13 money-saving tips from a woman who lived on $14,000 a year

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Even when it feels like your budget couldn’t be stretched any thinner, it probably could — it may just take some effort.

And for people like Danielle Wagasky, there is no other option. 

Before she transformed her entire way of life, Wagasky got into some serious financial trouble while her husband was deployed to Iraq.  ‘I went shopping way too often,’ she says in her book, ‘Living a Beautiful Life on Less.’

‘I was constantly dipping into our savings to cover our checking account. I was late on bills and overdrafting like it was going out of style.’

In order to take care of her family, Wagasky had to turn things around — and she figured out how to do it on $14,000 a year for five years. She learned to live below her means and was able to dig herself out of debt and get her family on a path to a much brighter financial future.

If you want to pay off debt, put more away in savings or just stop living paycheck-to-paycheck, it may be easier than you think! Changing your habits may not be easy at first, but once you start cutting costs and saving more, you’ll quickly realize just how much it can change your life — and your future.

So, how exactly did Wagasky do it? Business Insider pulled together some of the lessons that she learned along the way — and we’ve compiled a list below with more resources to help YOU save more each month!

13 tips to help you save more money

1. Record every expense

‘When we spend money, we put it into our spreadsheet,”I save all my receipts, so I know what each purchase was made for and what category it goes into. If I didn’t save my receipts, then I may forget why I spent $15 at the store.’

Tracking your spending is one of the absolute best ways to cut costs. By keeping track of every purchase you make, you’ll be able to identify areas of your budget where you’re overspending — and next month, that money can go into savings instead.

Here are 7 apps to help you get organized and get your budget back on track.


2. Find a cheaper TV and video service

Seriously, how often do you watch all those channels? The average cable bill is nearly $100 per month — that’s a lot of money you could be saving!

Here are some cheaper alternatives.

3. Downsize however you can

There are plenty of ways to downsize — your car, house, monthly bills, lifestyle — the list goes on. Downsizing involves figuring out exactly what you need and what you can cut out. Do you need that SUV or can you get a smaller car that costs less and is cheaper to maintain? Do you need unlimited data for your cell phone every month? Ask yourself this question, ‘Do I really need it?’ about every aspect of your life — and then start downsizing from there.

4. Use a programmable thermostat

Programmable thermostats can reduce heating and cooling costs in your home by 25% to 30%. These devices learn your living patterns and figure out when to bump the temperature up or down a few degrees to save you money while you’re out — without you having to tell it to do anything.

Read more: 10 easy ways to cut your home energy costs

5. Avoid impulse buys

According to recent research, more than half of Americans increase their spending on the day their paycheck is deposited into their account — by more than 25%! On days people get paid, they’re more likely to go shopping — and then of course, they end up spending more than they had planned.

And the convenience of swiping plastic doesn’t help. When people use credit cards, they end up spending more — because if you’re standing at the checkout with a $10 bill and an item costs $5, you may think twice about buying it. If you’re using a credit card, you may just think ‘it’s only $5…’

Wagasky’s advice is this: ‘Go home and think it over. If you decide it is something you would like to have, then add it to your budget and save for it.’

Here’s one simple way to stop wasteful spending.

6. Don’t pay ATM fees

ATM fees are at an all-time high — with the average fee around $4.52! When you pay an ATM fee, you are essentially flushing money straight down the drain. While it may be convenient to go to the nearest ATM, there are plenty of other ways to get cash these days without having to pay those big fees. All it takes is some simple adjustments to your routine!


Here are a few options:

  • Join a bank or credit union that offers a network of ATMs you can use fee-free
  • Many supermarkets and stores will give you up to $200 at the register, fee-free. (This is a great way for stores to reduce cash on hand.)

  • Sam’s Club allows you to get up to $100 cash back when you check out.

7. Use the ‘envelope system’

If you have a hard time managing your money and actually sticking to your budget, using the ‘envelope system’ may be a great solution for you.

