1. Keep Track of Your Spending
If you’re planning to live on a tight budget, you need to start by keeping track of all your expenses. From car repairs to that cup of coffee you buy every morning, everything must be recorded. It’s easy to lose track of how much you spend in any given week. The next thing you know, you are looking at a credit card bill that is well outside your means. So, you pay the minimum payment, which is another no-no, and the cycle of perpetual debt begins. Keeping better track of your spending can help you avoid wasting money on unnecessary expenses.
2. Change Your Spending Habits
Now that you’re keeping track of what you’re spending your money on, look through your monthly expenses and start trimming the fat. This is where people begin to think that frugal living is a complete downer compared to a lifestyle of superfluous spending. Don’t think about limiting yourself on the things you want, start thinking about cutting out the things you don’t need or waste money on. Avoiding name brand items, buying in bulk, and buying used or refurbished items are just a few examples to help you save and change your spending habits.
3. Monitor Your Money
Many people are guilty of not knowing how much money they are carrying in their pocket or purse on a daily basis. Even worse, many people are guilty of not knowing how much money they have in their bank account. How are you supposed to follow a budget if you don’t even know what you are working with? What if you dropped some cash without even knowing it? Finding random cash in your pocket is the best feeling in the world, but you should be taking better care of your money if you plan on living on a tight budget.
4. Carry a Coin Purse
Want to live happy on a tight budget? Start carrying a coin purse, and stop treating loose change like it’s the plague. Most people become annoyed with fishing through their pockets for change, so they just pay with large bills and get more loose change that they don’t want. Keep those coins organized with a coin purse. If you still refuse to pay with exact change, just stuff the coins in the coin purse and empty it into a jar when you get home. When the jar is full, take it to a coin counter at your local grocery and exchange it for cash or a gift card.
5. Give Yourself an Allowance
Limit yourself to a set amount of spending cash per week, like $100, and only withdraw that amount from your bank account. Stretch that weekly allowance as far as you can, and if you spend it all, don’t withdraw more money until it’s time for your weekly withdrawal. Giving yourself an allowance will help you develop better spending habits to help you save money for when it counts.