There are a lot of reasons why you could find yourself in deep debt and trying to budget with a frugal lifestyle could be one of the solutions you are thinking of. You could have heard of people having a lot of success with their finances when they decided to adopt a frugal way of life. However, the stigma of frugality could be holding you back.
Some people believe that when you choose to be frugal, you start to become the cheapest person in the room. You will be coming to parties with take-out containers asking for take-home food from the hosts. They might also think that you will start spending your weekend dumpster diving or looking for used items left out on the curb.
These are just some of the beliefs you need to overcome when you start to budget with a frugal lifestyle. It is challenging enough to get started in doing the responsible thing and budget your money. But to do it through a frugal lifestyle will be an additional challenge for you. Especially if you have been so used to just going with the flow for the past few years.
If you have taken on a passive approach with your finances and the way you manage it, that might be the reason why you are in deep debt. CNBC shares that the average American has about $38,000 in personal debt. This excludes mortgage loans. You could be letting things just fall into place and you have been acquiring debt over the years. If you are serious in your desire to start budgeting your money better with a frugal approach, here are some pointers to consider.
List down debt accounts you need to pay off
Even before you start to budget with a frugal lifestyle to address your debt problems, you need to audit your debt accounts first. There is no point in going through the painstaking process of budgeting your finances if you do not have a goal in mind. The first step in almost any challenge that comes your way is to clearly identify the goal or the problem you need to solve.
In this case, it is the debt problem you are facing which is forcing you to start tightening your belt. It is so easy to generalize challenges that come your way because, in a way, it helps you avoid scrutinizing each and every one of them. However, before you begin to put together a plan of action, the problem has to be clearly defined at the very beginning.
One way to do it is to write down all your debt obligations and include as many details as possible. Put down not only the amount you have to pay but even the interest rate as well as the due date. It would also help if you can put down lender details. This way, you can easily reach out and get in touch with them for any concerns you have about your account.
Check how much you need every month
One of the steps you need to look into if you want to budget with a frugal lifestyle is to identify the amount you need every month. As you have made a careful and honest assessment of your debt obligations, you need to do the same with your household budget most especially for the income side of it.
The reason for doing this is that you have to identify the amount you need to cut down on when you start living a frugal lifestyle. Remember that in the beginning, it is important to already have a goal in mind before you even start with anything. You need to know the amount you need to cut down on which is the whole reason you will start a frugal lifestyle.
You can do this by looking at your budget and compare the amount you have left after all your expenses with how much debt you have to pay. This is if you have not included debt payments in your budget yet. If you have, then you just need to find the gap between your income and expenses. The bottomline is to make sure that you know how much you need to save every month.
Figure out where you can cut down on costs
Now that you have that amount, it is time to budget with a frugal lifestyle. One of the first areas you need to overhaul is your budget expenses. Take a look at your budget and identify all your expenses items and you can rank them how you see fit. You can list them down according to the amount or even by how important each of them is in your lifestyle.
Once you have created the list, it is time for the next step in the process. You need to find a way to lower down the costs of these expenses. It seems quite easy but there are people who struggle with this step. For one, they simply cannot find a viable way to cut down on costs. However, this is where a frugal lifestyle can come in to help.
If one of your challenges in your expense list comes out to be your food budget, you could be quick to defend it by saying food is crucial. USA Today shares that food is the third-largest living expense next to housing and transportation. It is crucial and you really need to budget for this but there are ways to help you save money with it. For one, you can start batch cooking your meals at home so you get to serve hot home-cooked meals to your family. You can also take turns with your friends in hosting dinner parties to help you save costs.
How you can budget with a frugal lifestyle and have fun as well
Once you start living a frugal way in a bid to save money and pay off debt, you might think that this will snuff the joy and fun out of your life. However, on the contrary, being frugal is actually synonymous with taking on a fun and challenging way of life. Here are a few ways to help you do just that.
Use your creativity to save money
Having a frugal lifestyle is actually a license for you to unleash your creativity in life. Remember that creativity and trying to wiggle your way out of fairness and equality are two different things. It is not frugality if you cheat your way out of things. You cannot charge it to creativity for walking away from a restaurant with an unpaid bill just because you can.
Creativity in frugal living means choosing to cook your meals at home rather than ordering take out food every single time. It can also be finding a way to fit everyone’s schedule with one car in the family. This can also be attributed to scouring staycation ideas for the family rather than takin everyone out on an expensive holiday trip.
Get the whole family in on the journey
One way to help you transition into a frugal way of life in hopes of getting your debt obligations situation under control is getting your family involved. You can start with your spouse by being honest with your current financial situation. There is no use in hiding problems from your family most especially from your spouse.
Getting them involved can make the journey a lot more fun and creative. Movie night can transform with the whole family in their pajamas in the living room with home-baked pastries on hand. This is a lot less expensive than going out to the movies, buying tickets, popcorn, and having to drive all the way back after the movie to get home. If you stay at home, you can simply walk to your room and go to sleep once the movie is done.
Monitor your progress to realize your hard work pays off
One of the best ways to help you enjoy a frugal lifestyle is to look at the results as well. It may not be an easy change in the beginning but if you are able to validate your hard work with real results, it can keep you going. Take a look at the amount you are able to save and the debt obligations that you are paying off with this new approach.
It is certainly not easy to budget with a frugal lifestyle especially if you are doing it for the first time but this can definitely help you pay off debt obligations much faster. You need to have a strategic approach to the new lifestyle to make it work to your advantage.