How To Budget And Save Money Like A Frugal Ninja

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

fat roll of dollar bills on top of a fan of 100 dollar notes

How To Budget And Save Money Like A Frugal Ninja

I started adult life as a teenage single mum and 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.

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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
montage of pictures of money inclulding bank note rolls and coins

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


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

You might choose to cut 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

hands holding a model house on one hand and coins in the other

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 Bills is 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 is LAMB free 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


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

open glass jar with savings written on black label filled with various currency and rolled up dollar bills spilling out

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:

25 Tried & Tested Money Saving Tips

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.

woman looking at an open red purse with coins and bank notes spilling out

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.


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

Do you want to know how to budget and save money? Read how to live on a tight budget that helps you pay off your debt and provides the best way to save money for your family's future. #budget #debtfree #budgeting #moneysavingideas
This is what I needed to know - how to budget and save money. Read how to live on a tight budget that helps you pay off your debt and provides the best way to save money for your family's future. #budgettips #debtfree #budgeting #moneysavingideas

Last Updated on 21st February 2021 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

2 thoughts on “How To Budget And Save Money Like A Frugal Ninja”

  1. Hi Tuppeny

    Financially, the debt snowball doesn’t really make sense (to me)- while you are getting ‘quick wins’ by clearing small debts, the bigger debt with higher interest continues to accumulate and add to the debt pile.

    I get that it’s psycholological, meant to be motivating, but I’d argue that putting £500 towards a credit card bill of £3000 with a 16% interest rate will be better than paying £500 towards a small debt where the interest rate is 6%?

    Perhaps I’m biased because I cleared my debts by paying the ones with higher interest first, regardless of size of debt and it worked for me. The snowball method I guess works for other people and if the result is to pay off debt, then that’s good, even if it ultimately does increase the debt unnecessarily.

    • Hi Weenie. It absolutely makes mathematical sense to follow the avalanche method as you rightly say, you pay less interest. But, many people can’t look past the debts themselves and the interest rate is a secondary consideration (yikes!). So yes, the psychological aspect makes the snowball method a winner for some people (too many in fact). The most important thing is debt being repaid and never entered into again, I think we can definitely agree on that!


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