable or internet bill, no phone bill and no credit cards. I just have rent, electric, water/sewer, gas for the cars and day care. I make 17 dollars an hour and my wife takes home about 1000 a month part time. we pay 400 a month in daycare, 1100 for rent, electric is about 180, water is about 100, insurance is about 130. some how i can barly scrape enough money by each month to pay my bills. then of course by living with the tight budget there is alway the overdraft from some lame surcharge or somthing, and that just starts a chain of effects for other small debit charges. wow, what a world we live in when the upper class gets richer and richer and stands on the backs of the middle and lower class. not sure what people actualy do with that much money.
BUY American, Ban made in china.
Support our own country and stop sending money over seas to a country that doesn’t realy have any major imports from the US.
did you know 72% of People with shoes in the US have a made in china label stamped on it.
Livesimple says on October 29th, 2008 at 11:59 am

I have a decent income but was always broke. I bailed out of the spend to be happy trap. First got rid of my TV, best thing I ever did. Two instant changes, no depressing news and lost wieght. I quit buying electronics. Started shopping in bulk and at healthly grocery stores. Yes the food is more expensive but my overall costs went down because I am not buying all the junk food, they don’t sell it. My biggest change I sold my house and now rent. No more upkeep, remodels, etc. I feel so free without being tied to a house. I travel and get out much more then I ever would have.
Livesimple says on October 29th, 2008 at 12:06 pm

Dear broke why did you have kids if you can’t support yourself. Most of the “RICH” started life just like you. But instead of complaining and blameing others they worked hard, suffered and took advantage of the oppertunities this great country has to offer. When others come to this country with nothing more then the clothes on thier backs and become wealty you have no one but yourself to blame.
Thunk says on March 24th, 2009 at 6:08 pm

1) DIY — you can make clothes, wallets, food, utencils, gasoline, and about a zillion other things just with a little bit of time.
2) Pirate everything. I know some people have moral objections to piracy, but if you don’t believe in intellectual property rights, you can literally download anything. TV, movies, etc. So stop ordering cable, stop buying cd’s, etc.
3) To answer some of the other commenters:

I am a rich kid myself. This shite about rich people is only half true. My dad was lower-middle class and now we’re filthy stinkin’ rich, but I have never really been poor (except voluntarily). The vast majority of poor people will remain poor no matter how much they work and the vast majority of rich people inherit. THis crap about “work harder” is just plain unrealistic, as most people who have arrived at this article already know.

Do some googling for DIY stuff — everything from your shoes to building your own house complete with plumbing and electricity. It’s nuts yo!
John says on May 27th, 2009 at 10:31 pm

fource yourself to own only a certain number of shoes,suits coats etc. If you are going to own 5 pairs of really good shoes is enough. If you want to buy a new pair then give a pair away. This will stop the impulse buying. Take a good hard look at the difirence in the things you want and the things you need. Most people dont know the diference because they dont want to know the diference. Not know the diference is an enabler. Basically we need food shelter and health care. We need a car to get to work,we do not need a mercedes