If you thought only the low or middle-class people lead a frugal life then you are wrong. Billionaire Mark Zuckerberg (Owner of Facebook) bought a $25,000 wedding ring for his wife when he could easily spend a few million dollars on the ring. His wedding ceremony was held in his backyard and the guests were served Mexican food worth $7.50 a plate! Warren Buffet, the billionaire investor, leads a frugal life too. He only recently replaced his flip phone, still lives in a 5-bedroom house that he bought in 1958, and drives a Cadillac XTS which he bought for $45,000 instead of limousines or sports cars that he could comfortably afford.
Being frugal doesn’t mean buying cheap and low-quality things. ”Frugal’ focuses on making smart purchases so that you get the best value for money. Quality is always a priority here. But being ‘cheap’ emphasizes saving money even if it means buying the worst quality product in the market. Frugal people use different cash-saving strategies but never compromise on quality. They spend money on things that are important to them, but not on things that have little value.
Benefits Of Frugal Living
Many people today like the idea of frugal living, especially at a time when the prices of commodities are rising, medical and other essential expenses are increasing, and the economy is in a downturn. The recent coronavirus pandemic has taught everyone a big lesson — nothing is permanent or guaranteed in this world. During this difficult time, many people lost their jobs, businesses suffered losses, and people became hospitalized. If you lead a frugal lifestyle, you can save a lot of money for unexpected life events. Living frugally doesn’t mean that you live on cheap things. It only means being cautious about where you are spending your money. Some of the benefits of frugal living are mentioned below.
🢂 If you lead a frugal life, you won’t have to work overtime or look for a second job to meet your financial needs.
🢂 You will have more money to save or invest. So, you will achieve your goals faster; for example, you can buy a house within a few years.
🢂 Frugal living will result in savings so you will have less financial stress. You won’t use your credit card much, therefore you won’t be in debt.
🢂 A frugal lifestyle leads to environment-friendly living. Those who lead a frugal life don’t buy unnecessary things and so they don’t need to throw away too many things in landfills.
Tips For Leading A Frugal Life
Making small changes to your lifestyle and developing some good habits can help you lead a frugal life without compromising your comfort. With this lifestyle, you will save more and spend less and therefore reach your financial goals quickly. Making healthy money habits will help you become more stable financially throughout your life. Here are some tips for you.
Your expenses should be in control; that is, they should be proportionate to what you earn. Try to stop impulse buying; instead, create a budget at the beginning of the month and spend accordingly. You can use an app to create a budget and manage your monthly expenses. If you want to go on a holiday or buy a new car, keep aside some money every month for this purpose. That way, you can save up and do the things you like without feeling any financial pressure.
Limit Your Debt
You shouldn’t buy things that you can’t afford at this moment unless those are necessary like buying medicines if you are ill. Limit your use of credit cards and avoid taking loans. Even if you are in debt, make sure it’s not more than 30% of your income. If you have a credit card and other dues, pay them on time to avoid fines and poor credit scores.
Have A Savings Account
You need to save money every month so that you can achieve your short-term and long-term financial goals. Always keep a percentage of your income for vacations or major purchases like a car. Choose a high-yield savings account so that you can get a good return.
Stay In A Smaller House
A family of four doesn’t require a 6-bedroom house, for example, If you live in a big house, you will buy more furniture and other things to fill up the space. Also, the maintenance cost including utility bills will be high. By living in a smaller house, you can save a lot of money.
Keeping your money in your savings account won’t increase your money much over time. To grow your money you need to invest it in stocks, real estate, business, and other ventures. You may need to take some risks to get high returns. But it is wise to do thorough research on the various investment options and find a deal that is not very risky and can give you decent returns.
