Living on a Tight Budget: The Secrets to Success

Trying to live on a tight budget is tough. 

It may feel that no matter what you try, you’re ending the month with very little or nothing to show for it. That worry can be even worse if you’re in debt and struggling to make your repayments. 

However it is completely possible to survive and thrive on a tight budget – even if you feel like you’ve already cut your spending down as far as it can go. 

The most important first step is taking a look at your finances in close detail, understanding exactly where your money is going and then figuring out how you can fix your finances to meet your money goals. 

What is a tight budget?

A tight budget is where you have very little or no money left over from your income at the end of the month after you’ve paid for essentials. 

Those essentials include your rent or mortgage, household bills, food, fuel for your car and extras such as clothes and shoes to replace things that have been outgrown or are damaged. 

It may even be that you find you have not enough money to cover those essentials each month, and that you’re having to fund the difference with credit cards or an overdraft. 

There’s no set amount for what a tight budget would be, as everyone has a different set of living expenses depending on the size of your family and how much it costs to run your home. 

You may suddenly find yourself living on a tight budget due to losing part or all of your income. Or it could be your essential expenses suddenly increase. 

I myself was on a very tight budget for a long time after I lost my full-time job. 

It was a stressful time and meant I often worried how we would pay for emergency items, such as when my car had an issue that needed fixing. 

The key for me was finding ways to cut way back on spending so I was living frugally within my means – in particular holidays and days out – and then working to boost my income with side hustles (more on that later).

18 ways to succeed on a tight budget 

1. Get the numbers on paper 

The best place to start is by understanding exactly what is going in and out of your bank accounts each month. 

It may be that you are almost afraid to look, but approach it with a practical mindset that you cannot solve any problems without fully understanding them. 

Write down all of your income. Next write down every single penny of expenditure. 

Don’t forget to include big expenses such as your mortgage or rent, how much you spend on groceries, the cost of running your car and any monthly subscriptions. 

This will include your monthly bills, as well as any bills you pay annually (make a note of the date your renewal is due as well). 

Also include small spends, such as any takeaway drinks or snacks you buy. Take a look at how much you have spend on clothes over the last year as well as any extras. 

Once you have this in front of you, you can start to formulate a plan! 

2. Formulate a plan 

It can help to divide up your outgoings into essential fixed spending, essential spending that could be cut back (ie your food bill) and non-essential spending. 

Your non-essential spending is the stuff you can live without. 

For annual expenses, check what you expect the next year’s bill to be, how many months you have left until the date it is due and figure out how much to set aside per month so you can cover that bill when it comes. 

3. Stick with your budget  

This is absolutely key to living on a tight budget. Every single penny matters in this situation. 

It can be easier said than done, so this is where you may need to repeatedly refer back to steps one and two. Refer back to your plan and the reality of the numbers whenever you start to waiver. 

One thing that can really help you stick with your tight budget is to have very clear goals.

What is it that you want to achieve with your money makeover? Do you want to be able to save for a larger home? Or do you want to be able to afford a nice holiday? Do you want to pay off debt?

Try setting yourself reasonable goals and costing out how much they are. This can really help to motivate you when sticking to your budget seems impossible.  

It may be that in order to stick with your plan you need to amend your relationship with money. 

If you have felt out of control with spending in the past or feel stressed about the idea of dealing with your finances head-on, now is the time to address that. 

Sticking to your budget and your plan can help you to regain a sense of control. 

4. Use a budget planner 

Writing down your monthly income and expenditure can be a huge motivator and great way to stay on track and organised. 

You can grab a free copy of my monthly budget planner just by signing up to my mailing list. 

Alternatively my ultimate budget planner features 15 pages of handy trackers and forms to help you keep on top of every aspect of your budget. Check the planner out here.

A budgeting app can really help you to stay on top of your incomings and outgoings too!

5. Create a sinking fund 

A sinking fund is your money set aside to pay for expenses you know are coming. 

This may include your annual car or home insurance renewal, your boiler servicing or even a boiler replacement if you know that it is likely to need replacing soon. 

It will also be where you save for fun stuff like holidays and days out. 

