When it seems that you are having a hard time making ends meet, you may think that the answer is to earn more money. This is not necessarily true because the issue may be that you do not know how to manage your money effectively. Dedicating yourself to frugal living may make it possible for you to live on your current salary, but you don’t have to be afraid of the words “frugal living.” This occurs because people misunderstand what “frugal living” means.
What Does “Frugal Living” Mean?
“Frugal living” means that a person is spending money for the purpose of accomplishing a goal. Frugal people do not spend money on an item that does not add value to their lives. They avoid spending on items and other things that do not help them reach their goals. As a result, they do not take one dollar for granted. Each dollar is spent intentionally because the person’s goals are clearly in mind.
Many people believe that being frugal and being cheap are the same thing, but this is not the truth.
What Does It Mean to Be “Cheap”?
“Cheap” means that people will avoid spending money, whether it hurts them and their families or not. For example, someone who is cheap will buy the least expensive product, even if it is of the lowest quality. This type of person will also refuse to spend money on a product that he or she loves, even though they can afford it comfortably. Lastly, cheap people save money rather than spend it on those they love.
An Example: The Difference between Frugal Living and Being Cheap
A cheap person will purchase a $15 coffee maker because it is the least expensive option in the store. A frugal person will not accept this option because it is not of the best quality. Instead, frugal people will select a high-quality coffee maker that has the potential to last 10 years. The fact that the coffee maker costs $99 will not deter them. They would rather have a product that lasts and makes great coffee than spend the least amount of money.
The Long-Term Picture
The long-term picture is highly important in frugal living. In the example above, we described someone emphasizing value over cost. This is a more forward-thinking example of frugality. The focus is always on obtaining the most for your dollars, and it emphasizes strength rather than weakness. Frugality is also a long-term commitment to knowing whether an item is a need or a want.
How Can I Be More Frugal?
Start a Monthly Budget.
Being frugal means that you are spending your dollars intentionally. The best way to do this is to start a budget. When creating this budget, you must have your goals in mind. For example, you may want to spend money on a particular item or save to fulfill a dream. You do not have to believe that a budget is something that is going to restrict your happiness. Instead, it is a spending plan that will take you where you want to go financially.
To do this, you will set aside a sum of money from every paycheck that will go toward your monthly bills. Also, set an amount aside that will go toward personal expenses. When you do this, you are ensuring that your bills are paid, but you also know that you have a sum of money with which to enjoy yourself.
Shop Around.
A big part of being frugal is shopping around. You have many options for where you will spend your money, so you can take advantage of the chance to look for the best price for the best choices. This is a good thing to do for expenses that you pay yearly. Car insurance and homeowners’ insurance are two good examples. You may find better rates for car insurance and homeowners’ insurance by comparing rates at various companies.
You can also compare prices for big-ticket items. This includes home appliances and furniture. Take the opportunity to search for used items as well as new ones. Once you find the best prices, decide which options give you the best value.
Reduce Your Expenses.
Obviously, reducing the number of things you buy will lower your expenses. In addition to that, many frugal people found that purchasing fewer things made them happier.
Search for High-Quality Items That Are Going to Last.
If you are searching for an item that you are going to use a lot, do not be afraid to spend more money on a quality option. For example, you can purchase tires for your car that will only cost $200 a tire, but they will not have a warranty. A frugal person would purchase tires that cost more but are more durable and have a warranty. With this option, he or she eliminates the need to buy tires again in a year. This is the action of a frugal person.
Purchase Used Items.
Frugal people are never afraid to buy used goods. They are very big fans of buying used cars that are one or two years old. If an item is not new, you can be assured that it will be less expensive. For example, you can purchase used home decor and clothing.
Buying used items is distasteful to some because they are not in favor of going to yard sales, but you do not have to do this. You have the option of going to a consignment store, and you will find designer clothes that sell for hundreds of dollars in expensive stores that are much more reasonably priced. There are also recycling groups that take items that people want to give away. These groups give you the chance to save a lot of money before you purchase things in the stores.
Most importantly, frugal living means that you keep your eye on the money you spend at all times. By doing so, you keep the possibility of ending up in very difficult financial situations at the lowest possible level.