Living on a budget—6 money saving steps to a lower cost lifestyle

Discover 6 ways to save money while living on a budget

For many of us, the pandemic has altered our lives—from employment and childcare—and impacted our finances. Savings may be running low and salaries may not be covering the basics, but with a good budget and smart savings habits it’s possible to make our money work harder. Below are our top 6 tips for living on a budget.

1. Food for thought—saving money at the store

Your weekly groceries are a great place to look for savings when you’re on a tight budget. We’re often on autopilot while grocery shopping, selecting the same items week-to-week. However, taking some time to re-evaluate your cart can reveal savings. Here are some our tips for cutting back in the food aisle:

  • Make a list of the food and products you regularly purchase—by going through your shopping list, previous receipts, or online shopping orders —and mark what’s essential and what isn’t. Consider cutting back on any non-essentials. Next, review your list for treats and see if there are more affordable options available, or whether you could reduce those items to every other shop to cut costs further. 

  • Take stock of any items you’ve been regularly throwing away (despite your best intentions)–like meat, poultry, fruit and vegetables–and consider purchasing less of those items. By cutting down your list, you’ll avoid unnecessary food waste and help your wallet. 

  • Before you go shopping, create a weekly meal plan—this will help give you a clear list of which ingredients you actually need. And always avoid grocery shopping on an empty stomach, since it can lead to extra temptation!

  • Once you’re at the store, check out cheaper brand alternatives for a better value. Also, consider purchasing bulk in items you regularly use, such as toilet paper, for cost savings. It’s also a good idea to stock up on non-perishables like tinned items and freezer foods, so nothing goes to waste—frozen fruit and veggies are still great for your health. 

  • Check to see if your favorite shop has a loyalty program. And they might even have an app where you can earn points or vouchers everytime you shop. For more ways to save on a tight budget and reduce your food spending, check out our article on how to save money on groceries.

2. Utilize smart savings on your utility bills

Keeping an eye on your utility bill while practicing energy saving habits can help you keep costs down. Try the following tips:

  • Review and compare contracts: Review your current contracts with other options on comparison websites to ensure you’re getting the best deal. If not, contact your service providers to see if you can negotiate a better deal. Also, note when your contract expires and set reminders to shop around at that time since most providers offer the best rates to new customers. 

  • Make cost-saving changes at home: Here’s a simple step–reduce your water bill by taking shorter showers. Heating costs can also be a place to save if you can bundle up inside instead of turning up the thermostat. And it’s also worth checking for drafts or leaks in the house that could be letting heat escape and fixing those with insulation. A final easy way to save money and energy, is to turn off or unplug any electronics not in use. Get more tips on reducing the energy costs by checking out our guides on saving money on your gas bill and saving money on your electric

3. Slice your subscription costs

Cancelling subscriptions can be a quick way to cut back on costs—they may seem like small monthly fees, but add up quickly. Take the following steps to save:

  • Review all of your subscriptions and if there is any crossover between then start cutting down. Cancel any unused subscriptions you have, like gym memberships or tv/movie streaming services you don’t regularly watch. Cancelling rolling contracts, like most streaming services, will provide instant savings, whereas gym memberships often have a longer notice period.

  • Review your travel and lifestyle insurance policies and use comparison websites to check if you’re paying more than average. Insurance companies sometimes offer welcome rewards to new customers, so you could benefit from switching it up from time to time. And if you travel regularly, annual policies can be more cost effective than one-off trip cover. 

  • Check regular subscriptions often so they don’t rollover automatically with fee increases. And don’t forget to compare offers from other companies when renewals are coming up. 

4. Master the art of entertaining (and saving)

Living on a budget doesn’t mean you can’t have fun, it just means you might need to get creative. Try these options:

  • Host fun nights at home—if you like going out to bars and restaurants, there’s no reason you can’t bring the party to your place instead. Entertaining at home is usually far cheaper than going out and you can get creative with your menu too. Try creating new cocktails for friends at a fraction of the price or honing your cooking skills with a fancy meal.

  • Check out free activities—try your local community websites or forums and watch out for posters around town to find free events in the area. You can often find no-cost exercise classes, galleries, and street markets to participate in.

  • Search for offer sites—there are so many voucher sites these days, it’s easy to find a great deal near you. Whether it’s an amusement park, a museum, or a painting class, you’re sure to score a big discount and have fun!

5. Drive down costs—saving on transportation 

No matter how you commute, there are savings to be found. Check out these tips:

  • If you’ve built up a good driving record over the years, call your car insurance provider and discuss deals they may offer you.

  • Review any high premiums that are charged for your car due to emissions. Consider switching to a more efficient model that saves on fuel costs, while also helping the planet.

  • Cycle or walk where you can–not only will you save, but you’ll get in shape too. You could also look into car sharing or whether you can save on your public transportation costs by purchasing an annual pass. 

6. Get handy around the house—give DIY a try

We’re all occasionally hit with unexpected costs at home, like a broken radiator, but it might be time to see if you can fix it up. Read on to see how:

  • Find an instructional video online that’s easy to follow and at your skill level.

  • Ask friends and family if you can borrow any specialty equipment you need to make a fix. And double check your measurements to make sure you’ve ordered the proper material to get the job done.

  • Be patient and take it step-by-step, as it will usually take more time to DIY. And when you‘re done, you’ll know you saved AND learned new skills for the future!


Avoid bank charges—your money at N26

 When looking at how to budget money, hidden bank charges often go unnoticed, and these costs can significantly eat into an already tight budget. If you’re paying hidden checking and savings account fees, now is the time to take back control and change banks. At N26, we don’t believe in hidden fees, we believe in transparency. On top of that, we also offer a host of budgeting features to help you manage your money. 

Open an N26 Standard account today, free of charge, and discover a better way to bank in just a matter of minutes.

What should I consider when living on a budget?

Some things to think about when living on a budget are your debts and any large expenses, and if these can be changed. Consider what your priorities are in both the long and short term so you can make your financial plan sustainable. This will help you to define what’s important for your day-to-day lifestyle, while you add to your savings.

Does making a budget cost anything?

Creating a budget does not have to cost anything when you use the right resources. There are many free or low-cost apps you can download that provide features and tools specifically designed for creating budgets. See our top budgeting apps here. You could also choose a bank like N26, that provides you with specialized budgeting features–such as automated transfers and daily spending limits–that support your saving goals.

What if my tight budget is not working?

No matter how frugally we live, sometimes your budget can come up short. Remember budgets are a plan that can be adjusted, so rework them where you can. When your income total is coming under what you think is essential to live on, consider where you might be able to make more money, such as part-time gigs and weekend work. And depending on your salary, you may be entitled to support from your local government programs.

How do you survive on a low budget?

Unexpected expenses is one of the biggest reasons living on a tight budget can be difficult. We often have no wiggle room when it comes to sudden house repairs or urgent medical bills. To avoid breaking your budget, try to set aside whatever you can each month for an emergency fund that you can dip into in case of surprise costs. Read our blog post on saving tips during a pandemic.

What is the 50/30/20 rule?

Using the ratio 50/30/20 is always a good rule to start with when determining your budget. On a tight budget, try to set aside 50% for the essentials, 30% for the additional treats and comforts, and 20% toward savings or an emergency fund. If this split is still too tight to live on, try to reduce the treats and comforts until you’re in a better financial position.

By N26

The Mobile Bank

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