Even though you may be having a tough year, the fundamental rules about money have not changed.
One way to truly stretch your dollars all the way to the end of the month is frugal living.
Don’t have enough money left at the end of the month?
Many people struggle with this issue.
I know you must be scared and worried.
Having a simple plan can help ease the fear and anxiety.
It will empower you and give you a sense of control.
So, set aside your fears and commit to learning more about your finances and what you can do.
A frugal lifestyle is key
A frugal lifestyle does not mean that you will live a life of poverty. Frugal living is actually very freeing.
It frees up your finances to work harder and smarter for you so that you in turn do not have to work so hard to actually bring in an income.
Living a life according to your values is important to living smart and creating wealth. Putting your values first rather than just collecting stuff is empowering. Understanding this will help you live and create the life you really want.
Many Americans live beyond their means, meaning they spend more monthly than they bring in.
If that’s you, finding ways to save and live within your means is a winning idea. There are a few key concepts that you must adopt in order to begin living a more frugal lifestyle.
How to live frugally with these three key concepts
1) Smarter money management
You must begin to not only spend less money but also manage the money you have in a smarter way. You must know where your money is going and make adjustments that align with your values. This can take some time and discipline but will truly pay off in the long run.
Track your spending for 30 days no matter how small the purchase. Make sure you pay your bills on time to avoid paying late fees or interest. If possible, pay credit card balances off each month. If not, devise a plan to pay them off quickly. If you prefer to track your finances online, you can use a website such as www.mint.com.
Set up a system for bill paying and keeping financial records. A system allows you to find your bills and important documents quickly. You’ll feel more in control and more organized which reduces stress.
2) Spend less
You must learn how to spend less than you make. This can be a difficult process for some who have spent more than their paycheck for a long time, however, if you adopt some frugal living ideas, you can be doing this in no time.
Know what your monthly living expenses are and how much you have left for further spending after that. Then look for ways to purchase items for less or not purchase at all. Beware though that you are purchasing items because you need them, not because you want them. Don’t be an impulse buyer.
A few suggestions for spending less
- Use your 30-day spending tracking to make adjustments and identify where you can cut down on wasteful spending.
- Pay your bills on time and reduce late payments. Not only does this save you money, but improves your FICO score as it impacts 1/3 of your score.
- Make coffee at home rather than stopping at Starbucks on the way to work.
- Cook dinner at home instead of eating out.
- Use dinner leftovers to take your lunch to work the next day or freeze for another night’s dinner.
- You may want to join discount sites so you can purchase items and services at a discount.
- There are also auction sites where you can name your price.
- Scrutinize your bills and shop around for better rates on credit cards, bank accounts, insurance, cable, mobile phone plans, etc. or consider canceling these services if possible.
- Look for ways to have fun for less. Play cards or a board game, get a DVD or book from the library, and attend free events. Rent a book from BookLender instead of purchasing.
- Stop buying bottled water. Water from the faucet is just fine, especially if you use a water filter.
- Stop smoking. They’re not good for you anyway and will end up costing you more in healthcare expenses in the long run.
- Skip luxuries such as manicures, pedicures, massages, facials, and the like.
- Check out my Hot Deals page on my website to find discounts on things you might already buy.
- Buy pre-owned devices and trade in your old ones for cash.
3) Save money
With the money that you save through managing your money and not spending as much, you can begin to pay down any debt and put money into savings. It is important to have some reserves put away to help you get ahead.
Make sure you have an emergency fund for those unexpected little things that pop up. Experts recommend $500 to $1,000. Without this cushion, you are only one accident away from disaster. This money is not to be touched unless you have an emergency, so no dipping into it because you want to go to a concert or eat out. Those are not emergencies!
I can’t count the number of times this alone has saved me. When the engine in my car blew up, when my tires went bad, when I had to go to the emergency room, and many more. It was nice to have that money socked away to help me through!
Once you have your emergency fund established, you can start saving for purchases or retirement. Make short-term and long-term goals for your savings plan. Decide how much you will put aside from each paycheck to meet your goals.
If your employer offers a 401(k) plan, start participating now. If you don’t have access to such an account, start an IRA. You must get in the habit of saving to become financially secure.
If you still have money left, you can start a dream account. Save for a vacation or a down payment on a house. Or perhaps you want to start your own business. Start saving for capital.
Continue The Process
Continuing to spend less, save more, and manage your money well is important to get your financial life on track. Create some rituals in your routine to support this process.
Arrange to have money deducted from your paycheck and automatically deposited into your savings accounts to make it easier. Create some goals and review them periodically to help keep you on track. Be sure to celebrate your successes (frugally of course)!
In summary, adopting some key concepts to frugal living can truly change the way you live your life and the way that your money works for you. Follow these frugal living tips and become different from the norm and begin a smarter, more frugal lifestyle today.
And most importantly, DON’T GIVE UP!
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You’ll get Powerful Debt Reduction Strategies, 89 Money Saving Tips, and Money Affirmations About Attracting Wealth to help you achieve your financial goals.