How to Start Budgeting: a Beginner’s Guide to Creating a Budget, Cutting Costs, and Saving Money

How to Start Budgeting: a Beginner’s Guide to Creating a Budget, Cutting Costs, and Saving Money

Ugh. Budgeting.

How to Start Budgeting When You're on a Small Income: Plus a Free Beginner's Budgeting Checklist

The last thing you really want to spend time doing or thinking about, right?

We all know we should do it, but it’s usually the last thing we get around to.

It’s like the vitamins of home management.

Here’s the thing though, budgeting can actually be fun!

I feel like you don’t believe me, so let me show you:

Wouldn’t it be fun if you could afford to take that trip you’ve been dreaming about? 

Wouldn’t it be fun if you told your money where to go instead of credit card debt bossing you around? 

And wouldn’t it be fun if at Christmas time, you already had the money saved up for gifts instead of digging yourself into a financial hole?

Budgeting can make all that happen!

Yes, it takes some time, some effort, and some grit to stick with it.

No, it isn’t easy at first.

But when you pay off that first debt, when your savings account starts growing, and when you stop spending money on things that you don’t need, it is all worth it!

Before we get into the HOW of building a budget, let’s take a quick look at WHY you should start a budget, in case you still aren’t convinced.

Or if you’re ready to get started, just skip the next section. 🙂

And if you prefer to watch your content instead of read it, here is the video that goes with this post:

Why You Should Start a Budget

1) You Will Get Your Spending Under Control

If you spend more than you make each month and money seems to magically disappear between your paychecks, starting (and sticking with!) a budget will help! 

When you have your money allocated to where it needs to go, you know exactly how much money you have left over to play with each month.

Basically, it keeps the money from getting confused as to whether it is fun money or serious money

Creating a budget will help you see exactly what you are spending your money on… and see if you need to make any adjustments. 

Having Netflix, Hulu, and Amazon Prime may be nice, but would it be better if you could afford better gifts at Christmas time if you only subscribed to one entertainment hub?

2) You Will Reach Your Goals Faster

Do you have a trip you want to go on? A car you want to purchase or pay off? Are you thinking of purchasing a house and need a down payment?

Start that budget!

By laying out exactly how much money you need to save and dividing it up into nice manageable chunks that you can save each month, you will reach your goals more quickly.

3) You Will Save More Money

Putting your money toward an emergency savings account or retirement can be a challenge when you are budgeting based on your feelings every month. 

Going out to eat will always win over putting that money in an account when you don’t have clearly defined goals.

9 Reasons you should start a budget today! Plus a Free Beginners Budgeting Checklist

But when you write down your goals on paper, and auto-draft directly into your savings account(s), you will start to build a nest egg for when you need it.

4) You Can Stop Living Paycheck to Paycheck

Living paycheck to paycheck is frustrating and stressful. 

No one enjoys living that way without any financial cushion.

Knowing exactly where your money should go each month will give you the courage to say, ‘no’ to things that aren’t in the budget so that you can begin to build in some wiggle-room.

5) You Can Be Flexible from Time to Time

Sometimes, the kids will need a whole new wardrobe, and usually they all need it at the same time.

If you have a budget though, it’s not a problem!

Just eat cheaper foods for a month, or cancel some subscriptions, or put a little bit less into the college savings accounts.

If you know how much money goes everywhere each month, you can easily move things around temporarily if need be, without completely throwing things off track.

6) You Can Get Back in the Driver Seat

Sometimes it can feel like your finances are in control of you, especially if you are in debt. 

By creating a budget, you are back in control.

You can allocate where every bit of money is going and know when your debt will be paid off if you stay on track.

7) Having a Budget Keeps You Accountable

Building a budget, is like having a financially savvy friend who will say, “do you really need to buy that cart-full of things at Target? Or have you already spent your shopping budget for the month?”

It may not be what you want to hear, but you know that your friend is right.

Sometimes it’s just what you need to kick your finances into gear.

8) Having a Budget Simplifies Your Finances

Even though it seems more complicated at first, once you get the hang of it, it will make your finances simple.

Especially if you use my simple percentages trick that I talk about in this post, you will be amazed by how easily you can keep track of your money.

You will know where every dollar is going and never wonder why your credit card bill is so high again.

9) Money Will No Longer Get “Lost”

Have you ever put money in your bank account and had it “disappear” less than a month later? You aren’t even quite sure what you spent the $100 you got for your birthday on, but it must have been something, right?

Having a budget and sticking with it will keep you from spending your birthday money at the Taco Bell drive-through and enable you to use it for something fantastic. (That’s never happened to me by the way…)

How to Create a Budget:

Now that we all understand why creating a budget is so important, let’s go through the simple steps for creating a budget!

1) Grab Your Gear

We are kind of spreadsheet junkies. We have a spreadsheet for everything… from every board game that we own, to our Christmas card address list.

