16 Frugal Living Tips That Can Help You Reach Financial Freedom
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Did you know that an average American has about $38,000 in personal debt? It’s true. And these debts are a combination of personal loans, car loans, mortgages, student loans, and credit cards. Living in debt can be both stressful and and we think that needs to stop! That is why we put together a list of frugal living tips that are completely painless to try. If anything, these tips will bring even more joy to your life.
But before we dive in, why does debt creep up for so many people?
Often, the reason why we’re struggling to stay afloat in our financial status is because of our extravagant lifestyles. Whether we’re trying to keep up with our neighbors, strive to be like the celebrities we see in movies and TV or social media influencers we follow each day, we sometimes live outside our financial means. We may feel pressured to get the latest smartphone, buy the most expensive bag or book that luxurious vacation. But living beyond our means will bury you in debt.
If you want to improve your financial situation, now is the time to evaluate your lifestyle. By living frugally, not only will you teach yourself the virtues of discipline and perseverance but it could also be a road to get out of debt and save more money.
Many people have a negative association with this kind of lifestyle. Living frugally (or living stingy) often gets a bad rap, with people associating it with cheap living. There is a huge difference between the two and if you take time to fully understand what frugal living really is, you may learn to appreciate its importance.
Before we dive into frugal living tips to help improve your financial status, lets look at frugality a little deeper.
What Does Being Frugal Really Mean?
When you look up the meaning of frugal in the Merriam dictionary, you see things like “unwilling to (lavishly) enjoy the fruits of their labors” and “using money or supplies in a very careful way” come up. No wonder some people have given this word a negative connotation.
But if you really take a step back and analyze its use financially, living frugally is not negative at all. In fact, this kind of spending lifestyle is positive in every angle of the word. It is being mindful of how you spend your money. It also involves careful thinking before you make a specific purchase.
Frugal living could mean something different for everyone. For some, it might be buying unbranded clothes rather than spending your entire paycheck on a signature dress. For others, it might be finding the right opportunity to make a purchase and not paying a premium for an item them want. Others may find the fun in negotiating to get the best deal they can. There is really no exact definition of how to live frugally.
Being cheap and being frugal are entirely different. You are not trying to save every dollar that you earn. Instead, you’re tightening your purse and avoid unnecessary spendings. It’s giving value to things that are more important.
Is living like this a bad thing?
Pros and Cons of Frugal Living
Living a frugal lifestyle obviously comes with its share of benefits and downfalls. But if you’re doing this lifestyle correctly, the advantages definitely outweigh the disadvantages. Let’s take a look at the pros and cons of frugality.
- You place value on purchases. All purchases that you are making add value to your life. As Marie Kondo says, you should treasure things that “spark joy”. What once was mindless spending is now turned into a deeper appreciation of the value of goods.
- You’re developing a productive lifestyle. By eliminating wasted time, you achieve more things and deliver better performance.
- Thanks to frugal living, you get to create and follow a sound budget. Budgeting is the basic foundation of every financial routine.
- It helps you achieve financial freedom. By living stingy, you tighten your belt and save money to get out of debts.
- You develop a habit of saving. You don’t buy any items out of whim or purchases you will never use.
- It helps you invest in your future (investment accounts, retirement investment, savings)
- You’re most likely to have a savings fund so you are prepared if something happens.
- You wont have buyer’s remorse on impulse purchases that don’t provide real value
- You might get misunderstood, especially if your financial decisions involve family and friends.
- Possibly missing out on social gatherings such as watching a movie, dining in a restaurant, etc.
- You may also buy products that fall short on quality.
- When taken too far, living frugally could lead to missed opportunities and self-denial.
16 Best Frugal Living Tips To Help Achieve Your Financial Goals
There are many different ways on how to live frugally. Below are some of the tips that you can apply to transform your way of living and uplift your financial status.
Set Up a Financial Plan
The first step to take on your road to living life more frugally is creating a financial plan.
Setting a long-term financial plan can help you focus on your short-term goals and reach your long-term goals. It will serve as a guide on how to determine your financial steps.
