Budgeting · June 17, 2020

Ways to Save Money on a Tight Budget

If you're short on cash, saving for the future might seem like a far-off goal. The good news is that you don't have to wait until your income hits a certain threshold before you start building an emergency fund or saving the things you want most. There are plenty of easy ways to save money on a tight budget.

If you're looking to make your money go further, the first step is to put together a solid savings plan and then build some new habits that help you stick to it.

Savings plan 101

Your savings plan protects you from life's curveballs. But how much money do you really need in the bank to provide a solid financial cushion? 

Some experts suggest saving 10% of your disposable income each month. Others recommend that you have three to six months of living expenses in the bank. Those numbers can seem overwhelming if you're starting from zero, but starting small is better than not starting at all.

When you're looking for ways to save money on a tight budget, a great rule of thumb is to pay yourself first. Every payday, put a set dollar amount or a percentage of your paycheck into your savings account. It's OK to start with small steps—even saving $25 or $50 per paycheck or per month will add up over time.

Making savings painless

It's one thing to talk about paying yourself first, but it's another to have to manually move money every payday or every month into a savings account. You can make savings painless with some smart strategies that automate the process for you. Here are a few ideas to explore.

  • Direct deposit: Your company's payroll provider might have an option that allows you to split your direct deposit into two separate bank accounts. If so, you can designate a portion of your paycheck to your savings account so you never see it or miss it from your checking account.
  • Automatic transfers: Set up automatic transfers on each payday from your checking to savings account. These recurring transfers can take the stress out of remembering to move money.
  • Handy apps: Check out apps like Stash and Digit that can help you save money throughout the month. Ask your bank if they have any digital tools to help you manage your finances, too.

The key to a painless savings strategy is to find a system that gives you access to the money you need for living while protecting the money you've committed to saving and limiting access to the savings so you don't regularly tap into them.

Tips for lifestyle adjustments

How can you pare down expenses without compromising your quality of life? The first step is to get a full picture of where your money goes each month. 

Pull your last three months of credit card and checking account statements. Be sure to make a list of every expense. When you have a complete picture, here are a few ideas to help you save while not sacrificing the things you love the most.

  • Subscriptions: Make sure you're only paying for subscriptions you actively use. Consider canceling your streaming service's premium channel add-on after your favorite show ends for the season. Many shows can go several months to a year without new episodes. You can shift your budget so that you're only paying for premium channels when your favorite shows are on the air.
  • Eating out: If you find that eating out is emptying your wallet, try starting by bringing your lunch from home two days a week. You could also consider bringing your lunch to work every day and saving your dining out for weekends. If you're spending more per month on your post-workout morning smoothie or lunchtime grain bowl than you're saving, try making more affordable versions at home. You could even spend $10 a week on cold brew coffee from your local grocery store rather than spending $10 every two days on a fancy cup on the way to the office.
  • Adventures: You might think saving money means cutting out weekend trips with the family or outings with friends, but that doesn't need to be the case. Look into activities in your area like free community events at local museums, zoos and art galleries. Take a day trip to a hiking area instead of an epic three-day getaway in the mountains. There's always a way to keep doing what you love and do it for less.

Now that you have some ideas for ways to save money on a tight budget, where will you begin your savings journey? Everyone starts somewhere—the important thing is to create a plan that puts you on track toward the future you want, and then to act on it.


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This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.