The Ultimate Guide To Frugal Living in 2020
Tips & Strategies With The Power To Change Your Life
What happens to all my money? I never even see it! It’s all spent before I get it and I never have any left over for the things that I want.
Does this sound like you? Are you feeling like modern life is just pushing you around?
If so, frugal living may be right for you. What follows will get you thinking about money in a different way. I am going to give you a well-rounded introduction to frugal living. I want to offer some tips and strategies to get you started and go a little deeper into what it really means to live frugally. So whether you are ready for big change or just want to learn to be a little smarter with your money, read on.
What Is Frugal Living?
Frugal living is a philosophy that relies on creativity, discipline, and resourcefulness. It requires you to take control of your life. It means being wise with your money and prioritizing your needs and wants with intention and purpose.
In essence, creating options for yourself and making choices based on what is important to you.
Benefits of Frugal Living
The main reason to start frugal living is to keep more money in your pockets. This creates new possibilities and opportunities for yourself and improves your quality of life overall. Here are some specific benefits that could result from frugal living:
● Work less
● Retire early
● Pay off a mortgage sooner
● Go on more vacations
● Feel less stressed
● Learn about yourself
● Free up your time
There are many more advantages to exercising restraint with your money. One of these is that frugal people are in good company. Studies have shown modern millionaires to be very cautious and vigilant spenders. In other words, frugal living really works.
But, like most things in life, you must exercise common sense and balance. If living frugally becomes an unhealthy obsession, making you anxious or sick, you've lost the objective and should pull back. Ultimately, frugal living should be an easier, less stressful lifestyle, not a stingy one.
The Myth of Frugal Living
Frugal living doesn’t have to mean making huge sacrifices and acting like a cheapskate. It is a common misconception, and largely a myth, that a frugal person is just a penny-pinching cheapo.
In reality, those living the frugal lifestyle have simply made a choice to take control of their finances and their destiny. Those who do it correctly put thought into what is most important to them. And while this does often mean shunning extravagance, they do enjoy quality and even luxury at times. The wise frugal person decides what luxury means to them and indulges in moderation—this might be a cup of tea, a $5 lavender scented candle, or something else.
At the end of the day, making intelligent decisions with your money so that you are keeping more to use how you want is frugal living.
"The most substantial people are the most frugal and make the least show, and live at the least expense." - Francis Moore
How To Begin Frugal Living: Frugal Living Ideas That Have the Power To Change Your Life
Begin by Learning About Money - Your Money. Take an Account of Your Finances.
This, where frugal living begins, is the most important step to gaining control of your money.
Start by answering these three questions:
How much money do I have?
Where does it come from?
Where is it going?
You can't stop the bleeding if you don't know where the injury is, so get down to business. Track all of your expenditures. Write down every dollar you spend over a 30 day period—everything, coffee, meals, snacks, bowling, and all regular recurring expenses. You may be surprised by where your money is going. Awareness is the first step. Then, do these three things.
Learn to delay gratification. Before you buy anything, ask yourself the following: “Is this purchase really necessary? Is there an underlying emotional reason for my purchase? Can I get the same feeling without spending money? Is this an impulse buy or a purchase I am feeling pressured to make?”
Ask yourself these tough questions about what it is that you want and what you really need. You’ll learn to do this more often over time. Author and advocate Elizabeth White calls this “smalling up” and recommends thinking about what it is that you really need to feel complete and grounded.
With practice, learning to delay gratification or resist impulses becomes a type of pleasure in and of itself. It will get easier as you go, particularly as you begin to see results.
Adopt an attitude of gratitude. Be grateful for what you have as you gradually save and build toward an even better tomorrow. Embracing gratitude helps guard against runaway materialism and despair, acting as protection against an insatiable quest for more. As author Richard P. Evans says, “Those who forget to be grateful for what they have often waste their lives and wealth looking for more.”
