10 Tips for Surviving on a Limited Budget

There are many families these days living on tight budgets and in many cases, even the income they are earning each week is still not enough to make ends meet let alone do much of anything else. Living on a limited budget is not impossible but it does involve sacrifice and creativity.

How to Make Ends Meet with a Limited Budget

Here are 10 tips for helping you survive a limited budget whether it is just temporary or likely to be a longer term situation:


Photo by Horia Varlan via Flickr

1. Fine Tune Your Budget

While it may first appear that your budget leaves no room for extras, it is important to take the first step and really look at your budget. If you have simply written down all the bills you need to pay and the expenses you normally pay for, there is likely some room for you to fine tune your current budget by slashing spending and cutting out services and other expenses you do not need to live on. You can use software budget tools to help identify potential gaps in your plan. If you work through your budget and still find little room for leftovers, start incorporating the other tips found here into your financial life.

2.Stick With Basics

You should prioritize the things you actually need to live and put the luxury items low on the priority list. For instance, you need bread, milk, and butter to live but you don’t need cookies, cakes, and candy. Those extras can be nice treats from time to time but not necessarily a staple in your kitchen at all times. You can cut back on groceries without sacrificing quality. The same is true for other items in your home. Any extras beyond food, shelter, and reasonable clothing should be cut from your priority list and be seen as luxuries.

3. Pay Yourself First

As soon as you receive your paycheck, put some amount into a savings account you can’t easily access. Even if you put just $25 per paycheck into an account, the savings can start growing rather quickly. This will be the start of your emergency fund. Set up automatic payments to deposit cash into this fund and leave it alone to grow over time. Don’t touch your emergency fund until a life event that absolutely qualifies as an emergency occurs and you need extra cash. Up the deposit amount as time goes on and finances permit.

4. Downsize Your Life

You may not actually realize just how much stuff you have acquired over your lifetime but take a weekend and a few empty boxes and go through each room of the house, tossing the junk and boxing the things you don’t need. Take those still usable items and turn them into cash by having a yard sale or selling your stuff online. Deposit your profits into either your emergency fund or another account outside of your emergency fund and tack a savings goal onto that account. For instance, set up a new savings account for the purpose of debt elimination. Set a goal amount to reach and a timeline to reach it and add extra cash you have from additional sales or budget cuts into the account as you can.

5. Don’t Utilize Credit

You should only ever use credit cards if you have the actual cash equivalent on hand to pay off the balance in full at the end of the billing cycle. Credit cards used wisely can help you improve your credit score but when used in place of income will rack up debts faster than you can afford to pay them off. A lack of income to pay for all of your expenses does not give you the license to go into credit card debt. You will just be adding to the financial hole that you are already in.

6. Shop Outside the Box

The popularity of dollar stores, thrift stores, and discount chains are on the rise because so many more people are trying to live a more frugal lifestyle. If you never stepped foot in places outside of your hometown grocery store, start checking out your other options. Visit farmer’s markets to get fresh seasonal vegetables and fruit at a reasonable price. Use the dollar store for your household cleaning products. Shop in thrift stores to supply your kids with gently used and significantly less expensive clothing.

7. Supplement Your Income

In addition to the yard sales and such you are utilizing to access more money, it may be time to face the facts about your employment situation. If you are in good standing at your job, it may be time to ask for an increase in salary. If that is not possible, it may be time to look for a better-paying job or at least add a second job to your schedule, if only temporarily. The more you can earn the less you have to struggle to keep ends meeting. If you don’t have time to add another job into your schedule, consider earning side income through freelancing. You will be able to earn extra cash while setting your own hours.

8. Tend to Your Financials Regularly

In addition to consistent budgeting, it is important to pay attention to your finances each week when money is tight. With online banking and other technology, it is much easier to keep tabs on your bank accounts and billing statements. If you are not paying attention to your money matters, you end up spending extra cash in fees and penalties for forgetting your obligations. When things are tight you don’t want to be wasting money on unnecessary bank fees. Balance and reconcile your checkbook regularly to ensure you are not going to overdraw the account and make sure you pay your monthly bills before the due date. Automatic bill pay can help make your attention to money matters nearly effortless.

9. Live Within Your Means

Society and our close circle of friends and family often influence our money decisions. Rather than try to keep up with everyone else you know, you have to start learning how to live within your means. Just because the neighbors can afford a new car every three years doesn’t mean you can or should have to. As more people find they have a harder time making ends meet, the tendency to ‘keep up with the Joneses’ is on the decline but can still affect your personal life negatively.

10. Plan for the Big Picture

Once you get your regular money matters under reasonable control, it is time to start planning for the bigger picture. Having both short-term and long-term goals is essential to be sure you are on track and ready for what comes now and later. Savings plans and goals for your earning is important. It is also extremely important to consider your retirement plans no matter what age you are now.

What other tips do you have for surviving a drop in income within your budget?

About the Author

By , on Jun 20, 2011
Tisha Tolar
Tisha Tolar is a co-owner of Trifecta Strategies, LLC and the author of Gen X. When she is not busy being a fiction writer, she writes personal finance articles for several web sites, including Moolanomy.com.

Leave Your Comment (2 Comments)

  1. @Juan: The big picture can definitely keep us motivated. Sometimes you have to stop looking at where your foot goes next, and look out to see where you are on the trail.

  2. Juan says:

    I love that you mentioned planning for the big picture. So often we just focus on paying down debt and thus forget why we are doing all of this work.

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