To maintain a frugal lifestyle, you should prepare your meals at home often rather than ordering food from outside or going to a restaurant frequently. This way you can save money and also keep your health in good condition by avoiding junk food. Cooking in bulk can save money too. You can cook once or twice a week and freeze the food in various proportions to go for the rest of the week. That way you won’t feel tired or frustrated to cook at home as you won’t be doing it every day. Before preparing your meal take a look at your pantry. Try to use the things that are already available rather than shopping for new things. Take a trip to grocery stores once twice or thrice a month; that way you won’t shop too much and save money.
You should take advantage of all the discounts, promotions, and coupons while shopping. There are seasonal discounts and you must shop more during that time to save money. You can get offers on various credit cards; that would be helpful too. Many shops sell similar products; compare the prices of a few shops before purchasing so that you get the best deal.
Become Environmentally Friendly
Being frugal can help you to become environmentally friendly. You will consume less electricity, water, and gas. As these resources are limited; spending less of these can save the earth. If people buy less furniture then fewer trees will be cut. Eating more than necessary or purchasing things that you don’t need end up in landfills. So, limiting your shopping can cause less pollution. Using public transport instead of cars can cause less pollution and also save fuel which is now limited on Earth. You can also walk or use a bicycle for commuting if your destination is not that far away.
Sell Unused Items
You may have clothes in your wardrobe that you don’t wear, furniture that is lying around without any use, or a bicycle that you don’t ride anymore. Sell these things in online marketplaces or elsewhere to get some extra cash.
Buy Used Items
Sometimes you can get used items in fine condition. You can buy these instead of new ones and save a lot of money. For example, if someone is selling the previous version of the iPhone which he bought only 6 months back and is in good condition, then it’s better to buy the used phone at a cheaper price than buying a new one.
Plan Holiday Carefully
Living a frugal life doesn’t mean that you can’t go on a holiday. Of course, you can do it, but plan your travel wisely. For example, choose to go during the off-season as the ticket and travel expenses will be low then. Stay in a B&B instead of a luxury hotel. Eat from restaurants on the road rather than the expensive buffet dinner in 5-star hotels.
Grow Vegetables At Home
Gardening is a great hobby. It not only helps you to refresh your mind but also saves a lot of money. By growing your vegetables and fruits in your backyard, you can save money on grocery shopping every month. You also get to eat organic and fresh fruits and vegetables that are good for your health.
Workout At Home
Going to the gym has become a norm now. The monthly gym membership fee is high and sometimes you may need to travel long distances to go there and in that case, you will have extra travel expenses. Lots of workout videos are available online and you can watch those to exercise at home. You can also walk daily in your nearby park to stay fit.
After a busy week, we all seek entertainment. Instead of going to movies, concerts, restaurants, or resorts, you can think of visiting local museums and parks that have free entry. You can go to your local library and rent books or DVDs. You can spend time with your family by taking part in fun family games.
How To Develop A Frugal Mindset
Your perception of frugality should be positive. Don’t nag about what you might lose but look forward to what you might gain at the end of the journey. Here are some tips to cultivate a frugal mindset.
Be Honest With Yourself And Others
You should get into an open discussion about money with your partner and other family members. By being honest you will know your financial situation and convey the same to others in the family. You should write down the monthly expenses, current debts, and monthly income to see whether your financial condition is stable or not. Your relationship with your family members will improve if you have an open conversation about your finances.
Emphasize On Value
Dining at an expensive restaurant may give you temporary pleasure, but having sufficient money at the time of retirement will give you value. You should have a value-oriented mindset. You must think of the long-term benefits. Spend money on something you value; for example, if good clothing is important to you then buy branded clothes. On the other hand, if the quality of coffee you are having is trivial to you, then have coffee at home rather than at an expensive coffee shop.
Anyone can start living a frugal life, not only the low or middle-income groups. Even the rich feel a lot of financial pressure to keep up with the high-class lifestyle. They can also free themselves from the stress of high living by leading a frugal life. You need to develop a special mindset to lead a frugal lifestyle. By sacrificing little things today you can achieve something great in the future.