Financial planning is not one-size-fits-all. It varies from individual to individual. Understanding what you want plays an important role in creating a financial plan. Where do you want to be in five years? Do you want to own a house, or maybe purchase a new car? How do you imagine your life in retirement? These questions can help you determine your goal and create a solid financial plan.
You can design a financial plan yourself, or you can seek help from a financial planning professional. Regardless of which route you go, remember that your financial plan should be an inspiration to reach your goal.
Create a Budget and Stick to It
Have you also experience moments when you’re wondering where all your money goes?
Money, without a purpose, fly to unknown destinations. Before you know it, your entire paycheck is gone aimlessly. The best way to beat this mindless spending is creating a budget.
A solid budget plan is a foundation of every great financial plan. Regardless if you’re trying to save for your dream vacation or pay off debts, creating a budget is critical to make your financial goals come true.
Creating a budget is important, so does sticking to it. But how do you create a budget and stick to it? You may find these tips helpful:
- Calculate all of your expenses and determine your actual income.
- Set a portion of your income towards savings and paying off debts.
- Keep track of all your purchases and spending.
- Drop the credit card. People tend to spend more when using a credit card instead of paying with cash.
- Find an accountability partner that can help you stick to your budget.
You can also choose to use services like Billshark and Truebill to help you create and stick to a budget. One advantage of using a service is they can sniff out places where you are wasting money and help you eliminate them.
Evaluate Your Daily Spending Habits
Americans are one of the biggest shoppers in the world. We purchase unnecessary items all the time, not because we need them, but because we believe that they will make us feel good. This approach to buying will put us financial debt and stress.
If you’re sick of living paycheck by paycheck, it’s time to evaluate your daily spending habits. Track your spending to have a full grasp of how much money goes out of your pocket every week or month. Are these items really necessary? List down all of your purchases in a day and evaluate the importance of each item. For sure, you can survive without the $4 coffee from Starbucks. Can you pick up food versus ordering? Or better yet, make a home cooked meal?
To stay on track of your spending habits, you can use apps such as Personal Capital, Clarity Money, Wally, Mint, and PocketGuard. These apps are great for budgeting and tracking, especially if you’re not a fan of keeping every receipt. You can also look for a budget buddy or hire a financial advisor if you find it hard to keep track of your spending habits.
Cancel Unnecessary Subscriptions
Subscriptions have become a part of our life – from gym membership, video streaming subscription, music subscriptions, magazines to cell phone service.
It’s easy to fall into the trap of these subscription services. A lot of companies design their subscription process to be easy and convenient. And oftentimes, we let these subscriptions run because it may be difficult to unsubscribe or we may have totally forgotten about them. Before you know it, the $5 a month service that you signed up for 2 years ago already cost you $120. That’s money senselessly going down the drain.
Stay on top of your subscriptions and save money by canceling those that you rarely use. Apps like Truebill can help you track your subscriptions. They will also send a notification if there’s an increase in your monthly subscription fee. More importantly, these apps can help you cancel unnecessary subscriptions.
Unknowingly, you may have subscriptions billed through your Apple App Store or Google Play. With Truebill (or similar services, You can easily keep track of these subscriptions and cancel the unnecessary ones.
For Android users, go to Google Play app then choose Menu > Subscriptions. Go over your active subscriptions and select cancel subscription for those that you want to cancel. For iPads and iPhone users, go to Settings > Apple ID > iTunes & App Store. Then choose Apple ID > View Apple > Subscriptions. A list of all subscriptions will then be displayed.
Get Rid of Junk and Monetize Them
Junk don’t just take so much physical space but they also add to our stress.
Do yourself a favor and get rid of all the things that you are no longer using. If you haven’t used it in the past year, then you’re probably never going to use it again. Instead of holding on to these things that occupy 50% of your closet, let them go and sell them instead. Your closet will not only be 50% more spacious, but you have also found a way of earning a few dollars.
How can you make money from your junk?
First, there is an indoor yard sale. Invite your co-workers, neighbors, and friends to come. You can also promote your yard sale on social media to get a wider reach. Your unused mason jars may be valuable for someone.
Then there is also Craigslist. By using this platform, you increase your chances of selling more items in less time. You can get rid of the things that you no longer use and you may also meet interesting people.
