When you’re living on a shoestring budget, money is tight. Not only that, but you’re experiencing a lot of financial stress, too. You’re constantly worrying about making ends meet and paying bills on time. If that wasn’t bad enough, without a plan, it’s also nearly impossible to break the cycle and get ahead!
To stop living on a shoestring budget and improve your financial well-being, you have to find ways to save money. In doing so, you’ll have funds to pay down debt, build a strong financial foundation, and start creating wealth!
Although this may seem simple when you’re struggling it’s not. You’re working and focusing so hard on meeting today’s financial needs that you may not have the mental bandwidth to think or plan ahead!
Truth be told, people living on a shoestring budget aren’t the only ones that struggle to put money aside each month. As prices and inflation rise, more people are being affected. In fact, almost half of workers earning over $100k per year now report that they’re living paycheck to paycheck!
Regardless of your income or whether you’re living on a shoestring budget, you may have to make some tough decisions and get creative to save money. In doing so, you’ll begin to have a financial transformation and experience more peace!
What is a Shoestring Budget?
When you’re living on a shoestring budget, money is in short supply. Between paychecks, you’re struggling to make ends meet and get by. In some cases, you’re constantly juggling bills and spending money that was earmarked for an entirely different purpose!
In this situation, it’s easy for your financial position to take a turn for the worse. As you’re shuffling money around to pay bills, you’re also likely racking up late fees and wasting money on interest. Rather than your situation improving, it’s getting even worse!
If that wasn’t bad enough, when you’re living on a shoestring budget you’re also financially insecure. Without savings or a financial safety net, there’s nothing to stop you from falling further. A small sudden expense or a slight drop in income could trigger a full-blown personal financial crisis!
To top it all off, the ongoing pressure to keep up with bills causes an endless amount of stress.
While you’re working and making due, you’re constantly worried about running out of money. Not only that but there’s no end to this situation in sight, either!
To improve your situation and find breathing room, you have to save. With that being said, here are 7 simple ways you can save big money on a shoestring budget!
#1 – Make a Budget
By definition, living on a shoestring budget implies that you have some type of budget. But unfortunately, this isn’t always the case!
Either way, making or reviewing your budget can give you a better understanding of your financial situation. It allows you to grasp the amount of money you have coming in as well as the places where it’s going out!
Oftentimes, people are unable to save due to confusion between their needs vs wants. Needs are things you have to spend money on and can’t live without, like housing, food, and clothing. Whereas wants provide comfort but aren’t necessary to your survival which gives you greater opportunities to cut back!
Still, it’s important to keep spending on your needs under control, too. For instance, if the majority of your income goes towards housing, then trimming it back will help you find significant breathing room!
Also, as you review your budget and spending it’s common to discover that you have duplicate recurring costs. You may pay for multiple streaming services, subscriptions, and other memberships. If you reduce or eliminate them, your burn rate will fall which may make the difference between saving and not saving at all!
#2 – Change Your Shopping Habits
Regardless of whether you’re on a shoestring budget, it’s easy for anyone to fall into comfortable routines. After all, trying to make changes and build new habits can be hard!
Despite the challenge, changing the way you spend money can help you save it. Rather than going to the store unprepared and buying goods on impulse, plan your purchases out. Start using a shopping list, cash budget, and a money calendar to plan purchases in advance. This way, you’ll know what you need to buy as well as the best time to buy it!
Also, buying in bulk is another easy way to save money. Not only do you pay less per unit, but you also limit the number of trips you make to the store. Not only do you spend less time in the store, but you have fewer opportunities to get tricked by their marketing gimmicks, too!
Switching to generic brands can also help you save money. In general, they are the same product as the brand name except they come at a fraction of the price. According to the FTC, switching to generic drugs can save you between 20 and 70% alone!
Another consideration is the time of day that you shop. For instance, many restaurants offer happy hour pricing or early bird specials. By going a few hours early or at off-peak times, you’ll spend less and save more money!