So for us, it’s a no-brainer to grab our laptops if we are looking at our budget. We like to use Microsoft Excel for all of our spreadsheets, and I built a Money Mastery Google Spreadsheet to get you started on the right foot if you’ve never used spreadsheets before.

The advantage of using a spreadsheet for your budget is that you can easily change the numbers if anything changes without having to completely re-do the math. 

If you use the formulas, the spreadsheet does the math for you!

But if paper and pen is more your style, it is also a great way to build a budget. You can grab my Money Mastery Printable Workbook if you would like an easy plug-and-play template.

2) Determine Your Reliable Monthly Income

Take your income after taxes, your spouse’s income after taxes, and any other consistent incomes that you have (after taxes!) and add them all together.

The sum of the net incomes is the amount of money you have at your disposal every month.

Notice that we aren’t looking at every bit of money that you *might* make in a month.

What you want to know is what will absolutely be at your disposal.

Be very sure that you are not looking at your Gross Income. That number is quite different than the cash flow you will have available after all of your deductions are taken out.

How to Start Saving More Money By Starting a Budget

3) Write Down All of Your Monthly Expenses

Grab your Workbook or Spreadsheet and write down every bit of money that you spend in a month. 

Jot down anything you can think of from how much you spend on eating out, to your mortgage or rent payments, to your Netflix subscription.

If you get stumped, your credit card or bank statements might offer some inspiration.

Be specific. 

Then add everything in each category together and write it down. (You’ll find a list of categories in the Workbook and Spreadsheet.)

How to Budget for Food

The food category can be tricky for some people because their eating habits vary greatly from week to week, or because they typically eat out and they want to start eating at home more to save money.

If you fall into either of those categories, you have three options:

1. You can track how much you spend on food for a month before setting your food budget in stone.

2. You can make your best guess and adjust after the first couple of months if you need to.

3. You can commit to eating more meals at home and begin meal planning. (Check out my post on How to Begin Meal Planning When You Don’t Know Where to Start if this is new for you!)

UPDATED in 2021 after the coronavirus:

I used to make a specific recommendation for how much money you should spend on your budget ($100 per person/per month).

BUT in this video I talk about how food costs have gone up since COVID. I now think that you should try to set your food budget as low as you can while still making tasty, healthy meals for your family.

Adjust the number according to your geographic location (I know some places like Hawaii are much more expensive to buy groceries), and your eating preferences (or dietary restrictions). But don’t be afraid to challenge yourself with spending less money!

When you are all done writing down everything you spend in a month, add up all your expenses. Are your expenses 70% or less of your net income?

(If you aren’t sure what 70% of your net income would be, simply multiply .7 by the total net income that you came up with in Step 2. Then compare your answer with the total expenses.) 

If you are spending more than 70% of your net income, you are probably going to need to cut some costs in order to be able to save money or pay off debt depending on your goals for creating this budget. We’ll, take a closer look at this later.

(For more information about why I suggest spending only 70% or less of your net income on expenses, check out my post The Secret to Sticking With Your Budget from the Start.)

4) Divide Necessary from Unnecessary Costs

Why divide your expenses into two categories? I thought you’d never ask!

After doing all the math. you may find that you don’t have the money to put into savings that you would like to. Or you may be looking to pay off your debt quickly but aren’t sure how you will do that. Or you may want to save for a trip. Or you may find that you are spending more than you make and are getting deeper into debt…

If that is the case for you, then you will probably be looking at cutting some expenses (after you track your spending for a month in Step 8). Dividing your monthly expenses into these two categories will make it easier to see what you can live without.

Necessary Expenses

Everything you put in this category is a non-negotiable expense for your family. You won’t be able to minimize or cut out these expenses without moving or drastically changing your eating habits.

Common things that you may have in this category are Rent/Mortgage, Utilities, Debt Payment, Cell Phone Plan, Groceries, Car Payments, Car Insurance, Home Insurance, Health Insurance, Life Insurance, and Gas.

Unnecessary Expenses

Now jot down everything that is a typical monthly expense that you can either spend less on or cut out completely if you need to.

This is the list that you can work from if you realize that you need to make some adjustments.

It’s hard to minimize necessary expenses (although not impossible if you are willing to put in some work), but unnecessary costs can easily be shrunk, skipped for a month or two, or completely eliminated if you are in a less than ideal financial situation.

Things that could possibly go in this category: Clothes Shopping (most of us don’t need as much as we think we do), Miscellaneous Shopping, Entertainment, Going out to eat, Television/Cable/Dish, Netflix, Hulu, Amazon Prime Subscriptions (even though Amazon wants us to feel like Prime is a necessity).

You’ll be surprised how easily you can live without so many of these things!

