How To Live On Less Money In Difficult Times

Just how to live on less money when you are used to earning and spending your paycheck?

When you hit difficult times (and many people are right now), your first thoughts are full of worry.

  • Worry about how you are going to cope living on less money, is it even possible?
  • Worry that you could lose your home, get into debt.
  • Worrying about money can put you into a such a spin that you can’t think straight.

Just when that is exactly what you need to do. Think straight, be calm and make a plan.

When you lose your job or get laid off it can feel like the worst thing. And rightly so because that job was your money earner and part of your identity.

Especially when you are not expecting it. Especially when you rely on that income to feed your family and pay your bills.

Panic can set in, you fear the worst and your stress levels skyrocket.

Even if you haven’t lost your job, just had a severe reduction in income, trying to acclimatize to that, to living on less money takes getting used to.

What you need to do though is take a step back and start planning.

Planning helps you find a way forward, a way to channel that worry into something proactive and helpful.

5 pale pink roses on ruched hessian cloth to signify how to live on less money

Acknowledge Your Emotions

When life becomes difficult overnight it naturally affects your emotions. And it’s okay to be upset, angry, frustrated, to be worried about money, or all of them together.

Don’t beat yourself up for being human. Feeling emotional about a job or less income is perfectly natural.

Changes that happen when you least expect it can make you emotional and that’s okay.

Acknowledge your emotions and stress, but try to park them for the time being as you have got things to do.

The more focus you can put in to creating a new money plan the less your emotions are going to overwhelm you.

But go right ahead and have a cry and get some of those emotions out of your system first.

It’s good to cry.

Make A Plan

OK, Now we need to get down to business. Planning how you are going to manage living on less money is the key to being successful at it.

There is a saying by Benjamin Franklin:

“If you fail to plan, you are planning to fail.”

Doing nothing is not an option, doing something is the only way you are going to deal with the situation you find yourself in.

The following tips will help you formulate the right plan for you in your specific circumstances.

Steps To Take To Learn How To Live On Less Money

Check Your Entitlements

If you’ve been laid off check what benefits your employer may be able to offer you. It’s always worth checking here first.

Then check welfare benefit entitlement. These vary between states and countries and can amount to very little or a decent amount.

They may also be dependent on whether you have a working partner or not, and any children.

Please do not be embarrassed about claiming welfare benefits.

They are there precisely for your current circumstances and you will have paid for them through your taxes over the years anyway.

flower pattern purse with orange inside. Open with coins spilling out to signify how to live on less money

Create An Emergency Budget

Now I am hoping you already have a living, breathing budget that sees you through a normal month.

But of course this isn’t a normal month so your normal budget isn’t going to cut it.

Right now you need to survive, you have a money emergency so you need a budget to reflect that. Normal budgeting rules do not apply.

Your emergency budget is for absolute essentials and nothing more. I’m talking shelter (home), fire (warmth), food.

If you’ve got those covered and have money left over then you slowly add in non-essentials. Many things you might consider essential may not be so.

Broadband is truly convenient but not essential. Having a 2 year old car is not essential, having one that gets you from A to B might be.

To create your emergency budget you should start everything from zero and ask yourself these questions for each bill or expenses:

Is this truly essential right now?

If so, is it at the absolute lowest cost?

That 2nd question is going to be key for many of your bills. Utility bills are essential but they are a variable cost.

When push comes to shove, you can cut most utility bills down by not using so much of that utility.

Energy bills are ripe for cost cutting. Thermostats can be turned down or off, standby buttons no longer used. Extra layers worn etc.

Same goes for your grocery bill.

You’ve still got to eat, but in difficult times you can downgrade your brands, focus on very cheap, simple meals using cheap ingredients.

My post on how to create a survival budget goes into much more detail on the things you can do to get your budget down as low as possible.

black calculator with a fan of different dollar notes to signify how to live on less money

Deal With Your Debt

Now I know you can’t start paying it off any faster than you have been. Indeed you probably cannot keep up those repayments.

And that is why you need to be proactive and deal with it now.

Firstly, see if your new emergency budget has enough room in it to keep paying your minimum repayments.

If not, do not delay, contact your debt companies and see what help they can provide. Not all do, but some can.

See if you can switch credit card debt to 0% if applicable.

Use a website that does a soft check to see if you would be accepted before you actually apply. That way you don’t leave a mark on your credit report.

Here in the UK MoneySupermarket has a eligibility checker you can use and some credit card companies offer the same.

There are debt charities that can help you negotiate with credit card and loan companies.

Always use the free debt help available.

For more help on which FREE debt help to choose, visit these websites:

For help in the US click here

For help in the UK click here

bank statements spread out and a calculator

Know Your Money Situation

What I mean by this is knowing every aspect of your money right now. What money have you still got, what money could you access if necessary. So take stock of the following:

  • Balance of your main bank account
  • Savings account balances
  • Money squirreled away in jars, piggy banks etc
  • Credit card balances
  • Cash in the house
  • Credit union accounts
  • Gift cards
  • Credit/refund notes

And anywhere else you might be holding money. Every penny and cent can make a difference so count everything.

