Frugal living is a lifestyle choice that everyone can and should adopt. It focuses on being mindful of your spending habits and finding ways to save money on everyday expenses. According to a LendingClub survey back in May 2022, around 64% of Americans live paycheck to paycheck.
What is even more shocking is that you may assume that this is only an issue for people of low income. However, an earlier version of the study also revealed that 48% of those making in excess of $100,000 a year lived paycheck to paycheck. This leads us to believe that it is not an income issue. It's a financial literacy issue, with many Americans living well beyond their means. It is critical for many people to adopt a more frugal lifestyle to achieve financial freedom.
Below we have put together some straightforward tips to help you get started on your frugal living journey:
Create a budget: We cannot stress the importance of creating a budget. If you don’t even know where your money is going, it will be almost impossible to accurately reduce costs and identify areas where you can cut back. By having a budget in place, you can clearly understand your financial situation and make adjustments as needed.
Cut back on unnecessary expenses: Once you have a budget, look at your expenses and see where you can cut back. This may include subscription services, dining out, entertainment, memberships, and other non-essential expenses. The most common areas we see with room to cut expenses are eating out and going out. We cut these expenses ourselves by planning at-home meals with friends or pregaming by going out by having a couple of drinks at home. By cutting back on these expenses, you can free up more money for other areas of your budget.
Shop for deals, buy in bulk, and shop at different places: The next step is to look for deals, buy bulk from places like Costco, or go to cheaper stores. If you go to Whole Foods, consider switching to a store like Aldi for your groceries. If you like going out to the fancy bar every weekend, try a dive bar with happy hour (trust me, these can be more fun!) By being considerate of where you shop, you can lower expenses. This may require a sacrifice in your lifestyle, but if you need to cut back, you are already living beyond your means.
Cook at home: As mentioned above, eating out is one of the most significant expenses for most households. Try to cook at home as much as possible. Not only is it cheaper, but it's also healthier for you. Cooking your meals is a great way to save money while still being able to eat delicious and healthy meals. You can also consider using meal delivery kits which can be a great option.
Avoid impulse buying: Impulse buying can majorly drain your finances. Before making a purchase, ask yourself if you need it or if it can wait. By avoiding impulse buying, you can save money on things you don't need and instead focus on buying the things you genuinely want or need.
Reduce your energy consumption: You can save money on your utility bills by reducing your energy consumption. This can be done by turning off lights and appliances when they are not in use and by using energy-efficient appliances. By reducing your energy consumption, you can save money on your bills and also do your part in protecting the environment.
Live below your means: Finally, one of the most essential aspects of frugal living is to live below your means. In other words, money in > money out. This means spending less than you earn and saving as much as possible. The general rule of thumb is the 50/30/20 rule, where you allocate 50% of your income to needs, 30% to wants, and 20% to savings and paying off debt. By living below your means, you can avoid debt and achieve financial freedom.
Living a frugal lifestyle is not about being cheap but about being smart with your money. Following these tips, you can start living a frugal lifestyle and save money on everyday expenses. Remember to be patient and persistent with your frugal habits, as it can take time to see the results. Frugal living is a journey, not a destination; with time and effort, you can achieve your financial goals and live the life you want.