How To Budget And Save Money Like A Frugal Ninja - Tuppennys Fireplace (2024)

When you are broke and in debt the hardest thing is to learn how to budget and save money.

You probably don’t have an effective budget that works for you.

In fact I could almost guarantee this.

After all if you knew how to live on a budget you wouldn’t be feeling broke.

Have you got a budget that works?

This is not a trick question as genuinely many people don’t know how to budget their money (I didn’t) and you end up in a vicious cycle of over spending and taking on more debt.

No matter where you are right now, I promise you will be able to learn how to budget your money and create a budget plan that works for you.

It will take a bit of hard work and effort but it will be worth it.

You might like to read:

How To Pay Off Debt Fast And Still Have A Life

23 Reasons You Are Stuck Being Broke And How To Fix It

How To Budget And Save Money Like A Frugal Ninja - Tuppennys Fireplace (1)

How To Budget And Save Money Like A Frugal Ninja

I started adult life as ateenage single mumand didn’t know how to budget and save money or even how to spend wisely.

I lurched from day to day, running out of money, because I didn’t know better.

I took out my first credit card at 19 to help make ends meet (not a good move).

Being in debt at such a young age was difficult and stressful.

My 18 month old daughter had the bare minimum of clothing (only 3 sets for day wear) because I did not know how to live on a budget.

What I needed then, and what you need now is to learn how to budget and save money.

Not a tight budget that says you can’t spend any money but a money budget that helps you know what you can spend.

Whether you earn a little or a lot, have too many bills or too many debts.

Living on a budget will help you manage all your money and get you back on track.

Action Step 1 – Look At Your Finances

When I say look at your finances I mean really look.

You need to understand how much money you have coming in each month and how much money you owe.

The money you have coming in will include your salary, any extra money and benefits you receive (e.g UK child benefit).

You also need to know what all your bills are.

I am currently helping a friend learn how to live on a budget and the first thing I noticed was she didn’t even know what bills she had and how they were paid.

As a result she often ran out of money before she got paid which is such a stressful place to be.

Come and follow me on Pinterest for more money saving hints and frugal tips!

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Action Step 2 – What Expenses Do You Have?

List out all your expenses. And I mean ALL your expenses.

Check back over the past 2/3 months of bank statements and credit card statements to see what bills and expenses you have.

Split these expenses into NEEDS and WANTS.Your needs will include:

  • rent/mortgage
  • utility bills
  • minimum debt repayments
  • childcare costs (if you need this to work)
  • food
  • travel to work expenses

Your wants will include:

  • clothes
  • eating out
  • entertainment
  • memberships & subscriptions (e.g. gym and magazines)
  • TV packages
  • Mobile/cell phone plan

Action Step 3 – Expenses Versus Income

Total up all your needs and deduct these from your total monthly income.

If you find you have already run out of money at this point then unfortunately you don’t have any money left for your wants.

You need to start thinking about the amount you spend on all your needs and wants.

Something has to give when you have a tight budget.

You might like to read:How To Survive, Thrive And Save Money On A Tight Budget

Action Step 4 – How To Save More Money – Review Your Needs

Food

We all need food to survive but grocery budgets can vary enormously.

You might choose tocut your grocery budget to the bone to free up extra money if you are living on a budget.

Or maybe you want to find the right balance between living on a tight budget and saving a reasonable amount.

This is your choice but having more money left after your needs are paid for means you have some money for your wants.

One of the best ways to save on your grocery bill is to shop in a different store.

Aldi and Lidl here in the UK are always cheaper for me and I saved over £80 a month switching to them.

Related reading:

When Money Is Tight, How to Enjoy A $35/£30 Grocery Budget For 2

Your Simple Guide To Meal Planning On A Budget

55 Best Cheap Foods To Buy When You’re Broke

10 Frugal Meals For When You Feel So Broke

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Housing Costs (rent)

Not something you can change overnight but are you renting more house than you need?

Do you have a spare bedroom you are paying for? Are you in one of the nicest areas of your town?

Moving costs money I know but when money is tight, if you can reduce your rent by say $100 a month that’s a good chunk of money you have to put toward your debts or pay another bill.