The Ultimate Step by Step Guide for Building a Budget. How to Start a Budget from Square One: Plus a Free Beginner's Budgeting Checklist

5) Allocate Your Savings/Debt Payments

Why is this section about Savings and Debt Payment together? Because if you have debt (other than a mortgage), pay it off before you start putting money into savings.

Once the debt is paid off, you use the money that you had been putting toward your payments and start putting it into your savings accounts.

If you try to save while you are paying off debt, you won’t make progress with either of them very quickly and will probably get discouraged before you are done. 

But if you pay off your debt first, you are able to put more money toward your debt and pay it off faster. Then your savings will grow more quickly when you can put all of that money toward savings.

For this step, you should decide what percentage of your income you would like to save or put toward paying off your debt.

If you aren’t sure, read How to Use Percentages to Build Your Budget for all the details.

In our budget, this category accounts for 20% of our net income. When we had/have debt, we use this chunk of money to pay it off. When we don’t have debt, we save 20% of our income.

What To Do With Savings:

Instead of dumping your savings into one giant catch-all savings account, I suggest dividing it up among several different accounts.

The main reason for this is that it is much easier to track the money we have saved for different items or experiences without dipping into our emergency fund.

If you decide to have several accounts for your savings, I recommend using a separate tab in your spreadsheet to keep everything straight.

Here are some savings accounts that we have and I would recommend to anyone that they apply to:

Emergency Savings Accounts: This account is for emergencies such as a job loss or a medical need.  Don’t touch it unless you are in a crisis. It is best if you can pretend this account doesn’t even exist. 

Set up auto-drafting for this account on the day that you know you get paid.

It is a good idea to have 6-12 months of living expenses stored in this account. If you are just starting out and don’t have a savings account yet, put the entire 20% of your income into this account until you could live off of this account for at least 6 months if you needed to.

Big Goal Account: If you know that you plan on purchasing a house, boat, car, going on a trip, or paying for a wedding; it is a great idea to save money ahead of time.

Putting all your savings into one account can make saving for a goal messy. By having a separate account, you know exactly how far you are from your goal.

If you have more than one goal that you are saving for at a time, open two accounts! Opening accounts won’t hurt your credit or cost you anything as long as you maintain the required minimum balance.

Investments: It is a good idea to put money into investment accounts for retirement needs. Often long-term accounts will have higher interest rates than your run-of-the-mill savings accounts.

We use Edward Jones to keep track of putting our money in the highest yielding investments so that we don’t have to watch the market so closely.

Sinking Funds: These accounts are what we use to save for expected hits to our bank account. For us, this is mainly our cars and insurance.

We use Progressive Insurance and with them, we can save money by paying yearly for our insurances instead of every month. 

To avoid a financial surprise once a year, we divide the total amount we need to pay into 12 smaller payments. Each month, we put 1/12 of the money into an account. When our premium is due, we have the cash available.

We also use our sinking fund for car repairs and oil changes. Ross averages out what we need for these each year and puts the money away to take care of the vehicles… plus a little extra since car repairs can come at a premium and usually happen when you least expect them!

College Savings Accounts: Each month we put a little money into two college savings accounts. One for each of our girls. Any time Ross gets a bonus from work, we also put in a little extra.

Most likely the accounts won’t completely pay for their college educations, but it will give them a nice start when the time comes. 

Considering the time value of money, it is best to start these accounts as early as possible when you have children.

The accounts that we use for our girls are for education only. The upside of that is that they have a higher interest rate than a regular savings account. The downside is that they can only be used for trade schools or college. 

So if neither of our girls decides to go to college, we will have to transfer the money to someone else who wants to use it for education. This is worth it to us because we figure that worst-case scenario we could give it to a niece or nephew.

If you want more ideas for setting up different savings accounts, check out this post!

6) Determine Your Giving

You can obviously skip this piece of the puzzle if charitable giving doesn’t align with your personal values. 

But if you’ve never done it before, I encourage you to give it a try!

It’s ok to start small here, even donating $25 a month to a cause can go a long way. Just eat at home once or twice more per month instead of eating out and it will cover the cost.

Even if you aren’t part of a church, it never hurts to give back to your community. Find a cause or a charity that you are passionate about. 

I’ve never heard of anyone who regretted paying it forward!

If you really can’t afford it, volunteer once a month at a homeless shelter or soup kitchen in your area! 

There are a million ways to give back if you get creative. 

Plus volunteering will teach your children the importance of helping those less fortunate than yourself and treating everyone with respect.

In our house, we tithe 10% of our income to our church. (See this post for more information on recommended budgeting percentages.) 

Additionally, we like to donate to ADRA which supports people who live in less fortunate areas of the world or who are in difficult situations. 

We like to get the kids involved in choosing how we donate and they often like to pitch in by asking for donations for Christmas and birthdays. This year we bought a goat for a family who needed food and a way to make money.

