tight budget Archives — Beating Broke

10 Unexpected Benefits of Living on a Tight Budget: The Upsides of Being Broke

April 16, 2024 By Catherine Reed Leave a Comment

In an era where consumer culture and social media often define success and happiness, living within a tight budget can seem less like a choice and more like a last resort. Yet, as we navigate through economic uncertainties, a rising cost of living, and a collective push towards more sustainable living, the constraints of a tight budget reveal numerous unexpected advantages. Here are ten surprising upsides to embracing frugality that might just redefine your notion of being “broke.”

1. Unleashing Creativity and Innovation

Necessity is undeniably the mother of invention, and a tight budget is the playground of creativity. Limited financial resources force you to think innovatively, be it through DIY projects, discovering alternative solutions to everyday problems, or simply finding joy in creating something from nothing. This kind of creativity not only adds a unique zest to life but also hones problem-solving skills that are invaluable across all aspects of life.

2. Mastering Financial Discipline

Navigating a tight budget is akin to a masterclass in personal finance. It teaches you the importance of tracking every expense, differentiating between wants and needs, and planning for the future. This acute financial awareness and discipline lay a solid foundation for managing resources more effectively, ensuring long-term stability and peace of mind.

3. Rediscovering the Joy in Simplicity

In a world with a constant bombardment of messages telling us we need more, living on a tight budget teaches us the opposite. It reminds us that happiness often lies in life’s simplest moments—reading a book, enjoying nature, or spending time with loved ones. This realization fosters a deeper appreciation for what truly matters, leading to a more content and fulfilling existence.

4. Contributing to a Greener Planet

A frugal lifestyle naturally leads to reduced consumption and waste. By making thoughtful purchases, reusing, and recycling, you not only save money but also contribute to environmental sustainability. This mindful approach to living aligns with the growing global consciousness around minimizing our ecological footprint and living more harmoniously with our planet.

5. Building Resilience and Flexibility

Living on a tight budget is not without its challenges. Yet, through these challenges, you develop a resilience that transcends financial aspects. You learn to adapt, make do, and find solutions, precious skills for navigating life’s unpredictable nature.

6. Fostering Authentic Connections

Without funds for lavish entertainment or dining, you’re likely to seek out more genuine and heartfelt ways to connect with others. Simple gatherings, shared experiences, and meaningful conversations often lead to stronger, more authentic relationships that aren’t predicated on spending money but on the quality of time spent together.

7. Escaping the Debt Trap

A tight budget often necessitates living within your means, which naturally steers you away from the lure of credit cards and loans. This debt avoidance spares you the stress and constraints associated with repayments and fosters a sense of freedom and autonomy in your financial life.

8. Gaining Clarity on What Truly Matters

When resources are limited, you’re compelled to scrutinize your spending, which, in turn, brings clarity to your values and priorities. This reflective process allows you to align your lifestyle more closely with your values, leading to a more authentic and fulfilling life.

9. Embracing Self-Sufficiency

The constraints of a tight budget often lead to learning new skills out of necessity, whether it’s cooking from scratch, repairing items instead of replacing them, or growing your own vegetables. These skills not only save money but also instill a profound sense of self-reliance and empowerment.

10. Laying the Groundwork for Future Prosperity

Interestingly, the habits cultivated from living frugally—such as saving diligently, investing wisely, and making thoughtful financial decisions—can significantly contribute to future financial success. When your financial situation improves, the principles and practices honed during tighter times ensure you manage your increased resources wisely, avoiding the pitfalls often accompanying financial windfalls.

These Benefits of Living on a Tight Budget Show There’s an Upside to Being Broke!

Living on a tight budget may initially seem daunting, but it harbors many unexpected benefits that extend well beyond mere financial savings. From fostering creativity and resilience to promoting environmental sustainability and deeper human connections, the advantages of a frugal lifestyle are profound and far-reaching. Embracing the constraints of a tight budget paves the way for a more stable financial future and enriches your life in ways money cannot buy, illustrating the timeless truth that sometimes, less truly is more.

The Psychology of Poverty: 18 Surprising Effects of Being Broke on Your Mind

Catherine Reed

Catherine is a tech-savvy writer who has focused on the personal finance space for more than eight years. She has a Bachelor’s in Information Technology and enjoys showcasing how tech can simplify everyday personal finance tasks like budgeting, spending tracking, and planning for the future. Additionally, she’s explored the ins and outs of the world of side hustles and loves to share what she’s learned along the way. When she’s not working, you can find her relaxing at home in the Pacific Northwest with her two cats or enjoying a cup of coffee at her neighborhood cafe.

Start the New Year by Finding Money

December 26, 2022 By MelissaB 1 Comment

The last few years have been difficult for most people. First, the COVID-19 pandemic shut down much of the country, causing many people to lose their incomes and livelihoods. Then, when the country opened up again, inflation took hold. The United States, and much of the world, battled inflation in 2022. As a result, money is tight for most people. If this is the case for you, I invite you to join me; I plan to start the new year by finding money.

Why Find Money in the New Year?