Housing Costs (mortgage)

Again not something you can always do straight away but have you refinanced recently?

Could you get a lower interest rate and pay less each month?

DD1 has just refinanced her mortgage and is now paying £90 a month less and she also fixed her rate for 5 years so she knows what her bill will be every month.

You might also like:

How To Pay Off Your Mortgage Early (So You Can Be Free)

Mortgage Free Living: How We Achieved It

Utility Bills

Have you looked into switching utility companies recently? Here in the UK there are many energy companies offering deals on electricity and gas.

If you are on your providers standard rate you are probably overpaying. Keeping your energy bills low means more money in your pocket.

Look After My Billsis a fantastic new service in the UK that will automatically switch you to a new provider as your existing one becomes more expensive.

Not only isLAMBfree to join, they keep checking the market and switch you again as your existing deal ends, so you know you will always be on the best deal.

How fab is that?!

If you are not in the UK, why not contact your utility company, explain you are living on a tight budget and see if you can negotiate a price cut? If you don’t ask you don’t get.

Action Step 5 – You Need To Learn How To Live On a Budget So Reconsider Your Wants

If you are determined to tackle your debts and stick to your new money budget then you need to look at each of your wants and consider whether you really want to continue paying for them.

If you have run out of money after paying for your needs you are going to have to make some hard decisions.

Related posts:

48 Oh So Simple Ideas To Stop Living Paycheck To Paycheck

Live Cheaply – How You Can Win At Living On Next To Nothing

Eating Out

You know what to do when you have no money. You need to cut this drastically or even completely and save every penny.

Food cooked at home costs much less money and often tastes better.

You might also like:A Round Up of Super Thrifty Lunch Box Ideas

Clothes

You already have clothes don’t you? You don’t need more clothes although you might want the latest must have item.

Perhaps now is the time to consider a new clothes shopping ban just until you get used to living on a budget and your debts are on their way to being paid off.

If you really need a new clothing item then why not use your local charity shop or thrift store to keep the cost down?

Related post:Why you should create your own work uniform

Mobile/Cell Phone

You can switch to sim only or pre-paid to eliminate contract costs.

I cut DD2’s mobile contract from £36 to £20 and it could be as little as £9 if she wasn’t constantly on her phone!

TV Packages

You can watch TV for free but you won’t necessarily get to watch the latest movies or sports.

When you are looking at how to save more money you will want to consider downgrading or eliminating your TV package cost.

Memberships & Subscriptions

Some people swear by their gym membership but if you’re on a tight budget then this might need to go.

You don’t NEED a gym to get fit although it can make it much easier to do so.

When money is tight subscriptions for magazines and monthly beauty boxes fall into the luxury want category and you will likely need to cut these out completely.

At least until you have learned how to budget and save money.

You might not need, want or be able to reduce all of these but I am sure you’ll find the best way to save for you and reduce your overall money budget.

You may also like:How To Start Saving Money: 7 Tricks You Can Easily Do

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Action step 6 – It’s Decision Time, How To Save More Money

Having completed steps 1 through 5 what is your new money budget telling you? Can you see now how to budget and save money?

Do you have spare cash or are you currently budgeting for more money than you earn?

This is where you are going to have to make some hard decisions.

You need to review your wants and needs again until your new budget covers all your spending and leaves a little left over (for debt repayment).

Maybe you originally budgeted £100 for eating out each month.

Decision time means you might need to cut this down again or out completely.

Think about how to cut monthly expenses, one by one until your new money budget balances and leaves some left over every month.

Related posts:

How To Live On Less Money In Difficult Times

Action Step 7 – Money Is Tight But It’s Time To Face Your Debts

Look at how much you are paying on debt repayments right now.

That is exactly how much MORE money you will have once you have paid off all your debts.

But right now you want to actually pay more toward your debt to get them paid off as fast as possible.

Write down all your debts. How much you owe each company or person, what the interest rate is and what the minimum monthly repayment is.

You can pay off your debt in a variety of ways but I encourage you to use either the Debt Snowball method or the Avalanche method.

