How to save money on a budget

A person holding a jar of coins labeled "savings"

We’ve all been through difficult financial times when cash is scarce and spending needs to be cut down. Economists call it a cash crunch, but we refer to it as operating on a tight budget. 

It's key to learn how to budget and save money. Fortunately, there are ways to save money even during tough times. A few smart moves and some changes in spending habits can make a big difference in your personal finances.

We've outlined some simple strategies and common-sense ways to save money on a tight budget.

Simple strategies to save money

Automated savings: An automated savings plan automatically transfers a portion of your income to various savings accounts, helping you stick to a budget, avoid late fees, and meet payment deadlines.

Consolidate all debts: Consolidating all your debts into a single payment can help you improve your credit scores and meet payment deadlines.

Frugal living: You can practice frugal living by only buying the groceries you really need and cooking and eating at home. You can also switch to exercising at home instead of a gym.

1. Get a budgeting app

Get your own virtual money manager with a budgeting app like YNAB or EveryDollar. These apps provide easy-to-grasp reports on the state of your finances, giving you a better understanding and control over your income and spending. They are easily integrated with your credit card and bank accounts and keep a record of all your transactions. You can use them to categorize your monthly spending under different headings to get better insights into your finances than the standard bank statement allows.

2. Automate your savings

This is one step that has several benefits besides helping with your savings. Automated savings plans let you transfer money to various savings accounts effortlessly. That means you’ll never miss a chance to save. Automated savings will help you stick to your budget, avoid late fees or bounced checks, and take out the stress of approaching payment deadlines. It forces you to be more frugal and avoid unnecessary or impulse spending.

3. Refinance your mortgage

Refinancing your home mortgage can provide some much-needed breathing space when you’re on a tight budget. You can expect immediate benefits such as a lower monthly payment and interest rate. Depending on your loan conditions and how much equity you have in the house, you might even qualify for a  shorter repayment term. However, the benefits of mortgage refinancing are often contingent on the available interest rates compared to your current loan’s interest rate. You can also expect an end-to-end process similar to buying a home in the first place. It can be somewhat time consuming and even a little complicated, so it’s important to consult a mortgage expert when you weigh this option.

4. Consolidate other debt

In addition to your mortgage, you can also look at refinancing or consolidating your other debts including vehicle loans, credit cards, student loans, and others. Consolidation means rolling all your debts into a single payment, which can often mean a smaller monthly payout at lower interest rates. This can also be a great way to improve your credit scores and relieve the stress of meeting multiple payment deadlines. Ideally, consult with a nonprofit credit counselor to know your best options, especially if you have to weigh a variety of interest rates across loans you intend to consolidate.

5. Find ways to cut back

A few pennies saved daily can add up to big bucks at the end of the month. Find small ways of cutting expenses in every category of your budget. Daily habits such as leaving your car at home for trips that are within walking distance, switching to a less expensive cell phone plan, or buying non-perishable items in bulk will gradually accrue into meaningful monthly savings. You can be creative and come up with many other ways to save a few more dollars every month. Maybe it’s time to cancel that streaming service you never watch, for instance.

6. Eat at home

The average American spends  $3,000 every year by eating out. Preparing meals at home can eat up some of your time, but it’s far more cost-effective. Creating a weekly meal plan based on what’s in your fridge will also help you cut down on food waste. Instead of habitually reaching for $5 mochas and lattes, keeping a coffee maker at home can also help you stick to your monthly budget and transform you into a budding barista.

6. Work out at home

The average gym membership costs around $600 a year. While gym memberships can have meaningful advantages for your health and fitness, you can also achieve a good workout at home for a fraction of the cost. Additionally, you have the benefit of privacy and the flexibility to maintain your exercise schedule. Buy the basic equipment once and you’re free from recurring expenses or discover simple bodyweight exercises that avoid the equipment altogether.

7. Check your subscriptions

They may not count for a lot on their own, but every $10-$15 monthly gaming, streaming, or audio subscription can quickly add up to a hundred dollars or more by the end of each month. 

You can save money by canceling unused subscriptions or those with overlapping functions. For the ones you can’t live without, try switching to a plan that offers better value for money. There’s also no penalty to rotate subscriptions when you’re not using a service regularly, then resubscribing when your favorite shows return.

8 Get better insurance rates

Take a closer look at your auto and home insurance policies. It’s also worth speaking to your insurance broker to check if you are entitled to any discounts or even negotiate a better rate. If that’s not possible, feel free to shop around for better coverage. If you have separate providers covering your car and home, you can occasionally save some money by merging both insurances with the same company.

9. Get a reliable savings partner

It can be tough to save when you’re on a budget and trying to make ends meet. That’s why you need a reliable and trustworthy savings partner. 

Raisin is an online savings marketplace offering a wide range of high-yield savings products that you can easily access with one account. Whatever your savings goals, a Raisin account can help you get some of the best returns on your money. 

All savings products on our platform are from federally insured banks and credit unions. So hop on to Raisin and start your smart savings journey today!

Share this article

Call: 844-994-EARN (3276)(Monday to Friday from 9:00 a.m. - 4:00 p.m. ET)

The Raisin name and logo are trademarks of Raisin GmbH. All other trademarks, logos, marks, and brand names are the property of their respective owners — used with permission.

© 2023 Raisin GmbH. All rights reserved.

APY means Annual Percentage Yield. APY is accurate as of {todayDate}. Interest rate may change after initial deposit. Minimum opening deposit is $1.00.

Customer funds are held in various custodial deposit accounts. Each customer authorizes the Custodian Bank to hold the customer’s funds in such accounts, in a custodial capacity, in order to effectuate the customer’s deposits to and withdrawals from the various bank and credit union products that the customer requests through The Custodian Bank does not establish the terms of the bank or credit union products and provides no advice to customers about bank or credit union products offered through Central Bank of Kansas City, Member FDIC, d.b.a. Central Payments is the Service Bank. Lewis and Clark Bank is the Custodian Bank.