How do you live on a budget?

To live on a budget, you need to choose a budgeting strategy that fits your lifestyle and find tolerable ways to rein in your spending, whether that’s leveraging sales and coupons or minimizing the number of purchases you make. You should also make sure to leave room for fun, so living on a budget is not a chore. Living on a budget just means making mindful choices so you don’t spend more money than you are bringing in.

How to Live on a Budget

Choose a Budgeting Strategy Based on Your Lifestyle

A budgeting strategy like the 50/30/20 rule, zero-based budgeting, pay-yourself-first strategy, or envelope budgeting can help guide you to use your money more effectively for the things that you value. There are several different budgeting strategies, so you can choose one that fits the commitment level you want to put in and will help you accomplish your goals.

Prioritize Saving Before Spending

Saving money for the future is an important part of budgeting. Having some money in savings allows you to have funds available when a financial emergency arises and can help prevent you from going over your budget.

To prioritize saving over spending, set money aside for savings every time you get paid, before putting it toward any of your expenses. This is called the pay-yourself-first method, and it lets you put money into savings before you get the chance to spend it. You can set up automatic transfers from your checking to your savings account, so you don’t have to remember to manually do it.

Prioritize What You Want to Spend Money On

After your needs are taken care of and you have put away some money for savings, determine what items to allocate your discretionary money to, based on what you value the most. For example, if you like dining out more than buying new clothes, you can put more of your discretionary money toward dining than shopping. This prioritization allows you to use your limited resources for the things you really want.

Find Ways to Pay Less for Items You Want

Living on a budget does not mean you have to stop spending money on things you enjoy. Instead, you should find ways to reduce the expense while retaining the enjoyment. Some things you can do include:

• Looking for sales or discounts
• Using coupons
• Comparing prices for different services and products to find the best deal
• Buying gently used items, like clothes, electronics and cars, instead of buying brand new

Plan Out Large Purchases

A large purchase, such as an expensive vacation, new furniture, or pricey concert tickets, can have a major impact on your budget, especially if you don’t consider your budget before making the purchase. Planning out monthly contributions for a potential major expense in the future can limit the impact on your budget compared to making an impulse purchase, which can cause you to exceed your monthly budget.

Pay Down Debt

Interest from debt eats away at your savings and leaves you with less money to pay for your everyday expenses. By coming up with a plan to pay down all your debts, you can free up more money that you can use for other expenses. WalletHub offers debt payoff plans that can help you find the quickest and cheapest way to become debt-free.

Use a Budget App

A budget app, like the WalletHub app, can making living with a budget more convenient since you can access your budget anywhere you go and always keep track of your spending. WalletHub, in particular, lets you sync your financial accounts to automatically track your expenses, and you can set up alerts to notify you if you are spending past a certain limit.

Review Your Budget Regularly

Reviewing your budget every week or every month allows you to make sure you are staying within your budget and not spending beyond your means. If it looks like you are not staying on budget, this gives you the opportunity to reduce spending to get your budget back on track.

Make Room for Fun in Your Budget

A budget is not about depriving yourself. It’s just a way for you to use your income more efficiently for the things you need and want. You can still do fun things like dine out at your favorite restaurant or shop for new clothes, as long as you factor them into your budget.

To learn more, check out WalletHub’s guide on how to make a budget.