Is being frugal the same as being cheap? Absolutely not! Being cheap is buying the lowest-priced item without considering its quality. Frugality, on the other hand, is evaluating your needs and wants and choosing to spend your hard-earned money on things that matter to you.
A frugal lifestyle doesn’t necessarily mean putting tight restraints on your spending or missing out on things that make life so wonderful. Frugal living is being cautious with how you spend your money.
Being frugal means that you know your priorities and values and are aware of what you need to do to achieve the most important things in your life. It also means that you are smart enough to identify what things are less important and put a financial restraint in those areas.
Frugal living is of paramount importance more now than ever. Be wise with money and try these tips for frugal living:
1. Make a Budget
Budgeting is one of the oldest and the most effective financial advice. A realistic budget helps you track your spending and cut down on unnecessary expenses.
2. Build an Emergency Fund
Emergencies don’t come knocking; they just strike when you least expect them. The best way to deal with emergencies is to be financially prepared for them. That’s where the emergency fund comes in. Set aside a certain percentage of your monthly income towards your emergency fund. Financial experts recommend saving at least 3 to 6 months of your living expense in your emergency fund. And this fund should be assessed only in emergencies. For other non-emergency cash crunch situations, consider taking an unsecured personal loan.
3. Minimal or No Cost Entertainment
Look at low-cost or no-cost forms of entertainment. Some free entertainment ideas include:
- Neighbourhood park
- Hike
- Volunteer work
- Picnic
4. Avoid Impulse Buying
Creating your budget (point 1) will make you realize how much of your money is spent on impulsive buying. Surprisingly, it’s quite a lot. The simple solution to avoid impulsive buying is to make a list of items you need and always stick to that list.
5. Sell What You Don’t Need
Most of us have things in abundance – clothes, books, toys, or shoes – usually more than we need. It’s a good idea to downsize and clear off the clutter. Sell these things online via various reselling websites like Poshmark, eBay, or Facebook Marketplace.
6. Automate Your Savings and Investments
With so many things going on in your life, it’s quite possible to lose focus on keeping up with your finances. That being said, you should never lose an opportunity to save money or invest every month. The best way to ensure is to automate savings and investments.
7. Avoid Credit Card Debt
Although a credit card is an incredible financial tool, it can be extremely expensive. If you don’t pay the balance in full each month, it’s easy to rack up unnecessary credit card debt. Avoiding credit card debt by minimizing its use and paying it off in full each month is one of the key frugal living tips.
8. Lower Your Electricity Usage
Lowering your consumption of electricity is one of the best ways to live frugally. You can avoid electricity wastage and save money by:
- Only using fans and ACs when it’s hot.
- Switching off the lights or TV when you are not using it.
9. Buy Reusable Items
It’s not wise to spend your money on ‘use and throw’ items like disposable plates, food containers, spoons, kitchen tissue rolls, etc. Wise spending would be using your money to buy plates, spoons, and cleaning cloths that can be washed and reused.
10. Cook Meals at Home
This is a great habit, not only for frugality but also for health. Cooking meals at home saves a significant amount of money by reducing ordering takeaways and eating out.
Leverage the Benefits of Frugal Living
A frugal life helps you achieve financial freedom more quickly by pushing you to achieve your financial goals much faster. Every time you make a cautious decision to spend less on something, you put the money saved towards things that matter most to you. The best part about frugal living is you decide what’s worthy of your money.
Frugal living is not a sacrifice. It is, rather, a conscious decision to enjoy what you care about in life. When you have financial freedom, you can spend the money on things you care about. Try our frugal living tips and get inspired to live a life you always wanted.
Author Bio:
Tanya Singh works as a Content Marketer at LoanTube – a loan comparison marketplace where borrowers can connect with multiple lenders via a convenient and transparent application. She writes about topics related to personal finance and loans helping her readers in making smart decisions when they need to borrow. Yoga brings her inner peace and strength, and traveling brings her joy (besides her work of course).