Like many Americans, I am struggling to stay within our grocery budget. Looking at the USDA’s cost of food, I see why I’m struggling. Grocery prices increased sharply in 2022.

In addition, fuel costs and interest rates on loans are up. Everything is expensive.

To give our family a little breathing room, I plan to start the new year by finding money.

How to Find Money?

You can find or reclaim money in your budget in various ways. For example, I found money in these ways:

Cell Phone Expenses

My husband and I use Ting to keep our cell phone expenses down. The monthly bill for the two of us combined averaged $40 to $45. Then we added our teenage son to the plan, and suddenly our bill shot up to $100 to $120 a month. After some sleuthing, I discovered I could limit how much data he uses a month. Once I added that limit, our bill dropped to our average amount, saving us $50 to $75 a month.

Cutting Streaming Services

We have several streaming services including Hulu, Paramount+, Disney+, Netflix, Peacock, and Discovery+. I have ended or paused them all except Netflix and Hulu, which I’m temporarily keeping to watch Kindred. When we finish that, I’m pausing it again. With this action, I save $35 a month.

In the new year, we’ll only have one streaming service at a time. So, after we watch every show we want on Netflix, we’ll end the subscription and subscribe to a different one for a few weeks or months. By rotating streaming services, we’ll pay no more than $6 to $18 a month.

Pausing Services

I have a monthly Audible subscription that costs $14.99. I have several books I haven’t listened to yet, and I have nine credits. Therefore, I’m going to redeem my credits and pause my subscription. I have plenty to listen to for the next few months, so why keep paying? I can pause the subscription for at least six months before I run out of new audiobooks to listen to, so I’ll save myself $90.

I also have a $26 monthly fee to Ancestry.com. Genealogy is one of my hobbies, but there are some months, especially in the summer and fall, when I don’t have time to warrant the expense. So, my plan going forward is to gift myself a six-month subscription in November when they go on sale. Then, at the end of the six months, I’ll cancel my membership until next November. That gives me the winter and spring months to do my research. Using this technique, I’ll save approximately $150 a year.

Evaluating Memberships

Likewise, I’m evaluating memberships to see if we should keep them or let them go, including the following:

Amazon Prime

We’ve been Amazon Prime members for years, but the price increases each year. We’ll need to pay $139 in February to renew our subscription. We’ve been members for so long I’m not sure what perks we’re benefiting from. In the new year, I will spend some time researching how much we spent on Prime, what savings we reaped (especially from Whole Foods as Prime members), and what we would miss if we let the membership go.

Life360

Life360 costs $20 per month. I like this because it’s on all of our phones, so if someone needs help, we know exactly where they are. In addition, Life360 offers emergency roadside service. I’ll likely keep this service for now.

Other Places to Find Money

There are two other places to look to find money. One applies to us, and one doesn’t:

Refinancing Our Home

I don’t know if 2023 will be the year for this, but as soon as interest rates drop, we’re refinancing our home. We bought our new home in September, and our interest rate is 5.375 percent. However, I’m not sure if 2023 will be the year. We might have to wait until 2024 to do this.

Negotiating with Credit Card Companies

My husband and I don’t have credit card debt, but if we did, I would call up the credit card company and make two requests:

Can They Drop the Annual Fee?

When I did have credit card debt, they couldn’t drop my annual fee, but they did offer to give me enough points that I could redeem them to pay the annual fee. This essentially made the annual fee free. It’s worth asking if they can waive the fee or make you a similar offer.

Can They Reduce the Interest Rate?

Interest rates are so high now that paying down the balance is difficult because so much money goes to interest. If you call the credit card company t*o ask to reduce the interest rate, remind them what a loyal customer you’ve been. They may say no, but if they say yes and drop your interest rate a few percentage points, you have more money to apply to the balance or to add to your budget.

Using Cash Back Sites

Another way to save money that a lot of people don’t consider is using cash back sites. Cash back sites are older, web 2.0 technology, but they work reliably to save money. How they work is you open an account with the site, and click through the site when you’re shopping online. If you buy something, the retailer send a commission to the site, who splits it with you. Its a reliable way to slash 1% to 3% off your budget. Good sites to check out are: www.rebatefanatic.com, www.swagbucks.com and www.dollardig.com.

Refinancing Our Home

Flip Old Comic Books

Do you watch Storage Wars? Or Antiques Roadshow? Those shows are about people vetting junk and forgotten items to hopefully find valuable collectibles to sell. You can use the same concept with comic books. There is a big market out there where collectors pay top dollar for certain comic books.

You don’t need to be a comic book expert to understand what makes comic books valuable or worth a few bucks. It should be rare, aesthetically in good condition, signed by a creator, written or drawn by specific creators, or feature fan-favorite storylines, amongst some other factors.

If you have a stash of old comic books or want to go looking for cheap ones to flip, there is a way to check their current market value online for free. Use a comic book price guide. The main idea is to check the value of your stash before you try and sell it.

Then, once you have a sense of the rough ballpark value, you just sell the comics to a dealer or you put them out on Facebook Marketplace, or eBay. Ebay is probably the best as its fee structure is lower than Amazon and you get more buyers than Facebook Marketplace.

