In a survey conducted by OnePoll on behalf of Slickdeals, it was found that an overwhelming 73 percent of Americans made a New Year’s resolution last year that centered around being smarter with money.
Some people believe they need to earn more while others would like to become savvier about investing. However, one thing we can all do to improve our financial situation is to learn how to be more frugal.
Practicing frugality can help you save more for retirement or a big planned purchase (like a car or down payment on a house). But it can also be a good way to simplify your life and cut down on the things you either don’t need or that don’t bring value into your life.
To help you get started, we asked for some tips from the experts. Here’s what they had to say.
1. Be Mindful of Your Budget
“Winging it” is not a great strategy when it comes to managing your finances. However, for a large percentage of the population, that’s exactly the approach they seem to be taking.
According to data reported by The Ascent, only 3 percent of Americans spend any time managing their household finances on an average day. And of those who do, they usually allocate less than two minutes.
That’s a major opportunity loss to be more strategic about planning your spending and being more mindful of your budget. This is why Alex Mastin, the Founder & CEO of Home Grounds, offers a different approach:
“After I’ve paid off the essentials such as rent, utilities, subscriptions, and budget for my food shop, something I like to do to make sure I am living frugally (as well as potentially saving) is to separate the rest of all the remaining accessible money into a daily budget. This allows me to know what I’ve got each day, and can help me make more concrete decisions on what I’m going to use it on – like treating myself to a coffee, or having an evening out.”
Remember that budgeting doesn’t have to involve complex spreadsheets or manually tracking every penny you spend. You can use a helpful app like Buxfer to automatically monitor your purchases in real-time and make sure your budget is always on track.
2. Use Cash Whenever Possible
Do you ever go out shopping, get the credit card bill a month later, and then wonder why the balance is so high?
This happens because making purchases with credit cards is psychologically less painful than paying for something on the spot with cash. The credit card companies know this, and that’s why they entice us with goodies like sign-up bonuses, cashback rewards, and reduced APRs.
To combat this, Lisa from the Candida Diet suggests making it a habit to use cash instead of credit cards whenever possible. Train yourself to only use your credit card when it is absolutely necessary, such as during a medical emergency.
Using cash for most purchases will help you avoid hefty interest charges and keep your balance down. It will also minimize how much you spend on unnecessary items since it will be mentally harder to part with cash.
3. Prep Your Meals Ahead of Time
Americans spend an incredible amount of their incomes on food. Behind housing and transportation, it ranks as the number 3 expense for the average household.
You’d think a lot of this expense would be related to eating out at restaurants. But we’re also guilty of buying items we plan on cooking at home and then simply letting them spoil. Things like fruit, vegetables, and other perishables that don’t get used end up going straight into the trash and becoming a huge waste of money.
This is why Shawn Richards, the Expedition Coordinator at Ultimate Kilimanjaro, recommends that you prepare your food in advance. Whether it’s for lunch at work, or just cooking a bigger meal to last your dinner over the next few days, meal prepping can quickly help you to be more intentional about what you buy and actually put those items to use.
4. Frugality Equals Freedom
Do you ever feel weighed down by the size of your mortgage or the bills you have to pay? Or maybe you feel trapped trying to keep up appearances or maintain a certain standard of living?
Millions of people feel this way, and the unfortunate part is that there’s a simple path of escape. Chris Muller, the Director of Audience Growth at DoughRoller, sums this up with the following advice:
“When it comes to living frugally, freedom is the ultimate objective. When you live frugally, you don’t have to give up the things that matter most in your life, such as your objectives and time with those you love the most. When you live a frugal lifestyle, you get economic freedom. A thrifty way of life does not include giving up everything you enjoy. Living on a budget allows you to do more things you value in life without breaking the bank, which is the goal of frugal living.”
5. Keep Your Eye on the Prize
Perhaps the best way to practice frugality is to stay focused on the thing you want the most. Maybe you’d like to:
- Travel the world
- Grow your retirement nest egg
- Pay for your children’s college
- Start a business
With every purchase, ask yourself: Is what I’m about to buy as important as the thing I really want? If the answer is “no”, then you can put it back or consider buying it later.
The main concept is to be mindful of how much you’re spending, where it’s going, and what that means for the rest of your financial goals. The more conscious you are about your lifestyle and the steps you can take to simplify, the more control you’ll give yourself to live the way you want.
Remember, whatever has happened in the past is behind you. Start now and make 2022 your year to shine financially.
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