While it may seem daunting initially, saving or cutting costs while on a tight budget gradually becomes easier as it turns into a habit
While budgeting is not necessarily everyone’s favourite pastime, having less money often makes it necessary. It could be due to a recent job loss, unexpected expenses, or simply wanting to save for a future goal. Regardless of the reason, when resources are limited, it’s wise to look for ways to reduce spending here and there.
This article looks at 10 practical tips to help you save money on a tight budget:
1. Make a budget: Before making significant strides towards saving, you must understand where your money is going. A well-planned budget shows your income versus your expenses, helping you identify areas where you can cut back and save.
Amit Nigam, COO & Executive Director of BANKIT, said, “While navigating a tight budget, you must prioritise essentials over your desires. Craft a comprehensive budget, diligently monitor expenses, opt for generic products, curtail dining out, and stash spare change. Persistent, incremental actions yield substantial savings. Monitor the consumption of utilities—electricity, heating, and cooling—to curtail costs. Shed unnecessary subscriptions and adhere to financial objectives for stability and a robust future. Maintain a clear overview of monthly expenditures to allocate funds strategically, propelling you towards your financial aspirations.”
2. Track every penny: You’d be surprised how quickly small expenses can add up. Keep records of every time you spend on groceries, gas, or a cup of coffee. This will help you recognise your spending pattern and identify non-essential expenses.
Anurag Agrawal, COO at YPay, says, “When on a tight budget, prioritise needs over wants, create a detailed budget plan, track every expense, explore generic brands, cook at home, limit eating out, unsubscribe from unnecessary subscriptions, buy second-hand items, negotiate bills, utilise free or low-cost entertainment, carpool or use public transport, and save any spare change. Small, consistent efforts can lead to significant savings over time. Stay disciplined and focused on financial goals to achieve stability and build a secure future.”
3. Save on food: Plan your meals for a week or cook in bulk to save on costs. Limit your dining out and learn to cook your favourite restaurant dishes at home. Consider buying in-season produce or shopping at local farmers’ markets, where items are typically cheaper.
Joseph said, “By spending money in advance, does it help you to curtail expenses to a certain extent? A classic example of this is with milk. In a month, if you need 30 litres of milk, that is 1 litre of milk a day, and if you buy the milk coupon ahead of the month, you don’t need money for the rest of the month. You can use that coupon. In this manner, you can save money. Now that you will buy in advance or bulk earlier, can you save 5 or 10 per cent extra? Because our needs are guaranteed, and we can put money upfront for your monthly expenses, you can save 5 or 10 per cent extra.”
You must figure out how something can be done more economically. For example, if you were eating out, figure out how the eating out can be done better. Nowadays you have so many offers. You can choose the offers on an app or in the restaurant or sometimes you also realize that you are going to this expensive place when you can go somewhere else where the cost is lower.
4. Cancel unnecessary subscriptions: Analyse what subscriptions you truly use and cut out unnecessary ones. Cable subscriptions, for instance, can be replaced by cheaper streaming services. Many people pay for gym memberships they rarely use, so consider other free or low-cost exercise forms, such as running or home workouts.
Joseph, CEO and Founder of Refolio Investments, said, “Sometimes, you realise that you have one Netflix subscription or Hotstar subscription or two internet bills at home, which you got used to, and you forgot to disconnect or something where the money is being wasted, and you are unaware. You realize that you can cut out one or two expenses that are not required.”
5. Shop smarter: Always compare prices before buying, especially for larger purchases. When grocery shopping, stick to your list and never shop when hungry or tired. Utilize coupons and pay attention to sale cycles at your favourite stores.
“When buying luxury items, if it is possible to take instalments or EMIs to pay the same amount of money to increase your cash flows, choose that because it improves your cash flows and gives you the benefit,” said Joseph.
6. Reduce utility bills: You can also save money on your electricity or water consumption bills. Turn off lights and unplug electronics when not in use. Consider energy-efficient bulbs and appliances to cut down on your energy bills. You can switch energy providers to get a cheaper rate in many areas.
7. Prioritise paying off debt: The longer you hold onto debt, the more you pay interest. Prioritising to pay off debts can save you significant money in the long run.
“When you are on a tight budget, you establish a simple rule that you struggle to make ends meet, or maybe your expenses align with your income. So, you begin by revisiting all your expenses and determining if you can reduce or cut these expenses. You begin a process by actually prioritizing these expenses. What are mandatory, what is important, what are needful, and what are good to have? When we start this exercise of prioritizing or starting to accord importance to expenses, the bottom end of the expense list can be the ones that can be avoided or even skipped. Once you do that, you suddenly find that the tight budget becomes a relaxed one. So, the first step is to allocate practicality,” said Joseph.
8. Save on transport: Consider options like carpooling, biking, or public transportation to work or to run errands. Regular manicures of your vehicle can help improve its fuel efficiency. Instead of taking a cab, you can travel by metro. Instead of going when the surcharge is higher, you can go when the surcharge is lower.
9. Do-it-yourself: Instead of hiring professionals for various tasks, consider learning and doing it yourself. From home repairs to beauty treatments, there is a DIY guide for virtually everything online.
10. Save, no matter how little and invest: Even if it’s just a few hundred a week, saving can cultivate habits that will benefit you in the long run. Open a savings account if you don’t have one, and consider setting up automatic transfers to make the process easier.
Satyajeet Kunjeer, Founder and CEO of Deciml, said, “It is important for young investors to start viewing investing as an efficient way to save money, one that will translate into solid returns and ultimately help them build wealth. Whether it is through monthly SIPs or round-up investing that allows them to invest with every spend and isn’t too heavy on the wallet – it is important to leverage such features and the many platforms available today to create a nest egg that support youngsters’ short-term and long-term financial goals.”
While it may seem daunting initially, saving or cutting costs while on a tight budget gradually becomes easier as it turns into a habit. Remember, saving money is not merely about making sacrifices but smart choices. Every little bit helps; each small savings is a step towards your larger financial goals. Stay positive, stay focused and remember that you are working towards financial freedom. Keep your end goal in sight and adapt these tips to your lifestyle. With intention, dedication, and strategy, anyone can save money, regardless of their budget.