Setting a goal is absolutely key here, you need to refer to what you wrote down in the first stage of these tips. 

Add it all up, divide it by 12 and that tells you how much you need to be saving each month in order to cover those essential costs. 

Some people have their sinking funds in a few different bank accounts.

How you organise your money is up to you, but it can help to keep a note of how much is in your sinking fund and what it needs to pay for. 

6. Save for emergencies 

Once you have your plan in place and are tracking your expenditure, you also need to plan for the unexpected. 

A leaking roof, a broken boiler, new shoes for the kids, a dented bumper. These are all things that can come about out of the blue and leave you stressed out because there’s no room for manoeuvre in your tight budget. 

This is why as part of your tight budget, you need to have some savings put aside for a rainy day. 

Many experts recommend you have at least three to six months of living costs set aside in your emergency fund at all times. 

Even if you can only afford to set aside £10 a month into an emergency fund, start doing it ASAP. 

7. Track your spending 

Keep an eye on every penny that you spend. This can be useful not just to keep you on track with your budget, but also to see areas that actually you could cut back on or ditch altogether. 

You can keep track of your spending with a monthly budget planner, like the one I offer free for signing up to my mailing list. 

Alternatively keep a running list in a notebook or on your phone. 

8. Know your spending triggers 

When it comes to living within your means this is the most important tip you can follow. 

Your spending triggers will be personal to you and could be anything from betting on sporting events to buying the latest gadget. 

For me it’s dresses! 

Once you know what things get you overspending your money you don’t necessarily have, think about what it is that makes you spend. 

Do you overspend when browsing online late at night? Is it particular emails from brands that keep coming to you? Is it Instagram or some other social media channel?

Whatever it is that gets you spending, find ways to avoid that trigger. You can unsubscribe from mailing lists and mute particular accounts on social media. 

If gambling is a struggle for you, why not get in touch with a support charity for help?

Often spending money can be something we do when bored and we’re looking for that adrenaline rush that comes for getting something new.

Try finding a low cost hobby that can replace that. You could take up running or start making your own clothes.

9. Ditch unused subscriptions 

Once you have written down all of your outgoing you can analyse where the easy areas to make cuts in your budget are. 

I try to take a look at my subscriptions every six months or so and see if there are any I can ditch. 

I recently axed Now TV and my Telegraph newspaper subscriptions, as I found I could actually get more from other services that were cheaper or free. 

If you have Sky TV then you may find it useful to check out my best alternatives to Sky TV.

10. Check you’re using all help available 

If you are really struggling to make ends meet and pay your essential bills then you could get in touch with your suppliers and ask for help paying your bills. 

Agree a payment plan with your energy supplier, rather than just not paying. 

Also double check that you are claiming all of the possible help available to you. There could be certain benefits you are eligible for, or help funds that could be available. 

Turn2Us has a handy calculator to see what benefits you are eligible for. 

11. Haggle for money off  

There’s often deals to be made with your subscriptions and services. 

For example when I went to cancel my Now TV subscription I was offered a huge discount on the service. I went ahead and cancelled, but it’s worth trying if it’s a service you use. 

In addition TV firms such as Sky TV will give you money off your monthly bill if you call and tell them you are planning to cancel. There are more tips on how to haggle your Sky bill down here. 

12. Plan how to pay off debts 

The interest rates on debts can be crippling and make it feel like you’ll never get free of debt. 

So focus on how you can free yourself from your debts. Within your budget find a way to meet the minimum payments, and if possible add a little more so you can pay off the debts as quickly as possible. 

13. Meal plan

I get that you’ve probably been told to meal plan by every single money-saving article on the internet. 

However the truth is that it actually does work. 

Sitting down for 30 minutes each week and thinking about what you will eat, how you can make full use of what you buy and stock checking your kitchen for existing food is so worth it. 

I have a handy budget shopping list here. 

14. Shop savvy in the supermarket 

As food is probably one of your biggest monthly expenses, being extremely frugal and savvy during your food shop can save a huge amount of money. 