Knowing how much money you have helps you to plan how long that money needs to last.

Compare your emergency budget with your total money. See how many weeks or months you can live on that money using your new budget.

4 glass jars with different volumes of coins in them

Look For Alternative Ways To Make Money

In good times there are often a million and one ways to make extra money. In difficult times, less so.

But that doesn’t mean there aren’t opportunities to make some money and it doesn’t mean you shouldn’t be actively looking for them.

There might be jobs out there that other people don’t want to do. Being honest you probably do not want to do them either.

But if you need money then put your feelings about crap jobs to one side and apply. Do not discount minimum wage jobs, part time jobs or zero hour contract jobs.

If that is all that is available and it would give you more money than what you have and what you could get from welfare benefits then do it.

It’s not forever, it’s for now, to get you and you family through a tough time.

Related posts: 

How To Make 300 Dollars Fast: 30 Proven Ways

The Best Work From Home Jobs When You Need Flexibility

41 Awesome Hobbies That Can Make You Money Right Now

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

Don’t Make Panic Decisions

We all panic sometimes and it’s okay to do so. But it’s not okay to keep panicking because it stops you from getting stuff done.

When you panic you can end up running around like a headless chicken, starting lots of things, finishing nothing.

Panic does not help you move forward.

If you have money in the stock market and the markets tank (as they do every 10 years or so), do not panic sell.

Stock markets fluctuate constantly but usually they are on an upward trend. However there are times when they can drop significantly. As in 20%, 30% or worse.

During those times on paper you have suddenly lost a lot of money and that is hard to swallow.

But! It’s only a loss if you sell. Don’t sell, and ride out the stock market roller coaster. And I know it’s easier said than done.

In 2008 I had to watch the few savings we had in stocks plummet. It took more than 3 years for them to get back to the amount we had put in.

Conversely, a friend put money in a bond at a similar time to us. Saw the markets crash and pulled their money out. They lost 30%. Because they panicked and sold.

So, keep your feelings of panic pushed down low and work on planning your way out of this situation.

ginger tabby cat lying on wooden bench with coffee cup on

Refocus Priorities

If you are facing a truly difficult time then not only does your normal budget go out of the window, so does your normal life.

Things you used to think of as a priority, as necessary are not any longer.

When you are scrabbling to find a few cents here and a few pennies there, your priorities look very different. Your priorities get back to the basics of shelter, warmth, food and family.

Family don’t cost anything but they are extremely important. As long as you have your family (or friends) then you are okay.

But family does not need to cost anything. It may well have done in the past because as a family you did activities that cost money.

Well, you don’t need to spend any money to have fun and be active with your family.

brown flap purse on top of a pile of coins

Tips For Living With Very Little Money

When you need to focus on how to live on less money, it’s not just about planning and budgets.

It’s also about what you can do, must do, each and every day to survive. To spend as little money as possible.

If you need to delve really deep into extreme frugal living then do it. You need to do whatever it takes in order for you and your family to make it through this time.

If that means going the no-poo route or eating offal or even roadkill (!) then do what you gotta do.

The following are some tips on what you can do to spend way less than you are used to.

wooden bench with patchwork blue blanket on top against white brick wall

Drastically Reduce Your Grocery Spending

How much you spend on groceries and food is very much down to individual choice.

If money is so incredibly tight you don’t know how you will pay bills this month or next then it’s time to go extreme on your groceries.

I don’t mean dropping down a brand, going generic. I’d hope you’ve already done that.

Going drastic on your groceries is more about forgetting what you normally buy, the foods you like to eat and coming up with a meal plan and budget grocery list that is as cheap as possible.

In difficult times your priority is to actually be able feed yourself and your family, not eat what you usually do or adhere to your preferred food choices.

Focus on the foods that are cheaper to buy and don’t worry about health. The cheaper foods to buy are usually healthy anyway.

My post on the cheapest foods to buy when broke gives you a list of 55 top cheap food items that you can make multiple meals from.

Cheap foods are often healthy by default because they are not processed but items in a more natural state. For example oats, rice, flour and potatoes.

Related posts:

How Much Should I Spend on Groceries Each Month?

13 Killer Ways to Save Money on Groceries – Save Hundreds

18 Things We Cut From Our Food Shopping List To Save Big Money

Clothing Ban

I think this one is fairly self explanatory. When you really are trying to live on as little money as possible, buying clothes needs to stop completely.

Because I know you cannot tell me you only have a few sets of clothes and those are wearing out.

And the same goes for all family members. I know teens might not appreciate this advice but tough times call for tough decisions.

