Living on a Tight Budget and Owning a Home

It’s not easy to live on a tight budget, especially if you’re a homeowner and have to deal with all the expenses that come with maintaining your property and all the other expenses from property taxes to homeowners’ insurance and HOA fees. According to CNBC, nearly three-quarters of U.S. consumers live on a budget and most tend to overspend by an average of $7,400 a year. Let’s see about living on a tight budget and owning a home.

While the idea of trying to follow a strict budget can sound overwhelming, there are a few things that you can do to make your living situation one that’s more comfortable.

Eat Home Cooked Meals

Eating out even once a week can be well over $60 for a family, and doing this over time can really add up. Eating home-cooked meals isn’t as bad as it seems, since it’s healthier and leaves you with leftovers for dinner or work the next day. Planning out your meals and shopping for the ingredients with a list at the grocery store is one of the easiest ways to cut back on non-essential spending. It may be convenient to buy pre-made meals, but the cost can quickly add up, taking a big slice out of your budget.

Meal Plan

Take time on a Sunday and spend a half-hour or so planning out meals and lunches for the week ahead, and include all the ingredients you need. If you’re using a recipe book and need specific ingredients you don’t normally buy, save time and snap a photo of the page, and take it to the grocery store with you. This way, you will be only buying what you wrote down and will save both time and money instead of running to the store twice a week to get the ingredients you missed. 

When doing this, it’s important to not get sidetracked and head down the beauty products and accessories aisle, or buy that small luxury ice cream you’ve been eyeing up. Sticking to the plan is important, and all week you’ll be set on food, snacks, and have leftovers for lunch the day after.

Review Recurring Expenses and Cut Back Where You Can

If you don’t carefully monitor your spending habits, it can be difficult or even impossible to pinpoint exactly what you’re spending your cash on. To make it easier, track all of your expenses, from morning coffee runs to recurring subscriptions, using a spreadsheet, notepad, app, or whatever is most convenient. 

Of course, you’ll also want to include a list of all of your bills, from regular monthly expenses to annual insurance payments and the like. Figuring out your home expenses every month should be relatively easy when you know what your mortgage payment, taxes, and utility bills total up to. Non-housing-related expenses can easily sneak up on you when you factor in groceries, entertainment, recreational activities and hobbies. Once you’ve totalled up everything you’ll be able to see where you can most easily cut back. 

Consider Refinancing Debt

If you have high-interest credit cards or loans, you may be able to save money by refinancing that debt at a lower rate which will also reduce your monthly payments. Using a tool like a house payment calculator can be helpful for visualizing the breakdown of your expenses, check out Redfins house payment calculator here. If it’s been a while since you’ve had your house accessed, it could be that the value is higher than you thought, making refinancing one of the best options for reducing your monthly costs. 

Cut Utility Bills

Depending on the size and location of your home, utility bills can also take a big chunk out of your budget. If you live in an area that gets extremely hot in the summer and/or cold in the winter, there are steps you can take to reduce the amount of heating and cooling you need to do. For example, you might put on sweaters when it’s chilly and use darkening shades on the windows when your home is baking during the warmer months. Other options include switching traditional light bulbs for LEDs and hanging clothes on a line outdoors to air dry instead of running your dryer.

Another huge thing that can cut utility bills by a lot is turning down the heat when you leave for work during the day, and in the summers, turning it off or up so the AC doesn’t kick on. If you think about it, you’re gone for 8-9 hours a day at work, when these systems are running constantly. Even if you have a dog or cat, they won’t mind if it gets a little chilly or warm. Just don’t let the temps get into the danger zone of overheating your pet, either.

Go the DIY Route

When your home is in need of minor repairs that are fairly easy for a handy person to fix, avoid calling in a pro which usually comes at a very high cost. Assuming the job isn’t a dangerous one, like wiring, you might be able to find DIY videos to help you out. Oftentimes home improvement stores have experts on hand to provide advice as well. You can always call a family member or friend to help out if the DIY videos are too challenging and daunting to try by yourself.

Go Thrift Shopping

Thrift shopping isn’t for everyone, but when you’re living on a tight budget, it really helps out on the wallet. When you do own a home, clothes and accessories will become wants, instead of the “needs” you had to have back in high school. It’s about putting your money into the things that matter, instead of pricey clothes every week. Things like jeans and simple basic pieces are great to head to the thrift store for, as you’ll end up paying $5 or $10 for jeans instead of $50 in popular retail stores. Plus, it’s a fun way to get out, since you never know what you’re going to find there! 

 

Tagged: How do you live on a tight budget?, What is the 50 20 30 budget rule?