Final Thoughts

Inflation is hitting most Americans. Unfortunately, there’s not much you can do about the high grocery prices besides altering your diet to eat cheaper foods. However, you can start the new year by finding money and eliminating services and subscriptions you no longer need or use. Doing so will give you extra cash to increase the grocery budget, pay down debt, or give yourself extra wiggle room.

Read More

Our Favorite Small Ways to Save Money

Save Money with Buy Nothing Groups

How We Save Money with Ting as Our Cell Phone Provider

4 Ways to Find Extra Money to Put on Debt

MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.

www.momsplans.com/

How to Survive Being Broke

July 20, 2020 By MelissaB 3 Comments

Many of us have been broke. It’s not a fun place to be. You may feel depressed and desperate, but recognizing that you won’t always be in this position is imperative. There are steps you can take to live a more comfortable life financially. Until then, here’s a primer on how to survive being broke.

How to Survive Being Broke

If you’re broke, you must take care of your immediate needs first.

Short Term Action to Take

Maintain a Positive Attitude

Many people who are broke become depressed. They don’t see any way out of their situation and can’t imagine a future where they’ll be in a better position.

To successfully beat being broke, you need a positive attitude. Research stories of people who were broke and went on to become successful and much more comfortable financially such as Erin Brockovich (played by Julia Roberts in the movie Erin Brockovich) or Chris Gardner (played by Will Smith in the movie, The Pursuit of Happyness).

Remember that life can change quickly. You may be broke now, but you likely won’t be in the same position in five years or even two years.

Live on Beans & Rice

How to Survive Being Broke — Photo by Paul Hanaoka on Unsplash

The next step is to trim your expenses as much as possible. Since food is often the largest monthly expense behind rent, that’s the best place to start. You may love to eat salmon and steak, but now is not the time to do so. Now is the time to eat the proverbial beans and rice. For instance, when my mom and dad were first married and broke, my mom would buy one pork chop, pound it flat, and then split it between the two of them. Once they had two kids, she would buy two pork chops and pound them flat to make four servings. Now is the time to stretch your food as much as possible and buy the least expensive food you can.

Choose Your Friends Carefully

What financial position are your friends in? You’ll want to find friends who are mindful of their money and not spendthrifts. When my husband and I were first married, we were broke.

Some of my coworkers invited us to go with them out to eat. The other two couples were both financially comfortable, and they chose a Mexican restaurant. To my dismay, there were no prices on the menu. We ended up spending too much that night, even though we tried to make frugal choices. It was just an expensive restaurant. We couldn’t go out with my coworkers again because we couldn’t afford their lifestyle.

If you try to maintain friends who are in a better financial position than you, you may never become financially comfortable.

Entertain at Home

Just because you’re broke, you don’t have to give up your social life. Instead, change the way that you socialize. Instead of going to a bar or restaurant and spending a lot of money, invite friends to your home. Have a potluck at your house or have a game night. Once a month my parents used to have their friends over in the summer for a volleyball night. Be creative. You’ll find there are plenty of ways to socialize without spending a lot of money.

Find a Hobby That Pays

Sometimes when people are broke, they have a lot of time, but not much money. If that’s your circumstance, find a hobby that pays. For instance, my uncle started a small side business for athletes at his former high school. He would comb through micro fiche to find all of the articles for a particular year about the high school football team. He’d print these out and bind them all together and sell them to the athletes. He made some money on the side, and the former athletes had a scrap book of all the old newspaper clippings from their glory days.

Other ideas might include gardening, crafting and selling the product on Etsy, doing genealogy research for someone, building web sites for others, etc. You’re only limited by your imagination in what you can do.

Long Term

When you’re broke, you may immediately think just of the short-term, but you must also think of the long-term. How will you get out of this situation so you’re not broke your entire life?

There are several important steps you should take.

Earn a Degree

If a degree would help you secure a better job, than look into taking college classes. When you’re already broke, you may feel like you have you have no time or money to do so. However, if you don’t take steps to improve your situation, you’ll remain broke for much of your life.

I had a friend, Becca, who was raising her niece and nephew. Money was tight, but she prioritized her education. She took one or two classes a semester, putting in much of her study time early in the morning or at night when the kids were asleep. It took her many years to get her degree, but she did. Now, she lives a comfortable, middle class life and has a professional job.

Learn about Finance

If you don’t already have a solid background on personal finance, now is the time to learn. This doesn’t have to cost any money. You can borrow books from the library, take free finance classes online, and read blogs. Learn all you can about managing money. I’m not just talking about ways to save money, but ways to build your emergency fund and invest so you don’t end up broke again once you get out of your current situation.

Final Thoughts

How to survive being broke is a challenge for many people. However, the first step is a mental one. Realize that you’re currently broke, but you won’t be broke for the rest of your life. You can make both short-term and long-term changes to improve your life and vastly improve your financial situation. Many, many other people have done so. Learn about those people and take concrete action to improve your current situation.

MelissaB