The Easy Way to Start a Budget and Take Control of Your Money: Get Started With the Ultimate Beginner's Budgeting Checklist

7) Create a Calendar for Your Budget

Sit down with your calendar (I love this Amy Knapp Big Grid Calendar) and write in your paydays. Now, choose which payday you will have your expenses auto-drafted.

For example, We have our mortgage payment taken out on the first of the month with the first paycheck. Because of that, we have most of our other expenses drafted after the other paycheck hits our account. 

That way we have plenty left over for groceries and gas in between paycheck one and paycheck two.

After you have your expenses divided up, decide when you want your savings or debt payments auto-drafted. You may want to do this all at once, or a little bit from each paycheck. 

Having this money taken out automatically tricks your mind into forgetting about it!

The other thing you should write down on your calendar is your weekly grocery budget. 

Divide your monthly grocery budget by 4 and write it down. It is much easier to stay under budget when you know how much money you have to spend each week at the grocery store, instead of trying to remember the monthly amount.

8) Track Your Spending

Alright, now that you know where you want your money to go each month, it’s time to find out where it is actually going each month.

You can use the spending tracker in my Money Mastery Workbook or Spreadsheet, or you can do it electronically by using is a free spending tracker that we love using. 

It pulls information directly from your accounts so there is no guesswork.

The only issue that we have is occasionally a purchase will get categorized incorrectly, but you can easily go back and adjust it.

And, using, you can create as many categories as you need to!

9) Evaluate and Cut Costs

How did you do with tracking your spending? Did you stay within your budget?

If the answer is yes, you’re done! Stick with your budget and you’ll be on your way to hitting your financial goals.

If not, then you should look at cutting costs. Grab the worksheet with your Unnecessary Expenses on it, and start cutting costs wherever you can.

If you cut something out of your budget, it doesn’t mean you can never add it back in. But for now, it will help your budget a lot.

Maybe you just need to limit yourself to only eating out on the weekends, or choosing between Netflix or HULU or Amazon Prime instead of all three.

I have a feeling you’ll be surprised how little you miss some of the things that you thought you couldn’t live without!

If you need additional inspiration, check out my post 10 Ways to Save Money When You’re Living Paycheck to Paycheck.

10) Track Again

If you needed to cut some costs, track your spending for another month. Then see if the initial things that you cut out of your budget were enough for you to meet your goals.

If you are still spending too much, keep repeating steps 8 and 9 until you get where you want to be!

If you find yourself struggling to stick to your budget, you may want to use a cash system until you have your spending under control. 

But I don’t recommend using a cash system in the long run because you can build credit and make money by using credit cards… if you use them wisely.

Using a cash system is a great way to reset your spending if you need it, though!

11) Stay On Top of It

Once you have honed in on your perfect budget, don’t just forget about it. Check your budget regularly against your bank accounts to make sure you aren’t overlooking any spending.

We love using to stay on top of our money. It saves lots of time, and it’s free!

I recommend checking at least once a week, but it doesn’t hurt to check daily while you are getting into the habit. Or you can be super-cool like Ross and check multiple times a day from now until forever.

I always play a game with myself whenever I buy anything other than groceries to see how long it will be before I get a text from him confirming that I did indeed purchase whatever it was from wherever it was.

It used to annoy me until I realized that’s one of the reasons we have been able to live debt free for so long… and it was a helpful habit to have when someone stole our credit cards…but that’s a whole other story!

The important thing to remember is to check frequently, whatever frequently means to you!

The Ultimate Guide to Creating a Budget for Beginners Living Paycheck to Paycheck: Plus a Free Beginner's Budgeting Checklist

Here’s a quick re-cap of How to Set Up a Budget:

  1. Grab Your Gear: Use a spreadsheet, notebook or use my Money Mastery Workbook and Worksheet.
  2. Determine Your Monthly Net Income: Add all reliable monthly net incomes together.
  3. Write Down All Monthly Expenses: Write down everything you spend money on in a month from your debt payment to buying toothpaste.
  4. Divide Necessary From Unnecessary Costs: In one column write down everything you can’t live without, in the other, write everything that you might be able to adjust if you need to.
  5. Allocate Your Savings/Debt Payments:  Put 20% of your Net Income toward paying off your debt first. After your debt is paid off, build up your savings accounts. 
  6. Determine Your Giving: Decide where and what amount you will give to charity.
  7. Create a Calendar for Your Budget: Write down when you get your paychecks. Then determine when your expenses/savings/debt payments/charitable giving will auto-draft.
  8. Track Your Spending: Write down everything you spend for a month.
  9. Evaluate and Cut Costs: How did you do with sticking to your budget?
  10. Track Again: If at first you don’t succeed, try, try again.
  11. Stick With It: You can do this!

Good luck!

You May Also Enjoy…

How We Paid Off $20,000 in debt in 18 Months!

How to Organize Your Finances With 7 Bank Accounts.

