To many people, the word “frugal” means having to settle for less. However, adopting a frugal lifestyle actually provides the opposite. When you gain control over your money, you have more of it for things like vacations, buying a home, and retirement. Listed below are a few tips to enjoy the benefits of living frugally.
Paying Down Debt
Being in an enormous amount of debt is overwhelming. It can cause mental anguish leading to many sleepless nights. Reducing your debt will improve your health and financial status. Credit card debt is much easier to accumulate than it is to remove. If you are unable to pay the entire balance by the due date, you’ll accrue interest. In some cases, you may end up paying two to three times more than the original cost of your purchases. If you have just a couple of credit cards, you can start with the one with the highest interest rate and pay extra monthly until you reach a zero balance. If you have many cards and the balances are high, applying for a consolidation loan may provide the best option.
Rein in Spending
Living above your means causes financial hardship. It creates the scenario of borrowing money in advance from your next paycheck. Unfortunately, it’s only a matter of time before you become consumed by the debt and your paychecks are no longer yours. Thankfully, you can turn things around by controlling your spending. There’s a difference between the wants and the needs and the needs always come first. Impulse purchases are not beneficial to sustaining financial wealth. If you want to buy a large-ticket item, factor it into your budget. When you have the funds available, buy it using cash. This will stop additional debt and allow you to free up money in your budget to be used for home or car repairs, tax prep services, future investments, or financial emergencies.
Saving on Food and Essentials
Using a frugal mindset, before heading out to the grocery store you have a plan. You make a list and stick to it. You go through the weekly fliers of a few stores within a mile or two of each other and write down who has the items you need at the best price. Many times, different stores run different promotions. Use this to your advantage and capitalize on savings. You should also use coupons when available and purchase store brands when possible. Some stores offer rewards for loyalty in the form of cash, discounts, and free stuff.
Activities for Less
When the weekend comes along instead of spending hundreds to have fun, find things to do that have little or no impact on your wallet. Museums, beaches, and parks provide an inexpensive way to get out of the house and have fun. Check online for events going on in your area. In many cases, towns and cities have a wealth of activities and events for short money. If you have an anniversary or birthday coming up and you want an evening out, look online for discounts on food and entertainment. If you have children, start a tradition on Saturday nights and include choices like playing games, watching movies, or doing crafts.
Creating a Budget
One of the best tools available to track finances is the household budget. It helps you achieve long-term and short-term goals. Once you find out what you owe to creditors, you begin the process of cleaning it up. You also find out the amount you have leftover after all of your monthly bills and expenses are paid. Use this information to start a savings account for a down payment on a home or a car, college for your children, and your retirement.
Prepare for the Unexpected
Life happens and in many cases at the worst time financially. You can avoid a disruption in your budget by starting an emergency fund. The money you put in is only used for unexpected bills including repairs on your home or auto or a sudden illness.
Adopting a frugal lifestyle sets you up to establish and sustain financial wealth.