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Understanding Frugal Living
Do you live paycheck to paycheck? Do you wish you had more money to spend on activities you enjoy, vacations, or more money to invest in retirement? Are you constantly buying things impulsively that you don’t actually need? Are you overwhelmed with all the “stuff” in your life? If you answered yes to most of these questions, I want to help you embark on a new lifestyle with the art of frugality.
When most people think of frugality, they just think it’s someone being cheap, stingy, not buying anything, living small, and not enjoying life. These are common misconceptions because frugal living is a lifestyle. It’s about many choices that make up a chance to change your life for the better. I will explain the basics you need to answer what is frugal living for yourself and why you should incorporate it into the way you live.
What is frugal living?
A common misconception about this lifestyle is that people are just being cheap. That is so far from the truth. It’s choosing to live a certain way, just as people choose to have children and raise families. It’s about not having the latest and greatest thing that comes out or spending impulsively. It’s thinking strategically about your money and spending wisely.
Why should you live a frugally?
Do you currently live paycheck to paycheck? A large number of people are in this situation. Imagine that a major setback happens and you cannot afford it. Living a frugal lifestyle will change all of this by making better decisions about how you spend your money. When setbacks occur or you have something you want to invest in, you will have the money available to handle the situation.
How do you benefit from this lifestyle?
“What’s in it for me?” you ask. There are several benefits to living frugally, so I’m going to give you a few of the most important ones.
1. While others will enter retirement with little savings, your new lifestyle will allow you to save for many years prior to retirement and allow you to make better decisions during retirement. While most Americans will question how they can survive on retirement savings or force them to work for years into retirement age, your decision to live frugally will make it easier for you to retire when the time comes.
2. Being debt-free is around the corner
Imagine having your mortgage paid off or not having credit card debt. While most Americans are struggling to pay off all their monthly bills, choosing a frugal lifestyle means paying off those debts sooner. Imagine logging into your checking and savings accounts and seeing a hefty balance each month.
3. A better credit score
A less debt-to-credit ratio means that your credit score will improve significantly! Higher credit scores will help you to get better rates and opportunities when applying for home loans or other big purchases.
4. More vacation time
Do you feel like you live to work rather than working to live? You’re not alone. When did you take your last vacation? When did you have to use a credit card to pay for your last vacation and how long did it take you to pay off? Living a frugal life means you will have more time to take off and enjoy trips and the means to pay for those trips without pulling out your credit card.
5. You will smile when you see your bank statement
Living a frugal lifestyle means saving more money. The more money you invest, the more the bank gives you in interest. Years of compounding interest will continue growing. Saying no to the impulse buys and adding that money to your savings will make you smile in the long run.
6. No more mortgage
How amazing would it be to pay off your home early? Living frugally means more money to invest in your mortgage which will result in paying it off sooner! Imagine not having a house payment each month and investing that money into your future. Paying off your home sooner also means you can invest in other properties or avenues to grow your nest egg.
7. If disaster strikes, are you ready?
We never know when life is going to throw a wrench into our day and also if it will be costly. If something breaks in your home, do you have money set aside to fix it? If your child is in an accident and insurance doesn’t cover all the medical bills, do you have enough money to cover them? Living frugally means having money set aside for these unexpected moments in your life and being able to handle them. What does that mean for you? Less anxiety and more control.
8. You can relax
Having enough money in the bank for the unexpected means that you can relax a little. Being able to cover events that happen in your life is a huge relief for you mentally and emotionally. Who needs the extra stress of worrying about the unexpected? You don’t. Living a life of frugality means having the control you need to handle everything in your life!
What now?
I explained what frugal living is, why you should engage in this lifestyle, and some common misconceptions. So, how can you act? There are ways that you can start living a frugal lifestyle today.
- Learn how to do projects yourself.
- Buy in bulk.
- Grow your own fruits and vegetables or find farms that will allow you to pick your own for less.
- Use the library over buying books.
- Create your own cleaners with vinegar instead of buying expensive cleaners.
- Find alternatives to expensive cable bills.
- Shop for discounted clothing at second-hand stores or buy clothes at the end of the season.
- Never, ever (I repeat) buy anything on impulse.
Finding the right balance.
If you choose to live frugally, it’s important to find a good balance between the ability to save money and spend thoughtfully and going to an extreme. When I say extreme, I just want to encourage you to not live cheaper in a way that negatively impacts your life. I will give you a couple of examples.
1. Be thoughtful about ways to save money on groceries, but don’t buy cheaper alternatives that are not healthy. Cheaper food is not necessarily better in some cases. Food manufacturers can make unhealthy food at a lower cost to you. Instead, buy food in bulk in order to save.
2. I encourage you to do projects on your own rather than hiring a contractor unless you pose a risk to yourself or someone else by doing so. There are some projects that should be left to the experts.
The main point of my examples is that frugal living can be taken to an unhealthy extreme. You want to be critical of your decisions and how they can impact your life. Be frugal, don’t be cheap.
If you’re excited to get started you can start small. Make it a weekly goal to tackle something on this list or create your own. It’s never too late to start living a frugal lifestyle. Here’s your motto to live by: live frugally is not to live cheaper. It’s so much more.