Pay yourself first. Author Geoge Clayson wrote the following way back in 1925 in his timeless classic The Richest Man in Babylon: “I found the road to wealth when I decided that a part of all I earned was mine to keep.” These words are no less true in 2020 than 1925. Put 10% of your income aside before doing anything else. If you make $100, put away $10. Automate and make a habit of doing this first. Do this not just when you have extra but when you are struggling to pay the bills. You will not have less difficulty right away, but you will start to see a light at the end of the tunnel. In paying yourself first, you will learn to live on less than you earn and find your limits.
Frugal Living Tips to Reduce Recurring Expenses
Recurring charges are fixed expenses that occur regularly and indefinitely. Most bills qualify as recurring expenses. They are great for businesses but bad for consumers. To reduce the negative impact that these expenses can have on your wallet if you’re not careful, take a look at your recurring monthly expenses and see if you can reduce or eliminate any of them. Magazine or digital music subscription? Gym membership? Here are some recurring expenses to think about.
Shop insurance. As the world changes and technology advances, new businesses crop up that blow the old models out of the water. Insurance is no exception. Take Lemonade home and renter’s insurance, for example, which offers a much more convenient and modern approach to protecting your stuff or easily compare insurance companies through thezebra.com.
Change your cell phone service. Downgrade your cell service to a simpler plan because chances are that you’re paying for more than you need. Basic plans from Republic or Ting cost just $15 a month. T-Mobile and AT&T also offer "pay as you go" plans that are worth considering
Get rid of cable. The amount of content available to consumers today is astounding, but it’s also overwhelming. You'll never watch all of it, so why keep it? Even if it were your full time job to binge watch cable TV, you could never get through all the shows, movies, and documentaries. So cut the cord and give it up. There are plenty of alternative streaming options out there like Hulu, which costs $5.99 a month, and Crackle or Plex, which are free.
Buy a modem. In case you didn’t know, you don't actually have to rent a modem from your cable/internet provider. You can buy one instead. After a few months, you will have recouped the purchase cost of your modem and start saving money. This is a recurring cost that’s easy to eliminate.
Lower utilities bills. Set the water heater to a lower temperature, shorten showers, and use fans instead of AC. Put on another layer of clothing or blanket before turning up the heat, replace existing light bulbs with energy friendly LEDs, and water plants and lawns in the morning or evening. These are all ways to lower your utility bills.
Save on printer ink by joining the HP Instant Ink, which is the cheapest way to buy ink that I have found. If you use a fair amount of ink, it is worth buying an HP printer just to join this program.
Cut your hair at home. This may not appeal to you if your look requires more maintenance, but for some of us, this is a no-brainer. My wife puts on the #2 shears, runs it over my head, and I'm done. You could even try cutting your own hair with Flowbee.
Fire the gardener & bug guy. Eliminate another huge monthly expense by doing your own lawn/garden maintenance and pest control.
Create recurring income for yourself. Better yet than reducing expenses, think about ways you might be able to get on the other side of the equation and create recurring income for yourself. Maybe you have something that can be rented out. Property? A parking space? Your car? (Check out turo.com if you’re thinking of renting out your vehicle.)
Eliminate debt. It is difficult to ever get ahead when you are continually servicing debt. Once your frugal living saves you enough money, begin paying extra toward your debts. Pay off consumer credit card debt first, starting with whichever card has the lowest balance. Work on the highest interest card next. Getting rid of one debt entirely feels really good and will give you the confidence to pay off the rest. Automate your payments and pay as much over the minimum as you can manage.
Haggle. You can and should ask for a better price on just about anything. Consumer Reports found an "impressive success rate among shoppers" who haggled over price. Furthermore, online shoppers were even more successful than in-store negotiators at getting a better deal, with success rates of 69% and 59%, respectively.
Start with the live chat feature on a site. Make sure you know what kind of deals are out there. Be able to say something like, “I'm looking for a good deal and am ready to buy. If you can take 10% off the price, I will buy now,” says Michael Wheeler, author of The Art of Negotiation: How to Improvise Agreement in a Chaotic World.
