Budgeting can be fun when you have extra money, and you’re deciding how you want to spend it. When money is very tight, however, budgeting can be stressful. But these are the times that budgeting is the most critical. Here are some tips for budgeting when money is tight.

Take care of necessities first

Whether you are single and living alone or you have a family to support, you should take care of your needs before you begin budgeting for bills. You shouldn’t starve yourself to pay your bills, but that doesn’t mean you should be eating steak every night either. So, decide on a reasonable amount of money that you will use for groceries for the month.

After you decide how much money you will be spending on food for the month, identify other necessities. For example, how much money will you need for gas to get to work? Are there any other unexpected yet necessary expenses that might pop up? Once the essentials are clear, you can move onto the rest of your budget. 

Pay high priority bills first

If you don’t have enough money left over in your budget to cover necessities and all of your bills, decide which payments are the highest priority. If you are already behind on payments for one of your bills, (depending on what that bill is) you may want to make that bill a priority for this month, so you don’t end up paying shut off fees. Your mortgage or rent payments, car payments, and utilities should also be priorities. You don’t want to risk losing your electricity, vehicle, or your home when money is tight. 

Identify money-wasters

Identifying money-wasters is a critical step for budgeting when money is tight. You need to try to squeak every dollar out of your budget that you can, so you need to cut out any expenses that are not necessary. Some examples might include trips to coffee shops, cable, unused gym memberships, cigarettes, alcohol, and even small impulse purchases. If you’re paying bills late or living paycheck to paycheck, you should make every effort to cut out money wasters to allow yourself to get ahead.

Consider using cash

Most millennials never carry cash because they worry about losing it, and they generally find it to be unnecessary. You should consider shopping with cash, though, because studies have shown that you will spend less when you purchase something with cash rather than a card. Cards, even debit cards, make shopping very convenient and easy. Spending cash is more painful because you can see the money leave your possession. Try shopping with cash for one month and see if this trick works for you. You might just end up with a little more wiggle room in your budget!