20 Tips To Stay Financially Healthy Without Sacrificing What You Want

Cameron Huddleston   Tue, Jun 20, 2023,

If you're trying to live on a budget, you might not feel like you can have the things you want.

But you don't have to resign yourself to living a bare-bones existence if your budget is tight -- it's possible to live on a budget and get some of the stuff you want.

Create a Budget That Prioritizes Needs

If your income is limited, make sure it covers your needs first. "Food, shelter, clothing and utilities are needs," said Donna Freedman, author of "Your Playbook For Tough Times. "The rest is just a series of wants."

Creating a budget can help. List the expenses you have to pay to survive. Add them up, and then subtract them from your income. If there's not much left over, you might have to make some sacrifices. Don't think of cutting out wants to cover needs as deprivation, though -- think of it as a smart use of available funds, Freedman said.

Build an Emergency Fund

If you're living on a budget, you might not think you can afford to set aside money each month in an emergency fund. But would you be able to afford an unexpected cost without savings?

"The thing that keeps you out of debt is to find room in your budget to grow your savings," McClary said. You won't be able to build your savings quickly, but if you can stash away a little each month, you can fall back on your emergency fund rather than go into debt when something unexpected happens.

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Tackle Your Debt in Smart Ways

When you're struggling with debt, you don't want to just keep paying the minimum balance on what you owe. However, you may not be able to afford much larger payments, so you should look at other smart ways to tackle your debt. A personal loan could consolidate that debt into one set regular monthly payment.

Take Advantage of Tax Breaks

If you're a low-wage worker, take advantage of tax breaks when you file your tax return -- such as the earned income tax credit. To qualify for the 2022 tax year, your income must fall below certain limits: from $16,480 if you're filing as single, head of household or widowed with no children, to $59,187 if you're married filing jointly with three or more children.

If the credit you receive is more than the taxes you owe, the IRS will refund you the difference. That tax refund can be used to help pay off debt, build an emergency fund or cover additional expenses.

Eat at Home

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