#3 – Pay Down High-Interest Rate Debt
Too often, people live on a shoestring budget because of credit cards, personal loans, and other types of consumer debt. But if you can get rid of them, then you’re going to spend less money and have significantly more breathing room!
Unfortunately, most Americans carry some level of consumer debt. According to Bankrate, the average person owes over $5,000 in credit card debt. Not only that, but it accrues at over 16% interest, too! (No wonder so many people struggle to save)
If there was such a thing as a benefit to having consumer debt, it would be the ability to pay it back while receiving a risk-free rate of return. Each dollar you put towards your debt reduces the balance you owe and prevents it from compounding into more!
Depending on your situation, you may also want to consider a 0% Balance Transfer or Debt Consolidation Loan. In many cases, these loans reduce your interest rates and allow you to become debt free, faster!
However, they may come with strict terms and conditions. Having said that, it’s important to understand the ins and outs before you sign on the dotted line.
#4 – Understand Your Current Spending
Even with a detailed spending plan, many people still find it difficult to save money. Rather than staying on budget, they get distracted and go over which derails their plans for putting money aside!
One easy way to keep your spending under control is to track it. When you monitor your spending you’re able to see not only the amount you’ve spent but also the amount you still have left to go. This way, you have greater financial awareness and can limit your spending before it gets out of control!
For example, after reviewing your spending you may realize that the majority of your food budget has been spent on takeout. Becoming aware of this early on, allows you to switch to a lower-cost option, like buying groceries, and save while there’s still time!
Another important part of staying within budget is understanding your emotional spending triggers. These are the events that provoke an emotional reaction within you and cause you to spend money as a way to cope. When you become aware of them, you’re also more likely to recognize them which gives you time to tighten your purse strings!
#5 – Turn Saving Into a Game
For the majority of money personalities, saving isn’t any fun. But, spending and consuming is and therefore they take priority. But, if you learn how to turn saving into a game, then you’ll enjoy the process more and likely stick with it!
One way to do this is by starting a money-saving challenge. Rather than saving for saving’s sake which may be boring, try challenging yourself to make it more fun. You could test yourself to see if you can avoid spending money for a day, a weekend, or even more!
Completing a money savings challenge isn’t as difficult as you think, either. For instance, rather than going out to eat, you could cook the food you already have at home. To save money on entertainment, you could camp, go to a park, or find other free things to do around town!
In addition to the financial benefits, challenging yourself to not spend also helps you learn to be more resourceful. Not only that, but when you go without, you may realize that you’re not missing anything at all!
#6 – Pay Yourself First
Depending on your income, your spending may be the primary obstacle that’s preventing you from saving. When it’s out of control, you’re going to spend everything you make and more!
Rather than overspending and living on a shoestring budget, try paying yourself first. In doing so, you’re prioritizing saving over spending and not vice versa. Not only that, but you’re going to have money to improve your financial future, too!
At first, saving anything, no matter how small, can help turn your financial situation around. Even if it’s only a few dollars, starting allows your situation to improve so you can save even more!
#7 – Increase Your Income
Oftentimes, living on a shoestring budget means you have limited income. In some cases, you may not earn enough money to cover necessities, either. In this situation, increasing your income may have a dramatic effect on your financial situation!
A few ways to increase your income are:
- Negotiating a raising
- Switching employers or careers
- Investing in yourself
- Starting a side hustle
- Learning how to make mailbox money
Truth be told, making more money doesn’t mean that you’re going to stop living on a shoestring budget, either. You still have to practice financial discipline, control spending, and contain lifestyle creep if you’re going to save any of it at all!
No matter what is causing you to live on a shoestring budget, it’s important to start setting and working toward short-term financial goals. But, don’t make short-sighted decisions that put your entire financial future at risk either, like getting rid of insurance.
Instead, find ways to lower each of your monthly expenses. This way, you won’t just save mince, you’ll save for months to come!
Although living on a shoestring budget is challenging, it’s not hopeless. As long as you can save money, then your situation will improve and you’ll begin to feel less stress!
How are you saving money on a shoestring budget? Comment below.
Leave a Reply