Frugal living is one of the most potent tools people use to manage their financial lives. But as it stands, there are a lot of people who are not too sure how it works. There are even some consumers who equates this lifestyle with the extreme measures some some have been known to take when practicing frugality with their budget.
There are people who thinks of dumpster diving when they hear about people being frugal with their budget. Some even believe that it always includes living off on noodles for months at a time just to get the food budget down. Or living like a caveman at home just to lower down utility bills such as electricity or even water consumption.
There is fine line between being cheap and frugal and sadly, extreme stories about the practice are the ones being proliferated around and the ones people tend to believe in. As they gather momentum and it gets passed on from one person to another, the more they believe it to be true. In the process, it blurs and distorts the practical applications and real financial benefits of frugal living.
Although there will be changes and at some point limitations, just like how Business-standard.com shares one person’s experience of having to take the bus rather than a cab, you need to understand that frugality does not always have to be extreme. There are people who has embraced the lifestyle and there are a lot to learn with how they use it to their advantage.
Frugal living tips
There are people who will swear by the effectiveness of the lifestyle and how living below their means has helped them achieve a better financial standing. Here are some of the lessons people practicing a frugal lifestyle can teach you as you weigh your options.
Proactive financial perspective
Being a proactive consumers simply means that you do not just sit around and wait for things to fall on your lap. If you try and take control of your finances, it can do wonders for you even to the extent of helping you prevent bankruptcy. If you are pondering on whether a frugal lifestyle automatically equates to living below their means just to squeeze every dollar they have then this could enlighten you a little bit. The people who chooses to live within and below their means are simply being proactive because they know that careful planning for the present can lead to a more fruitful financial future.
Keep your eyes on the ball
This is one of the reasons why people living a frugal lifestyle has been able to hold on to their practices for such a long time. They believe that as they worry and look for creative ways to manage their spending now, it ultimately leads to their financial goals in life. Whether it is paying the house down in just a few years, saving up for their children’s college fund, getting their retirement fund to a certain level or even just being able to travel the world. They know that their sacrifices at present will help them get closer to their goals.
They know who to pay first
You might be thinking that it is common knowledge that people should prioritize their financial obligations before anything else. But frugal living is a little bit different in the sense that people know the value of paying themselves first. Even Forbes.com shares that this is one financial practice that can help boost a person’s wealth. This does not mean that they splurge on things they want such as clothes or gadgets. This means that they put in the money for their financial goals first before anything else.
Frugality is often a win-win situation
It is a common notion that frugal people always have to give up a lot of things in pursuit of their financial goals in life. They pass up on dining out with friends or in purchasing the latest smartphone because they want to save money. But the truth of the matter is that frugal consumers are looking at the overall value of the things in life and they are able to strike a middle ground. Rather than eat out on expensive restaurants in the city, they would rather cook for their family and ensure a less expensive yet healthy and delicious meal.
It was not an overnight decision
Similar to people who are trying to quit smoking, going cold turkey poses some serious risks and questions. It works for some but not without problems and struggles along the way that is why it is better to slowly get off the vice. The same can be said with frugal living where people do not really jump head first without trying to understand what the lifestyle is all about. Most people slowly get into it putting in small increments of frugal practices into their budgeting mix. They might learn how to cook for a few weeks then start cooking for the family. They might invest in car cleaning equipments and start cleaning the car on their own. They learn about the lifestyle first before they jump in and they do it methodically,.
People who are practicing frugality in their lifestyle knows all too well the benefits of what they are doing now will ripple out to their future needs. People may look down on their decision to keep using an older model car but doing so will help them save money, save more for retirement and even put in more to their reserve funds. Slamonline.com recenlty talked about NBA superstar Kawhi Leonard who recenlty signed a max eeal but still drives a 19 year old car simply because it was paid and more importantly, it still runs.
It is a continuous learning curve
It is hard to find a frugal person who can answer all your questions about frugality but there are some who can enlighten you on most parts. This is because the lifestyle is a never ending learning process and what works for one person does not automatically apply to the other. You friend might have time to cook every night but you get off work late which makes it physically impossible for you to copy the same routine. What might work is to do batch cooking over the weekend to help save money on food and ensure that your family eats healthy food everyday.
What to aim for with the money
If you are decided on taking on a frugal lifestyle, there are a few things you might want to line up those extra funds for in your budget. One is you should consider paying off debt. If you are saddled with debt in your budget, it is a good idea to prioritize them for two very important reasons. First is that you get to save and use the interest amount you would have been paying your creditors over to your retirement or even reserve funds. Second is that you lower your financial stress and put your finances in a great position to earn rather than lose money.
Taking on frugal living is not rocket science but it takes a lot of hardwork and dedication on the part of the consumer. It also needs a lot of insight to know which methods will work work based on their lifestyle and need. But once you start feeling comfortable, it can be a great help in getting you closer to your financial goals.