One of the key things to gain control of your finances and pay off the debts is to learn how to live a frugal life. Frugality is often related to pinching pennies and depriving yourself of things that bring joy. But, does frugal living means dooming yourself to a life of deprivation just to save a few bucks here and there?
It is not true. Frugal living isn’t about deprivation or sacrifice. It is all about living a smarter life so you can afford to live a rich life – the life you always dream of living.
Table of Contents
- What is Frugal Living?
- Why live a Frugal Life?
- Benefits of Living a Frugal Life
- How to Start Living a Frugal Life?
- Final Words
What is Frugal Living?
Frugal living is often misinterpreted into negative. While a frugal lifestyle can look like a sacrifice in quality, it doesn’t have to be. You can choose to be frugal in many ways to add more value to your life.
Frugal living is the act of being purposeful with spending. If you do it properly, you will prioritize the things that matter the most to you. You will spend money only on things that matter and avoid spending on other areas.
Frugal living is a choice to manage your money in a better way and not spend lavishly on things that you don’t require. Frugality is a lifestyle that will provide you with financial independence and stability for your remaining life.
This lifestyle is becoming very popular and is accepted by people across the world because of its numerous benefits, both long-term and short-term. By adopting this lifestyle, people have discovered new interests, started to think more strategically, and have become more responsible.
So, why should you live a frugal life?
Why live a Frugal Life?
According to CNN money, about 80% of the people live paycheck to paycheck. They struggle to save money every month and restrain themselves from buying things. Imagine you are from the other 20% of the category. Have you ever come across a deal that you can’t miss but had to let it go because you don’t have the money to spend?
Well, most of us have been there. So, to avoid such things in the future, we can make a few adjustments to our lifestyle so that we can take advantage of such deals in the future.
But does that mean that we should stop living our life?
No. Living frugal life means making smarter decisions and taking charge of your finances. Many people go out and start spending their money as soon as they get their paychecks. This needs to be avoided so that we can live a frugal life and buy things that we need.
Benefits of Living a Frugal Life
No one will do anything for the long term unless it is beneficial. So, here are the benefits of frugal living:
1. Better Retirement Savings
Around 40% of the Americans will likely be broke when they retire and will have less than $10,000 as retirement savings. No one wants to end up like this. You can make a change to handle your finances and plan better for retirement without any worries of money. There are several ways to save up for your retirement, and frugal living can be one of them.
2. Better Retirement Savings
Americans carry over $800 billion of credit card debt. This is a huge amount that results due to spending on consumer items like expensive, branded smartphones, televisions, and computers.
Imagine living a debt-free life. This can be achieved by controlling the urge to spend money and live a frugal life.
3. Increases Your Credit Score
With lesser debt, you will have a better credit score, and this can go in the opposite direction too. A better credit score can help you get better deals with lesser interest rates. This will be a huge benefit, especially when you are planning to buy something big, like a house. Hence, with frugal living, you will not only improve your credit score but will also get a loan with minimal interest rate.
4. Will provide More time to Enjoy
Frugal living provides you with an ample amount of free time that you can spend doing what you always want to do. By not worrying about your spending and debt, you will save a lot of time and money that you can spend with your family the way you want to. When everyone is squeaking to take a few weeks off from work, you will be able to afford to get off from your hectic work schedule for a week or two occasionally.
5. Will provide More time to Enjoy
With frugal living, you will be saving more money, which you can either keep in your bank or invest. You will be able to get benefits of compounding interest for your savings. Watch your bank account balance grow faster than ever. What would take forever to build up, will now only take very less time.
Many people in America live from paycheck to paycheck and have very little to no bank balance.
6. Help you Own a Home
Do you have a goal to own a house without any mortgage payment? You can achieve this goal by following a frugal lifestyle. Frugal living will help you pay 15-20 years of the mortgage in just 5 to 10 years. Just pay a little more every month by saving through frugal living.
7. You can Save for Emergency
During times of uncertainty, most people are unable even to arrange a few hundred dollars. But, by implementing frugal living, you can protect yourself in case of emergency and pay for your medical bills. Frugal living will help you stay prepared for whatever comes your way.
8. Provides better Relaxation
Everyone is worried about money, even if you have a lot of it. With a frugal lifestyle, you will have everything in place. With more money, you will have less debt. Hence, you will not have to worry about accumulating debt. You will be in a position to take control of your finances and enjoy a more relaxed life.
How to Start living a Frugal Life?
If you haven’t tried to live a frugal life, it may seem difficult in the beginning. Don’t just give up; you can just start by making a few changes at first and then implement different tips and tricks. However, remember, this is not one size fits all kind of strategy.
Try different tactics and see if it works for you. You may find that giving up eating outside is not a problem, but leaving your favorite brand of shampoo may not be a good option for you. Keep your mind open, and don’t hesitate to try different strategies to go frugal. Keep experimenting to find the balance that will work for you.
Also, it is important that you don’t overdo it. Although cutting your expenses without any mercy may feel like excitement at first, but too much expense cut may also backfire. Instead of saving over the long term, you may end up experiencing burnout and losing your savings. So, don’t get carried away while planning for frugal living.
A good way to start employing frugality in your life is to add new strategies slowly. If you like one strategy, stick to it and add another. If you don’t like something, you can skip it and try the other one. You may have to try different strategies before you find the right ones for you.
