We all want to save more money — to pay down debt, save for the future, or just to have a little more financial breathing room.
But when you’re on a limited budget, it can be tough to get ahead. How do you save money on a tight budget?
This comprehensive guide goes over all the ways you can reduce your spending and save money on a limited budget.
How to save money on a tight budget
There are many ways to save money, regardless of your income level or the size of your budget. But there are specific strategies that will be most effective for anyone on a tight budget.
With so many different options to try, what should you prioritize?
Instead of getting bogged down by the little things, it’s helpful to start with the largest expenses and slowly work your way down to the more minor expenses.
Focusing first on monthly expenses, like rent and bills, can also be more impactful. Reducing these costs will save you extra money every month.
To help you navigate your new money-saving journey, we’ve divided tips into categories. Below, we’ll cover ways to save on:
- Utilities & other bills
- Health and wellness
- Clothing & miscellaneous costs
Feel free to jump around to the sections most relevant to you — or use all these money-saving tips to maximize your savings potential.
Are you a college student? Check out our college savings guide for more student-specific tips.
How to save on housing costs
Housing is the #1 expense for most people, so it makes sense to start here. Plus, housing is a recurring expense — if you can save a bit of money on rent, it will benefit your budget each and every month.
1. Get a roommate
Sharing your living space with a roommate can cut your rent in half. It can sometimes save you even more than that, as you can also share utilities and other expenses with your roommate.
In expensive cities, having a roommate could save you around $500 per month. And even in cheaper areas, the savings can be quite significant.
2. Rent out a room temporarily
Don’t want a full-time roommate? You may also be able to rent out a spare room in your house or apartment short-term. Platforms like Airbnb have made this much simpler and provide insurance if something happens.
Renting out a room won’t technically save you money, but you’ll have some extra income coming in that you can apply to your rent.
3. Downsize your living space
Moving to a smaller living space can save you a bundle on rent and lower your monthly utility bills. This also presents a good option for those who like their privacy and don’t want a roommate. If you move from a two-bedroom apartment into a one-bedroom or a studio, you can save hundreds of dollars each month.
You can use websites like Rent.com or Apartments.com to see how much you could save in your area.
4. Try “house-hacking”
“House-hacking” is a term that refers to creative strategies to produce income from your living space, thereby lowering your living expenses. Some examples include:
- Buying a duplex or triplex, living in one unit, and renting out the other unit(s)
- Buying a large house and renting out individual rooms
- Renting out a spare bedroom on Airbnb
- Renovating a basement into a separate rental unit
Many of these strategies require you to buy a property, so they are not accessible to everyone. But for those able to get a mortgage, house-hacking can really pay off.
5. Move in with your parents
There’s no shame in it: 52% of young adults (ages 18 to 29) in America live with their parents, and plenty of older adults do too. If you have a good relationship with your parents, living with them for a period of time can help you save a ton of cash.
6. Look for “work for room and board” opportunities
In some cases, you may be able to trade labor for free or discounted rent. For example, some apartment units hire a live-in manager who helps with collecting rent, repairing damaged appliances, etc. Often, this manager is given a free apartment to live in.
There may be similar opportunities on farms and other rural businesses.
How to save on food
We’ve all got to eat, and food can get expensive — food makes up around 10% of the budget for the average American household.
The good news is that food is a category with many opportunities to optimize your spending and save some money. Here are some ideas — and check out our budget nutrition guide for even more tips.
7. Cut back on restaurant spending
Restaurants and takeout food are quick and easy, but it’s around five times more expensive to order takeout than it is to make a comparable meal at home. That means that the $20 meals from your favorite restaurant probably only cost around $4 to $6.67 to make!
You don’t have to forgo restaurant food altogether — even cutting back a bit can save you a lot of money over time.
8. Use coupons
When grocery shopping, be sure to use coupons to save more money at checkout. You can sign up for grocery store loyalty programs to take advantage of their digital coupons, and you can also print out manufacturer coupons from home. There are even some free food coupons available!
If you order groceries online, you can also keep an eye out for store-specific promotions and coupons. For instance, you can score a discount at Safeway, Kroger, and other popular grocery stores, particularly if it’s your first time ordering online. You can also use Instacart promo codes to save on grocery delivery.
9. Meal prep
Cooking can take a lot of time, which is why we often turn to takeout. But if you prep certain items ahead of time, it becomes much easier to stick to your meal plan — and your budget. Over time, meal prepping can save you a lot of money.
You can prep entire meals ahead of time, or you can use a mix-and-match approach. For instance, you can cook some rice, protein, and vegetables and throw them in the fridge in containers. When it comes time to eat, you can mix and match different pre-cooked ingredients to form the basis of a wide variety of meals.
Need some inspiration? Check out BudgetBytes for budget-friendly recipes or Downshiftology for some healthy meal prep ideas.