Some key things you can do: 

• Switch supermarkets – Use one of the budget supermarkets and never buy food at petrol station shops as the mark-up is huge 
• Buy cheaper cuts of meat
• Bulk out your meals with beans and pulses – they’re healthy and cheaper 
• Shop the bottom shelf – most products come in a variety of different brands and price points. Often supermarkets put the higher priced items at your eye level, while the cheaper versions are at the bottom. 
• Forensically examine the price – This sounds more complicated than it actually is! When looking at prices, always check the price by weight. You may find that it’s cheaper to buy a bigger pack, or cheaper to buy two smaller packs. It really varies so it’s well worth looking at the price tag on supermarket shelves to see the cost breakdown. 
• Bin the brands – try shopping for supermarket own products rather than branded goods. 
• Take advantage of loyalty schemes – always check what vouchers and points you have in order to save cash. 
• Get cashback – the Jam Doughnut app lets you buy shopping gift vouchers for stores such as Sainsbury’s and M&S, providing you with cashback in return. Use my referral code 6FYD to get 200 bonus points upon signing up. 

There are lots more tips for saving money on food here. 

15. Boost your income 

If the numbers still don’t add up and you have cut back to essential spending only but still don’t have enough to stretch to cover your costs each month, you need to increase your income. 

Some people do this by taking on a second job, such as weekend and evening work in hospitality. 

There are plenty of great ways to boost your income with a side hustle or quick money-making wins. 

Some easy ways to make more cash include: 

• Survey sites. I recommend YouGov, Prolific and Shoppix (a receipt scanning and survey app). You can also try Swagbucks. 

• Tasking apps. Companies such as Roamlr will challenge you to complete tasks in local shops in exchange for cash. 

• Start a blog. It can take up to two years to start to see results, but if you stick with it this can boost your income by hundreds or even thousands of pounds a month. Find out how to start a blog here.

• Pet sitting and dog walking 

You can find lots more great side hustle ideas here. 

16. Make clear goals 

Having a clear goal for what you want to achieve with your tight budget can really help you to focus. 

If it’s something like a holiday then why not print out a picture of your dream destination and stick it on the fridge to remind you. 

Your goal could be paying off your debt, in which case it can really help to visualise your progress with a tracker sheet. 

You could simply draw a grid of 10 by 10 squares on a sheet of paper and colour in a square every time you pay off 10% of your debt. 

17. Have a budget for fun stuff 

Allowing yourself some fun stuff will help you to stick with your budget.

Try setting aside a small amount a month that you can either save up to put towards a day trip out as a family, or treat yourself with.

If you’re looking for ways to save on weekend family fun then check out these ideas for cheap family things to do.

18. Try switching to cash 

Keeping track of your budget can be much easier if you use the cash envelope budgeting system. 

This simply means you count out your monthly and/or weekly spending budgets into separate categorised envelopes. 

For example, say you have £100 to spend this week, you would divide your cash the following ways into marked envelopes: 

• Food – £60
• Petrol – £20 
• Spending money (for drinks out, snacks etc) – £20 

I have some free cash envelope templates that can make cash budgeting easier.

Living on an extreme budget 

If you find yourself living on an extreme budget it may be through necessity or because you want to save a large amount of cash as quickly as possible. 

Many people go on an extreme budget in order to save enough money for a house deposit. 

An extreme budget takes the above tips to the next level. 

You’ll need to do the following: 

• Cut out all unnecessary spending

• Find free fun. Having a great time at weekends with your family doesn’t have to cost the earth. Make it a challenge to visit a new park or walking spot every weekend. Go for picnics or look for free events at your local library. 

• Make the stuff you have last. Instead of surrendering to trends try to focus on making the stuff you have last. If your furniture is looking tired, can you upcycle it with a coat of paint or add some new drawer handles.

• Shop smart. Whenever you need to replace something, shop around for the absolute best deals. That may be through shopping second-hand or looking for bargains in online auctions. Some people are looking to offload furniture for free online in Facebook marketplace, so keep an eye on those forums. 

• Clear out the clutter. Look to boost your income by selling your stuff for money.

You may also like:

How to stop spending money on clothes

How to live frugally on one income