Automate payments. Set up autopay on your regular bills to prevent late fees, particularly on credit cards. Americans collectively paid about 3 billion in late fees alone last year—a complete waste of money. But if you do still miss a payment, call and ask for forgiveness. Many customers that politely explain their situation and ask for fees to be waived are successful. And don’t forget to automate payments to yourself either.
Do your own taxes.
Not only will you save money by not paying someone to do your taxes, but this is a great way to learn about your personal finances, going back to tip #3 from before. Doing your own taxes can also help you plan for the future. Is there anything you can do this year to cut your tax liability and/or get more money back? Check out Turbo Tax and Credit Karma Tax. If you get good at this and enjoy doing it, you may be able make some extra money on the side by doing taxes for others.
Cheap Living: Take the Leaps
The following tips involve major lifestyle changes. Most people will not be able to do these, but the biggest changes have the biggest payoffs, thus making them worthy of serious consideration.
Downsize. Housing is likely your biggest expense, but you might be able to trim it. Can you still live comfortably in a smaller house? Are you able to move out of the city to somewhere with a lower cost of living? Many employers are encouraging work from home since COVID first hit. Is this a possibility for you?
Make sure you take the time to really think these decisions over; moving is expensive both financially and emotionally, so be positive that you will stay in a new location long enough to make this risk worth it.
Move to a different state. In 2020, the five cheapest states to live in include Mississippi, Arkansas, Tennessee, West Virginia, and South Dakota. Visit financer.com for more information.
Sell one or both of your cars. Make no mistake about it—cars are expensive. Most of us don't take into account the total cost of having a car beyond what we paid for it. But gas, insurance, maintenance, registration fees, and parking costs can quickly add up. If you can, consider selling one of your cars and putting the money you make right in savings. Then, take public transportation, use ride sharing services, bike, walk, or carpool.
Our family went for about two years without a car once and it was trans-formative. This was before we had a child, but it really helped us build up our nest egg. Money previously spent on cars can now go right into your pocket.
Learn to DIY. This is a basic tenet of frugal living. Whenever you can fix or replace something yourself, you will save big time. With an abundance of instructional step-by-step videos on YouTube, it has never been easier to learn how to be handy around your own home. With a little patience, you’ll be fixing and maintaining everything on your own.
Frugal Food Tips
Cook. You must learn to cook to live the frugal life because eating at home is almost always cheaper and healthier than going out. The more you learn about cooking, the better off you’ll be.
Buy generic. Store brand groceries are often just as good as and almost always cheaper than name brand groceries, especially when you’re buying organic. Research firm Nielson puts the average savings at 18% for store brands over comparable name brand organic food.
Eat less. Sometimes the answer is obvious: eat less and save money. In the U.S. we generally eat too much, and it’s no secret that portion sizes have increased dramatically in the past 20 years. The food industry continues to try convincing consumers to eat more, and most of us go along with it.
So keep your portion sizes in check and if you do eat out, share a meal instead of getting your own. That’s a 50% reduction on your bill and your waistline will thank you too.
Grow your own fruits, veggies, and herbs.
Shop at farmers market’s or look into joining a food co-op. If you are going through a particularly tough time, check out Gaballi Foods.
Clean out the cupboard. Use everything you have before going shopping again.
Buy in bulk. It costs more up front to make bulk purchases, but there is no question that the long-term cost is much less. We are big fans of Costco at my house and I would recommend becoming a member. They have everything we need and we rarely go anywhere else.
Cook in bulk. You save time and energy by cooking one large meal instead of several smaller meals, and having prepared food at home reduces your temptation to get takeout. Be creative— look for recipes online, research meal planning, and use your slow cooker. Think foods that are easily scaled up, like chili, soups, stews, pasta, and roasts.