37 Ways to Save Money on Groceries if you aren’t sure how to get your grocery budget under control.

10 Ways to Save Money When You’re Living Paycheck to Paycheck if you need some ideas for how to cut costs.

If you want to be sure that you can stick with this budget from the start, check out The Biggest Secret to Sticking With Your Budget.

Does worrying about what other people will think of you if you start living more frugally keep tripping you up? Check out 7 Powerful Mindsets for Low-Income Families.

Teach your children how to budget with The {Simplest} Budgeting Method for Kids.

You can read about our journey learning to live on one income here: How We Became a Single Income Family.

Want 7 Extra Hours Every Week? Grab the Streamline Your Home Quick-Start Guide!

Ready to Stop Feeling Stressed About Finances?

Then check out Master Your Money!

In Master Your Money, you will learn how to 

  • Calculate Your Net Income
  • Track Your Spending
  • Calculate Your Monthly Expenses
  • Determine Your Fixed & Flexible Expenses
  • Set Up a Budget
  • Pay Off Debt
  • Create Savings Accounts
  • And More!

Master Your Money walks you through exactly how to take charge of your finances so you can afford to live the life of your dreams!

Plus you will receive the Money Mastery Workbook and Spreadsheet and email support from me anytime you have questions.

I hope to see you inside the course!

(Or if you are more of a do-it-yourself kind of gal, you can check out my DIY Master Your Money Resources!)

See you on the next one! Kassy
Budgeting for Beginners: How to Create a Simple Budget, a Step-By-Step Guide
How to Create a Simple Budget: With a Free Budgeting Checklist
How to Start Budgeting Like a Boss for People who are Terrible at Sicking With a Budget (Plus a Free Budgeting Checklist!)
The Beginner's Guide to Budgeting a Step by Step Guide Plus a Budgeting Checklist
How to Start Budgeting: Create a Budget, Lower Expenses, and Save Money! Plus a Free Beginner's Budgeting Checklist!
How to Start a Budget Even When You're Behind on Your Bills
How to Budget When You're Living Paycheck to Paycheck: Plus a Free Budgeting Checklist
How to Start a Budget in 2024, the Ultimate Guide for Busy Moms. Plus a Free Beginner's Checklist
10 Frugal Living Tricks for {Saving Money}

10 Frugal Living Tricks for {Saving Money}

10 Surprising Ways to Save Money!

I’m guessing you stumbled across this post because your budget makes you feel a little bit like your pants do after thanksgiving dinner… uncomfortable.

If your budget is too tight, there are two things you can do to fix it: make more, or spend less. 

Guess which one most people have more control over. 

Spending Less Money.

Usually, when people think of spending less money, they think of not buying the big things like a fancy new car, going on a nice vacation, or getting a bigger house.

But the truth is that the day to day decisions add up faster than you think. The daily spending will set the tone for your weekly, monthly, and yearly budgets, and can make or break your ability to stick with your budget.

And if you can get the little things under control in your budget, you can start to afford some of the bigger things that have always been out of reach.

(If you’d like a step-by-step guide for setting up your budget, check out my full post on How to Start Budgeting.)

We are a single-income family, so there isn’t much wiggle-room in our budget every month.

And on top of living on one income, we only live on 70% of our net income. So basically any time I can cut a couple of extra dollars from my expenses, I am all in! 

(If you are unfamiliar with the concept of living on 70% of your net income, check out my explanation of the rule in my post, The Secret to Sticking With Your Budget From The Start.) 

When Ross and I got married, we found ourselves living on one (small) income… with a bunch of debt to pay off. (You’ve gotta love those school loans that are supposed to land you a couple of nice paying jobs.)

Luckily, I had married a fellow penny-pincher. (He’s probably the most frugal person I know.) And we quickly decided that we would take our spending down to the bare bones to pay off the debt. 

And when I say bare bones, I mean bare bones.

(You can read more about our story here.)

This post contains the frugal living habits we used to pay off our debt, save money, and stop living paycheck-to-paycheck.

Frugal Living Tips for Saving Money

1) Create a Realistic Budget

Start by creating a budget that works with your family’s income, goals, and needs.  

By setting goals and limits for yourself within your budget, you will see where you can afford to cut expenses, save more, and find out where all the money is disappearing to every month.

If you want a step-by-step guide for creating a budget, check out How to Start a Budget: a Beginner’s Guide to Creating a Budget, Cutting Costs, and Saving Money.

2) Shop Insurance Companies

When Ross and I were going over our budget about a year ago, the number that we were paying for our insurance struck me as high. 

We realized that it had been a couple years since we had shopped insurance companies and decided that it was time to do that again.

I spent every spare minute over the next couple of weeks on the phone, giving different insurance companies the same information over and over again.

How to Save Money When You're Living on a Tight Budget

About a month later, after going over the policy with a fine-tooth comb to be sure we were getting the exact same coverage, we switched and saved $120 per month. That’s $1440 a year! 

