I am not an expert in the area of budgeting and saving money. But I am someone who lives frugally and manages to save money despite a fairly meager income. I offer the following tips as strategies that have worked for me. I will also link to other sources that agree with these strategies, and who may be considered “experts”.

1. Set up a monthly budget

I’m sure many of you already keep a monthly budget. I know some people’s budget is so tight that if they did not keep a budget they may overdraw their accounts. Our goal has always been to have extra money in our checking so that we don’t have to worry so much about our day to day purchases. This has meant that I have not always kept a budget. By not keeping a budget it has caused us to spend extra money sometimes.

I recently started adding up all of our purchases in a month. It was a bit of a shock how much money we were spending on things that were not necessities. It was crazy to think how much money we could save each month if we simply cut out all of these extra things we didn’t absolutely need.

Fast food was definitely the worst category for us. It is crazy how expensive fast food is and yet it often isn’t even that great or you are still hungry afterward. After realizing what bad habits we were in, we decided to make a change. You can read another post here about how we started meal planning and stopped buying fast food so often.

If you need an easy way to keep track of your budget there are a lot of great apps out there. I recently started using one called “clarity money”. I had to connect my bank account and it pretty much keeps track of what I’m spending. I sometimes have to move an expense to a different category if it puts it in the wrong one. But other than that it is working great. It is an easy way to see how much I’m spending. It also lets you save things as “recurrent expenses” which is very helpful.

2. Live within your means

This means trying to limit your debt or things that you don’t absolutely need. Food is a necessity but there is a limit on how much you really need. Clothing is a necessity but again, there is a limit on how much you really need. The same goes for furniture and other household items. We still have mostly hand me down furniture. Having nice furniture is not a necessity, cheap furniture works just as good as nice stuff.

Keep your debts to a minimum.

Only go into to debt for things that are absolutely necessary. While it is tempting to use a line of credit for other things it is easy to get in over your head. Just because you have a line of credit does not mean you should use it. There are payment programs and other lines of credit for just about anything these days. While it can be tempting to use one of these and possibly helpful if you have no other means to acquire the item, it is usually a trap! Interest is usually high and continues to accrue as you are paying it off.

We are currently trying hard to save money and pay off our debt. The only debts that we have come from necessities(Home, Car, School). While there are about a million other things I wish I could buy, I know I can’t actually afford them. While we do have a little extra income each month that we could spend on the “wants”, it is better for us right now to focus on saving and trying to pay off the debts that we still have.

For more on this topic from an expert, see these 2 posts from daveramsey.com

The Truth about Credit Card Debt

Do I Need to Keep a Credit Card?

Already have debt?

If you already have a lot of debt you might consider consolidating it somehow. You can also re-finance your credit card which could be potentially helpful for you. I don’t have much experience in this area. But if you want more information in this area you should head over to Lendedu.com. They have a lot of helpful stuff! Here is one post that talks about Credit Card Refinancing vs Debt Consolidation that may be helpful for you.

3. Limit your shopping

I could easily become a shopaholic. Shopping is one of my favorite pastimes. I love finding good sales. Bringing home new things is so exciting.

Since I know my tendencies, I know that I need to stay away from stores for the most part. Whenever I go to the store for a specific item, I end up coming home with extra things that I may or may not need.

This is why I try to limit how often I go shopping. If I am not in a store I won’t be as tempted to buy extra things. This is why I do a lot of online shopping too. Shopping online is a little easier because there are fewer distractions from what you really need to buy.

4. Only shop in the clearance section or thrift store

When I do go shopping I limit myself to the clearance section. Even at bargain stores like Ross. Looking at normal prices makes me overwhelmed. I can’t stand to pay more than $5 dollars for an item and definitely no more than $10. This may sound crazy, but it helps me not spend too much money when I or the kids are in need of clothes.

I also love thrift stores. You can often find items that are nearly new there. I like buying things for the kids at a thrift store since they outgrow things so quickly.

5. Consider buying a house

One way we are saving a lot of money is by owning a “cheap” home. Our “cheap” 2 bedroom home with a decent sized yard is cheaper per month for us than renting an apartment or home would be. No, it is not our dream home. It is already too small for our family. But it is manageable.

Lately, we have thought about selling this house so that we would have enough money to upgrade to a slightly larger home. This has been super tempting but we have realized that if we really want to save money each month remaining in this home is one of the best ways. We won’t have to stay here forever, but the time here will help us save money so that we can upgrade when the time is right.

Here is what Dave Ramsey has to say about homeownership though: He says you should only consider purchasing a home if you meet the following criteria:

  • You’re out of debt.
  • You have 3–6 months of expenses in your emergency fund, plus enough cash for a 10–20% down payment on a 15-year fixed mortgage.
  • You’re paying cash up front, or your mortgage payment is no more than 25% of your monthly take-home pay

While we are not completely out of debt, we do have an emergency fund and our mortgage is well below the 25% of our take-home pay. For more on Renting vs Buying see this post from Daveramsey.com

6. Drive “older” cars

Up until a year ago, we only had “hand me down” vehicles that we did not pay a dime for. When we did buy a car last year, it wasn’t brand new. But it was still quite an upgrade for us. I always felt so frumpy driving our old ugly cars, but I knew it was worth it.

While a larger car payment might fit in our budget, it would take away from the amount of money we are able to save each month. This is why we have decided to drive “older cars”

7. Set up automatic savings transfers

We have set up our bank account to transfer $100 dollars to savings each month automatically. This means that without even thinking about it we will save $1200 dollars in a year. We could increase or decrease this amount depending on our budget or make one time transfers when possible, but knowing that we will save a little over $1000 in a year is very encouraging.

save money

Hope these tips are helpful. Doing these things has helped us make it through very hard financial times. Continuing to live this way even though we are more financially stable has helped us save and work towards paying off our debt. I know that they can help you do the same as well!

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