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12 Ways to Save Money on a Tight Budget

Keys to Saving More and Spending Less

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If you could save a sizable chunk of money this year, what would you use it for? A vacation? An emergency fund? Paying off your credit cards? Your child's education? Whatever you want or need to save this year, know that you can do it. Start with these 12 ways to save, and make a commitment to yourself to put the money you save into a separate savings account, so that it doesn't get eaten up by your regular expenses.

1. Balance Your Checkbook

A woman balancing her checkbook.
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This is a simple, but often overlooked, way to keep track of what you're spending. It does take some time and patience - and a calculator - but getting into the habit of balancing your checkbook each and every month will help you be more responsible with your day-to-day spending.

2. Create a Monthly Spending Budget

A monthly budget and checkbook.
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Do you know where your money is going each month? The only way to really manage your spending habits is to commit to a monthly spending budget - a guideline for what you will allow yourself to spend on everything from housing, to transportation, food, child care, and more. For help getting started, read:

3. Pay Your Bills On Time

A bill is paid on time.
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Create a system to help you pay your bills on time and avoid late fees - which quickly add up. For example:

  • Set up automatic payments through your bank for your mortgage payments or monthly rent.
  • Set up automatic payments with each credit card. Aim for paying the minimum balance plus $50-$100, if possible.
  • As bills come in, open them and write on the outside of the envelope how much is due and when. Then, sit down once a week and pay your bills online.
  • When paying bills online, make sure that you schedule them 5-7 days before they're due, in order to leave enough time for the bank to process and send the payment.
  • Shop around at different banks to find an online payment program that you're comfortable with. If necessary, schedule a one-on-one in-person or over-the-phone training session with your bank, to ensure that you fully understand the features of their online payment options.

4. Become Famliar With the Fees You're Being Charged

Late fees accumulate quickly when you're bills are past due.
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Take a look at your bank, credit card, and cell phone statements. Are there any fees that surprise you? If so, call the provider and ask for more information. Knowing what you're being charged and why will help you avoid certain fees and save money.

Examples of Fees You May Be Charged:

  • Annual credit card fees
  • Interest fees
  • Late fees
  • Branch fees
  • Debit card fees
  • ATM fees

If necessary, shop around to find establishments that either don't charge these fees at all, or charge less than you're currently paying. For credit card accounts, specifically, call each company and ask them to lower your interest rate. They might surprise you!

5. Compare Prices Online

A woman shops online with a credit card.
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Get into the habit of shopping around for the best price online before you make any purchases. Use sites like PriceGrabber.com to quickly learn which retailers have the items you want at the best price. Then, for additional savings, enter the name of the retailer and the phrase "coupon code" into your favorite search engine. Browse the results for coupon codes that will help you save an additional 10-40%.

6. Buy Used

Jeans displayed at a thrift store.
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Find a consignment shop in your area that suits your style, and get into the habit of buying the bulk of your clothing there, while also selling items that you no longer wear. This will help stretch your clothing budget while enabling you to purchase items you feel good about. Thrift stores are another great resource for used clothing and household goods. And for big-ticket items like furniture, try Freecycle.org or Craigslist.org.

7. Go Without

A woman turns off the TV.
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We tell our kids all the time that they can't have everything, but do we live by the same principle? Force yourself to go without a luxury you can spare – like cable TV – for a fixed period of time to save money.

8. Have Money Automatically Tranferred to Your Savings Account

A computer screen shows an online banking account.
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This is the key to saving money. For example, have $200 transferred automatically from your checking account into your savings account each month, so that you can save money without even thinking about it. If you need to set up a smaller amount, that's okay. Even $25 per month adds up to $300 over twelve months!

I recommend that you keep your savings in a money market account with check writing privileges. This way, the money will be readily available in the event of an emergency, but not so accessible that you'll dip in to it unnecessarily.

9. Enroll in Savings Clubs

A customer uses a loyalty card in the grocery store check-out lane.
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Most grocery stores offer complimentary savings clubs to encourage store loyalty. Enrolling in these plans, and planning your grocery shopping around the items that are on sale, can save you $20, $30, or even $40 per shopping trip. Consider joining other savings clubs, too, at stores you frequent.

10. Plan Your Meals

A woman writes a grocery list.
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Planning ahead what you're going to eat for each meal will help you save money on groceries. For example, plan on having chicken salad for lunch the day after you make a whole chicken roaster. This will help you get an extra meal out of the purchase, while also helping you save time and eat healthier.

I recommend using an online calendar to create two week's worth of lunch and dinner menus, and then setting the calendar to repeat each entry every two weeks.

11. Double and Freeze

A lasagna casserole is ready for the freezer.
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You can save a lot of money by doubling your favorite recipes and freezing the extra batch. This cook-once-eat-twice approach will allow you to buy larger quantities of the meats that are on sale, and it will also save you time on the nights you simply pull a casserole out of the freezer. Look for good-quality freezable dishes at garage sales and thrift stores.

12. Pack Lunches and Snacks

A girls eats a sandwich packed by her mom.
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How much of our convenience food purchases could be avoided if we planned ahead? Get into the habit of making your kids' lunches (or, better yet, teaching them to pack their lunches themselves), and bringing your own lunch to work, as well. Stash a few hearty snacks and juice boxes or waters in your glove compartment, too, for those occasions when you're hungry on the go.

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