You may also like:

How To Pay Off Debt Fast And Still Have A Life

21 Tips To Help You Become Debt Free

How To Choose The Best Method To Become Debt Free

Action Step 8 – Debt Snowball Method

With the debt snowball method you pay off your smallest debts first gradually building up until you have only your largest debt left.

With your new money budget you should have some money left over.

If not work through steps 4 and 5 again until you do have some spare cash.

Use this extra money to reduce your smallest debt until it is paid in full. Once paid off, use all the extra money you have to pay off your 2nd smallest debt.

Continue paying off your debt this way until you have cleared all your debts – phew!

Action Step 9 – Debt Avalanche Method

This method is about paying off your most expensive debt first, e.g. the one with the highest interest rate.

By concentrating your extra payments onto your most expensive debt you should end up paying less interest overall.

If you are disciplined and can stay the course then you will save a bit more money using this method in contrast to the debt snowball method.

But what the snowball method does is give you quick wins – actual debts fully paid off quickly.

The avalanche method concentrates on the highest interest debt and this is often one of your bigger loans so it could be a year or more before you finish paying off this first debt.

Choose the debt pay off method that will work best for you.

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Action Step 10 – What To Do When You Have No Money

If your finances are in really poor shape, perhaps you have lost your job and are struggling to find another, call your loan companies and explain the situation.

You are not the first person to struggle with repaying your debts whilst learning how to budget and save money and many loan companies understand that you can hit hard times.

Options may include freezing or lowering the interest you pay or lower monthly payments for a set period.

Related post:What To Do When You Can’t Afford The Snowball Method

It’s All About Successfully Living on a Budget

Learning how to budget and save money when you are broke can be hard.

You have to take a close look at your finances and all your bills when perhaps you have been deliberately ignoring them for months.

Then you have to make some tough decisions on what you can spend your limited income on.

And then you have to knuckle down and work out how you are going to tackle your debts.

This is hard, emotional work but it is necessary. And you will feel so much better and more in control of both your money and your finances once you have taken these steps.

Why not take the first step today to a new, financially savvy you?

Start taking back control of your money by grabbing your copy of the Money Saving Starter Guide today.

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Grab your Money Saving Starter Guide:

– 30 quick and easy ways to save money today (tomorrow & next week)

– cash envelope template

– money vision

– goal planning

– spending log

– no spend planner

– monthly budget overview

– bills calendar

All the printables you need to take back control of your money and become the super savvy saver I know you are.

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Come and follow me on Pinterest for more money saving hints and frugal tips!

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Last Updated on 21st February 2021 by Emma

How To Budget And Save Money Like A Frugal Ninja - Tuppennys Fireplace (2024)

FAQs

How to live on very little money? ›

These seven tips may be able to help.
  1. Understand your current financial habits. Not sure how to start spending less? ...
  2. Create an effective budget and stick to it. ...
  3. Look for ways to reduce spending. ...
  4. Set financial goals for future success. ...
  5. Save for emergencies or major purchases. ...
  6. Pay down debt. ...
  7. Stay aware of lifestyle creep.

How to live simply and cheaply? ›

12 Tips for Frugal Living
  1. Choose quality over quantity. ...
  2. Prioritize value over price. ...
  3. Use credit wisely. ...
  4. Declutter regularly. ...
  5. Use a budget to guide your spending. ...
  6. Know the difference between wants and needs. ...
  7. Be a savvy consumer. ...
  8. Prioritize your values.
Oct 17, 2023

How to be frugal but not cheap? ›

15 Tips for Living Frugally Without Looking Cheap
  1. Eliminate monthly subscriptions.
  2. Shop for new insurance.
  3. Reduce prescription costs.
  4. Buy used items.
  5. Rent, don't own.
  6. Purchase at the right time.
  7. Buy high-quality products.
  8. Enlist your friends.

How to save money with low income? ›

SHARE:
  1. Focus on small changes in various budget categories.
  2. Automate your savings into a high-yield savings account.
  3. Earn interest on your checking account.
  4. Use those three-payday months to save more.
  5. Keep a budget.
  6. Shop around for insurance rates.
  7. Refinance your mortgage.
  8. Find a way to save on rent.
Oct 19, 2023

Is $4000 a month enough to live on? ›

The answer is yes, almost 1 in 3 retirees today are spending between $2,000 and $3,999 per month, implying that $4,000 is a good monthly income for a retiree.

