After so many years, whenever the word frugal comes, people give some bad expressions like it is some illegal thing to do. I even heard people assume that being frugal means to live on beans and water, and they spend even after giving 1000 thoughts to their needs. This is something boring about a person. If they are frugal, they might not know how to have fun, etc., etc., but ground things are really different because it is not true that frugal people can not have fun or live on air.
How to be extremely frugal?
People can be extremely frugal if, in the first step, make a deep analysis of expenses, remove bad spending habits, bad living habits (smoking, alcohol drinks, etc. ), unnecessary spending costs. Everybody can be frugal and still have fun because petty pleasures should be preserved. Walking, reading activities are free of charge and can fill a large part of the day. However, if you have children, a large family frugality is possible but only up to certain limits.
Research is the first step to realize opportunities to save and reduce costs.
Personally, I do Pareto analysis.
Pareto analysis
In the first step, you need to write all Excel costs, and then I sort them and calculate the average cost. Then mark all costs above-average cost with one color and all costs below average cost with some other color. In the first step, try to see you can reduce costs above-average value! Higher value costs need to be reduced first. Usually, 80% of the effects (80% of all costs) come from 20% of the causes. For example, if you have 100 items on the list, 20 items will be above average, and those items will be worth 80% of all expenses.
Being frugal defines two, you have to spend and where you have to spend, which is the real thing of being frugal. People on a budget can feel the difference between frugality and be boring and cheap.
Now here comes another difference in savings and earning like; many people argue that earning more is the right and better option than going to save or become frugal etc.
Let me share one of a story with you, my colleague did her MBBS last year, and soon after her degree, she got a job in a renowned hospital; after some months, she started to have increments as she gained experience.
One day we met in a boutique, and she was asking me to refer her to other people for regular checkups, etc., because she intended to buy a new car. Since I was aware of her job and her salary increments, I was shocked to hear this from her. However, I managed to ask her why don’t save some money for two to three months rather than working overtime as she was already working enough and earning more than enough for one person.
It is okay if you want to do overtime and earn more to maintain your wants and needs according to your wish. But this will not make you stay on track; you earn more, eventually, if you are not saving! Then you will spend more too. If you manage to save a little amount every time you shop or want to shop, that will become a great number after a year.
Rather than doing overtime and spoiling your health and peace, it is a far, far better option to save. I do not think if people are earning more, they can not save even a little. Yeah! People like me, the strugglers, can be on the list of frugal. By the way, I love myself for being frugal; this accounts for me in a decent life and bounds me to stay mature and simple.
Sometimes I think of the old times when I spend like crazy and feel embarrassed to save, especially with my friends, and that thing makes me feel proud that I have overcome those spending habits of mine.
Of course, you can leave frugal habit after thinking you are shrinking yourself in a small budget but giving it a try is not anything to lose.
So here are some of the ways to become frugal.
- The first is to accept frugality.
- Figure out your car expenses before thinking about buying it.
- Stop making excuses
- You don’t deserve materialistic things anymore.
- Always be happy with what you have.
- Finally, stop spending on doubles.
- The less you spend more you save the formula.
- Downsize your expenses and living style
- Stop spending money on smoking or entertainment.
- Stop wasting your money to impress others.
- Do not consider your wants as your needs.
1- First is to accept the frugality
obviously, the first step is to accept frugality, although people will object to your goals and suggest what they are doing. Frugality is different for every people. What matters is that how you see it; if you want to become frugal, you need to understand that being confident about it will make you have other good ways in your life.
What can they be? Being frugal, you can save a lot of money, which you can use for special occasions like giving your family a full week vacation in some country.
Being frugal will shape your habits and help you to lead a simple life.
2- Figure out your car expenses before thinking about buying it.
If you have a car, then you can easily figure out how much money you can save if you do not use the car. The maintenance fee, the fuel cost, tax registration, etc. Before buying the car think about these all things and then decide whether your budget allows you to have a car or is it better to travel in public transport which is way more frugal and save you much money with the safety that you can reach home without thinking about taking dark roads because of your car safety.
People on the internet always talk about buying a new car on lease or taking loans from banks and paying them in installments to buy the new and updated car. Some of them think about it as a one-time investment but do not count the average budget of their whole year will be going to fuel and taxes. So how come this could be a one-time investment.
Although having a car is a safe thing for you in an emergency. bUsingit io save money is another thing; you can definitely have a car, but you can put it on Turo or uber after a few months. Your car will be safe and make money so that you do not need to worry about paying its taxes and registration.
3-Stop making excuses
Frugality is a concept you need to work on consistently. If you make excuses today to save money the next day, this thing will take you nowhere. Taking responsibility and love what you do consistently is what frugality demands.
If you got to save money today, then it is to be saved today. No excuses will work on this. If you want to become more frugal, commit yourself to specific habits and realize what is important to you.
Today, breaking it tomorrow is not how frugality works for your budget, not just frugality even all other goals of your life needs consistency. Be confident about your decision once you make it.
4- You don’t deserve materialistic things anymore.
