Frugal living means different things to different people, but generally, it means spending less money on the things you need and want in order to meet your financial goals. When you start to live a frugal lifestyle, you look for ways to save money on the expenses you have every day, week, month and year. Some reasons for living a frugal lifestyle include wanting to be debt-free, saving to pay cash for a major purchase, or retirement.
Many people who live frugally do so because they have financial and life goals that they want to accomplish. A frugal lifestyle can allow someone to save for a rainy day, spend more time with family, or take really great vacations. There are as many goals as there are people, and frugal living can help in accomplishing all of them.
Frugal Lifestyle: Money Management
Most frugal people are not afraid of the dreaded “B” word: Budget. If you don’t know where your money is going each month or how much your bills are, it will be very difficult to decide how much money to spend on a given item and how much to save. Basic money management includes a written budget, tracking your spending, and planning for unexpected expenses by saving money for an emergency fund.
Once you have the basics down, you can also start saving for those major purchases that may be on your wish list: your next car, your kid’s college education, or the perfect house in which to start a family. Retirement savings is another important priority and should be started as early as possible.
Frugal Lifestyle: Cutting Expenses
Once you know how much you are spending each month, it’s time to see if you can do better in one or more areas. Looking at each of your bills and doing a little research will tell you whether there might be a less costly option that would still meet your needs. Can you choose a cheaper electricity supplier? Can you use less data and cut your cell phone bill? What about turning your thermostat down a few degrees?
The options for cutting your expenses are just about limitless, and there are many resources on this site and other sites online that help you figure out how to pay less for the goods and services you need on a regular basis. Some who embrace the frugal lifestyle choose to cut radically, while others balance convenience with cost and make gentler cuts that still give them the best deal for the things they really want and need.
Some of the biggest areas where expenses can be cut include groceries, clothing, and eating out. It is possible to save hundreds of dollars each month by making targeted cuts and asking yourself the number one question of frugal living: Do I need this, or do I just want it?
Frugal Lifestyle: Making Sacrifices
Depending on how far you want or need to go into a frugal lifestyle, you may find that sacrifices become part of the process. While sacrificing may have a bad connotation, many people decide to sacrifice things they would otherwise want in order to meet their financial goals. It is possible to have a positive attitude about making sacrifices when you have a true purpose and goal behind your behavior, and it helps to have a date in mind when the sacrifices will end.
Some sacrifices that people often make in frugal living include living on one income in order to have a parent stay home to raise children, living in a smaller home in a better neighborhood, or buying a used car instead of a new one in order to save the difference. It is up to each person to decide whether to make sacrifices for a frugal lifestyle and the level of sacrifices you are willing to make to achieve your goals.
Frugal Lifestyle: Baby Steps
Change isn’t always easy, and it can take time to change the way you’ve lived for many years. If a frugal lifestyle seems too overwhelming to tackle at once, taking baby steps can be an approach that feels more manageable while still moving in the right direction. Try to make one or two changes each week until you have made all the changes you can or want to make.
Start with the changes that make the biggest difference in the budget. For example, start packing your lunches instead of eating out at work for the first week, then cook from scratch the second week, and so on. In no time at all, you will find that you have saved a significant amount of money without feeling like you had to do everything all at once.
Frugal Lifestyle: Having Fun
Many people who choose a frugal lifestyle find that it is fun to find creative ways to save money and spend less. While not every way to cut spending is fun, it’s important to approach frugal living with your sense of humor intact and see it for what it is: Frugal living is a choice that you are making in order to achieve something in your life.
What one person considers a frugal lifestyle may seem extravagant to someone else. Part of a frugal lifestyle is figuring out what level of frugality you can live with and what are non-negotiable items in life. Finding a level of frugality that you, your spouse and your family can live with is key to long-term success.