How to Save Money in A Tight Economy

by

In today’s economy, with prices on everything from groceries to gas steadily rising every week, money is tight. Monthly utility bills are rising faster than the rate of inflation. For instance, the average rent in the US has risen to just over $1500 a month and over half of Americans are finding it difficult to continue to pay that amount.

It’s no wonder that the ability to drop expenses and save money may seem daunting…or even downright impossible.

Here’s a prime example. We just received an annual bill which had risen 35%. This meant we had to completely rebalance our budget for the remainder of the year and, once again, adjust our budget for inflation. Thankfully, after nearly thirty years of living debt-free on a low income, we have developed a specific system which we follow – especially when money gets tight.

Our process began three decades ago with six simple steps, which still work today. When you follow them, they will help you stretch your dollars further and save money – even in this economy.

(Please note: This is a paid post written on behalf of Mint Mobile. All opinions expressed are our own. Links in our posts are affiliate links. When you click on one of our links and make a purchase, we receive a small commission at no additional cost to you. To read our complete affiliate policy, click here.)

Step #1: Live on a Written Budget and Track Your Spending

Having just a general idea of your expenses won’t cut it when prices are rising. You need a detailed spending plan, a budget, and a reliable way to track your spending.

Consider using a spreadsheet or an online program like Dave Ramsey’s Every Dollar. If you’d rather not use any technology, it’s super easy to simply list your budget categories alongside your income and expenses in a simple 3-ring notebook. We used this pen-and-paper method for over twenty years, and it worked perfectly. We now use spreadsheets which I designed to reflect our frugal lifestyle.

Without a written record, you can’t see where your money is going or anticipate how price increases will affect your family. This information is essential for making intentional and reasonable adjustments to your budget.

If you have debt, now is the time to pay it off.

Make a list of your debts and create a repayment plan. You can use the snowball method (paying off the smallest debts first) or the avalanche method (paying off debts with the highest interest rates first). Both methods work—the key is to stick with your plan.

Reducing debt frees up money each month for essential expenses, especially important during economic downturns. Imagine what you could do with an extra $100 or more each month!

Need some inspiration?

Download our free Guide to Saving Money

Step #2: Prioritize Your Spending

One of the most important, key benefits of frugal living is using it to prioritize your spending. Every area of our budget is designed to help us save money, so that we can pay cash for things that truly matter and reach our financial goals.

A prioritized spending list puts all the most important items at the top of the list, where you are sure to see them. The least important, and most negotiable, items appear toward the bottom of the list. That means that if money is tight, you always know exactly where to begin cutting first.

We use our prioritized budget to set clear, achievable goals and then strategically cut back on non-essentials while growing our savings to meet those goals. 

For example, while raising our sons, we cooked at home, took frequent picnics, and very rarely ate out at restaurants. However, we are also the same couple who paid cash for big items, like automobiles and our home.

A “tight economy spending plan” is all about making thoughtful choices which allow you to consistently spend less and save more, while not feeling deprived or anxious.

Pro Tip: Create a Bare Bones Budget

One of the easiest ways to visually see areas of spending which could be cut back is to create a Bare Bones Budget. This spending plan represents cuts which you are willing to make. If the unexpected happens, how will you adjust your budget? What is the absolute minimum you can spend?

Each year, we create a budget, which lists how much we plan to spend in each budget category each month. Then, right next to our expected budget, we type our Bare Bones Budget. This is really helpful in allowing us to instantly see how we could reduce or eliminate budget categories in the event of a job loss, injury, or unexpected rising prices.

Read these Related Posts:

Step #3: Shop Around or Ask for a Better Deal

We often stick with the same service providers out of habit, but you can negotiate more bills than you think.

Consider these options:

  1. Negotiate with Current Providers: Call and ask about switching to a cheaper plan or getting a discount.
  2. Compare Alternatives: Research other companies, compare their plans, and see if you can get a better deal.
  3. Track Renewal Dates: List your bills, current costs, and renewal dates. Set reminders to review and compare rates six weeks before renewal.

Common bills to renegotiate include home and auto insurance, cable, streaming services, and cell phone bills.

Pro Tip: Start with your cell phone bill.

For years, we paid a premium price for our monthly cell phone contract. We were frustrated, but felt stuck and didn’t know what else to do. A friend raved about her experience with Mint Mobile. So, we checked them out (and thanked her later).

Mint is our partner for this post.