Good items to buy in bulk:
● toilet paper
● diapers
● formula
● laundry detergent
● coffee
Pinesol. Diluted as directed it cleans almost everything and last much longer than the spray bottles from the store
Consider investing in a deep freezer. Be frugal by making a large purchase? Yes, sometimes it does work that way. Buying a deep freeze makes it easier to buy and cook in bulk by giving you room to store larger quantities of food. Food is often sold at great discounts in high volumes, particularly meat, and you don’t want to miss out on good deals.
Buy pork and other inexpensive cuts of meat. Learn how to utilize these cuts in delicious recipes. Slow cookers are great for this and there are many resources out there for making cheap meat taste expensive.
Eat homemade Mexican food. Cheap, filling, and tasty, homemade Mexican food is hard to beat. Tortillas, beans, meat, and salsa can go a long way for your wallet and they taste great. Tortillas and beans are inexpensive and versatile. Black beans are one of the cheapest proteins available and they are packed with fiber.
Coupons Can Help. Coupons have, of course, been around forever, but there is a whole new world of coupons online. Tread carefully here because the nature of all coupon sites is to encourage spending, but with some discipline—only buying what you already needed anyway—these sites and programs can save you money. Check out Befrugal, Savings.com, SnipSnap, and The Krazy Coupon Lady.
Wal-Mart ad match guarantee. Walmart is committed to providing low prices on everything. They even go so far as to say, “So if you find a lower price from an online retailer on an identical, in-stock product, tell us and we'll match it.”
Become a "rewards member" at the places you shop at the most.
Make your own mocha. This one is personal. I have a weakness for a good mocha latte; it's a luxury for me, but the cost adds up. I’ve felt silly too many times when looking back at the expenditures of my week and discovering that I spent $30 on mochas.
Now, I do this instead: I buy organic cocoa powder for about $6. Coffee, cream, and sweetener (Stevia) are already staples for us. Combine these ingredients and boom—mocha at a fraction of the cost. One big container of pure organic cocoa yields dozens of drinks for the price of one drink at the coffee shop.
No booze, soda, cigarettes, sweets. I can't tell you how much money I have wasted in my life on dumb expenses and habits like these. Not only will you save money, but your health will improve when you cut these things out.
Save your change. At the end of the day, put all your change in a jar and forget about it. We do this and cash it out once a year and are always surprised at how much we’ve saved without thinking about it.
Save Money on Healthcare
Taking action to stay healthy is the best money saver. Get good sleep, move your body, and eat well. Take care of your mental health by doing something creative every day. Surround yourself with people that lift you up and reduce your stress.
And if you do require healthcare, negotiate bills (remember haggling?). Avoid pricey over-the-counter cold remedy products and use home remedies instead. Try Costco for your prescription meds (membership not required)
Frugal Entertainment
Frugal living doesn’t have to mean sitting at home counting pennies. There are plenty of ways to have fun without spending a fortune. You can:
● Visit the local library for books, movies, and music
● Walk, bike, hike, or swim.
● Have a picnic
● Play board games or cards as a family
● Sing or play music together
When you’re with family and friends, entertainment is free and yours for the taking. Just make sure to take it easy on holidays and birthdays and avoid making expensive purchases. Do something thoughtful for the people you love without going overboard. This is more than enough for most.
Most people who read frugal living posts do nothing more than that; they would like to change but they just end up staying where they are because it’s easier.
Don’t do that.
Instead, learn about your money now while you’re thinking about it. Ask yourself the questions we’ve talked about:
1. How much do I have?
2. How do I get it?
3. Where exactly does it go?
4. What do I really need and what can I do without?
Importantly, begin to pay yourself first and practice delaying gratification immediately after reading this. Start implementing as many tips and strategies as you can, adding your own as you go. A big part of frugal living involves learning what works for you, but you won’t know what works for you until you try something.
So make a commitment to try frugal living for 6 months and take it from there.
Your future is bright and it begins today.
- Rick Broadwell