What is frugal living?
Frugal living is a lifestyle that involves strict money management and focuses on eliminating unnecessary spending wherever possible. Beyond necessities, a person who lives frugally will carefully consider their discretionary spending budget and how those funds should be spent.
So as you can imagine, a frugal person isn’t prone to impulse purchasing, and they don’t go out and buy whatever they want just cause they want it. Frugal people carefully weigh the benefits and downsides of each and every purchase. They prioritize attaining their savings goals and paying off debt over buying items they just want and don’t actually need.
Why Frugal Living is Difficult in the Beginning
Frugal living is not for the faint of heart, but a frugal lifestyle can be adapted to suit nearly everyone, including you believe it or not!
To live frugally doesn’t mean to stop spending altogether. Rather, it’s helpful to think of frugal living as a spectrum. Some choose to get really extreme with their frugality, and others will simply tweak their current spending so that they’re more money conscious.
Figuring out where on the frugal spectrum suits you best, is the challenging part. If you get too ambitious about cutting your spending, you’ll struggle to make frugal living a lifestyle. And if you don’t go far enough with it, you won’t experience as many benefits to frugality, namely its incredible impact on your savings and net worth.
See, in the beginning you’ll be battling your entrenched and harmful spending habits, as well as your ingrained attitudes about money and debt that impact your daily life. We all suffer from these and they largely decide the course of our financial health.
What frugal living asks us to do is change these aspects of ourselves, which is incredibly difficult.
Just like how New Years resolutions never stick because it’s hard to form new habits, frugal living too won’t just become your new norm tomorrow. You’ll need to continually reflect on your money management, be honest about what you’re purchasing and why, and learn to switch off your unconscious spending on unnecessary items.
And that’s another big challenge for people new to frugal living: what’s considered an “unnecessary” purchase?
This might sound like a simple question, but your definition of what’s necessary and unnecessary now will be entirely different than after adopting a frugal lifestyle. Frugal living will force you to redefine “unnecessary” and “necessary”.
6 Tips to Change Your Lifestyle and Embrace Frugality
1. Take Advantage of Free and Discount Offers
Okay, so for the most part we all like free stuff and aren’t necessarily opposed to it when it’s offered.
But what I mean by embracing the idea of free, is that you’ll need to not only take advantage of freebies when they’re presented to you, but also actively seek out opportunities to get free stuff, even if it requires a bit of work on your part.
Free products, bonus offers, and financial incentives are everywhere, you just have to notice them. For example, did you know that you can actually get free products from Amazon sellers through direct shipping offers? All it takes is a quick Google Doc sign up, and free stuff will be sent your way.
And often times when you open new store loyalty accounts, you’ll get free stuff and/or significant discounts on your shopping.
As well, banks these days are offering more and more sign up bonuses, some even over $300 in cash just for opening an account! Sign up bonuses are so prevalent, that people are even turning this into a side hustle.
Free stuff, discounts, and cash bonuses are out there, people. And with your newfound frugality, it’s time to seize these opportunities.
2. Redefine Your “Needs” and Wants
Mistaking “needs” for wants is human nature. Our brains tell us we “need” a particular item right now, no matter the cost or financial consequences. Things like that brand new iPhone, or new 4K television model, or that sleek and awesome Playstation 5. I mean, we “need” these things, right?
Well, as you start your frugal living journey, you’ll be grappling with and completely rethinking which items are actually worth spending money on. You’ll realize that there’s a big difference between what you actually need to live comfortably.
Yes, you might want to go on a shopping spree and buy a bunch of new clothes for the season. However, unless your current wardrobe is embarrassingly outdated or worn through, then those new clothese are not a “need” they’re a “want.” End of story.
Frugality and the mindset that comes with it will redefine these two words in their literal meaning. Every dollar you spend from now on will be spent purposefully.
3. Track Your Spending
You’ll never actually know where your money goes unless you track it somehow. And while it’s tempting to think that our list of transactions in our online bank account is considered “tracking”, well I’ve got some harsh news for you:
You’re not tracking your spending, at all.
