Making frugal living a way of life is a wonderful thing you can do for your family. It means you can trim your spending where you don’t really need it, freeing up funds to use when and where you need them most. In many cases, you’ll find that you don’t even notice or miss the things you don’t buy.
“Frugal” doesn’t necessarily mean cheap, either—living a frugal lifestyle is more about learning to watch your money, tracking your spending and finding ways to get the best value for your dollar.
Here are 11 of our favorite tips for ensuring you’re living a more money-conscious lifestyle.
1. Familiarize Yourself With Your Own Money First
It sounds like a no-brainer, right? But what we mean by this is know how much money you bring in. If your earnings vary, then come up with an average estimate. Also, know how much you spend each month. Creating a simple chart with all of your monthly expenses and bills is a great way to see the difference between what’s coming in and what’s going out in a glance. It’s so important to have this baseline knowledge because without an idea of what you’re bringing in versus what you’re spending, it will be nearly impossible to set up a successful budget.
2. Live Below Your Means
If you’re living within your means, you’re in good shape. But you’d be even better off if you started to find ways to live below your means. By living below your means, you’d be able to have that extra money to stash away in savings or to invest. And by doing both, you’ll ultimately allow yourself to tap into long-term wealth building.
3. Automate Your Money
Banks make it easy to force yourself to save as well as earmark funds for essential monthly payments like your mortgage or student loans. Take advantage of automated banking by having your bank pull a set amount out of your paycheck monthly to commit to savings and other necessary payments. For example, try this Reddit user’s approach:
“Ever since I bought my house and took on a mortgage payment of $800 a month, I have had my bank take $400 out of my paycheck every other week and put it into a separate savings account. Then at the end of the month, I make my mortgage payment directly from that account. I never see the money, so I don’t miss it, and there’s no way for me to run out of money for my house payment. It makes things so much easier, especially for a habitual overspender like me.”
4. Understand That Spending And Investing Are Different
Here’s the bottom line: Investing is when you put your money into a tangible asset; spending is, well, spending your money on something that’ll likely depreciate in value while never providing any long-term benefit.
Purchasing a new home (within your means) in a desirable neighborhood is a good investment. But purchasing the newest version of your phone only because it had extra features, even though your old one was perfectly fine, is spending.
And hey, it’s okay to spend every once in awhile, but it’s important that you know the difference and track the money you spend. You’d be surprised how fast it adds up. This is a great list that highlights the differences between spending and investing in all aspects of your life, and the ideas can easily flow over into money management.
5. Pay Off Your Credit Cards
It’s a phrase you hear over and over again when searching for ways to save, but that’s because this is one of the best things you can do for yourself if you want to start living a more frugal lifestyle. While credit cards can come in handy when you’re in a pinch, try to avoid using them on day-to-day purchases unless you plan to pay off your credit card in full each month.