Get Some Breathing Room in Your Budget

Ideas to Cut Spending and Increase Income

A couple going through their bills together

When you’re living on a tight budget, managing your money can feel overwhelming.

AARP Foundation is here to help you make and stick to a budget that can give you some much-needed breathing room. We’ve been helping people secure the essentials for more than 60 years.

If you’re struggling to make ends meet, financial experts recommend using the 50-20-30 rule. Each month, you should plan to spend:

  • 50% on food, medical, and housing needs
  • 20% on saving an emergency fund and paying down debt
  • 30% for all other expenses

With household expenses like groceries and utilities on the rise, not to mention sometimes having more medical costs as you get older, making a budget can help you see a way forward.

Creating a detailed budget begins with three simple steps:

  1. Calculate your income from wages, social security payments, and side hustles
  2. Track your expenses — include household and health costs
  3. Subtract total expenses from total income to get your monthly budget

AARP Foundation created a budgeting worksheet (fill out the form below) you can use to track your income and expenses and figure out how much you can afford to spend each month.

Once you’ve filled out the worksheet, it’s time to look at cutting your spending and boosting your income in ways you may not have considered before.

  • Apply for government programs
  • Get some gig work
    • Cutting out a monthly subscription or lunch out won’t be enough to move the needle. Freelancing or a regular side gig is more likely to make a difference. AARP Foundation has employment programs that may be right for you.
  • File your taxes
    • Even if you didn’t earn enough income to file taxes, you may be eligible for money back. AARP Tax-Aide may be able to prepare your taxes for you at no cost, too.
  • Monitor your credit score
    • The higher your credit score, the better your interest rate for car or mortgage payments, which are some of the biggest monthly expenses. Learn more about credit scores and how to manage them here.
  • Be creative with housing
    • Getting a roommate or moving in with family can help you minimize your housing expenses.

As a general rule, you’ll want to adjust your budget —and keep adjusting it month to month — so you feel in control and making progress, even when money’s tight.

How To Budget for Home Maintenance

Follow these tips to make home maintenance easier, less expensive, and more predictable.

Think about parts of your home that will need replacing or major repairs, such as appliances, roofing, and plumbing fixtures. Because repairs and replacements tend to be much more expensive than ongoing upkeep, it’s important to prepare for these costs.

Estimate your monthly home upkeep costs, such as having the gutters cleaned or your HVAC serviced. Depending on where you live, the type of house you live in, and which tasks need doing, your monthly expenses will vary.

Consider putting money aside every month into a “home maintenance fund” or a savings account, if you’re able.

Download A Budgeting Worksheet

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