Keep in mind that your junk is not serving any purpose, except taking up so much space in your house. It’s a liberating experience to let go of these things. And making money while doing this process isn’t bad at all.
Utilize on Saving Apps
It’s always a good thing to save more money. The extra money that you tuck away can be used in more important things.
But it’s sometimes challenging to save when you’re living paycheck to paycheck. Thankfully, there are tons of apps that you can use not just to track your expenses but to help you save a few dollars.
Download a few (or all) of these on your smartphone and start saving money:
- Acorns – Rounds up your every purchase and automatically save the difference to your Acorns account.
- Clarity Money – It helps you find ways to lower down your bills. It also cancels the unnecessary subscriptions.
- Honey – It helps you save money by looking for coupon codes and sweet deals.
- Trim – Working like your very own personal financial assistant, this app analyzes every purchase made. It also provides suggestions on which expenses to cut back.
- Moneybox – This app eases you into investing. It rounds up every purchase made with your debit card. The difference is automatically put into investments in stocks and shares.
Think Twice Before Spending Any Money
Retailers and manufacturers always find ways to appeal to the hoarder in each of us.
When we see a huge discount sign, we’re too quick to purchase the item on sale when we don’t really need them. Don’t fall into retailers’ tricks. Before you put an item in your shopping cart, take a step back and analyze if it’s a need or a want. Purchased items that are not necessarily needed will either go to waste or would just occupy the extra space in your house.
By living stingy, you’re making a deliberate decision to spend wisely. You’re making sure that every purchase will add value to your life and don’t just go to waste. A few dollars you saved from sitting down on sales can go towards your dream house or vacation.
Take Advantage of Coupons and Grocery Deals
You won’t be called a pro at living stingy unless you master the art of using discounts and coupons.
The average American family spends between $500 and $1,100 on clothes, cleaning products, toiletries, and groceries every month. By using discounts and coupons, you can reduce some of these costs without sacrificing your hygiene and good nutrition.
Here are some ways of saving money by using discounts and codes:
- Use Groupon to save on everything from experiences to dining.
- Look for coupons and discounts everywhere. While you can still find them on Sunday papers, but you can find them in a lot of places too. Tons of websites are offering deals and discounts. Try a Google search and search for “coupon”.
- Some manufacturers reward their loyal customers. Create a list of your favorite brands and send them an email expressing your love and gratitude for their products. Some manufacturers would email you back with coupons as your loyalty reward.
- Sign up for loyalty programs and accumulate your reward points earned for every purchase. Additionally, you can earn extra cash on your purchases by becoming a member of cash back websites such as BeFrugal or Ebates.
- Save your coupons. One coupon may let you save a dollar but it can pay your entire grocery if you stack them.
Buy in Bulk
Buying household products and food in bulk, through BJs Wholesale Club or Costco, is probably one of the most popular frugal strategies. A lot of people practice this because they save a lot of money when they buy a certain item in large quantities.
When you buy an item in bulk, it becomes cheaper per unit. The difference may be small but it could add up to a bigger amount, especially if you’re using the product often. The 10 cents that you save on buying a larger shampoo could turn into a $36.50 savings in a year.
But you have to remember, buying in bulk is not always a good strategy. Not all bulk buying can equal to money-saving. Some items that are best purchased in bulk are beverages, diapers, canned goods, toiletries, dry beans, rice, and household and cleaning supplies. On the other hand, buying milk, meat, eggs, snack foods, fresh produce and coffee beans in bulk is not a good idea.
Sign Up on Cash Back Websites
Cash back websites help you earn money in every purchase. All you need to do is sign up, click on a special offer or link before you make your purchase and earn cash back while you shop.
If you are regularly shopping online, you might as well shop wisely and utilize these cash back websites to earn cash back rewards. You may be spending money on your purchase, but you earn back a portion of that money. It’s a smart way of getting more out of your buying experience.
Websites like Swagbucks, ShopAtHome, Lolli(which pays in Bitcoin!), Coupon Cactus, and BeFrugal provide excellent cash back rewards. Instead of visiting the manufacturer’s website, use these websites instead. You are still shopping like you usually do, but you’re earning cash back points as you do.
Pack Your Lunch
Do you want to cut your daily expenses?