Yes your bank is logging your transactions, but you are not pre-planning out your finances and carefully considering where every dollar goes. Instead, you’re taking a backseat to your spending habits.
So in order to make frugal living a habit and a lifestyle, you must track every dollar spent. This will ensure that you’re spending wisely and meeting your savings and debt payoff goals. You can track your spending via a budget printable, a budgeting app like Personal Capital or YNAB (You Need a Budget), or create your own Excel document. Whichever method works for you, just make sure you start as soon as possible.
4. Try No-Spend Days
Not spending money for a whole day sounds easy at first. But you’d be surprised how challenging not spending money is for the majority of us.
Now extend that no-spending rule throughout an entire weekend, or even 30-days. Yeah, still think it’s easy?
However, as intimidating as it sounds at first, doing no-spend days or no-spend challenges where you ban buying particular items, is an excellent way to improve your spending habits.
For example, if you “can’t live without” your morning McDonald’s breakfast, then do a no-spend week where you can’t go through that morning drive-thru. In doing so, you’ll figure out ways to make your morning breakfast at home (both cheaper and healthier!).
Basically, when you stop spending money on something entirely, you’ll naturally come to one or more of these realizations:
A. You didn’t “need” it in the first place, and it in fact was just a “want”.
B. You can actually utilize cheaper ways to get the same result.
C. You don’t really “need” to spend money on it as often as you did before.
5. Get Your Household on Board
To really succeed at frugal living, everyone in your household must be on board and ready to make changes too.
If you’re going to start diligently tracking your household spending, then other family members need to inform you of what they’re buying. If you’ve vowed to stop buying X item, then your partner needs to stop too. This is especially true if you share expenses and banking accounts.
This is not to say that you can’t attempt frugal living independently and focus solely on your own money management. If you want this to be your focus, go right ahead.
But in reality, just like when we’re dieting and trying to eat healthily, it’s really difficult to resist sliding back into your old habits when the people closest to you aren’t supportive and are making poor decisions themselves.
So talk to your partner. Sit down with your children and tell them what the family is doing. Whoever lives with you, then should understand why you’re going to start living frugally, what your goals are, what benefits they’ll experience, and lay the ground rules. These preliminary conversations will make all the difference in how successful your frugal lifestyle becomes.
6. Find Creative Ways to Earn More
Thanks to the blossoming of the internet, there are more ways than ever to earn more money these days.
At first, you might be wondering:
“But isn’t frugal living just about saving money, not making it?”
Well, in short, no. See, frugal living is about conserving the money you have. But that doesn’t mean you shouldn’t actively be seeking out ways to make more of that money.
Making and saving are intertwined. The more extra money you have, the more you’ll save by living frugally.
So you need to get creative. Write down a list of your strengths and skills and decide which money-making side hustles you can start. For instance, if you’re a sociable person and love meeting new people, maybe you can make money as a virtual friend and connect with people online.
For every skillset, there’s a money-making opportunity. You just have to pick one and start.
7. Make Reflecting and Goal Setting a Habit
As you’ve probably realized already from this article, careful consideration of your money habits is what frugal living is all about.
But what does careful consideration mean when it comes to your finances?
To give you an idea, your frugal lifestyle should regularly involve reflecting, either internally or externally on paper, how you’re doing. How your progressing towards financial goals, how your spending habits are doing, and how you’re feeling about money these days.
Some excellent questions to regularly reflect on are:
- Am I aware of where my money is spent? Is my tracking system working for me, or should I try another method?
- Am I reaching my budgeting goals? My savings goals? Am I paying down my debt well enough?
- Are there any habits that still need improvement? What actionable steps can I take to improve these?
- How am I feeling about money? Am I stressed? Am I depressed by my financial situation? What can I do to improve my feelings about money?
These questions and a multitude of others should be asked regularly. It’s a great idea to keep a journal or log of your frugal journey as you embark on it. Looking back at your reflections and goals will only make you even more proud of your progress.
The journey isn’t always easy, but once you’ve turned frugality into a lifestyle, you’ll start saving more, getting out of debt, and working towards becoming truly financially free.