8 tips for finding discretionary money on a tight budget
The Select editorial team works independently to review financial products and write articles that our readers will find useful. We may receive a commission when you click on product links from our affiliate partners.
You can feel like you’re caught up in the monthly chore of working just to cover your bills – and vacations make it even harder to manage your budget, let alone inflation. But with a little planning, there can be some smart ways to cut back on your spending to free up some cash.
Select spoke with experts to get their top tips and strategies to help you take a look at your budget and learn a few new ways to stretch your money a little further.
Here are their top tips for saving money:
Subscribe to the Select newsletter!
Our best picks delivered to your inbox. Buy recommendations that help you improve your life, delivered weekly. Register here.
Make a list before you do your grocery shopping
Research what’s on sale and build a list before you shop. Stick to this list to avoid overspending.
“You can cut your grocery budget just by buying weekly sales from your local grocery store,” says consumer analyst Julie Ramhold with DealNews.com. “Rather than buying what you want to eat, try focusing on what’s on sale and the meal plan around those items. It will save you spending on groceries.”
A grocery store credit card can also help you save money in the long run. With the American Express Blue Cash Everyday® card, you can earn 3% cash back at US supermarkets (up to $ 6,000 per year, then 1%; conditions apply). Cash back is received in the form of reward dollars which can be easily redeemed for statement credits.
Don’t miss Select’s roundup of the best grocery credit cards.
Consider a side activity
Do you have a hobby that you are particularly good at that people will pay for?
“Maybe there’s a type of craft that you love to do, or even a baked goods or dish that everyone is crazy about,” suggests Ramhold. Consider volunteering your services to friends and family to earn a little extra cash – just make sure you charge them for supplies as well as your work, she says.
Even if you don’t have monetizable talent, there’s a good chance you have some unused stuff that you could sell online. There is a wide range of Online resale sites, from Facebook Marketplace to Depop, where you can sell clothing, furniture, and household items to earn a little extra cash.
Save all the money you received
If you receive money for gifts, whether it’s for your birthday, vacation, or whatever, save the money for the future. You can use it later when you need a break from all the cost cuts you’ve made to enjoy a little splurge.
“It’s easy to use this for fun items because you won’t have to sacrifice elsewhere,” Ramhold told Select.
Another option is to split how you spend that extra money. Try an 80/20 split: put 80% in savings (or toward debt repayment) and the remaining 20% can be fun money. Even if you only have $ 100, it’s $ 80 in your savings account, and $ 20 that could be used for a movie ticket, fine coffee and pastry, or whatever.
Take an inventory of your monthly subscriptions linked to a credit or debit card.
“You probably have memberships or subscriptions and maybe not actually using them, so it’s money wasted,” says Rod Griffin, senior director of public education and advocacy for Experian. Decide if you really need four streaming services, two meal delivery providers, and that monthly box of pet treats. You don’t have to undo them all, but you may want to consider deleting a few.
There are a few apps that can help you track and manage your subscriptions, like TrueBill and Trim, which can help you keep track of your subscriptions and sometimes even cancel them for you (for a fee). Capital One and Chase offer customers free subscription tracking services so you can see where you might be spending too much money on recurring expenses.
Pay attention to your credit cards
Your credit cards can be a valuable and useful financial tool if used wisely.
“Unfortunately, many consumers carry balances on their credit cards from month to month, which could lead to hundreds of dollars in interest payments over time, which is a waste of money. consumers could save or spend on something important to them, ”Griffon says.
Instead, Griffin says you should plan pay off credit cards in full and on time each month. “This not only ensures that you won’t be charged interest or late fees, but can also positively affect your credit score,” he says.
Use a credit card with rewards
Your credit card can generate cash back rewards and offset future costs. “Cash back credit cards are a great way to be rewarded for the daily expenses you already have, ”says Mary Hines Droesch, manager of consumer and small business products at Bank of America. “You can use the cash back you earn on your purchases. you’re already doing to bolster your discretionary spending budget. “
For example, the Bank of America® Customized Cash Rewards credit card offers cardholders 3% cash back in one of six categories that you can change each month – including gasoline, online purchases. , restaurants and drugstores – and 2% Cash Back at grocery stores. and wholesale clubs (up to the first $ 2,500 in combined quarterly purchases). The card also offers 1% cash back on all other purchases.
“Pick a card that offers rewards in your highest spending categories and set aside the money you earn to spend on yourself,” she adds.
If you want a simpler cash rewards card, consider the Wells Fargo Active Cash℠ card. There is no annual fee and you can earn 2% cash rewards on all qualifying purchases. Additionally, new cardholders can earn a $ 200 cash bonus after spending $ 1,000 on purchases within the first three months of opening the account. See prices and fees
Reassess your invoices
Dive Deep into Your Monthly Bills, Says Andrea Woroch, Consumer Finance and Budgeting Specialist expert. Examining your bills can reveal unnecessary expenses and savings opportunities without requiring major sacrifices.
For example, pay attention to how the use of household electricity is managed. Can you reduce the number of loads you do each week or lower the thermostat a few degrees? Small changes can help lower utility bills.
Implement monthly expense cleanup
Each month, pick an item you won’t spend money on, like alcohol, new clothes, restaurant meals, nails, and more, suggests Jessica Weaver, CFP, CDFA, CFS and author of Confessions of a Money Queen. It’s an easy way to cut an expense without the stress of having to live without that luxury for an extended period of time. It’s easy to give up on something for just a month.
“Then whenever you would normally do this activity, transfer the unspent money to that separate bank account,” says Weaver. “For 30 days, you can go without an item and cash in the extra money. Over the course of the year, the average person saves an additional $ 1,200 to $ 1,500 per year.”
Catch up on Select’s in-depth coverage of personal finances, technology and tools, The well-being and more, and follow us on Facebook, Instagram and Twitter to stay up to date.
Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.