We talk a lot about how to save money around here, and we give you a lot of ideas. In this article, we will provide you with what is, perhaps, the biggest money-saving hack there is: Frugal Living.
Frugal living is a lifestyle that emphasizes spending less and living more simply. It’s how Americans survived the Depression and came out ahead.
Frugal living may sound challenging, but it’s easier than you might think. Once you get started, you’ll be surprised at how simple it is to save money without drastically changing your lifestyle. To get you started, here are the biggest and most practical ways to save money and build wealth through frugal living.
Follow the 50/30/20 Rule
One of the most essential tips for living frugally is budgeting. And one of the easiest ways to budget is with the 50/30/20 rule. With this budget plan, you allocate 50% of your net income to your needs, 30% to your wants, and 20% to your savings.
Once you have a set budget, you will have defined your wants versus your needs and can start to live below your means.
Live Below Your Means
Living below your means is simply spending less money than you make. And if you know the difference between needs and wants and you know what you can afford, you can easily live below your means. Here are just a few ways you can live below your means:
- Prioritize your needs. Before buying anything, consider how important that item is to you and whether you genuinely need it.
- Track your expenses. This is a great way to identify areas where you can save money.
- Stick to cash. It’s easy to overspend when using credit cards, so it’s best to stick to using cash when possible.
- Avoid impulse buys. Avoid buying things you don’t need by simply stepping away from an impulse buy.
- Comparison shop. Before making any major purchases, take the time to compare prices to get the best deal.
- Reducing and reuse. Reducing and reusing items that you need can save you from spending a lot more money than you think.
Reduce and Reuse
Frugal living can be defined as reducing and reusing. It’s how our grandparents got through tough times. We could write an entire article listing the simple ways you can cut costs by reducing and reusing the stuff you need. Instead, here are ten ideas to get you started:
- Use reusable containers for food storage instead of disposable plastic bags or containers.
- Shop at thrift stores or garage sales to find gently used clothing and household items at a lower cost.
- Repair and reuse items rather than replace them when they break or become worn.
- Use cloth napkins and dish towels instead of disposable paper products.
- Use a refillable water bottle instead of buying single-use plastic bottles.
- Use public transportation, walk, or bike instead of driving a car to save money on gas and maintenance costs.
- Grow your herbs, fruits, and vegetables instead of buying them at the grocery store.
- Use reusable bags instead of plastic bags when shopping.
- Buy items in bulk to reduce packaging waste and save money.
- Use a programmable thermostat to save energy on heating and cooling costs.
Stay Disciplined With Your Spending
Discipline is essential when it comes to living frugally and saving money. It’s so easy to get carried away with spending. This is why keeping on track and staying disciplined with your money is critical. Following the 50/30/20 budget we mentioned is a great way to stay disciplined with your spending. It helps you to keep track of your costs and avoid overspending. It also allows you to identify areas where you are spending too much and where you can cut back.
Another way to stay disciplined is to have a goal in mind and work towards it. Having a goal helps keep you motivated and focused. Whether it’s a certain amount of money you want to save or a specific type of purchase you wish to make, having a goal can keep you committed to spending wisely and living within your means.
*Tip – Resist temptation by shopping with a list. This will help ensure you stick to your budget and make it easier to avoid impulse buying.
Save Money Automatically
Automating your finances is one of the most practical ways to save and build wealth. Automating your finances allows you to save money and establish and stick to a budget while still being able to save and invest in the future.
Setting up regular automatic payments and transfers will help you pay your bills on time, pay down debt and build savings. For example, you can set up an automatic transfer from your paycheck to your savings account each month. This is a great way to ensure you save money even when you are too busy or forgetful.
Other ways to save money automatically include:
- Setting up automatic reminders for recurring bills.
- Creating a backup account for future planning.
- Tracking your spending through apps.
- Signing up for e-billing to eliminate paper bills.
- Setting up automatic payment methods for recurring expenses.
By utilizing automation with your finances, you can save time and money, reducing stress and worry about making sure your bills are paid on time. It can also make it easier to set and keep your savings goals and invest in the future.
Live a Debt-Free Life
Living a debt-free life is essential to being frugal and building wealth. Therefore, paying off debt should be a priority to free up more everyday expenses and create budget flexibility. Here are some practical, frugal tips for living a debt-free life:
- Establish a budget: This will help you create a plan for how to manage debt and spending to be successful. Here again, a 50/30/20 budget can help you work towards becoming debt-free.
- Put away savings: Put money away into a savings account before you pay off any debt. This establishes an emergency fund that can be used in case of unforeseen circumstances. As previously mentioned, automating this can be a great help.
- Live below your means: Here again, living below your means is integral to frugal living. Cutting back on unnecessary expenses and sticking to frugal budgeting practices can help you stay debt-free.
- Consolidate debt: Consolidating your debt can be beneficial if you have multiple outstanding loans or credit cards. Consider a debt consolidation loan or balance transfer to reduce overall interest rates and make repayment more manageable.
Make Some Extra Cash and Save It
Frugal living is even easier when you have some extra cash, and making it doesn’t have to be hard. For example, you can get paid to take online surveys from the comfort of your couch and put the money you earn in savings. Or be frugal with it and use it for household items that you need. Just sign up for a free account, answer questions, give opinions, and get paid in cash and rewards.
To get a realistic idea of how much money you can make with surveys for cash, check out the 2023 Guide To Making Money With Paid Online Surveys.
Living frugally can help you gain financial freedom and the capacity to save more money for investments or extra savings. And it doesn’t mean you must give up everything and live a boring existence. Instead, it is about reducing unnecessary costs and living within your means so that you have more money for the things that are important to you.