What does it mean to live frugally? Like most, I once thought living frugally meant depriving yourself of things. This could not be further from the truth; the amount of money we make does not always mean we have good money habits. Deciding to live frugally is taking control of your finances and employing good daily practices in spending. Frugal living is simply about living well while spending less.
What adverse effects can poor spending habits lead to?
- 80% of Americans have consumer debt
- Americans have $14 Trillion in debt collectively
- Mortgage debt is the biggest debt in America – with $9.44 trillion owed collectively
- The average consumer debt is $38,000, excluding mortgages
- Medical costs have increased 33% in the past 30 years, while income has only grown 30%
- 2 out of 10 Americans use at least 50% of their income to pay back what they owe
- Only 1 in 3 Americans have a written budget
- Almost half of the families in the US live paycheck to paycheck
- 19% of Americans have $0 set aside for an emergency
Do we need it?
Our life’s requirements have gradually increased over time, and many of us have lost sight of the true meaning of life. We have culturally shifted toward luxuries, keeping us in this vicious cycle of working, buying, working more, buying more, and upping the ante as we go. If we lower our life’s requirements to the essentials and adopt some practical, frugal habits, the silver lining is freedom. Here are some more details on when this cultural shift started The Truth about Credit Cards.
Leo Babauta, the writer of mnmlist.com, shares the simplicity of lowing his requirements.
How has Frugality Helped us?
Living frugally and gradually implementing frugal habits has opened the door for us to pay off debt, live on one income, increase our savings, invest, and, most importantly, give us deep gratitude for what we have. Getting a pay raise is typically the goal of most, but what is the magic number? Is there a magic number? From my personal experience, I can recall a time when a pay raise meant an upgrade of some sort, a new car, new clothing, frequent salon visits, etc. The ironic part is that none of it satisfied long term; it was only satisfying during the purchase; once the newness wore off, so did the excitement.
Why have frugal habits?
Our income changed, and soon after, our money habits changed too, it was a painful transition, but we quickly realized how content we became with the things we owned. What can we attribute this to? Adopting and implementing frugal habits! These habits that were once used as a tool have become part of our daily life; we no longer have the desire to own or purchase more than we need. Frugality has offered us quite a simpler life, something we once longed for and now live out.
Henry D. Thoreau, the author of Walden, said, “I did not use tea, coffee, butter, and milk, beef; he had to work hard to pay for them.”
This was published back in 1854, it may seem extreme in today’s times, but those products were considered a luxury.
Habits of Frugal People
It was clear to us, after living with the essentials for a few years, that the luxuries in today’s time were no longer necessary to us, and we valued time much more.
Owning things is directly related to how much we are willing to work for them; while we love our home and are not extreme minimalists, we do opt out of many of the “extras,” allowing us to live below our means. Living below our means ultimately grants us more time to do the things we love.
I have listed some of our frugal habits categorically in how we budget. Deciding to live frugally is a personal choice; these are not rules but rather ideas that can help save you some hard-earned money. It could prompt a drastic lifestyle change or help save extra cash for traveling. Frugal living is an excellent way to generate a pay increase and start living abundantly.
Home Expenses
- We own are car and do not have a car payment.
- We take good care of our home maintenance (AC system, landscaping, furniture, etc.), allowing it to last longer.
- We fix what we can and outsource what we can’t. YouTube university has been a helpful tool for our DIY home and car maintenance projects.
- We purchased used quality furniture, except for couches & bed mattresses. Purchasing quality furniture ensures the pieces will last longer, spending less on replacement.
- We mow our lawn.
- We use products to the end, even if we are not fond of them.
Clothing
- Hang dry clothing – they last longer and save money on energy bills.
- Purchase used quality clothing – they last longer and can be resold easier.
- Purchase quality clothing & products – they usually have a manufacturing guarantee; if the item does not hold up, it can be exchanged or returned.
- Adopted a minimalist wardrobe – having less clothing cost less.
- Our daughter uses her clothing until she grows out of them or until they are no longer in good condition.
- We shop for seasons – if we need a summer wardrobe, we purchase the pieces required and are done with it for the summer.
Entertainment
- We dine out occasionally and select places like chipotle, chick filet, or a yummy ice cream shop.
- Purchased a DVD player and borrow DVDs from the library.
- Free entertainment – browse antique shops (a fun way to get décor ideas and inspiration), and go to the pool, beach, and library.
- Bowling, miniature golfing, roller skating – does not break the bank and can even go on discount days.
- Grilling at home.
- Plan vacations – this gives us something to look forward to while spending time on low-cost or free activities.
- Puzzles – borrow from the library.
- Reading – borrow books from the library.
Health
- Purchase whole-quality foods – it keeps us healthy.
- We work out at home and no longer purchase gym memberships.
- We stay active – daily family walks.
- Annual checkups – if a doctor visit is needed, we use web MD, saving $ on doctor visits.
Food
- We purchase quality food, avoiding processed foods (they cost more and are not necessary for a good diet).
- Meal plan
- Pack lunches for work
- Shop sales
- Bulk purchase
- Eat at home about 90% of the time.
Personal Cash
- We closely track our nonessential purchases; while we do not have an exact dollar amount listed for each of us, it does keep us accountable.
- Coffee stops are included here.
- I cut my daughter’s and my hair – I have concluded this is nonessential and can be done at home.
- We wait for sales.
- Selective on invitations – keeping a small circle
- Research before purchasing – getting the best deal or best quality for the price
Extras
- Go back to the drawing board – we always keep track of our finances; if something is not working, we reevaluate the cost and change.
- Be a student – keep reading, listening, and learning about finances
- Power of saying no – the power of saying no can go a long way in finances, saying no to invitations that are not important to us, as well as the gimmicks offered to us all day via advertising.
- Think long-term when purchasing an item – the things you don’t need will eventually be donated.
- Reset months – have a no spend month; this is a great way to reset the habit of overspending.
- Simple budget – keep budgeting as simple as possible; a notebook works for us. Grouping versus having a lot of small sub-categories makes it easier to budget.
- Make your home where you want to be; for example, we have some simple go-to baking recipes. We enjoy the baking process and having some special yummy treats. Here’s a list of our Favorite Family Recipes.
In conclusion, we could be better at spending; there are still times when we have to dial it back. We continuously track our spending and keep our budget current. The discipline of living frugally is a learned habit and a great tool to use to take control of your finances.
Photo by Matthew Henry