When some people see ways to save money on a tight budget, they think it pretty much hard or difficult to do, but honestly that isn’t the case.
Though I must say that it involves a lot of determination and perseverance.
When it comes to personal finance, saving money is very important and essential and paves way for financial freedom.
So this post will give you the best tips on the ways to save money on a tight budget.
The best creative ways to save money on a tight budget
To implement the tips on saving money involves a lot of determination and perseverance, and I know the reason why I’m stressing this.
So first you need to say this yourself;
I’m determined and must save money from my tight budget.
Before that, you must have any debts accrued.
Do you think you can save money owing lots of money?
That is not possible.
You need to clear off your debts as it helps in saving money. Nothing pains more than making a weekly or monthly income and it goes into your debtor’s account.
I’ve been into this and it really pains me when I have lots of debt piled up to pay. Half of my monthly earnings going into my debtors account until I paid off my debts.
Again I don’t really feel very comfortable knowing full well that I have debts to pay. If I receive my salary, the very first thing that comes to my mind is paying off half of my debt.
With this, there’s no way I can save enough money to meet my target at the end of the year.
This is why I strongly recommend paying off your debts even if it is gradually before other things.
Below are the ways to save money on a tight budget.
1. Setting a financial goal
This is so important if you want to determine that you want to save money, setting up a financial goal will help you a lot to achieve that.
Your financial goal may be that by each month’s end you’ll save N50,000 and will do so for twelve months which totals N600,000.
Your financial goal may be going into a new and better apartment, and which you need to work and save towards achieving that. Or maybe buying a brand new car for yourself.
To achieve this doesn’t come cheap at all, and requires cutting down expenses.
2. Analyze your income and expenses
This can also be said as a financial audit. You analyze how much you receive in a week or in a month, and also how much you spend in a month.
Expenses matter most when it comes to conducting a financial audit, your expenses for the day, week, and for the month.
How much money do you spend in a day, in a week or a whole month?
Where are your expenses going into?
Is it a need or a want?
You calculate the total amount of money you’ve spent on both the needs and also the wants.
Then you need to ask yourself this question;
Does this want really matters to me?
What if I save the money on a daily, weekly, and monthly basis, and see how much it gives me at the end of the year or in six months.
If you are determined to do this, I tell you that you’ll be shocked at the total amount of money you have saved at the end of your plan.
So having analyzed your income and expenses, getting to know where all your expenses are going into, the ones that are important and essential, and the ones that are not, then you go over to the next step.
What are the next steps?
Cutting down your expenses.
3. Putting to stop unnecessary expenses
This pretty much depends on you. You’ve to list down all the unnecessary expenses that you’ve been making in a week or a month. Separate the needs from the wants, and I will tell you to reduce the amount you spend on wants drastically.
This part is very useful if you’re serious about ways to save money on a tight budget.
What are the wants?
1. Unnecessary spending on clothes, shoes, fashion accessories, etc.
You have lots of clothes inside your wardrobe, but still, you’re not content with them. Every week you’re buying new clothes, shoes, jewelry, etc and in two months’ time, you do away with them and get yourself a new one.
Irrespective of the fact that you like fashion a lot, you should ask yourself this question;
Does it really make any sense that I’m changing my wardrobe every week while I’m not earning a fat salary?
Even if you’re, does it really make any bit of sense at all?
You’ll see that your answer will be no, just that you want to satisfy your want. The pleasure you drive in changing your wardrobe every week or month.
If you can put an end to that, calculate the amount of money you’ve been spending on new clothes and other fashion accessories on a weekly or monthly basis, and multiply it by twelve months, you’ll be shocked at the amount of money you’ve been wasting.
I’m not saying you shouldn’t dress cute or classy or buy new clothes, shoes, etc, no, but buy when there’s a need to do so.
2. Getting yourself a new phone whilst you’ve three already.
There was a time when I found myself doing it, and it is usually every six months. Sometimes I tend to sell my previous phones, or I kept them. At a point, I had like eight smartphones with me.
I go crazy when I see an advert for a new, especially if it is a Samsung galaxy phone.
I had the galaxy s3 to galaxy s7 edge plus LG G6.
I’m not the type that easily sells off my things which includes phones, it gives me a good amount of pleasure seeing them lined up on my table.
Until one day, I calculated how much I bought each of the smartphones, and mind you they are all flagship devices meaning that they really cost me a lot of money.
I realize the total amount of money I’ve spent on these phones.
I said to myself, if I had saved the money and uses it for something that will yield returns on investment for me, it would have been better. Look at all of them, the galaxy s3 to s7 is now completely useless and worthless including the LG G6.
Since then, I only have my galaxy note 9 and no other phone.
3. Paying for cable TV highest package
Whenever I see people doing this, I call it stupidity, and I mean big stupidity.
Is your money and I’m not dragging it with you, but one needs to reason sometimes. Why would you pay the highest package in a cable TV whilst other lower packages can suit your needs?
I don’t see the reason why one should do such, even if you stay at home for twenty-four hours and don’t go out at all.
For me, this is best suitable for hotels or motels or guesthouses. Through indirect tax, they get the money spent on these high-cost cable TV from their customers.
Let me use a multichoice premium package for an example.
You go to work by 8 am in the morning, and comes back at 5 pm in the evening depending on your work opening and closing hours. So you only have four to five hours to watch the television before going to sleep.