Cut The Non-Essentials Out

Truly, cut all non-essentials out. Remember essentials are housing, warmth and food.

I know life will feel very different but it’s not for ever, it’s just to help you keep going whilst you wait for the bad times to pass.

If you can cancel contracts for non-essential things then do so. And yes I do mean your cell/mobile phone if needs be.

And Netflix. And Hula. And cable. And any services you usually pay for like beauty treatments, haircuts, yard clearing, grass cutting.

You can go without or do it yourself for all of these things. Don’t believe me? I’ve cut my own hair for over 20 years, as has my husband.

collection of star fish in glass bowl along with other glass pieces

Focus On The Little Things

When you are looking at the need to cut back as much as possible then it can be easy to focus on the quick wins.

Big ticket items like your mortgage, loan repayments, pension contributions are all areas you will want to look at for a quick win.

However, they are once and done things. After you’ve trimmed them the best way for you, what else can you do? You can focus on the little things. My Grandma used to say:

“Look after the pennies and the pounds look after themselves”.

Every cent you can save is a cent you do not need to earn. If you can save 2 cents by walking to the shop next door to pick up something then do it.

Don’t be thinking your time is too precious to spend longing doing your grocery shopping. Time is something you have enough of, money is not.

If you buy anything that is the convenient, easy version then stop and go back to the traditional longer version.

I’m talking about things like:

Microwavable rice – buy the basic (brown) instead, it will take 15 minutes longer but at less than 20% of the cost of the pre-packaged version.

Porridge pots – buy oats and make your own. If you take a porridge pot to work, then you can take oats, milk and sugar.

Ready meals – make your own instead. Sure they take longer than the 4 minutes it takes to heat a ready meal so find the time.

I am sure you can think of any number of things that you pay a little more for convenience, dishwasher tabs instead of loose powder, pre-cut vegetables like carrot sticks instead of whole carrots.

glass jar with open clip lid overfull of coins

Create Challenges

Most of us will rise to it when challenged to do something and achieve more than we would have done if we had not been challenged.

So challenge yourself, to help you get further on less money. Challenge yourself in any area of your life that involves spending money. Challenges like:

  • A low limit for your groceries one week
  • Eating only meals made from your pantry, no shopping at all
  • Walking to places you would have previously driven
  • Only using your car 1 day a week for errands (bundle them together)
  • Watching only free to watch TV channels
  • Exercising for free
  • Give up alcohol for a week or more (this would be a real challenge for me, eek!)

How To Be Successful With A No Spend Challenge

2021 Money Saving Challenge – Inspire Your Frugal Life Today

Treat It As A Game

When you are forced into learning how to live on less money overnight it can be difficult to acclimatize to it.

And we all hate being backed into a corner and being told we must do something. We invariably fight against it.

You can’t afford to be fighting against living on a shoestring though can you? So turn the situation on it’s head and treat it as a game.

Believe it or not, it can be fun to try and spend as little money as possible. It’s fun seeing how far you can stretch $10. Can you make it last a week? Two weeks?

Everything can be turned into a game with the right mindset.

bouquet of purple and pink flowers in white vase on white iron table

Time To Get Frugal

Frugal folk have worked hard over many years to do all of the things I’ve been talking about in this post.

They’ve stretched their money, they’ve cut their grocery budgets, drove down non-essential costs and created budgets that allow them to live an enjoyable life on a low income.

Frugal folk are not cheapskates but they do know the value of their money.

Being frugal can really help you right now, to develop a frugal mindset that will see you learn how to live on less money and keep you going.

If you are interested in being more frugal, more deliberate with your money, making your money stretch further.

Then sign up for my free email course where you will learn how to build the strong frugal foundations you need.

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

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Last Updated on 3rd March 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 Live On Less Money In Difficult Times”

  1. This is an excellent read. I would also add that we know bad things that are beyond our control will happen, and the best way to handle them is to prepare when times are better. My husband and I had a stocked pantry before the pandemic lockdown happened. I was already cutting our expenditures because we are retired and know that prices will go up.

    If you are laid off from a job, take a day to mourn the loss. You have lost a major part of your life, especially if you were with an employer for a long time, and you will grieve. But, by the next day, you need to start to get control of your circumstances. Immediately start all of the smaller cost cutting measures that add up to bigger savings. At the same time get a handle on your financial situation.

    My husband and I have been through more than one lay-off because of company mergers, program closures, etc., and so I am very familiar with a lot of this advice.

    Thank you for this very good post.

    • Hi Claudia. You are absolutely tight, prepare for the bad times when times are good. Doing this will relieve a lot of the stress when the bad times happen, because you know you have planned for it. You’re right about taking the time to grieve, for a previous job, previous colleagues, previous way of life, they are things we can take for granted only to have them whipped away at a moment’s notice. Thanks so much for stopping by!


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