How To Live Fabulously On A Budget (And Save Money)

Last Updated on 14th July 2020 by Emma

Some people say living on a budget sucks.

I say you’re not doing it properly then.

I don’t mean that to be harsh but as a frugalista I get fed up of people belittling budgets and saving money.

I say you can have a fabulous life on a budget, you just need a little help.

Let’s start by being clear what living on a budget actually means.

Your budget is basically your plan to spend the money you have.

If you have a low income then your budget is less than someone who earns more.

When you go into debt then you are spending your future earnings because that is what you will have to use to pay your debt back.

If that is you, then you know you need to change. You cannot keep spending future money, you need to learn how to live on a budget.

In fact what I want you to do is to learn how to live a fabulous life on a budget!

Who wants to just live, when you can live fabulously?

white & purple flower on blurred flower background

Fabulous Budget Living

The number one thing that can change your budget and your life is you.

Your mindset – how you view your money and your ability to budget your money.

Having the right mindset about your money, how you spend it, how far it goes and what you achieve with it makes for a great experience.

Focus on what you do have, not what others have got. When you look around you I know you will see others with more and you’re going to want that too.

But you are not them.

When I was younger I desperately wanted to be thin.

All around me were pictures of models and famous people who looked fabulous because they were thin.

Did I become thin because of seeing everyone else’s thinness? Nope! I comfort ate, yo-yo dieted and never got to be a size zero.

Hankering after what you think others have – thinness or the unlimited ability to spend – doesn’t help you actually achieve them.

Follow your own money path.

Learn the art of saying no. Practice it daily.

Focusing on the positives within your life will change your mindset.

Changing your mindset is hard, you don’t just click your fingers and BOOM! you’re there.

You will need to work at it.

You might like to read this: 11 Simple Things That Rich People Do (And So Can You)

Now we’ve got you working on getting your mindset in the right place, what practical steps can you take to start living on a budget and truly enjoying it?

11 Practical Steps For Living On A Budget

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

(This post contains affiliate links. If you click on a link and make a purchase, I may make a small commission at no extra cost to you. You can read more here)

pinterest image for living on a budget

1. Create Life Goals

I am a great believer in goals. Short term goals, financial goals, life goals.

Your goals are what you want to achieve now, next year or further down the line. Maybe you want to be debt free, to give up your job, to have an exotic holiday?

One of my first big goals was to be mortgage free. It took us 10 years so not a short term goal.

But knowing that every penny I saved meant being mortgage free that much sooner was very motivating. It kept me focused.

Having real, tangible goals helps you focus your spending and saving.

Keep them real and at the forefront of your mind.

When you’ve got your goals mapped out, reducing your budget and making the small daily changes to live on less is easier.

Your goals are your reason for your budget.

2. Prioritize Your Spending

If you are going to both learn how to live on a budget and save money (that’s two things) then understanding your spending and making good money decisions is key.

You need to know what you are spending your hard earned money on and prioritize where it goes.

No point spending $500 on groceries because you love food if that equates to 30% of your entire income.

To understand what you are spending your money on you need to track your spending.

Writing down everything you spend is an eye opener. It can also be laborious I know.

colour painted eggs on straw and white wooden background

3. Save Money By Re-skilling

Don’t outsource skills or jobs that you could do yourself.

With a bit of time and research you can take on all those jobs your grandparents used to, and more:

  • Cut your own hair (YouTube different styles)
  • Car oil change (use YouTube for tutorials)
  • Gardening
  • Window cleaning

For more inspiration on why learning some of your grandparents skills will help you save money, have a read of this post:

12 Traditional Frugal Living Tips To Supercharge Your Savings

4. Stop Impulsive Purchases

These are never in your budget, yet very easy to do.

Buying impulsively when you are out and about because you’ve seen something that suddenly you must have is how you spend too much.

Moving away from impulse buying could be as simple as just not buying when you see something nice.

Realistically though, you will need to change other things to reduce this spending.

