We all have heard about the benefits of frugal living and how it can help you to save money.
But the point that we often miss out is that a frugal life is not necessarily about living on the cheap.
At times, it can also be a matter of choice and choosing to live in a way that allows you to save money on the go and creating a savings deposit based on that.
The question is why frugal living even when you make enough money and your income is good.
This is mainly for those have financial problems for now and need to save some money.
However, when you get used to saving money through frugal living, then you will keep on doing it even when your income has become OK.
I have seen so many rich people who are still frugal living.
The enjoy it.
Frugal living, as long as it doesn’t affect your life, and doesn’t prevent you from enjoying your life, is not bad.
For example, while you can buy $1.95 tissue papers with a high quality, why you should pay %5 for it?
Or when you can drive a good car with $500 per month, why should you pay $3000?
The money you are overspending now, can be needed somehow in future.
Unfortunately, most people start overspending when they income becomes good.
Then, they stop improving their business and keep the same income.
This turns a good business, to a struggling business after a while.
Finally, the business collapses and they feel sorry for their ignorance and wasting so much time and money.
Taking a business off the ground is important.
But maintaining it and make it make more money every month is even more important.
So, you have to learn to manage your money and save money every month.
According to Robert Kiyosaki, it is not the matter of the money you make; it is the matter of the money you keep.
Frugal living is a skill; it is a management method that you have to learn and master.
What Are the Best Frugal Living Tips?
Here are some handy frugal living tips that will surely help you save as much as $25,000 every year:
- Explore the Option to Live With Parents
- Stop Needing to Look Rich
- Consider Driving an Old Car
- Resist the Temptation of Eating Out
- Limit Salon Visits/Wardrobe Change
- Savings Strategy
1) Explore the Option to Live with Parents
If your parents have a floor to lease out and you are exploring how to live frugally, a simple option can be living with them.
Remember renting an apartment on your own can be cool but the expenses involved do not just begin and end with the monthly rent.
That apart, there are many other related expenses.
A realistic analysis will make you realize that this decision can help you save as much as $10,000-15,000 a year.
In case you are not married/have a partner, you can also explore the option of sharing with a friend.
2) Stop Needing to Look Rich
You have to understand that living frugal is surely living only on necessities.
Moreover, it is not a crime to live within your means.
If needed, even scale down your lifestyle to fit into your budget.
If you have to, do not shy away from getting an additional job and also, there is no need to compete with anyone.
3) Consider Driving an Old Car
I already mentioned frugal living is just meeting your necessities.
In this context, one key concern area is about the kind of lifestyle accessories that you prefer.
For example, would you consider driving an old car?
Just because it is squeaky or makes a lot of noise is not a reason for you to replace your car.
If your car is in a good condition and you have already paid off your car loan, there is no reason why you should discard it.
In fact, you even save on the car insurance bit.
A rough base of the hand calculation would reveal savings close to $5000 a year but driving a rather rundown looking vehicle.
You can extend the savings even further by opting for a car pool or even choosing to use your bike over the car.
The additional savings this would entail is close to $600 a month and imagine how much that can add up to your yearly savings.
Often saving money is not about earning more.
But it is looking for avenues that can help you save from the existing pool of funds.
4) Resist the Temptation of Eating Out
One of the most common frugal living tips is about limiting eating out.
Perhaps it never registers but even small amounts like $20-30 that you might spend each time you eat out can well become a huge sum eventually when you look back on your savings.
When you are meeting your friends, look to assemble at someone’s house or a park.
Instead of a fancy meal at a swanky restaurant, choose the option to participate in a potluck.
You will be surprised that you could save as much as $1000 a year by this simple act.
Not just meals, even a cup of coffee counts when you are trying to save money.
Learn to make coffee at home, if needed even buy a coffee maker, even then your incremental cost of sitting or picking up coffee from Starbucks will be much higher than this.
In fact, a proper analysis of the numbers would reveal that avoiding the Starbucks and choosing to have homemade coffee could lead to savings of as much as $1200-1500 annually.
I am sure now that this number makes sense and drives home the necessity of incorporating.
This key element of frugal living in your day to day life.
5) Limit Salon Visits/Wardrobe Change
There are many times when we pick a dress on a whim, or we even look at going to the beauty parlor to simply feel better.
Maybe your local beauty salon was good enough, but you choose to go to a more upscale joint to simply do the same things your neighbor does.
This is a big no in the school of frugal living.
You must ensure that you go to a reasonably priced salon at times that you need.
See the beauty services you can even look at achieving at home.
Secondly, add to your wardrobe depending on necessity.
Do not buy just for the heck of it or on an impulse.
The good news is this could translate to savings close to $2000-2500 every year.
Now imagine what all you can use these additional savings for?
6) Savings Strategy
Frugal living is not sufficient.
If you cannot invest the money that you are saving effectively, all your hard work will be a huge waste.
Therefore, do not just target to save $25,000 a year.
It is very important to invest this sum in a way that these savings get translated to bigger savings in the future.
Explore the various investment options that you have and see how you can effectively use them for bigger and better gains.
At the same time ensure these instruments of investment are in sync with your overall investment strategy.
Do You Prefer a Frugal Living Now?
As you can see, managing to have a frugal living doesn’t affect the quality of your life.
It only saves you a lot of money.
Adopting a frugal life is one of the easiest ways to ensure assured savings.
The trick here is not how much you save.
It is often the kind of money you can save by simply altering some basic daily practices, something as simple as picking your coffee from Starbucks.
The advantage is if you are able to continue it on a sustained basis, the biggest gainer would be you again.
Think of Warren Buffett, the Oracle of Omaha.
He is one of the greatest investment gurus and among the top 3 richest men in the world.
He is also a living champion of frugal living.
His wealth stands testimony of how efficient the strategy is.