“To tighten your belt” is an idiomatic expression that is used during times of financial or economic crises. It simply means to cut down on your spending. This entails making sacrifices and giving up certain things in order to deal with the financial problem. The expression can apply to individuals, business entities, as well as governments.
The expression is believed to have originated during the Depression, when people had to literally tighten their belts due to losing weight, which was the result of having much less money to spend. Whether or not this accurate, the imagery that the expression offers makes the meaning quite clear.
One example of using this expression is if a household loses a stream of income. Let’s say the main earner loses his job. The household has then to cut back on expenses in order to survive. They may have to purchase less food weekly. They may have to buy lower quality food items. They may have to stop going to restaurants regularly. They may have to stop going to the movies or taking vacations for a while.
On a larger scale, a company that is experiencing cash flow problems can tighten its belt in different ways. The free coffee supply in the pantry may be stopped for a while. The employees may be asked to work shorter shifts.
Belt tightening is often seen as a temporary solution. It is a means to getting by while times are tough. However, it does not really tackle the root of the financial issue.