Tips for Living on a Tight Budget, Like a Pro

Well, it has been a hard period so far. From when the pandemic started, things became a bit tight, even much tighter for many others. 

Jobs have been lost, salaries slashed, some auxiliary revenue streams decimated and even though the economy has started opening up, things are yet to get back to pre-covid times. 

So, many of us have been sent back to the drawing board to reassess our finances. Trying to find ways to do more with what we have. 

Which brings us to the topic of budgeting - or rather, more specifically, living on a budget. A common misconception is that living on a budget means living a miserable life of miserliness or ‘pinching pennies.

That could not be farther from the truth. You should be able to easily live a fabulous life on a budget, the only difference with what you have been doing before is that it is more planned and intentional. 

It’s a learning process that should be painless and extremely rewarding regardless of your financial situation. It will take a little bit of reassessing your money mindset and some adjustment to allow budgeting into your daily money management routine. 

While we are here, take a look at our guide on the differences between savers and spenders and learn a little more about how either a spender or saver can improve their financial status. 

Now let’s dive into some of the ways many are adopting to these tough times to live on a budget like a pro. Note that succeeding in this can be a very gratifying experience. 

1. Saving Before Spending

While living on a tight budget, savings should not be done away with. In fact, you must make putting some money into savings as the first priority.

You could try saving up 10, maybe 20% of your earnings, whether salaried or from business before saving.  Ideally, saving should precede even important expenditures such as shelter food and clothing. 

However much of a setback it may seem, it can be the first step to help you take control of your finances.

Remember, it is very likely that the reason you are hard on cash is the lack of a regular saving habit.

2. Plan Your Meals to Every Coin

There are many who already plan their meals for the week, but when you are on a pretty tight budget, you could take it a notch higher. You can plan your meals to the cent. With this, it might require you to plan out the meals for the week and create a list with estimates of the prices for every ingredient. This will guarantee that your grocery expenditure fits in with the budget and before shopping, try to go there on a full stomach. Even the best meal plan will not survive the bakery aisle on an empty stomach.

3. Have Fun Occasionally

Guess what may cause you to fall off in budgeting? Boredom. If taken literally living on a fixed budget can lead to boredom - this prudent money management plan will start being painful and seem no longer necessary. 

You can avoid this by  having a bit of fun every once in a while. Because of this, you could dedicate 5-10% of your paycheck to take yourself out on some fun. Basically, do something that lightens you up and keeps you on a forward trajectory. 

It may not seem much to have fun on but you may be surprised to find how cheaply some fun activities go at these days. Take on biking, painting, reading, movie nights and many more.

It doesn’t have to get boring

4. Try to Live on Even Less

One of the things I like to do while living on a fixed budget, is challenging myself to live on a bit less. This may sometimes come with the feeling of being controlled by your budget which beats the whole logic because you are trying to take control of your finances. What I like to do is; for example the budget for recreation has been set at Ksh5,000, I challenge myself to use up to Ksh3,000. The remaining Ksh1000 is put in another area like transportation or groceries. Maybe you could try it some time.

5. Set Goals that Inspire You

As had said in tip 2, setting inspiring goals can be a great step to drive you into budgeting.

You could set goals like, “I want to buy/build a house in 5 years etc. and to do that I will have to cut the extra spending on luxury clothes. Instead I will save that money for this project.”

The goals you set should inspire, in you, greatness. They are meant to drive you forward even when budgeting becomes a little tricky. These goals will help you stay on track and not go off to spend extra on things you don’t really need.

6. Carpool

Perhaps you have a car which you use to go to work and there are colleagues using their cars to go to work also. Carpooling while going to work could be a major money saver. You could organize with those colleagues so that you use one car  for movement. All you have to do is just share the fuel costs. If it costs  you Ksh500 to drive to and from work, you can easily bring that down to Ksh100 a day.  

7. Cut Down on Utilities

You might have heard this advice, probably, a million times. Slashing down your utilities will save you money. How about you try turning off the shower when you are lathering up to save on water and electricity, turn off the lights you do not need, open the windows to allow free flow of air in the house instead of running that air conditioner.

8.  Differentiate Necessities from Wants

Being able to distinguish between need and wants comes as an advantage in budgeting. For example, needs are food, shelter and clothing. But just because food is a basic need does not mean that a person has to get fancy foods for every meal.

People on a budget so far live on enough to get by and not extra for some spice. Again, remember to add some fun with a few treats for yourself here and there. If you grew up in a family where many things were out of reach, you must have seen an attempt by your parents/guardians to add some little affordable luxury once in a while. 

9.  Cancel Unnecessary Subscriptions

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Sometimes people have a little too many subscriptions. Paying more for services which they probably could do without. For example a premium subscription for TV yet they are only available to watch the local TV news. Instead, subscribe to lower packages to save some cash. For those who do not use the subscriptions, cancelling them out makes good sense.‍

10. Including Your Partner in Planning

If you have a spouse and are on a seemingly tight budget, you could succeed if you both worked together. Having only one partner handling all the money decisions is probably an unhealthy situation that may result in financial struggles and disagreements.

How do you include your spouse in planning, you may ask?

• Dream together - You would find it energizing, therapeutic and fun to discuss the infinite possibilities you can achieve with the money you have.
• You could set goals and help each other achieve them together. 
• Speak honestly in the event that one party thinks that the other has veered off track with the spending. Remember to converse calmly and proactively together.

Work with your spouse to create a financial future that you can, together, be proud of.

Wrapping up

Living on a budget doesn’t have to be a depressing endeavor - whether your current financial situation forces you in that direction - or whether you are trying to be smarter with your money. 

Of Course it takes some energy to keep in focus but the end result seems to be really gratifying. With consistency, it can surely bring very much closer to achieving your dream goals.

Some eventually buy that house they have been saving for, some go on that vacation they could not have afforded - and you, you could definitely afford a better life in the longer-term without compromising on the minimum standards you have set for yourself today. 

What do you think?