All from just making some phone calls and putting in a little time.

3) Be a DIY Beautician

I’m a little crazy when it comes to saving money! 

As a general rule, I cut my husband’s hair, my own hair, and my girls’ hair. Once every couple years if I am going shorter than my shoulders, I will go somewhere and get it cut. 

But the vast majority of the time, we don’t spend any money on our hair.

If the thought of cutting hair makes you sweat a little, stick with me. Cutting your own hair, and cutting everyone else’s hair in your family, can save you quite a bit of money… And it can be fun once you get the hang of it! 

According to US News, the average women’s haircut costs $44 and the average men’s haircut costs $28. They also stated that the average person gets their hair cut every two months. 

That would be a total of $432 spent on haircuts per year for a family with one woman getting her hair cut and one man getting his cut. Add in a couple kids to the mix and you can be saving yourself a pretty penny if you make the switch to cutting at home.

Thankfully, the beauty college of YouTube can teach you everything you need to know!

Just type in “how to cut a _____________ (type of haircut) for__________________________ (boy or girl) at home” and you’ll get dozens of tutorials that you can play and pause and rewind when you need to.

Here are a couple of tutorials to get you started:

Sadia with Pick Up Limes has a great tutorial for cutting Women’s Hair.

Here is an easy tutorial for cutting Little Girl’s Hair.

Here is one for Little Boy’s Hair using clippers.

This is a very detailed Men’s Haircut how-to. I think she’s teaching a beauty school how to do it!

If this is your first time cutting hair, you will need a couple of things to get started:

Hair Cutting Scissors: I like this pair

You can technically make regular scissors work, but it will take you a lot longer and it won’t look as clean because they aren’t as sharp. 

(I may or may not have used a pair of office scissors for years before Ross bought me these scissors. Like I said, I like to save money!)

 Clippers: If the guys in your family like their hair short, you definitely want a pair of clippers. This set also comes with scissors if you don’t want to purchase both, but I still prefer the scissors I mentioned above.

Additional Money Saving Ideas:

If you color your hair, you can also do that in the comfort of your own home. I don’t personally dye my hair, but my mom has been doing her own color at home since I was little. No one ever knows the difference!

I also like to have spa days with the girls and paint their fingers and toes at home. 

No, it’s not as luxurious as having someone else do it, but it’s also a very small fraction of the cost and it’s a fun mommy-daughter activity!

4) Stop Buying Single-Use Products

Or at least, stop using them just once!

Single-use products are anything that is designed to be used once, then thrown away.

I’m looking at you, plastic sandwich bags, paper napkins, and paper towels!

Even if you buy paper towels at Costco, you could save over $40 a year if you stopped using paper towels alone and switched to using cloth towels instead.

That may not seem like much, but if I handed you $40 right now, what would you do with it? Would you wipe up the juice your toddler spilled, or would you spend it on something just a little bit nicer than that?

The Best Tricks for Frugal Living

Ways to Save:

1. Swap your paper towels for regular dishcloths or paperless towels.

2. Use cloth napkins instead of paper napkins. (But keep the paper napkins you get with takeout and use them on road trips or when you are out and about!)

We’ve been using our cloth napkins for about 9 years now and they are still as good as new!

3. Reuse your plastic freezer and sandwich bags until they cannot be used anymore. 

Just scrub them with a little soap and prop them upright on your faucet and/or soap dispenser to dry… good as new!

The next time you run out of plastic bags and need to buy more, consider a bag that is made to be reused like these.

4. Try replacing parchment paper with a Silicone Baking Mat to cut down on waste and cost in the long run.

5) Stop Going Shopping

Almost any time I step foot in a store I find something that I didn’t know I needed. But now I think I do because it’s oh so cute.

I’m not exactly sure when it happened, but there has been a switch in our society to the detriment of the consumer. 

It used to be that customers would tell the store what they wanted, and the store would try to stock the items. 

Now companies tell the customers what they need, want, and can’t live without. And the customer tries desperately to pay for and store all the items.

To take care of this problem, I don’t go shopping unless I have something specific that I am looking for.

I make a list, I stick to the list, and I don’t browse in any area of the store that doesn’t relate to the list.

My mom says I shop like a guy. I say I shop like a saver!

If I do happen to find something that I think I need that isn’t on my list, I have a one-week rule (or one month if it’s an expensive item.) I take a picture and I leave the item at the store while I go home to think about it.

If I am still thinking about it and want it after time has gone by, I can go back and get it. If I forget about it, then I obviously didn’t need it in the first place.

6) Share a Vehicle

Not only have we been a single-income family for most of our marriage, but we were also a single-vehicle family for the first seven-and-a-half years

Since we couldn’t afford to have a second vehicle and still reach our financial goals, we stuck with our one car.

