8 tips for finding discretionary money in a tight budget

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You may feel like you're caught in the monthly grind of working just to cover your bills — and the holidays make it even harder to manage your budget, not to mention inflation. But with a little planning, there can be sensible ways to cut your expenses to free up a little cash. 

Select spoke with experts to get their best tips and strategies to help you examine your budget and learn a few new ways to stretch your money a bit farther.

Here's their best money-saving advice:

Research what's on sale and create a list before you shop. Stick closely to that list so you can avoid overspending. 

"You can cut your grocery budget back just by shopping the weekly sales at your local grocery store," explains consumer analyst Julie Ramhold with DealNews.com. "Rather than buying what you want to eat, try to focus on what's on sale and meal plan around those items. This will result in you spending less on groceries."  

A grocery rewards credit card can also help you save over the long run. With the Blue Cash Everyday® Card from American Express, you can earn 3% cash back at U.S. supermarkets, 3% cash back on U.S. online retail purchases, 3% cash back at U.S. gas stations, on up to $6,000 per year in eligible purchases in each category (then 1%). Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.

Don't miss Select's round-up of best credit cards for grocery shopping.

Do you have a hobby you're especially good at that people will pay for? 

"Maybe there's a type of craft you like to make, or even a baked good or dish that everyone raves about," suggests Ramhold. Consider offering up your services to your friends and family to earn a little extra cash — just make sure you charge them for supplies as well as your labor, she says.

Even if you don't have a monetizable talent, chances are you have unused stuff sitting around that you could sell online. There are a huge range of online resell sites, from Facebook Marketplace to Depop, where you can sell clothing, furniture and home goods to bring in a little extra cash.

If you receive money for gifts — whether it's for your birthday, holiday or something else — stash the cash for the future. You can use it later when you need a break from all the cost-cutting you've been doing to enjoy a little splurge.

"Putting that toward fun items is easy as you won't have to make sacrifices elsewhere," Ramhold tells Select.

Another option is to split up how you spend that extra cash. Try an 80/20 split: Put 80% in savings (or toward debt payoff) and the other 20% can be fun money. Even if you just have $100, that's $80 in your savings account and $20 that could be used for a movie ticket, fancy coffee and pastry or something else.

Take an inventory of your monthly subscriptions linked to a credit or debit card.

"You likely have memberships or subscriptions and may not actually utilize them, so it's money down the drain," says Rod Griffin, senior director of public education and advocacy for Experian.  Decide whether you truly need four streaming services, two meal-delivery providers and that monthly box of pet treats. You don't have to cancel all of them, but you might consider cutting out a few.

There are a few apps that can help you track and manage your subscriptions, like Rocket Money (formerly Truebill) and OneMain® MyMoney, which can help you track your subscriptions and sometimes even cancel them for you (for a fee). Both Capital One and Chase offer customers free subscription tracking services so you can see where you might be overspending on recurring expenses.  

Your credit cards can be a valuable and useful financial tool if used wisely.

"Unfortunately, many consumers carry balances on their credit cards from month-to-month, and this could result in hundreds of dollars in interest payments over time, which is lost money consumers could save, or spend on something important to them," says Griffin.

Instead, Griffin says you should plan to pay off credit cards in full and on time every month. "This not only ensures you'll not be charged interest or late fees, but can also positively affect your credit score," he says. 

Your credit card may earn cash back and offset future costs. "Cash-back credit cards are a great way to get rewarded for everyday spending you're already doing," says Mary Hines Droesch, head of consumer and small business products at Bank of America. "You can use the cash back you earn on purchases you're already making to bolster your discretionary spending budget."

For example, the Bank of America® Customized Cash Rewards credit card offers cardholders 3% cash back in one of six categories you can change each month – including gas, online shopping, dining, and drug stores – and 2% cash back at grocery stores and wholesale clubs (up to the first $2,500 in combined quarterly purchases). The card also offers 1% cash back on all other purchases.

"Choose a card that offers rewards in your highest spending categories and put aside the cash back you earn to spend on yourself," she adds.

If you want a more straight forward cash-rewards card, consider the Wells Fargo Active Cash® Card (see rates and fees). There's no annual fee, and you can earn 2% cash rewards on all eligible purchases. Plus, new cardholders can earn $200 cash rewards bonus after spending $500 in purchases in the first three months after account opening.

Take a deep dive into your monthly bills, says Andrea Woroch, a consumer finance and budgeting expert. Reviewing your bills can uncover wasteful spending and opportunities to save without requiring major sacrifices.

For example, pay attention to how household electric usage is handled. Can you reduce the number of laundry loads you do each week or lower the thermostat a few degrees? Little changes can add up to reducing utility bills. 

Each month pick one item you won't spend money on such as alcohol, new clothes, eating out, nails, etc, suggests Jessica Weaver, CFP, CDFA, CFS, and author of Confessions of a Money Queen. It's an easy way to trim an expense without the stress of having to live without that luxury for an extended period of time. It's easy to give something up for just a month.

"Then every time you would normally do that activity, move the money not spent into that separate bank account," Weaver says. "For 30 days you can go without an item and bank the extra money. Over the course of the year, the typical person saves an extra $1,200 to $1,500 a year."

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For rates and fees of the Blue Cash Everyday® Card from American Express, click here.

Information about the Bank of America® Customized Cash Rewards credit card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.