When you hit a money crisis your budget is what will get you through it. The problem is, your normal budget just isn’t going to cut it.
In a money crisis you need to learn how to live on a tight budget, and the first thing you realize is what you actually need is a super tight budget. You need a survival budget.
It needs to be a tight budget as it’s going to help you survive the tough times until you get back on your feet.
Your personal survival budget could also be called the debt free budget. Make it tight enough and it will see you through the difficult times without going into debt.
Normal budgeting rules do not apply to a survival budget.
Survival is about shelter, fire, food. Or in the modern world: housing, warmth and food.
Things you take for granted as normal expenditure will have to fall by the wayside.
Your new tight budget is about essentials and nothing more. Create a survival budget and you know you can survive on that money. It won’t be luxurious but it will be doable.
A tight budget is about the absolute necessities and nothing more. Necessities would include:
- Mortgage interest (only) or rent
- Life insurance
- Medical insurance
- Home insurance
- Basic utility bills
- Basic food
- Transport costs to get to work
- Childcare (when required for you to be at work)
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In our modern day world the following might seem to be necessities but they are not. When the sh*t is going to hit the fan you have to make some tough choices:
- Mobile/cell phone
- Cable/streaming/TV costs
- Eating out
- Haircuts and beauty treatments
- Holidays/saving for
- More expensive food choices
- Your usual utility bill rates
Your survival budget is a super tight budget to see you through very difficult times. Times like:
- Taking a pay cut or worse
- Losing your job
- Having a medical emergency
- Relationship breakdown
- Losing your home to fire
When the difficult times hit you aren’t always in the right place emotionally to start planning how you are going to reduce your budget. That’s why I strongly encourage you to create your survival budget now, while you don’t need it.
Get your free survival budget template and a copy of my budgets from my FREE resource library.
How To Create A Strict Budget
There is a world of different between a tight family budget and a normal family budget. If you are going to remain debt free then your budget needs to be working on a cash basis.
As in, if you haven’t got the money in cash or in your account today you cannot spend it. No borrowing on credit or overdrafts.
Living cheaply can take a little bit of getting used to. Especially if you are just in the planning stage.
Turn every normal budgeting decision on its head and start afresh. A tight family budget or personal survival budget, whatever you wish to call it, calls for a different way of thinking:
Strict Budget Thinking
- If people across the world in cold places don’t have nice warm houses, perhaps you don’t NEED one when you are on a tight budget?
- Not everyone has air con, even in hot places, so why not plan on doing without if times are tight?
- Your car, do you actually NEED to use it every day or could you make do somehow?
- You don’t NEED internet at home when you can use it for free in town at various places.
- You don’t need Cable or Netflix or Prime, although they may make life easier and more enjoyable (this is what I say to Mr2p about our continuing cable reliance, sigh).
- Mobile phones are seriously convenient and totally normal these days. But they aren’t essential, honest!
- If bread is the cheapest food option, why do you need anything more than bread to eat each day?
These are just a few ways to get you thinking differently about living on a tight budget. I am certainly not advocating you only eat bread all day every day – that’s not healthy!
But to be successful in creating a strict budget you have to be willing to think differently.
I would recommend using the cash envelope system when you are being strict with your money. At least for the first couple of months. It helps you focus on the money you have.
Cash is emotionally much harder to hand over than your credit or debit card.
This is what our 2 different budgets looked like a few years ago:
As you can see, all non-essential spending is cut from our survival budget. Our mobile phones are on a monthly sim only package so we can stop paying for those within 30 days.
Petrol costs would be cut because we would only use our car for essential trips, no day’s out, or drives into the countryside.
Our gas and electric bills would be reduced as we would turn the heating off for all but the very coldest days.
Not fun but when you have a limited income it’s something you can control so something you can do to actively reduce costs.
Cable TV and internet would have to go. They might be jolly handy but when we are trying to live on a very tight budget they are something we can do without.
After all – they’ve been around for less than 30 years so the older generations did without them just fine. There are also plenty of free TV and internet options.