Call us crazy, but we didn’t want to put ourselves into debt just because society told us that we needed two vehicles… and as it turns out, society was wrong anyway!

When both of us needed the car at the same time, we carpooled. One of us had to work a longer day while we waited for the other person, but it was never a problem.

I was usually the person who was at work more hours, so I would just bring a book for the end of the day, keep working, or go for a walk. 

Sometimes I even ended up with a work friend who lived close enough to my house to give me a ride home!

During the spring, summer, and fall, Ross would often ride his bike to work when we lived in a small town.

And when we moved to a large city, I used public transportation to get around since I worked downtown.

There was never a situation that we couldn’t figure out a solution for. It just took a little creativity!

What to Cut From Your Budget so you can start living below your means

Not only did it work just fine, but we also didn’t feel like we were getting the short end of the stick. On the contrary, we enjoyed our life even more because we weren’t stressed out about how we were going to make a car payment or pay more for car insurance.

Plus, it’s fun to have someone to talk with when you are stuck in traffic!

Another way we saved money with our vehicles was by purchasing cars that we could afford to pay off in short order. 

We didn’t choose cars that were the coolest, or that we loved the most, or that we felt like we deserved, we chose cars that we could afford.

When our first (and only) vehicle was totaled in an accident, we purchased a car that we could afford to buy outright between our savings and tax return that year. It wasn’t fancy, but it did the job and is still running over 7 years later.

We only purchased our second car two years ago when we knew we would be able to completely pay it off within one year.

After doing both ways I can tell you, not having a car payment is way nicer on your budget than having to make a car payment. 

If you could never afford to pay your car off quickly, consider selling your car and getting a car that will fit more comfortably in your budget!

It is worth driving a car that may not be as amazing to us to have a little extra breathing room in our budget.

Updated: When the first car that we purchased was totaled, we spent a couple of months as a single-car family again before we decided to go ahead and get another.

After scaling back on all our other expenses and putting any extra money (like tax refunds!) toward the principal amount on the loan, we are on our way to paying it off within six months of the purchase date.

7) Plan Your Meals

It’s so much easier to go out to eat than to cook and eat at home.

But when my family of four goes out to eat anywhere other than Taco Bell, it usually runs us close to $50 once the tip is included.

Edit in 2023: It is now closer to $90 for our family of 5! Thanks Covid.

When we eat at home? I usually can shop for meals for our entire week for $100. Max. That works out to less than $6 per meal for the entire family (and less than $1.50 per person per meal!)

Edit in 2023: Groceries now typically cost $150/week. Not as great as it used to be, but it is still a lot cheaper than eating out!

I’m not saying that you should never go out to eat, you just need to make sure it fits within your budget.

If you find it challenging to eat at home after a busy day, check out How to Begin Meal Planning When You Don’t Know Where to Start

Additional Ways to Save:

1. Create a Food Budget.

We budget $100 per person in our family per month for food. When we eat at home, we almost never go over budget. But it’s a different story when we eat out.

Edit in 2023: For our family of 5, we budget $150 per week for food.

Check out my post How to Begin Budgeting for tips on setting up your grocery budget.

2. Eat Your Leftovers

We used to be responsible and put our leftovers in the fridge, only to promptly forget about them.

Unfortunately, leftovers don’t save you money unless you eat them. 

Now we schedule eating leftovers into our meal plan and rarely throw any out. 

(Check out my post on Planning to Eat Your Leftovers for more details 🙂

Want 7 Extra Hours In your Week? Grab the Streamline Your Home Quick-Start Guide

8) Use Cloth Diapers

How you choose to diaper or not diaper your children is completely personal. But if you are looking to save some moolah when you have a baby, you may want to check out the price difference between disposable diapers and cloth diapers. 

The total cost for our cloth diaper stash (meaning everything we purchased to cloth diaper both of our babies) was about $500. 

That was buying everything brand-new off Amazon. 

That was my total diaper expense for both of my children. $500 total. Combined. I didn’t have to purchase anything for the second child. 

And that’s the total for any children I decide to have in the future. And any children that I give my stash to when I’m done with them. 

One of our friends has used our size one cloth diapers for both of their children since our kids have been staggered in ages! Plus, I might even be able to sell the stash when we are done with them and make some of the money back.

My sister was even savvier than we were and was able to get her entire cloth diaper system for $100 from a Facebook mom group!

If saving money when you have a baby is something you’re into, check out my Minimalist Baby Registry Essentials for Having a Baby on a Budget!

9) Love Second-Hand Clothing

Friends, family, Facebook Marketplace anyone? Do your best to get some hand-me-downs from anyone who is handing them out. 

I know one person who got bins of hand-me-downs for her daughter from a Facebook group for only a couple of dollars a bin.

Sure, some might be a little stained or worn. Sure, they may not be your kid’s style. And sure, they may not even be what you would choose. But you will save so much money!