10. Buy in bulk (sometimes)
Buying some items in bulk can make financial sense — as long as you will actually use the food before it goes bad.
Going to Costco or Sam’s Club can be a great option, but most grocery stores also have a bulk foods section if you don't have a membership.
11. Cut back on drinks
Drinks — soda, bottled water, juice, beer, etc. — can be expensive, and they don’t provide much actual nutritional value. Sticking to tap water and other healthy, inexpensive (or free) beverages can benefit your wallet and your waistline.
12. Buy the store brand
Most grocery stores have their own “store brand” for popular food items. These are usually cheaper than comparable name-brand items and are usually of very similar quality.
13. Reduce consumption of expensive foods
Some food items are pricey regardless of where you buy them. Meat, out-of-season fresh fruits, and fancy packaged foods like olives or pickles are just a few examples. By packing the majority of your diet with nutritious, inexpensive foods (like whole grains, vegetables, legumes, and dairy) can help slash your grocery bill each month.
14. Buy ingredients instead of prepared foods
At the grocery store, it can be tempting to pick up a frozen pizza or other pre-made foods. But in most cases, buying raw ingredients rather than prepared meals will save you more money. For instance, a bag of brown rice costs just a few dollars and can provide sides for a week’s worth of meals or more.
How to save on transportation
Transportation is another large expense category for most households. Interestingly, this is a category that can have a huge variance from person to person. The average is $9,737 per household — but some people spend as little as a few hundred dollars per year. Here are some ideas to cut back your own transportation spending.
15. Get rid of a car
If you’re in a two-car household, cutting down to one can save you a lot. And even if you only have one vehicle, it’s completely possible to sell it and live car-free.
16. Consolidate trips
To save on gas (and time), you can tackle a number of errands back-to-back. This not only saves gas but can also reduce wear and tear on your car.
17. Find the cheapest gas in town
Gas can easily vary by $0.50 or more per gallon from gas station to gas station. If you have a 15-gallon gas tank, that means a more expensive gas station could cost you an extra $7.50 for a single fill-up. Use a website or app like GasBuddy to scope out the cheapest gas in town.
18. Drive used vehicles
Buying a new vehicle can have its benefits — but it can also be a huge expense. The average new car payment is a whopping $568 per month. Plus, new cars will be more expensive to insure. Opting for a modest used vehicle can save you money on both your car payment and insurance bills — and if you can pay cash, you’ll spend less on interest payments, as well.
19. Price compare car insurance
Car insurance costs around $133 per month, on average. But there’s a significant difference between different plans and car insurance companies. Fortunately, it’s pretty easy to price-compare these days. You can typically request quotes for car insurance online and compare several top options to find the best value for you.
How to save on entertainment
Entertainment is another category where spending can vary drastically. You could theoretically have a $0/month entertainment cost — or you could spend thousands. Depending on your lifestyle, this may be a good area to focus on cutting spending.
20. Cancel cable
If you have cable TV, consider canceling it and switching to streaming service(s). The average household cable bill is now a whopping $217.42 per month. Fortunately, streaming services like Netflix, Hulu, YouTube TV, and others have made it easier than ever to cut the cord.
21. Opt for happy hour
Going out for drinks or for dinner is always a good time… until the check comes! Cut back your entertainment spending by hitting happy hour when possible. You can look at restaurant and bar menus online ahead of time to see who has the best happy hour deals.
Bonus tip: In addition to happy hour, lunch is usually cheaper than dinner at many restaurants.
22. Find free (or cheap) entertainment options
Entertainment doesn’t have to cost much money. Think about all the creative activities you could enjoy that are free or very cheap:
- Hiking or biking
- Board games
- Video games
- Learning new skills online
- Watching your favorite YouTube channels
- Fishing or hunting
- Card games
23. Take advantage of entertainment discounts
It goes beyond happy hour: You can also score great deals on all sorts of entertainment options. Movie theaters often run 2-for-1 specials on certain days, and daily deals sites offer discounted entertainment specials. Research promotions and discounts in your area to score some great deals.
How to save on utilities and bills
Bills like electric, water, internet, and cell plans are monthly costs that can really start to add up. And because they are essential (for the most part), we often don’t pay much attention to them. Here’s how to save on monthly bills.
24. Compare utility providers
Whenever possible, you should shop around for the best deal in your area. Check different internet service providers (ISPs) to get the best deal on high-speed internet. Compare different phone plans and different providers to save on your cell bill. And complete this process every year, as deals and promotions change frequently.
Many bills can be negotiated — particularly bills like internet, cell phone plans, and cable. You will need to call in and ask if the agent is able to lower your monthly bill or add any extra features for free.
You will have the most leverage if you are prepared to cancel your service — it’s a good idea to research competitor offerings first to make it clear that you will be leaving the service if they don’t offer you a better price.