‘When we use cash, we tend to think more about what we are spending it on, and we literally see that the envelope is getting thinner,’ Wagasky says.

Here’s how it works: Figure out what you should be spending each month on each category of your budget. Keep only what you need to cover bills you pay by check or online in your checking account, and then split up the rest of your budget into envelopes of cash. Each envelope represents an area of spending — so if you’ve budgeted $500 for groceries each month, then put $500 cash into an envelope labeled ‘groceries.’ That way you can keep track of exactly how much you’ve spent and how much you have left for the rest of the month.

You can also apply this strategy by setting up your direct deposit so that certain amounts of your paycheck are sent to different accounts. For example, Christa on our team has three checking accounts and one savings account. She has each of her paychecks automatically split among these four accounts each month and then uses Mint.com to track her finances online (or using the mobile app) for free. There’s also a pay alternative some people like called YouNeedaBudget.com that has a free trial offer.

Bottom line: In order to eliminate wasteful spending, you have to track every expense and purchase, whether it’s using cash or an app that does it for you. Swiping a debit or credit card will no doubt cause you to spend more than you should, so tracking where every dollar is going will help you develop better habits and save more over time.

Read more: 19 ways to cut costs and save more every month

8. Go to the grocery store less

‘Think about the last time you just went into the store for a few items,’ she writes. ‘Did you buy only those few items you were in need of, or did you spend a bit more?’

Wagasky makes a pretty good point with this one. It’s a pretty safe bet that if you go to the store hungry or without a list, you can forget staying on budget. And the more often you go, the more you tempt yourself.

So if you want to save on groceries, here are a few strategies:

  • Make a list — and stick to it!
  • Only take cash with you.
  • Buy what’s on sale and plan your meals around daily/weekly sales.
  • Use free grocery apps that send deals and discounts right to your phone.

For more tips, check out our ultimate grocery savings guide!

9. Buy generic brands

Buying generic brands will absolutely save you money — especially over time. If you have a few favorite brands that you just can’t sacrifice for generic, then try to make up the cost by saving on everything else — because once you try out a few things, you’ll figure out which generic products taste just like the brand names and which ones don’t.

Wagasky has another tip about buying generic: ‘Make sure to look up and down the shelves of food. Most grocery stores put the name brand items at eye level. They want that to be what the consumer focuses on. Generic brands are usually on the bottom shelf or the top shelf, so keep those eyes open.’

10. Go homemade over pre-packaged

Buying pre-packaged food is definitely convenient, but it’s costing you a lot more.

These convenience items could be marked up as much as 40%. So if you want to save, avoid the packaged/pre-cut/prepared sandwiches, salads and produce. Instead, buy the ingredients (which will last you longer) separately and cut your fruits and veggies yourself at home.

Wagasky even took it a step further — and she now makes her own bread and even her own homemade granola bars and trail mix (which can be pricey and not very healthy when bought in a package or box).

Here are 15 more ways to save on groceries.

11. Comparison shop for insurance

This is one thing so many people forget to do — or just don’t want to make the effort — and end up missing out on some serious savings.

There are a couple reasons for doing this. If you shop around, you may quickly find that you can get the same coverage for less money from another company. Also, as your situation changes (marriage, kids etc.), your insurance needs change, too.

Here are some easy ways to shop for different types of insurance:


12. Consider every purchase an investment

‘Be conscious of all purchases. Whether you are buying thrifted items or brand-new items, think of each purchase as an investment. Make sure you get the most bang for your buck where quality and price are concerned.’ 

So these are things that will pay for themselves over time — like a coffee maker, Netflix (or other cable alternative) and LED light bulbs. Check out more tips on investments that will save you over time:

13. Don’t pay full price

With all the different ways to find discounts these days, you should really never pay full price for anything! If you can’t find a coupon code, deal or discount, then buy it used. There are tons of ways to get gently-used items for a fraction of the retail price!

Here are some ways to do it:

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