Switching to Mint was super easy. We sat in our living room, drinking coffee, and it took just fifteen minutes to get all set up on our new plan with Mint. We used an e-sim card, while our kids had Mint send them a physical SIM card. We find it super easy to manage everyone’s account on one handy hub with Mint’s Modern Family Plan.

Mint has three things we absolutely love:

  1. Unlimited talk and text.
  2. A 5G network (the largest in the nation).
  3. An amazingly frugal price! We use Mint’s $15 a month plan and it’s been quite sufficient for our needs.

Check out Mint Mobile: premium wireless for as low as $15/month. (You’ll thank us, later).

Step #4: Find Areas of Flexibility in Your Budget

As prices rise, your budget needs to be more flexible. We used to set our budget in January and leave it unchanged for the whole year. However, since 2022, we’ve started evaluating our budget quarterly.

Need to find more areas where you can cut back?

Pro Tip: Try our “10% Challenge”.

This activity takes just twenty minutes, but has been super helpful for us when it comes to cutting expenses. It works best if you have a partner with you to help you brainstorm cost-cutting ideas. Here’s how to do the “10% Challenge”.

  1. List all your budget categories on a piece of paper.
  2. Set a timer for twenty minutes.
  3. With your partner helping, look for ways to reduce each budget category by 10%.

You may not find solutions right away. You’re looking for ideas, which you will more fully investigate or try out at a later time. The challenge will give you inspiration.

More Related Posts to Read

Here’s a starter guide to finding ways to cut costs.

These suggestions will get you moving in the right direction and you can accomplish them in twenty minutes or less.

Google each budget category.

Use the following prompt: “How can I save on…(fill in the blank). Try variations to see if you get different articles or ideas. As you scroll down the first page of Google results, you will find a section with other questions that people are asking about the same topic. You may find the perfect article in these suggested topics.

Call, text, or email a local agency who specializes in that budget area.

For instance, in Illinois, the Citizens Utility Board is a watchdog group dedicated to helping people pay less for their utilities. They will review your most recent utility bill for free and give you suggestions on how you can pay less. They also have a website with informative articles.

If you are over the age of 60, check with your local agency on aging. They offer help, support, and advice for senior citizens. There are often programs and grants reserved for the older population.

Look up your local Cooperative Extension Service

According to the University of Illinois website, their extension service offers, “programs and information in nutrition, wellness, agriculture, sustainability, natural resources, gardening, parenting, youth leadership, and community and economic development.”

In practical, layman’s terms, I’ve personally taken several classes through our extension service about baking, cooking, and preserving food. The classes are very low cost, hands-on, and are taught by nutrition and preservation experts.

The classes and information offered by such service-based organizations can be very helpful in finding new ways to cut your budget.

By using The 10% Challenge regularly, you can reveal surprising opportunities to save and reallocate funds where needed most.

Step #5: Track the Small Amounts You Are Spending

Small, untracked expenses can add up quickly. Think of it like a slow leak in a tire—over time, it can cause significant problems. Keep a close eye on these little extras to prevent them from eating into your budget.

Consider the fact that if you spend an additional $2.40 each day, that adds up to nearly $900 over the course of a year. If you have several expenses like this that you aren’t tracking, you could find at the end of the year that you are short thousands of dollars and have absolutely no idea where the money went.

Step #6: Establish Money-Saving Routines

Saving money is a habit, just like spending. We often spend because we’re tired, frustrated, hungry, anxious, bored, or even happy. Changing your routine can help you save.

For example, if you often resort to takeout because you’re too tired to cook, establish these routines:

  1. Menu Planning: Plan your meals weekly.
  2. Inventory Check: Make a list of perishable items and plan to use them.
  3. Bulk Cooking: Prepare meals in large batches.
  4. Freezer Meals: Make and freeze meals for busy day

Small frugal habits, when practiced regularly and repeatedly, can add up to big savings over time.

You CAN Save Money in a Rapidly Changing Economy

The key lies in rebalancing your budget to reflect the new financial landscape. Start by reviewing your expenses and identifying areas where you can make adjustments. Finding ways to cut back and pay less requires creativity and flexibility, but it ensures that you continue to save despite rising costs. Finally, prioritize all of your purchases.

Your Turn!

What other money-saving routines do you use? Share your tips in the comments!

4 thoughts on “How to Save Money in A Tight Economy”

  2. Savings are automated,
    Put any change in a jar,
    Make as much at home as possible regarding food and drink,
    Still have treats but not as often!

    Reply

Leave a Comment