Don’t go shopping as a form of leisure.

Be strict with yourself and invoke a 72 hour pause or the 30 day rule.

If you see something you really like that wasn’t already a planned purchase, wait a minimum of 72 hours or 30 days.

Remember your goals – does this new thing fit with your goals or stop you from achieving them this month?

If it is still a want, and you have the money within your budget, then go buy it.

Be conscious of your spending decisions.

white keyboard and mouse with black coffee cup - living on a budget

5. Reduce Utility Bills

Paying for gas and electricity are musts, but you don’t need to pay over the odds.

Dependent on where you live you may be able to switch to a cheaper supplier or haggle with your existing one.

Until recently this meant using comparison sites to find the best deal and organizing the switching yourself.

But now in the UK there is a fantastic new service called Look After My Bills 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.


More than switching suppliers though is your ability and your power to reduce those bills.

Not to zero, granted, but you could shave $10 a month or more by focusing on using less energy every day.

You can:

  • switch lights off
  • turn your thermostat down
  • take a shorter shower
  • have a cold shower (I love them!)
  • use your crockpot more, your main oven less
  • unplug gadgets not in use
  • wear an extra layer or two

These may not seem like big money savers.

On their own they aren’t, but collectively they could save you $120 a year and they are also eco friendly.

These are productive steps you can take to reduce your bills and do your bit for the environment.

By doing so you are also building your new mindset. The mindset that will help you learn how to budget and save money every day.

For more help on reducing your utility bills and being more eco friendly check out these posts:

How To Go Green When You Live A Thrifty Lifestyle

How To Save Electricity Doing Absolutely Nothing

How To Keep Your House Warm In Winter And Save Money

50 Frugal Habits That Are Also Eco Friendly

10 Ways To Save Money On Your Water Bill

6. Don’t Start Out With Coupons

I’m not a big advocate of couponing when you are trying to lower your grocery budget.

Once you’ve achieved a reduction then by all means add couponing in (I have done).

But when starting out you want your focus to be on buying the right foods for the right meals for you.

Coupons can easily send you off on a tangent of spending more to save more.

bowls of food on plain table - living on a budget

7. Save Big On Groceries

There is too much choice in the grocery stores now which actually makes it difficult to only spend a small amount on food.

You need to focus on specific areas in order to have a tight grocery budget. With so much choice it can be difficult to choose wisely and stick to your spending plan.

Focus on whole foods, not processed. Healthy foods can be cheap.

Whole grains, beans and pulses are healthy and cheap. Seasonal vegetables and fruit can all be part of your food plan.

This post will give you an excellent basis for your grocery budget:

30 Of The Best Cheap Foods To Buy When You’re Broke

Budget Meals

The price of homemade meals can vary enormously, just as restaurant food can.

Plan your meals based on ingredient cost and set at bar for the maximum you will pay for one meal.

When I was feeding a family of 4 my bar was set at £1 for the protein/meat element of a single meal.

For the 2 of us now my bar is £1.50-£2 but I do like to sneak in a few £1 protein meals to reduce our overall food cost.

Be creative with your meals, pad your meat out with extra veg, beans or pulses to reduce the cost.

Don’t be a slave to recipe amounts, especially on meat. If a recipe says 200g of protein per person, I always reduce it by half.

For great cheap and easy budget recipes check these posts:

55 Cheap And Easy Meals You Are Going To Love

10 Frugal Meals For When You Feel So Broke

plates of food on white background

Meal Planning

Meal planning is THE BEST way to reduce your grocery bill and ensure you don’t waste any food. The best.

Some people aren’t keen on meal planning on the basis that they don’t always ‘feel’ like eating the planned meal.

You can deal with those thoughts 2 ways.

  1. Focus on the premise that food is fuel, ignore what you feel like having and have the planned meal or
  2. Stick to the weekly meal plan but switch up the days and have a meal planned for another day.

For help in getting started with meal planning check out this post:

Your Simple Guide To Meal Planning On A Budget

If meal planning is something you have never done or it feels a little overwhelming right now then the $5 meal plan could be your savior.