You only have Saturdays and Sundays to fully enjoy what you paid for, and if you have a standby power supply.
You should analyze and calculate the number of hours you spent, watching the television, and if it is really worth you spending such amount of money on the DStv Premium package.
You don’t need to answer cause the answer is definitely no. This is best for hotels and guesthouses that will get the money spent on such package through an indirect tax on their customers.
I want you to know that I’m not the type that will advise you to cut off cable TV subscription, no, I won’t say much but will rather advise you to go for the lower packages.
Aside from cable TV, there are other unnecessary bills we make a day in day out. For me, it goes down to an internet data subscription.
Recently I’ve tried my very best to stop wasting lots of money on internet data subscription and I know how much I saved by doing so.
You have yours, it may not be cable TV, internet data subscription but rather other things. You know yourself and as long as it is not a need, I will advise you to cut it off or don’t spend crazily.
4. Going to eateries and bars
This is another place where we spend money unnecessarily, especially going to the bar.
This is another thing that kills me when it comes to ways to save money on a tight budget. I’m the type that eats out a lot and drinks a lot. I’m not going to hide it, I can drink but that was then.
I realized that going to eateries to eat food is a complete waste of money. The money I spent on eateries, if I used it to cook or prepare food in my house, I will eat the meal money, afternoon and night and more will still remain.
This goes with going to the bar.
You drink yourself to stupor and do that all over again and again without putting a stop that. I drink so I know the cost of these good-quality wines or a bottle of beer.
If you’re so determined to save money on a tight budget, I recommend to completely put an end to going eateries or bars, or maybe you do that once in a while.
There are lots of unnecessary expenses that eat up our income, you know yourself very well and the things that consume your income.
This is why I said categorized or differentiate between needs and wants, and cutting down all the wants that are taking up your weekly or monthly income.
In case you’re confused between need and want, let me explain it to you.
When you hear the term NEED, it means something that you can’t do without. This includes food, clothing, housing, paying of tax and bills, etc.
The term WANT means something that you desired to have, but which may not be necessary especially at a particular time. They include shopping for fashion items which you have lots of them in your wardrobe, going to the bar to drink, etc.
Having analyzed and cutting down your expenses, you move over to the next step on ways to save money on a tight budget.
4. DIY (Do It Yourself)
This is now on the trend, if you watch youtube videos you’ll see lots of DIY videos.
A few months back when I called my big sis to ask about their house interior decor, I was shocked when she told me that they were asked to pay $10,000. So she and her husband decided to go with the trend DIY which simply means do it yourself.
I must say that they did a very fantastic job on the decoration especially the wallpaper. And the truth is at the end of the day, they saved $10,000.
Days are gone when people invite laborers or workers to do a project for them, especially if it isn’t a difficult one.
It only requires going to youtube or other social networks, watch some videos or get some samples and do it yourself.
Before I always think that it is pretty much difficult to plait my hair by herself until I watch some videos of people doing it by themselves. I put that into practice and right now I can plait my own hair without requiring the need of a third party though I’m not that perfect yet.
5. Opening a target account (high yield savings account)
Before going to open a target bank account, you’ll first conclude the amount of money you’ll be depositing into your account.
For example, you decided to save N50,000 from your monthly salary income, which you’ll be depositing into your target account.
The financial institution will give you their requirements and guidelines on opening an account with them, plus their interest rates.
Let me give you a tip on how it works.
You’re to deposit a said amount of money into the account, and not required to make any withdrawal at all or for a number of times. If you do so, you’re not entitled to receive any interest on maturity.
However, there’s a way that helps you to avoid the temptation of making withdrawals to the target account.
- Do not request for a debit card
- Do not enroll for mobile or internet banking including bank used code
These help you not to have the temptation to make withdrawals on your target or high yield savings account.
I don’t recommend saving the money into a savings account. There’s a tendency that one need may arise and you find yourself withdrawing the money.
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So please open a target or high yield savings account is essential if you’re serious to save money and be financially free.
These are the major ways to save money on a tight budget, but it doesn’t end here as I have other tips that will be useful to you.
6. Bulk buying
Do you know that buying products or groceries in bulk saves lots of money than buying them one on one?
For example, a carton of milk is a lot cheaper than going to the market and buying it on one. Multiply the number of times you bought it in a week or a month, plus the amount and you’ll see that you would have saved some bucks of money if had bought it in bulk (carton).
7. Read personal finance inspirational and motivational books
The seventh tips on the ways to save money on a tight budget are having the motivation to save and assure yourself that you’ll succeed no matter what.
Getting personal finance motivational books helps a lot, and I do this a lot. If I need the inspiration, the desire to invest, or to save money, I read motivational books to help me have the desire to achieve my dreams.
So you also put this into consideration or maybe watching some motivational videos on YouTube.
For now, these are the tips I have on the ways to save money on a tight budget. Let me do a round-up on what I’ve said so far.
- Be determined to do it and persevere
- Pay off your debts if any
- Set yourself a financial goal
- Analyze your income and expenses and differentiate between needs and wants
- Cutting down your expenses which includes putting to stop unnecessary expenses (wants)
- Embrace DIY (Do it yourself)
- Buying products and groceries in bulk
- Reading inspiration and motivational books
Generally, to save money on a tight budget, you need to cut down your expenses. Everything that involves money-saving revolves around expenses and that is all. If you succeed in reducing your excessive spending, you have already won the battle.