While many people associate frugality with an austere lifestyle, the opposite couldn’t be more true. Being frugal actually allows consumers to spend money on what they truly value while saving on the things they don’t.
“Frugality gives you freedom because you see how spending in some areas is keeping you from what you want in other areas,” says John Schmoll, founder of FrugalRules.com. “Frugality isn’t about deprivation. It’s about being purposeful with your spending, and about finding balance and spending on what you value.”
Consumers who seek to be more frugal have to set their priorities and learn to live without certain things to be able to afford others. Although it isn’t a difficult concept to grasp, making any changes can be challenging without a guide. To begin adopting a frugal lifestyle, follow these steps.
Identify your end goal. Adopting a frugal lifestyle isn’t something that will happen overnight. It’s a journey that will have bumps along the way. In order to maintain it for the long-term and reap the benefits, experts recommend outlining your goals.
“Writing down your goals and tracking progress will help you stay motivated when things get challenging,” says Jessi Fearon, personal finance coach at JessiFearon.com. “Although you may have a few instant wins, you won’t see results overnight and tracking your goals and progress will make it easier to stick to it.”
Consumers can list goals on a piece of paper or on an Excel chart, depending on their preference. Some may even find an app such as Mint helpful for tracking their various spending and saving habits.
Assess your spending and make a budget. Learning how to live without certain items, so you can spend money on what you value most, is the center of what it means to be frugal. In order to make this a reality, however, the most crucial step is setting a budget.
Begin by reviewing your checking and saving accounts from the last few months to assess your financial situation and identify potential expenses and purchases you can live without. Create a plan to reduce or eliminate these items, so there’s extra money to go toward goals and other more important expenses.
Change one behavior at a time. “Starting small is the best way to start living a more frugal lifestyle,” Schmoll says. “I always recommend to individuals that they try one thing to build confidence. Once they see they can make a change and do well, they will feel more motivated to make other changes.”
As an example, Schmoll suggests that those who want to cut back on dining outshould choose one or two meals to make at home at first. “Seeing how much money can be saved over the course of a few weeks is a great way to see how frugality can help with long-term savings,” Schmoll says.
Identify spending triggers. In a world where people are bombarded by ads and deals everywhere they turn, giving into the consumerist mindset is hard to avoid. In order to take control over impulsive and excessive spending, you must understand what triggers it in the first place. Spending triggers are anything that cause mindless spending.
“Knowing your triggers gives you power,” Schmoll says. “It allows you to know your area of weakness and make a plan to avoid the particular situation.”
Avoiding spending triggers is relatively easy. For instance, if you tend to overspend at a certain store, limit the number of trips you make to that retailer. If you’re constantly indulging in deals promoted on a shopping app, remove it from your phone. And if you’re feeling bored, find another activity to keep you busy, such as taking a walk or calling a friend.
Set a “use it up” mindset. Being less wasteful is a basic principal of frugality and this is easy to accomplish by shifting your mindset to think about using up everything you have before spending money to replace it. Think outside the box and let your creativity guide you to be more resourceful with what you already have.
“You don’t have to take things to the extreme,” Fearon says. “Start with creating new dishes out of leftovers, reuse worn-out shirts as cleaning rags and repurpose as many things as you can.”
Enjoy free activities. Being frugal doesn’t mean missing out on fun and adventure. It means looking for ways to enjoy life on less, and there are plenty of free activities available. These include hikes, picnics, watching the sunset, playing in the park, camping, hosting family game night and scheduling free days at local museums.
Lincicum suggests taking advantage of the local library for free family activities, such as arts and crafts, movie night and book and movie rentals at no cost.
Stash away cash for emergencies. The biggest challenges many people face when it comes to reaching any financial goal are those unexpected life circumstances that derail progress. A car accident, home repair or medical emergency can easily wipe out savings or add a tremendous amount of debt. Lincicum recommends setting aside cash in a separate savings fund to help weather these short-term financial storms and avoid high-interest debt.
Focus on lowering major expenses. While hacking away at small expenses by clipping coupons and buying used items will help boost savings over time, consumers can gain bigger financial rewards faster by reducing larger budgetary items, says Lily He-Prudhomme, founder of TheFrugalGene.com. Look at the expenses that take a bigger bite out of your monthly budget and think about how you can reduce these costs.