How to stick to a budget when you're broke

Saving money and paying down debt are important steps toward your dreams. It may not be easy, but you can get ahead by practicing a few careful, consistent money habits.

Sticking to a budget is a superpower you already have. Sometimes technology can make things even easier. Load up a free budgeting app to take some of the grunt work out of your budget. And then give these seven tips a whirl.

1. Spend good old-fashioned cash

Studies show that we spend less when we spend cash. In this age of one-click shopping, spending digital money is so easy, it’s easy to overdo it. That’s one reason many of us have too many subscriptions on auto-pay. 

On the other hand, when you give someone a $20 bill, you feel it, you’re aware of it, and you have a better sense of how much you’re spending. And you might be less inclined to spend it. 

You can’t exactly pay for your Hulu subscription in cash, but consider this. Take your grocery money and discretionary money out of your bank account in cash after every payday, and only use that when you make those purchases. Discretionary money would be money you’ve set aside for haircuts, clothing, nights out, restaurant meals, and other nonessential expenses.

Being able to see and hold your money in a tangible way could help you be more mindful about your spending decisions, like whether to get an iced latte or gas up the car. Knowing that you have cash left over for the next month, or that you’re running low too quickly could lead to new money management habits. 

2. Be hyper-aware of your budget

When there isn’t much to go around, it’s extra important to spend it wisely. Review your spending regularly and make sure your money is going to the expenses that are most important. 

An emergency fund has to be in the budget, or you may be forced to go into debt for an unexpected expense. Borrowing usually makes things cost more, and you don’t have the luxury of spending extra money when you’re broke.

3. Cut the extras

Cooking isn’t always convenient, but at the end of the month, dining out will have cost you a whole lot more. Cut back on restaurants as much as you can. Meal-planning could help you succeed, because when you get hungry, you’ll already know what’s for dinner.

The same is true for other nonessential expenses that are bloating your budget. 

A great way to get your brain around the extras is to do a no-spending challenge for a few weeks. During your challenge, you pay your essential bills, but you don’t spend any money at all on nonessential expenses. No meals out, no clothing purchases, no gifts, no haircuts—nothing that isn’t considered a “need.” 

If you have automatic purchases that go through, such as subscriptions, make a note of them so you can decide whether they should remain in your budget going forward.

4. Blow the lid off surprise expenses before they happen

Unexpected expenses come up for everyone. Expect them. Make a list of expenses that are likely to come up so you can get ready for them ahead of time.

For example, if you have a car, you’ll eventually need tires. One blowout could throw off your budget for months. Think about ways to avoid a tire surprise. Could you take public transportation more often, and save the wear and tear on your car? Could your kids carpool with another family so you don’t have to put miles on every day? Have you checked the tread on your tires so that you’ll know when you need new ones before something happens on the road?

5. Find ways to free up money

There are only two ways to get budget relief: Spend less or bring in more. If you’re not about to get a raise, and a lucrative side gig isn't an option, look for ways to reduce your expenses.

If your income is low, ask your cell phone carrier and your utility provider if you qualify for reduced rates. If you have subscriptions that you don’t want to give up, call and ask for a lower price. If you are a good driver, call your insurer and ask for lower premiums. You might even rent out space in your home or garage. 

The idea is to slash your budget to the point where there’s enough money to pay down debt if you have any, and set aside savings every month.

6. Make your goals visible

It’s useful to zoom out and dream a little. No dream is too big or too small. Visualize success. Make a vision board, write your money goals on post-it notes, get an accountability buddy. Whatever it takes to keep your future financial comfort front and center in your mind. You might find it easier to cancel your streaming subscription and put the money in savings instead if you’re looking at a photo of the car you want to drive someday.

7. Celebrate wins

Living on a tight budget isn’t easy, and you deserve the rewards that come to you. The effort you put into sticking to a budget is something to celebrate. After all, you’re doing something to take care of your present and future selves. Being your own hype person can go far.

Pat yourself on the back. Treat yourself now and then. You get to decide how, but make it right-sized for your budget.