Frugal Mini Series – part one
13 simple tips and tricks that frugal people consider mainstream activity
Some people were born frugal. Some were brought up by frugal parents. Others have become frugal through choice or necessity. What frugal people have in common is a way of approaching their finances, spending and approach to life.
You don’t get sucked into keeping up with the Joneses or following the latest spending trends. You carve your own path according to your priorities and personal situation.
I started on the path to being frugal when I became a teenage single mum. Being frugal started out as a necessity but became a habit that is now deeply ingrained. I love saving money and organising my family’s finances so that we get the most for our money.
Although of course I am not perfect and still make some mistakes.
When you have a frugal mindset you can’t help but apply it to every aspect of your life, whether that is your finances, your shopping or the way you live your life.
There are so many frugal tips that can help you that I have created a frugal mini series to help share all the frugal do’s and don’ts.
Today’s post is about how fabulously frugal people always organise their finances.
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If you are married or in a partnership then getting your partner on board is key to being successfully frugal. If you’ve hooked up with your frugal equivalent then great! However it’s more likely you are not on the same page at the same time.
This is where having regular money conversations becomes so important. Talk through:
- your bills
- what you plan to spend
- what you actually spent
- money goals
- future finances
In the UK it is very much a thing to NOT talk about money. Not with your partner, your parents or your friends. Why is that? If you can talk about sex, why not money?!
Having money goals gives you something to aim for. Without goals you will spend money aimlessly. Your money needs a purpose. We’ve all been brought up to aim for goals, whether that’s learning to talk, passing our exams or learning to drive.
Apply the same principle to your money. Have goals to strive for. Monthly, yearly, even 10-yearly.
Understanding want vs. need
Frugal people understand the key differences between want and need. Need is about the basics in life – shelter, fire, food. OK, maybe not quite as basic as that but you know what I mean! You don’t need a large car. Your children don’t need to have separate bedrooms.
You do need to put food in your bellies and a roof over your head. It’s not that you can’t have what you want, it’s understanding that what you want is just that, a want.
Wants are optional.
Separating out wants from needs allows you to identify what is most important in your life and make the right financial choices for you. If you want to spend money on that widget then go for it. But don’t deceive yourself into thinking you need it.
All about the budget
Most frugal people have budgets. There are a few exceptions and if you can work your finances without a budget then that’s great. However having a budget ensures you know exactly what money you have, what you plan to spend it on.
You can make sure every penny of your income has a job to do. It might be to pay for groceries or build your savings. If you fall off the budget wagon one month then get right back on it.
Frugal people know exactly what they spend, when and on what. They track their spending to make sure their budget is on track and to keep their money focus.
Whether you use a spreadsheet, an app or an online tool, tracking what you spend allows you to understand your money habits. It allows you to find new ways to save money and identify when you need to make changes.
Having an emergency fund allows frugal people to sleep easily at night. Knowing that you have a chunk of money in readily accessible savings to cover an unexpected bill is great. The ideal emergency fund would be enough to cover 3-6 months worth of living expenses. However having £1000 would make a big difference if your car needs repairing.
Pay your future self
If you are frugal you will have an eye on the future. Not only will frugal people have an emergency fund, they will also be saving for their long term future. This could be through a workplace pension, stocks and shares or property.
In fact most frugal people have their long term savings spread across different investments. Frugal people are risk adverse but not against taking risks. To have money when you retire, whether that is early retirement or a more traditional age you need to take some risks with your money.
Leaving your savings in cash is the fastest way to lose money as you watch inflation eating away at its value.
No, this is not some form of infection! No Spend Days or NSDs are a way frugal people build and flex their frugal muscles. Some people aim to have a certain number of NSDs per month and don’t always achieve their NSD goal.
For others it comes more easily. I work long hours at work and always pack my lunch. Therefore I don’t spend any cash 4 days a week. OK, maybe I do the odd spot of online shopping but rarely as my brain is fried by the time I sit down after work.
Having NSDs every week and month helps frugal people to reduce the focus on spending.
Credit card rewards
Depending on which country you live in you will have access to credit cards that provide you with the opportunity to earn rewards. These could be:
- air miles
- free flights
- free hotel stays
- loyalty points
Frugal Kings & Queens make sure they make the most of the credit card rewards on offer. They will use their credit cards for everything, from grocery shopping to petrol to a frugal night out.
Because they always pay their balance in full they don’t pay any interest on their credit card balances and get to use the rewards the card offers.
Best things in life are free
You can spend an awful lot of money in a short space of time to be entertained. Some people may fall into the trap of thinking that you have to spend a lot of money in order to have quality time with your family and friends. Not so the frugal person.
Money does not equate to happiness
Quality time is all about what you do with it and with whom. For instance having a pot luck supper with family is much more appealing to a frugal person than a meal in a restaurant.
You don’t worry about whether your toddlers tantrum is impacting on other diners night out. You can guarantee the food quality at a pot luck and you get more space to move around.
Paying your bills on time, preferably by automating them is the bread and butter of a frugal person. If you are late paying your bills it will cost you money, stress and a bad credit report. Frugal people always pay their bills on time, usually on receipt so it’s once and done – no doubling handling of that bill.
These days if you choose to pay monthly on many insurance products (e.g. car insurance) you end up paying a high rate of interest. Yes, it means you don’t have to pay the bill in one lump sum. But 22% interest?
Frugal people around the world say NO! Paying interest on a regular bill is unnecessary and something to be actively avoided. Use that money for something else more fun.
Money making opportunities
If a money making opportunity pops up you can bet frugal people will be checking it out and seeing if it’s something they can do. Money making opportunities are not just daytime activities like mystery shopping. They can also be something you can do in the evening on your sofa. Like getting paid £100s to switch your bank account.
If you are not always doing all of the above then why not start today and set out your frugal goals?