Step 1:
Determine your positive financial goals for living on a tight budget and write them down. As you cement the positive reasons for financial sacrifice this helps improve your perspective on material losses. Rather than focus on the negative (say to "Pay off the IRS") articulate goals in a positive way, such as "Gain freedom from financial worry."

Step 2:
 
You don't have to be mechanically inclined to do small repairs. Learn basic do-it-yourself (DIY) maintenance. Many items can be fixed with a simple screwdriver or a bit of super glue and a dose of patience.

Step 3:
Rethink new uses for old items or experiment with craft work. Rather than live with ugly, worn-out materials, consider new paint or fabrics to improve an item's look.

Step 4:
Spend less on consumables. Clip coupons and look for sale items when shopping for groceries and toiletries, save on utilities by turning off unnecessary lights and appliances and watching your heating settings, and save on gasoline by walking more. Use the savings toward your budget goals.

Step 5:
Explore sources for nearly new clothing and household goods. Great bargains can be found at consignment shops, thrift stores, garage sales and online auctions. Some items you will never miss paying full price for. Note too that not all dollar stores are created equal.

Step 6:
 
 Decorate your surroundings. Budget living does not need to be depressing. Add inexpensive decorations such as candles, throw rugs or new towels to uplift your home and spirits.

Step 7:
Reward yourself at least once a month with about 10 to 15 percent of the savings generated. This helps keep you motivated and breaks up long stretches of penny-pinching.