26. Conserve energy and water
When it comes to power and water bills, you usually can’t negotiate, nor can you shop around for different providers. The only way to lower these bills is to use less of the resources that you’re paying for.
Lowering your thermostat a few degrees during the day or turning it off completely at night can save you up to 10% on your energy bill. And using more efficient appliances can save both energy and water while conserving valuable natural resources.
27. Cancel anything you’re not using
It’s a good practice to review any bills you get and subscriptions you pay for and simply cancel any services that you’re not actively using. It could be that app you signed up for or the gym membership that you never use. To find these unnecessary subscriptions, take a close look at your bank statements or credit card bills.
How to save on health and wellness costs
Healthcare is notoriously expensive in the United States, but there are a handful of things you can do to lower your costs as much as possible.
28. Use all employer benefits
First off, check what health and wellness benefits your employer offers — and take full advantage.
Many employers offer health insurance and may even cover your family. Some companies even cover things like gym memberships. Check with your work’s human resources (HR) department for details.
29. Use the Affordable Care Act
Better known as Obamacare, the Affordable Care Act made it easier for people to get health insurance. It provides generous subsidies for low-income and middle-income families. If you’re under a certain income level, you can even get health insurance for free. Learn more at Healthcare.gov.
30. Consider a high-deductible health plan
If you’re a relatively healthy person and you don’t often use your health insurance, it may make financial sense to switch to a high-deductible plan. You’ll get a lower monthly premium, but you’ll have to pay more when you need medical care.
31. Buy generic prescription drugs (and use coupons)
If you take any prescription medication, it’s worthwhile to explore options for generic drugs. Certain medications have generic versions that are chemically identical but are made by a different company — and are often much cheaper.
32. Use a health savings account (HSA)
If your health insurance plan allows for the use of an HSA, you should take advantage of this valuable perk. An HSA is a special account that offers generous tax benefits if you have medical expenses — learn more at Healthcare.gov.
33. Exercise at home
If you have a pricey gym membership, it may be worth switching to working out at home. You can pick up some resistance bands or free weights to use at home or simply use bodyweight exercises. For cardio, consider jogging or biking.
How to save on clothing and miscellaneous costs
What about all the miscellaneous purchases, like clothing, home goods, toiletries, and more? Here are some general ways you can save on these purchases.
34. Automatically apply coupon codes
If you shop online, make sure you’re using coupon codes to get the best deal possible. After all, every dollar counts.
The most efficient way to utilize coupons is to use a service like Cently, a free browser extension that automatically searches for and applies the latest coupon codes to your purchases. Cently supports thousands of stores, so wherever you shop online, you can save with Cently!
35. Comparison shop
It pays to shop around. Be sure to compare prices at various different retailers (online and offline) to score the best deals.
36. Buy used
For many items, buying used can save you a ton of money. Check out local marketplace apps like OfferUp or Facebook Marketplace or online platforms like eBay and Amazon.
37. Wait for sales
If you have purchases in mind that can wait, it’s worthwhile to wait for the item to go on sale. Retailers frequently run sales throughout the year, such as:
38. Price match
Did you know that some retailers will match the price of other retailers? For instance, many stores will match online prices from their competitors.
This means you can buy in person but get online pricing — and you won’t have to wait for shipping. Each store has a different policy on this, so research your options ahead of time.
Bonus 1: Use government assistance programs
It’s also wise to make sure that you are utilizing any assistance programs that are available to you. There are dozens of government programs, such as:
There are many more programs, as well. The best way to see what you may qualify for is to use the Benefit Finder. This online tool from the U.S. Government asks you some questions to determine eligibility for a wide variety of government assistance programs.
Bonus 2: Reduce fees and subscription costs
Another way to save money on a tight budget is to reduce any fees you pay and/or subscription costs that you have.
For instance, you might switch your bank account to a credit union, which may have lower fees for your banking needs. You might cancel a credit card that has an annual fee or convert it to a card with no fee. Or you might cancel subscriptions that you no longer need.
The point here is to eliminate any unnecessary expenses from your budget so that you can set aside money for the things that matter to you.
Bonus 3: Optimize your finances
There are other steps you can take to improve your overall financial wellbeing and save money:
- Starting a monthly budget can help you get your spending on track
- Refinancing loans (student loans, credit cards, etc.) can help you pay a lower interest rate
- Improving your credit score can help you qualify for lower-interest loans
- Picking up a side hustle can add to your monthly income
- Setting up a financial plan can help you work towards your financial goals and get clear on how you will get there
- Using a debit card instead of a credit card can help prevent you from going into debt
- Automating your personal finance tasks (like paying monthly bills) can help relieve financial stress
There are hundreds of different ways to save money and stretch your budget further, but only some are actually worth the time and effort.
The tips above will help you save the most money without forcing you to make drastic changes to your lifestyle.
Finally, whenever you’re buying something, be sure to check CouponFollow first to find the latest coupon codes.