I’ve read a lot of minimalist blogs that say you should get rid of clothing as soon as your child outgrows them because you can buy them at a thrift store for cheap if you have another child. 

Um, what?? I may not be very good at math, but I’m pretty sure “free” is less expensive than ”cheap.”

Maybe if you are well-off this will work well for you, but this minimalist is hanging on to her hand-me-downs until I am positive beyond a shadow of a doubt that I’m done having babies. Those tiny clothes are expensive!

If you don’t have space to store the clothes, see if you have any friends that need them in the meantime. Our friends that we’ve shared the cloth diapers with also rotate bins of clothes with us. Our oldest uses them, then their oldest does, then our youngest used them, and now their baby will use them. 

They were more than happy to store part of the stash so that their girls could use the clothes and give them back when we needed them.

Additional Ways to Save:

1. Shop at second-hand stores.

In addition to taking advantage of hand-me-downs, second-hand stores are the first stop we make when we are in need of new clothing.

I often find higher quality clothing than I can on a sale rack at a store and pay about the same for it.

I’ve even found amazing deals on hiking boots at second-hand stores!

2. Head to the Sale Racks.

If our local second-hand store doesn’t have what we need, I can usually find what I’m looking for on the sale racks at Wal-Mart, Target, or Ross (the store not the husband).

I don’t think I’ve purchased anything for full price for the girls and we’ve scored a lot of good deals by doing a little extra looking. 

Thrift Stores Aren’t Just for Kids

Second-hand stores are also a great place to find adult clothing. 

I struggled with purchasing maternity clothing since you only wear it for such a short amount of time and they are so expensive. 

Then a friend who was also pregnant told me that she went to Goodwill and found high-quality items that were affordable. The next weekend I purchased a pair of maternity jeans for $3!!

10) Cultivate a Minimalist Mindset

About 4 years ago I began reading more on minimalism. I have always been drawn to the lifestyle as it naturally syncs with my thoughts and feelings.

This mindset especially comes in handy when the holidays and birthdays come around. You don’t need to spend hundreds of dollars on each occasion as the stores would have you believe. 

Sometimes thinking simple is best.

The cool thing is that once you are in the habit of spending less, simple can be fun.

With our girls, we have found that the simplest toys and experiences have brought them the most joy. 

My oldest daughter still talks about her birthday party that she had when she was three. Her “party” was going to a local splash pad and play structure (which is free), having a picnic there with friends (everyone brought their own lunch but we shared sides), and having our friends come back to our place afterward to barbecue. 

There wasn’t even a traditional gift exchange. But what did she want to do this year for her birthday? 

“Go to the splash pad with all of our friends again!”

How to Stop Being Broke and Start Living Below Your Means

Sometimes saving money takes a little creativity and sacrifice. But in my book, it’s usually worth it. 

Take a closer look at your finances and see if you can cut any costs.

Here’s a Recap of the Frugal Living Habits we use to save money in our family.

  1. Create a Realistic Budget
  2. Shop Insurance Companies Regularly
  3. Be a DIY Beautician
  4. Stop Buying Single-Use Products
  5. Stop Going Shopping
  6. Share a Vehicle
  7. Plan Your Meals
  8. Use Cloth Diapers
  9. Love Second-Hand Clothing
  10. Cultivate a Minimalist Mindset

You May Also Enjoy…

How We Paid Off $20,000 in debt in 18 Months!

How to Organize Your Finances With 7 Bank Accounts.

37 Ways to Save Money on Groceries if you aren’t sure how to get your grocery budget under control.

If you want to be sure that you can stick with this budget from the start, check out The Biggest Secret to Sticking With Your Budget.

Does worrying about what other people will think of you if you start living more frugally keep tripping you up when you try to start a budget? Check out 7 Powerful Mindsets for Low-Income Families.

Teach your children how to budget with The {Simplest} Budgeting Method for Kids.

You can read about our journey learning to live on one income here: How We Became a Single Income Family.

Ready to Stop Feeling Stressed About Finances?

Then check out Master Your Money!

In Master Your Money, you will learn how to 

  • Calculate Your Net Income
  • Track Your Spending
  • Calculate Your Monthly Expenses
  • Determine Your Fixed & Flexible Expenses
  • Set Up a Budget
  • Pay Off Debt
  • Create Savings Accounts
  • Donate to Charity

Master Your Money walks you through exactly how to take charge of your finances so you can afford to live the life of your dreams!

Plus you will receive the Money Mastery Workbook and Spreadsheet and email support from me anytime you have questions.

I hope to see you inside the course!

(Or if you are more of a do-it-yourself kind of gal, you can check out my DIY Master Your Money Resources!)

10 things to Cut From Your Budget When you're living paycheck to paycheck
Frugal Living Tips and Tricks for when your income isn't enough!