IWeget involved with materialistic things in our lives hat our values and feelings have started fading gradually. You own a car, but you do not feel happy without your family sitting in it. You own a house, but this house will remain empty if your family and loved ones are not in it. Having all facilities and luxuries in life does not guaranty you the happiness of life. If you are sad, your car will not come to give you a shoulder. Try to prioritize your things, and in every matter of life, I believe your relations always come first. Though we have needs and wants, the facilities serve us, but having them or not having them will not be that difficult for you, but not having anyone talk to or celebrate your life with is the worst feeling ever.
Being super-rich makes you realize that it was not money that can fill you with soul and happiness, but somehow somewhere, we fail to explain to each other that money is not everything.
For those who really want to become frugal and do not need to think again to spend a healthy and decent, and even simplified life, frugality is the right option for you.
5- Always be happy with what you have
If you think that frugal means to compromise even on your happiness, then you are totally wrong. An exceptional formula will make you realize that you do not need money to be happy, and being frugal does not make you unhappy.
That formula is to appreciate whatever you have. Just think how many people in this world do not have anything to eat and nowhere to sleep. Comparing to them, you are a thousand times better and blessed you have meals to eat, a bed to sleep, clothes to wear, a home to live, and a healthy body, and a family to love.
You got no excuse to appreciate what you have. So realize that what you have maybe others do not have, so love them and appreciate them.
Surely with this formula, you can be at ease that you do not need any special thing to treat yourself and be happy. Being frugal can not guarantee you to be happy or unhappy; happiness does not link with any of these.
6-The less you spend more you save the formula.
Your concept for needs should not be of wants. Now, if you want to have a Louis Vuitton suit worth 10,000 dollars, needs are clothes, shelter, food, etc. Then sorry, this is not your need, but you have turned your need into an expensive want. Here you know w huge difference between buying clothes from the general market for nearly 500 dollars or buying a 10,000 dollars suit from Louis Vitton.
Decide for yourself.
7-Finally, stop spending on doubles.
Spending doubles indicate that you are paying for the same commodity in two different ways. For example, you are paying bills for cable, and on the other hand, you are watching Netflix on the internet.
Paying doubles and getting less, so it is a waste of money, and similarly, you are paying for the telephone (home landline) bills and simultaneously paying your cellphone bills.
Though you can cut off one way to a single thing, you can do it on another. Pay for cable and do not pay for Netflix, and likewise, you should pay only for cellphone bills and cut off phone connection (landline).
8-Downsize your expenses and living style
Downsizing is far better than savings and making compromises; in some dimensions, they both show the same meaning, but they are not.
For example, you buy some of the beverages every week because you like them, but you do not buy them for a single week. In terms of savings, Yay, you save some dollars in a week. Now come to downsizing your Livingstone, you give up on junk food and adopt a healthy diet. Yes, now you have downsized your living habits.
Downsizing is the simple tact you can apply this to, especially your electricity bills and water consumption. The more you live simply, the more you can save.
9- Stop spending money on smoking or entertainment
You want to become frugal, then think of the ways to change your habits first. If you are a smoker, quit smoking. This can severely damage your budget and your health severely
Another thing is your way too much spending on your entertainment, including your Netflix bills, your cable bills, you’re eating out bills, your shopping bills, etc.
When you get to know when things actually make you happy and comfortable, then spending on this entertainment will make you stop right there; well, I am not getting too obvious about totally cutting off your entertainment bills but reducing them to a lower level frugal should do.
10- Stop wasting your money to impress others
It is genuine advice to everyone whether you want to become frugal or not this is for you people, that never spend your money to impress others. Believe me or not, no one cares about this.
If you are spending thousands of dollars to buy a branded handbag to attend, your friends get together, and you want to show off that bag. You are not only wasting your money but also your effort. Imagine if others do this to you, like showing off their stuff to impress you. What feelings will you get? I am sure that within a few seconds, I get annoyed if someone shows off in front of me.
Everyone has their own living styles and their own taste. Why would you showing off yours to impress others?
11- Do not consider your wants as your needs.
When we start spending more on our wants, we gradually start becoming habitual of living with them. As I can share one of the simple and basic habits, we all somehow use laptops and cellphones and tabs (iPads) though all things perform interrelated operations. But we use them separately and spend money on them; it has become our daily routine.
There was a time when these technologies were just part of wants, and many can not afford to have them. But, as time has changed, now every person uses them, and it has become one of our needs, without them maybe you are behind the time.
Figure out before getting habitual of those technologies that are not on your budget to afford; like me, I cannot afford to have MacBook pro-2020, but since I am okay with little older versions of laptops, it does not bother me to spend money on it.
Being frugal saves it.
Frugal lifestyle Tips:
Having a frugal lifestyle makes you feel the simplicity of life. It makes you realize that life’s beauty lies in simplicity, not living in luxuries (not specifically) targeting any class, but not everyone has the same life. So to have a great time in your life, one needs to be frugal. This will help you to live an off-burden life. Decide for yourself.
Good Luck!
After leaving Wells Fargo Bank in 2014, Daniel began a career as a finance consultant, advising companies and individuals on economic policy, labor relations, and financial management.
At Promtfinance.com, Daniel writes about personal finance topics, value estimation, budgeting strategies, retirement planning, and portfolio diversification.
Read more on Daniel Smith's biography page.
Contact Daniel: daniel@promtfinance.com