It can be difficult to figure out ways to save money on a tight budget when you are living on one income, but it can be done with a little determination, some sound advice, and a bit of technology.

You can save money while living on one income.

Below I share some tips on how to save money each month when you are living on one income.

And, keep in mind, even if you live in a two-income household, these tips will put you further ahead financially.

1. Pay Off Debt

As long as we owe money to someone else, we will never be financially free.

Credit cards charge anywhere from 17% to 27% (or more) in interest.

If you only pay the minimum, it will seem impossible to pay off the debt.

Try to pay off your credit cards fast.

The less you owe on a debt, the less you will pay in interest.

2. Save Money on Food

The average American spends $4,500 a year on food with a lot of that being lost in the drive-thru lane (this could easily cost $12 a day) and bad grocery-shopping habits [source].

If you want to cut down on food costs, try eating at home more, and follow a few simple grocery-shopping hacks.

Don’t shop without a list and definitely don’t shop hungry.

If you can avoid impulse buys (I’m talking about those tasty-looking snacks that are hard to pass up), you’ll be surprised by how much money save every trip.

3. Understand Your Finances and Use Budgeting Tools

In order to be successful with a single income, set aside some time to figure out and understand your finances:

  • How much money do you have coming in each month?
  • List all your expenses (mortgage, rent, groceries, phone, auto loan, water, electric, gas, insurance, property taxes, cable, internet, etc.)
  • Add up how much money do you spend on expenses/bills each month?
  • Which of those bills you pay are absolutely necessary and what is the amount? (Sorry, the internet and cable might not be essentials.)
  • Mark on a calendar when you get paid and when your bills come due.
  • Determine how much you have to set aside each paycheck to take care of groceries and bills.

When you have a clear snapshot of what you make and what you spend, you can now look for ways to spend less than you earn so you can save money.

Ultimately, that is the key: Spend less than you make.

Do this, and you can save.

4. Cut Your Expenses

Once you determine how much money comes in every month and what your bills cost, then you can start exploring ways to cut your expenses.

Do you have a home computer and rarely use it because you are on your phone all the time?

See if you can get rid of internet service.

You can always get free Wi-Fi in coffee shops, fast food restaurants, and libraries.

They can sometimes have better internet service than we have at home (a web developer friend who worked out of his house used to go to Panera Bread when he needed a quicker internet connection).

You might see some reduction in expenses when you move from two incomes down to one.

Couples save on daycare expenses, income taxes generally decrease, how much they spend on gasoline and vehicle maintenance goes down, they don’t spend as much on clothes, and they go out for lunch less often.

Also, ask yourself if you really need Netflix, Hulu, Spotify, Audible, Apple TV, Disney+ and other streaming services.

Something my wife and I have done is to cancel streaming services for months at a time.

Wendi really loved The Crown.

Once she caught up, we canceled until the next season premiered. I love football.

I subscribe to the NFL Network during football season, and cancel the rest of the year.

If you have ever subscribed to a subscription service, then there’s a good chance you are still paying for a service you no longer use.

It’s easy to do, and more people do it than you might realize.

These companies make it so easy for us to sign up for a free trial, then we forget about it.

We promise ourselves we will cancel before we have to pay.

But, life gets in the way, and we fork out money for a service we don’t want.

If the service automatically draws the money from a credit or debit card, then $8 to $10 a month will not even register.

5. Save Money on Housing

You can save money on housing several ways, from refinancing to downsizing to reducing the costs associated with living at your place.

If you own a home and plan to stay in it for at least five years, check the current interest rates.

If current interest rates are 1% lower than what you pay now, then consider refinancing.

If you look at the refi options and determine they are in your favor, you can reduce your monthly payment and increase equity quicker.

If you own your own home and don’t want to refinance, you can sell and move into a smaller home.

This takes time and involves other expenses (like moving, setting up utilities and paying deposits), so it might not be the best option.

However, something else to consider: Entertain the idea of roommates or rent extra rooms on Airbnb (and save the rental income).

No matter what happens with refinancing, downsizing, roommates or Airbnb, you still have choices when it comes to saving on housing expenses.

You can check out some Energy Star-rated appliances and other energy-saving devices. 

6. Save Money on Transportation

As with housing, you have several options at your disposal when you look at how to save money on transportation:

You can sell your car and buy something cheaper; you can sell your car to go down to one car; you can ride a bike; you can walk; you can use public transportation; or you can carpool.

Why you want to reduce transportation costs can be found in a study by AAA: It costs more than $9,200 a year on average to own a new car [source].

The amount includes the car payment, maintenance and repairs, insurance, gas, and licenses and registration fees. 

Friends of mine had three cars.

They sold two and made up for the lack of an extra vehicle by bicycling. If they really needed a second car, then they rented one for the day.

They saved money on car payments, auto insurance (we talk about saving on insurance in Tip #8), gasoline, and repairs.

You can save on gas by using a rewards credit card, and did you know it doesn’t have to be from a gasoline company?

Use a rewards card from a major bank or credit card issuer, you can get the best of both worlds:

You will earn cash back rewards for your gas purchases, and when you shop in-store and online.

Pro Tip: Credit cards can be a great financial tool if you do these two things: 1) Pay off your balance every month, and 2) use a rewards credit card that pays you cash back every time you swipe.

Some couples have earned up to $1,000 a year in rewards.

Check out some of the best reward credit cards of 2020 (check out #4 for double the rewards).

7. Save Money on Shopping

If you shop in-store, sign up for the retailer’s loyalty program.

You will receive emails (and maybe even regular mail) about sales and special discounts.

Store credit cards are another way to save when shopping.

My wife, Wendi, loves the deals she gets from Kohl’s, but you have to use their credit card.

So, what she does is to make her purchase with her Kohl’s card to get 20 to 30% off (she won’t bite on those 15% off coupons).

As soon as the cashier completes the sale, she says she would like to make a payment on her Kohl’s card bill.

Then she pays the exact amount of her transaction.

By doing this, she gets the nice discount, and she avoids paying interest on the credit card.

If you are shopping online, put an item in your cart, proceed to checkout and then just close the tab.

Retailers have sophisticated analytics that allow them to know when a shopping cart has been abandoned.

In order to get you to complete the purchase, they might offer you an additional 10% off or some other promotional offer.

If you don’t need the latest and greatest, look for TVs, software, phones or computers that are no longer top of the line because a new model or version just came out.

When I shop Amazon for electronics, I always look for models that have fairly high ratings and are a notch below the best-in-class.

I pay attention to the three- and four-star reviews more than I do five- and one-star reviews.

Time for Action

Please don’t read these tips and fail to act on them.

You can save some real money, which will make it much easier to live on one income.

The more of these tips you implement, the more you will have to save when you live on one income.

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