Now don’t get me wrong, I wouldn’t want to live on a bare bones budget forever. But that budget told me we could live on one income when we needed to. It told me I didn’t need to worry about money if one of us lost our job.
Saving Money On A Tight Budget
I’ve just talked about creating a bare bones budget where almost nothing is ring fenced and now I’m talking about ways to save money on a tight budget?
When you start living on a budget, especially a tight survival budget, there is very little if any slack in it. Rightly so, you’re trying to stay out of debt and survive whilst you get back on your feet.
However, I do actually advocate adding back into that tight family budget of yours a little bit of savings.
When you have no give in a budget, what happens when you have an unexpected bill to pay? You may have had an emergency fund, but you may well have already exhausted it.
What happens if you need to find $200 for a small car repair bill? $200 is nothing, but it is everything if you don’t have it.
The survival budget (without any savings) I shared above would work well for us if everything went according to plan. But nothing ever does, does it?
When we got hit with a £100 vet’s bill for one of our cats I realized I had created too strict a budget. There was no wiggle room for these one-off unforeseen bills.
Luckily we weren’t living on that survival budget, it was still in our back pocket for possible future use. But I realized we needed a little flex to make life a bit easier.
So my advice to you is build in a small amount of savings each month. Cut something else a bit more than you would otherwise do in order to make it happen.
Eating On A Tight Budget
Your grocery bill can be a very flexible thing. These days there is so much choice at the grocery store that you are bound to spend more than you need.
When you are living on a tight budget food is something you can get down very low, as long as you are prepared for it.
If you stick to the best cheap foods to buy when broke as the basis for all your meals then you will be able to eat well on a very tight budget.
I have deliberately not included any processed foods in this list. Cooking from scratch is both cheaper and healthier for you. It doesn’t have to take loads of time. Make use of your crockpot or Instapot to free up time.
- Make the most of reduced, bargain food and adjust your basic meal plan accordingly.
- Try to keep your meals below $1 a person or less.
- Meat is more expensive than beans and pulses so have more meat free meals.
- Wholesome bread is filling, make your own or buy reduced and use as a basis for a cheap meal to help you eat on a very tight budget.
- Check out this mammoth post of 55 cheap and easy meals to cut your grocery budget
You may also like:
Get your free survival budget template and a copy of my budgets from my FREE resource library.
10 More Ways To Save Money
- Reduce or eliminate eating out
- Avoid bank fees & credit card interest
- Negotiate your utilities
- Have a spending freeze on clothes
- Ask for discounts on anything you buy
- Don’t grocery shop midweek – stick to a meal plan
- Plug up drafts and keep your house warm
- Use your library
- Use cash
- Barter services with friends and family
For more money saving tips check out these posts:
Survive And Thrive
When you are forced to do things differently it is amazing how much you end up enjoying it. Recently Mr2p and I went away for a week with my parents. As members they like to stay in Landmark Trust properties.
We had an enjoyable time but it certainly took us out of our comfort zone and we all had to adapt:
- There was no road access to the property
- Everything had to be carried by hand/on backs up a windy, forest path 500 meters and across a heritage train track
- Landmark Trust actively encourages everyone to arrive by heritage train which my parents did – involving 24 hours and multiple changes
- There was no TV
- Nor internet or WiFi
Did we miss the convenience of a car outside, TV and internet? Of course, but it didn’t darken our days. Indeed we thrived on having to do things differently.
Shopping was much more minimal, we bought only what we truly needed given we were going to have to carry it all back.
We had to plan journeys around the train times (we had free passes so of course we had to use them for at least a couple of days).
And the same goes if you have to cut back on your usual entertainment expenditure. Why not try working through this list of activities to do on a no spend weekend?
Surviving And Thriving On Tight Budgets
Budgets are all about choosing how you want to spend your money. You can thrive on any amount of money, or none at all, with the right mindset.
I love living within my means and many other frugal people do to. You may not want to be a frugalista but if you need to survive on a tight budget make sure to embrace and enjoy the challenge.