Can someone live off $1,000 a month? ›

Living on $1,000 per month is a challenge. From the high costs of housing, transportation and food, plus trying to keep your bills to a minimum, it would be difficult for anyone living alone to make this work. But with some creativity, roommates and strategy, you might be able to pull it off.

How to be extremely cheap? ›

What are some tips for being frugal?
  1. Create a budget and stick to it. Being frugal begins with this tip. ...
  2. Shop around for the best deals. Buy what you need from the first store you see, but don't just go to the first one you see. ...
  3. Buy used instead of new. ...
  4. Make your own stuff. ...
  5. Repurpose and recycle. ...
  6. Be patient.
Aug 22, 2023

How to live frugally on one income? ›

Living on a one-income budget
  1. Assess your financial situation. Start by understanding your current financial status. ...
  2. List fixed expenses. ...
  3. Track changing expenses. ...
  4. Differentiate needs vs. ...
  5. Set financial goals. ...
  6. Create an emergency savings fund. ...
  7. Allocate for savings. ...
  8. Start a debt repayment plan.

How can I simplify my life fast? ›

Life can be overwhelming at times, but by adopting these easy-to-understand strategies, you can create a more balanced and fulfilling existence.
  1. Declutter Your Space: ...
  2. Prioritise Your Tasks: ...
  3. Learn to Say No: ...
  4. Practice Mindfulness: ...
  5. Set Realistic Goals: ...
  6. Simplify Your Digital Life: ...
  7. Practice Gratitude:
Aug 4, 2023

Why are some people so cheap? ›

Being cheap can be a personality trait, but it need not be a permanent one. It could be a habit developed because you grew up poor and wished for more money or possessions or it can stem from other insecurities. It's possible to change this behavior if you become more aware of it and are motivated to be less stingy.

What kind of behaviour makes you frugal? ›

They budget carefully, allocate a predetermined portion of their income to savings and investments, and do not exceed it. They save up for big purchases, prefer to buy with cash (as opposed to credit), and keep an emergency fund for times of need.

What is the 50 30 20 rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

What is the modern way of saving money? ›

Make a budget and make saving a necessary expense. Try out different budgeting methods until you find one you can stick to. Cut down on spending. Use budgeting apps to find out where you're money is going and look for places where you can cut back.

How can I save $5000 on a low income? ›

Ways To Save $5,000 in a Year
  1. “Chunk” Your Savings. The first step to saving $5,000 in a year is to break down your savings goal into manageable portions. ...
  2. Automate Your Savings. ...
  3. Save in a High-Yield Saving Account. ...
  4. Track Your Cash Flow. ...
  5. Boost Your Earnings. ...
  6. Declutter for Cash. ...
  7. Evaluate Your Subscriptions. ...
  8. Challenge Yourself.
Feb 5, 2024

How to live on under $1,000 a month? ›

How to Live on $1,000 a Month
  1. Assess Your Situation. You can't really learn how to manage your money better if you don't know where you're starting from. ...
  2. Separate Needs From Wants. ...
  3. Lower Your Housing Costs. ...
  4. Get Rid of Your Car. ...
  5. Eat at Home. ...
  6. Negotiate Your Bills. ...
  7. Learn to Barter and Trade. ...
  8. Get Rid of Debt.

Can you live off of $500 a month? ›

Can you live off $500 a month? Living off $500 a month is challenging and depends heavily on your location and personal circ*mstances. In areas with a low cost of living, it might be more feasible.

Is 1800 a month enough to live on? ›

Creating $1800 a month is just enough to have something left at the end of the month. If you live by yourself and have to pay for rent and food, you are facing major pressure with this sort of income. Most people don´t consider what they make NET, but what they make gross.

Where can you live for the least amount of money? ›

1. Colombia. One of the main benefits of living in Colombia is its low cost of living. The country offers many of the amenities and infrastructure you'd expect in a much more expensive country.

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