For just $5 a month you not only get a weekly meal plan, you get a grocery list of all the ingredients you will need to make those meals.

That’s less than $1.25 a week to ensure you don’t waste food and have easy, yummy meals to make every night.

Given we can waste up to 30% of all the food you buy, $5 a month for recipes and a grocery list emailed to you every week will definitely save you a ton of money over the next few months.

And with a 14 day FREE trial, what have you got to lose?

Try $5 Meal Plan Today!

TIP – you can use $5 meal plan even if you are, like me, based in the UK as everything is emailed. It took me way too long to work that one out, sigh.

Don’t Waste Food

According to statistics, we waste up to 30% of the food we buy. Right there is your potential to cut 30% from your grocery budget immediately.

Don’t waste food!

Is that easier said than done? Maybe, but keeping that 30% in your mind will help you reduce waste for sure.

Meal planning and sticking to it is a great start.

I’ve written in detail how you can reduce food waste in this post. I’ve created a free food waste audit  that you can download.

I encourage you to complete it for 2 weeks. You could find it quite eye opening!

How To Save Money By Cutting Your Food Waste To A Minimum

dollar bills planted in soil

8. Reduce Your Clothing Budget

Clothes are a prime area for reducing spend on to help you in your quest of successfully living on a budget.

I bet right now you have enough clothes in your wardrobe to not have to buy another item for at least 2 years.

Cut your monthly expenditure on clothes right down and save that money instead.

I’m not saying don’t buy any clothes for 2 years but if you did, think of the money you would save in that time.

Makes you think doesn’t it?

9. Find Free Entertainment

You can pay a lot of money for entertainment. Yet look around a little and you’ll also find plenty of fun and free entertainment.

  • Walk in the park
  • Movie night
  • Free events in your community
  • Museums
  • Have friends round to dinner
  • Fun at the beach

You certainly don’t need to forsake entertainment to live within your means, just find the free alternatives or create your own.

coloured chocolate eggs on white background

10. Use Cash To Reduce Spending

I know you can get rewards and cash back if you use your credit cards for all your spending. And I know these rewards can add up quite nicely.

But to help your mindset, to help you start living on a budget and be successful, I would encourage you to use cash for 2 months.

Cash for all those times when you would otherwise use your credit card.

I know from personal experience that I spend more money using credit cards than when I stick to cash.

Using cash makes you think harder about spending it, You have to hand it over to the cashier.

Your credit card isn’t real money at the moment, it’s just a bit of plastic. Only later when you get the bill does it become real, too late.

For more help in getting started on using cash check out these posts:

Why You Should Use a Cash Envelope System to Manage Your Money

The Best Cash Envelope Wallet To Help You Love Cash Budgeting

11. Create Your Survival Budget

A survival budget is the tightest of budgets. It’s the budget you turn to when the sh*t hits the fan.

If you were suddenly faced with living on one income when you are used to two, a new spending budget would be essential.

Creating a survival budget will show you what you could and would give up if you HAD to. When your back is to the wall and the money isn’t there.

Having a survival budget provides reassurance for tough times.

But it also shows you that your normal budget, the one you are living on right now, is not so tight.

Your normal budget does have flexibility and extra in it, unlike your survival budget.

There is money for fun, clothes and entertainment when you plan it right.

This is what our survival and normal budgets looked like a few years ago:

table of 2 different budgets - how to budget and save money

We no longer have a mortgage so our budgets are different

I strongly encourage you to create your own survival budget, have a read of my post on how to do it.

There is a free template you can download to help you create your own.

How To Survive, Thrive And Save Money On A Tight Budget

Living On A Budget

Creating your financial and life goals, prioritizing your spending and really focusing on reducing costs are key to being successful in living a fabulous life on a budget.

Mastering these 11 practical steps will help you love living within your means and help you save money for those fantastic goals of yours.


pinterest image for living on a budget

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.

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