One way of doing so is by packing your lunch. Now, you may be thinking that eating out when at work may not be too much.
Though the cost may vary – you can either spend $5 on a sandwich or $20 at a restaurant – the cost adds up. Americans spend an average of $3000 a year on lunches. You may still spend money when you bring your own lunch at work, but you will definitely save some money. If you’re planning your lunch meals carefully, you can potentially save at least $100 a month.
Cook Your Own Meals
Here’s a shocking fact:
Americans spend a whopping $70,000 on delivery and takeout in their lifetime.
If you’re living stingy, you certainly would like to avoid drive thru’s and eating out in restaurants. Cooking your own meals can help you cut down your expenses. Plus, it benefits your health too! A home-cooked Chicken Fajita Salad is definitely healthier than a double cheeseburger takeout.
Here are some extra tips for cooking your own meals and save money.
- Create a detailed shopping list. Stick to it and buy only the food that you need.
- Score super cheap fruits and vegetables at the farmer’s market.
- Cook a bunch of meals on Sunday. You can freeze them and reheat.
- Instead of buying more, utilize your left-overs and cook what you have.
- Buy produce that is on sale.
- Make your own salsas, sauces, dressings, etc.
Consider Downsizing Your House
The saying “bigger is better” does not apply to everything.
Sometimes, smaller might be better. This could be especially true for houses. If you’re working too hard just to keep up with your mortgage, perhaps it’s time to give downsizing your home a thought.
Why should you consider home downsizing?
First, you save more money if you’re spending less on your mortgage payment. You can allocate this increased cash flow to other needs or investments. Second, you save time cleaning and maintaining your home. Fewer rooms and smaller spaces require less care and attention compared to bigger houses with more rooms. Of course, smaller homes also mean lower utility bills and consumption.
When you downsize your home wisely, you also minimize your stress and responsibility. The key to downsizing is to get rid of the things that you don’t need without eliminating the things that you need. Separate the items you need from the ones that aren’t needed.
Use Your Time Diligently
Internet users spend an average of 2 hours and 22 minutes on social media and messaging platforms every day. That’s more than 800 hours of time go to waste every year.
Living frugal does not just apply to how you use your finances. It is also applicable to how you utilize your time. Time is money and when used diligently, it can increase your productivity. As a result, your savings account could improve when you accomplish more things.
Instead of lazily scrolling through your newsfeed, utilize social media to make money online. Or start filling out surveys for money on Swagbucks. It might not make you rich, but it is a great way to earn some extra cash while you watch TV.
Look for a Side-Hustle
Are you tightening your belt too much but you still feel that it’s not enough to make ends meet?
Looking for a side hustle might be the perfect solution for this dilemma. A side hustle does not necessarily require too much of your time, yet it can help you earn extra bucks. It can even be a medium to work on your interest and passion without having to commit your full-time. Some people have even become so successful in their side hustle that it paved the way to making more money.
Are you looking for some side-hustle ideas?
This article can help you find the perfect side hustle.
Renegotiate Your Services
We all need certain services to run our lives. Some of us have need car insurance, home insurance, life insurance, AAA memberships, house cleaner, dog walker, furnace cleaning, etc. And often times, once we find those services we tend to keep them for a long time.
One of the best places to be more frugal with your money is to look at these services and renegotiate them or find alternatives. Billshark is one of our favorite apps that can help you reduce your home and auto insurance payments.
Some services, however, will require you to handle the negotiations. Can you find a cheaper dog walkers? Do you really need the highest level of membership at your gym?
As part of the budgeting process, reviewing the services you have and finding lower cost alternatives is a great way to save. In our experience, you can find significant savings through this process and it forces you to review every contract to see what is expendable and what is actually of value.
Frugal Living: Is It Really Worth It?
In short, yes! And we hope by reading all of the frugal living tips, you think it is definitely worth it as well. Especially if your goal is to get out of debt and become more financially secure.
Remember, living this way is not equivalent to living cheap. It doesn’t deprive you of your needs.
It’s becoming conscious on all of your purchases and making sure that everything that you own carries value and purpose in your life. Once you have adopted to this kind of spending lifestyle, saving money and increasing your financial maturity will follow.
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