Rights & Money

How to Save Money When Times Are Tight

A tight budget doesn’t have to mean that you can’t save for the future—it just requires careful planning

By Matt Smith


When money is tight, you may feel as though saving is out of the question. How do you put some aside when you need it all?

In reality, though, this may be the best time to start building good saving habits, because every dollar counts. Although it may not seem like much, regular contributions of as little as $5 do build up over time and will help get your finances back on the right track.

It all begins with budgeting. Figure out your monthly expenses and the total up any debts. A good technique is the “zero sum” budget, where your income minus your expenses equals zero. This means that you have to plan out any contributions to your savings beforehand. Factoring savings into your budget in this way helps curb the temptation to spend any extra money.

Of course, you’ll need a place to keep your savings—away from your day-to-day spending money. Open a savings account if you don’t have one already, ideally one with no fees or a minimum balance. Online accounts can be good for this if your bank doesn’t offer an alternative. Once you have an account dedicated only to savings, you can set up an automated transfer to send a portion of every paycheque into your savings account.

Next it’s time to take a closer look at your expenses. Which services could you dial back on or even cut out altogether? Are you using all of the data in your cellphone plan every month? Do you really need that cable subscription in the days of streaming? Perhaps the basic cable package would do you. Compare services like car insurance and Internet against competing companies to see if you can find a better rate. Sometimes a service, not wanting to lose a customer, will work with you to save you money.

The most significant thing you can do to build your savings and improve your financial postion is to change your spending habits. Revise your budget after cutting out these expenses and, instead of spending the money saved elsewhere, add it to the savings portion of your budget. Such small steps can help you steadily grow your savings.

Photo: iStock/JackF.