How To Live Rich on a Tight Budget

Shot of a young woman dancing with her daughter in the kitchen at home.
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The COVID-19 pandemic has forced many Americans to live on a tighter budget. Almost half of all U.S. households have seen the loss of at least some employment income since March 2020, according to the Census Bureau’s Household Pulse survey. Along with that, a GOBankingRates survey found that 63% of Americans say their personal finances have been impacted by the pandemic.

Read: These 47 Billionaires Got Richer During the Pandemic

If you’ve had to cut costs to cope with hard times, you might be feeling like you’ve had to ditch everything that makes life enjoyable — which can be especially hard at a time when you could use all the joy you can get. Living on a budget, though, doesn’t necessarily mean eliminating everything you love. By taking these steps, you still can live a rich life.

Step 1: Figure Out What Makes Your Life Rich

A rich life isn’t determined by the number of dollar signs in it, said Donna Freedman, longtime personal finance writer and author of the “Your Playbook For Tough Times” book series. “Money is essential to survival, but it’s not all there is to life,” she said.

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See: 33 Things You Definitely Do NOT Need To Buy During the Coronavirus Pandemic

The key is to identify what brings you joy — not what you see others enjoying on social media — and brainstorm ways to get those things as affordably as possible. You might find when making a list of things that make your life richer, such as spending time with loved ones or helping others, that you can have many of those things without spending any money.

Step 2: Finesse Your Budget

You might have more room in your budget for the things you enjoy than you think. Start by reviewing your spending to see if there are costs you can cut. “Chances are you may be wasting money without realizing it,” money-saving expert Andrea Woroch said. For example, you might be spending more than necessary on auto insurance because you haven’t shopped around to see if you can get a lower premium from another insurer. Examine all of your monthly expenses to see if you can trim them by switching providers or negotiating lower rates.

Find Out: Cutting Out These 25 Expenses Will Save You $16,142.08 a Year

“What’s more, analyzing what you are spending money on can also help you identify the things you really don’t need –whether it’s because they don’t serve your goals or don’t bring you happiness,” Woroch saidne. “A little finessing with your budget can go a long way in creating a rich life on less.”

More: 11 Basic Money Moves Everyone Should Make in Hard Times 

Step 3: Look For Low Cost and Free Ways To Live Rich

There actually are plenty of ways to get the things you need, want or enjoy for little to no cost. Freedman recommends checking if there is a Buy Nothing Project Facebook group active in the area where you live. The groups allow people to give away things they no longer want, so you can find anything from free furniture to musical instruments to toys and clothes for kids. “What’s great about the Buy Nothing group is it can help you meet some of your needs along with your wants–which means even more money to spend on things that matter,” Freedman said.

Building Wealth

Read: Are You Eligible for a Third Stimulus Check – and If So, When Will You Get Yours?

Other options for lower-cost items include the Facebook Marketplace, OfferUp and Letgo, as well as thrift stores and yard sales. If you have a big event or even a job interview, you could rent an outfit through a website such as for a fraction of the price you’d pay to buy it.

You can even get paid to do some of the things you might have eliminated from your budget, such as dining out. Jen Smith, the creator of Modern Frugality and Frugal Friends Podcast, said she and her husband continued to “experience life” even on a tight budget while paying off $78,000 in debt by being mystery shoppers. “We would pick up shops at nice restaurants, hotels, movie theaters and other activities and be completely reimbursed for anything we spent,” she said. You don’t have to pay a fee or join an association to work for mystery shopping companies such as Amusement Advantage, A Closer Look and iSecretShop.

See: Things You Can Get for Free in Every State

Step 4: Find Frugal Alternatives

If times are really tight, Freedman said you should accept that just because you want something doesn’t mean you can have it right now. “But maybe you can get something like it,” she said. For example, if you want a chocolate cake from a fancy bakery but you know you can’t afford it, buy a cupcake instead and savor every bite.

Find Out: 17 Tips To Live Comfortably Off Just a Social Security Check

Another idea: You may not have the money to travel (or want to stay healthy at home), but you still can explore new cities, tour museums and immerse yourself in other cultures. “With so many online virtual tours these days, you can travel right from home,” Woroch said. She recommends this list of the 35 best virtual tours.

Step 5: Be Grateful for What You Do Have

Your life might feel richer if you focus on what you do have and what is going right. For example, maybe you want to upgrade your phone but can’t justify the expense. Focus on the fact that you have a phone and that it works, Freedman said. Maybe you might not have the job you really want, but you can be grateful that you do have a source of income.

More: How To Avoid Work Burnout During a Pandemic

“There’s nothing wrong with wanting things,” Freedman said. “But when we focus on wanting the right things for the right reasons, we’re more likely to be satisfied once we get them. If all we want is this idea of ‘more’ then we’ll never be satisfied.”

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Last updated: March 2, 2021

About the Author

Cameron Huddleston is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Fortune, MSN, USA Today and many more print and online publications. She also is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances. U.S. News & World Report named her one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named her one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, CNN, MSNBC and “Fox & Friends” and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR, WTOP in Washington, D.C., KGO in San Francisco and other personal finance radio shows nationwide. She also has been interviewed and quoted as an expert in The New York Times, Chicago Tribune, Forbes, MarketWatch and more. She has an MA in economic journalism from American University and BA in journalism and Russian studies from Washington & Lee University.
How To Live Rich on a Tight Budget
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