Here is how you can start:
1. Create a Budget to Match your Lifestyle
Creating and sticking to the budget is the key to your financial success. A budget is your financial plan on where you will be spending your money each month. If you don’t have a budget, any frugal strategy won’t make any difference. It might take you a while to set a frugal budget. You can start by prioritizing things that matter to you the most.
2. Increase Debt Repayment
Paying your debt faster is another way to live a frugal life as you will be saving a lot of money in the long run. The best frugal tip here can be to opt for debt consolidation. We know that the best strategy to be frugal is to spend less, and debt consolidation can help you save a lot.
3. Meal Plan
Start planning your meal, avoid excessive eating outside in costly restaurants, and dine-in places or ordering foods online. A combination of laziness and kitchen fears can lead to a lack of meal planning, and this will burn a hole into the budget. When you start eating by cooking yourself, you will be saving at least $5-$10 in each meal.
4. Buy a Car you can Afford
A car is one of the major purchases that you make in your lifetime. It is very important that you buy a car that you can really afford. Don’t just go for a shiny brand new expensive car. Buy a car that fits your budget. Before you head towards the car dealer, calculate what you can afford. This will help you decide what you should look for.
If you really want to buy those expensive ones, you can consider purchasing an old used car of that model. This way, you will get to choose the car that you like but will also be saving huge money for you.
Remember, the value of a new car depreciates by 10-20% as soon as you take it out for a drive. The value of the car will be decreasing with time, and it can go as low as 50% within the first five years. Hence, make a wise decision and buy what you really can afford.
5. Shop for best Insurance
Insurance is a necessity, but it can be a big burden on your pocket. Not buying proper insurance can derail your financial goals. It is important that you choose the best policy to protect your life and budget.
Evaluate what insurance you really need and make sure to look around for the best prices for your insurance. You can save a lot by looking around with different insurance providers.
6. Automate Your Investments and Savings
You need to automate your investment and saving goals. You can start by automating your retirement saving so that you don’t end up spending what you aimed to save. Next, you can also consider automatic bill payment. Automating your expenses and saving will help you regulate your urge to spend money. This is especially beneficial for people who live from paycheck to paycheck.
7. Use Coupons and Freebies
Couponing is another great way to be frugal. Just check for coupons every time before you go to the grocery store. This will help you cut your bill by 20-25%. You can look online for some blogs that offer the best deals and coupons. You can also look for cashback offers before you go shopping for your groceries, clothing, travel bookings, books, and more.
Freebies are fun. Sign up for a few free samples and freebies. You can get free meals using freebie deals. Look online once in a while to get freebie deals and offers.
8. Buy used items
By purchasing used goods, you can save a significant amount of money. Check around online marketplaces and local stores to buy items you need at a better price. When you buy used items, you can even get an expensive item at a much lesser price.
9. Keep your old Phone for longer
Are you one of those who will just rush to the Apple store as soon as the new iPhone model is launched? It is better to avoid this from now and keep using your old phone for as long as possible.
Do you know cell phone purchases cost more than we spend on cars in our lifetime?
Furthermore, you can also buy refurbished cell phones to save more money on your next cell phone purchase.
10. Buy in Bulk
Remember, buying in bulk can help you save in the long term. Stock up on things that you use frequently and those that run out quickly like frozen items, laundry detergent, paper products, etc. Moreover, this will help you save by not having to drive to the store whenever you run out of something.
11. Prefer to DIY
Repairs can be expensive, especially in your car and home. The DIY approach can help you save a lot. You can look online for how to do something. However, don’t overdo it. If something requires professional skills, you should leave it to the professional.
12. Take care of your Ride
Cut down on your rides by combining various errands together and walking or biking more. Owning a car is a huge expense. Keep up with scheduled maintenance, so it doesn’t become a bigger expense.
13. Switch to LEDs
LEDs use very little energy compared to standard bulbs. Moreover, they last longer. In the long run, this can save huge money, reducing your electricity bill.
14. Evaluate your Subscriptions
Do you have more subscriptions than you need? Evaluate your subscriptions and decide which ones you need and cancel those subscriptions you don’t require.
15. Declutter Your Possessions
Frugal living also means that you live with less in all the aspects of your life. Only keep the things that you need. Get rid of things you don’t need. You can sell these possessions to earn a few bucks. By getting rid of things you no longer need or use, you will save more space for important things. This will also help you stay organized.
These are just a few tips to be frugal. You can try these and check if these benefit you. However, frugal tips are not just limited to the above-mentioned ones. You can try whatever suits better for you. It is not something like one size fits all type of strategy. Try and make your own strategy.
Most of us have a bad reputation for the term “frugal living.” We love to spend and buy new products constantly. New phones and cars are launched every year, and the companies run advertisements to entice you to buy their new products. You need to keep your spending urges in control and spend wisely.
We need to understand that living frugally doesn’t mean that we need to sacrifice a lot. When you have your finances under control, it is easier to spend your money on things that matter to you.
Frugal living is not something that you can achieve in one day. Don’t think that you need to accomplish all these at once. Start small by trying a few frugal strategies at a time and find out what works best for you. Choose a few tips and make them a habit. Within a few weeks, it will become automatic, and you won’t have to think of it. Next, look for a few more tips and go through the same process until it becomes a habit.
You will see the benefits within a few weeks, and you will be on your way towards living a more enjoyable, safer, and relaxed life.