How to Live Cheaply on Next to Nothing and Be Happy

This post shows you how to live cheaply on next to nothing. Reducing your spending can be challenging. Spending temptations are everywhere, and you may not even know where to start.

When I got my finances in order in 2019, I reduced my monthly expenses by 50%. I didn’t sacrifice anything; I simply spent smarter. Below are my tips for when you have to reduce your expenses dramatically.

It is possible to live cheaply on next to nothing and be happy. The most important factor is your mindset. Live and think like a truly frugal person to succeed.

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1. Stay Calm

Money stress isn’t good for you. Stressing doesn’t improve your finances either. If you want to live on next to nothing, the first step is to stay calm.

Your bank account may be overdrawn, or debt collectors are knocking on your door. In these cases, it may help to know that many other people have been in the same situation. And there is a way out.

Learning how to live cheaply requires you to change your mindset. Embrace frugality, and you will understand that not having money does not mean you have to be unhappy.

2. Assess Your Spending

Do you know what you spend every month? Do you have a budget, and did you assign spending limits to your categories? If you do not, it is time to start.

A great way to see how much you spend is by using Monzo. Monzo automatically breaks down your spending into categories. Their app lets you see at a glance where you spend too much:

Monzo is a UK-regulated and authorised bank. It is legit and your money is safe. I’ve been using Monzo for years. Read more in my Monzo review.

If you sign up for a free Monzo account, you also get a £5 cash bonus.

3. Save Money on Groceries

Groceries are one of the major expenses for many households. This makes your grocery bill a great starting point for saving money. There are several ways to reduce food expenses:

• Cook at home
• Take advantage of cashback
• Use free food apps
• Become a mystery shopper
• Get free food

1. Cook at Home

Cooking yourself is the most effective way to save money on food. Choosing the right ingredients is the key. Rice, potatoes, and pasta are cheap staples you can buy in bulk. These could be your sources of carbohydrates.

Cheap sources of protein include beans and peanut butter. For your daily portion of greens, buy seasonal vegetables.

Combine the ingredients listed above to make cheap and tasty meals. Add homemade sauce for more taste. You can use:

• Tomato puree
• Blended beans
• Blended nuts

If you’d like recipe ideas, I’m using clean eating couple and Lazy Cat Kitchen.

2. Take Advantage of Cashback

Cashback is a great way to get money back when you make a purchase. Receipt scanning apps reward you for grocery shopping. So far, I’ve gotten over £1000 from cashback apps. You can see the detailed breakdown in my cashback post.

3. Use Apps That Give out Free Food

Restaurants and retailers often have food left that they cannot sell. If it is still good to eat, it would be a waste to throw it away. Or perhaps your neighbour has food in their cupboard that they do not plan to eat.

I use Olio. It is an app that lets you connect with people and local shops. Sign up, browse the listings and see if there is anything you need. You can contact the product owner and see if you can pick up the food for free.

4. Become a Mystery Shopper

Mystery shopping is the best way to get free food because you also get paid. Mystery shopping is a way for market research companies to collect brand data. These data involve information about products or staff at a specific store.

Mystery shoppers are ordinary consumers tasked to buy specific items on behalf of the market research company.

Your compensation depends on your mystery shopping agency. Some reimburse you for the item you bought, and the good ones also pay you.

5. Get Free Food

Food banks provide food during emergencies. This food stems from donations by the public. Citizens Advice, social workers, school staff, and other professionals can give you a referral. With this, you’d be eligible for free food packages.

These referrers will then give the person in need a voucher to exchange for food parcels at the food bank. Often, they also offer help and advice so that the person can overcome their crisis.

Food banks are a great help when you learn how to live cheaply.

4. Save Money on Housing

Everyone needs a place to live. Luckily, housing has the potential for savings, too. The best approach depends on your circumstances.

Singles face higher costs when renting because they cannot easily share a room with another person. However, singles are often more flexible and open to alternative housing arrangements.

For example, I was a home sharer; I lived with an elderly lady and only paid £150 monthly rent. Read more in my post about ways to live rent-free in the UK.

For couples, the easiest solution to reduce accommodation costs is to downsize and share a room. You can also ask your landlord for a rent reduction.

Alternative living could also be an option. This includes:

• Staying with friends or family
• Couchsurfing
• Living in a van

Couchsurfing

With Couchsurfing, you get free accommodation. The site matches travellers with hosts who let you stay at their place for free. This can save you a lot of money, but there are some drawbacks:

• Only suitable for solo travellers
• Cannot stay anywhere for more than 2-3 nights
• No privacy
• No key to the property (dependent on the host)
• Hosts may not be reliable
• The potential danger of staying in a stranger’s flat

As a student, I used Couchsurfing a lot to travel cheaply. I have never encountered issues, but you should always be careful.

Living in a Van

Living in a van is much cheaper than paying rent. It also means you are mobile and can travel at a moment’s notice. The cost of living in a van varies depending on your circumstances but can be under £300 per month.

Yet, living in a van also means adopting a different lifestyle that may not appeal to everyone.

5. Save Money on Transport

Transport is one of the easiest areas to save money on. Consider selling your car if you live in an area accessible by public transport.

Generally, people are quick to use their car or a bus when the distance can easily be walked. Even if you have children, they can use a bicycle or scooter.

6. Spend Less Money on Leisure Time

If you have expensive hobbies, now may be a time to put these on hold. This does not mean you have to miss out! In fact, this may be a great time to try new things.

Fun things to do without spending money include:

• Visiting the museum
• Reading (joining the library)
• Going to a park
• Watching freely available documentaries
• Many other hobbies

Read more on how to read novels online for free.

You can even look for a hobby that makes money. For example, my hobby is blogging, and MyMoneyYard is also an income source.

How to Live Cheaply on Next to Nothing Summary

Everyone can reduce their expenses and learn how to live cheaply. This may require changing your mindset and adopting a frugal outlook. Practical approaches are:

• Stay calm
• Assess your spending
• Reduce your food expenses
• Save money by reducing your rent
• Travel and commute for less
• Make the most of your leisure time

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