Frugal mini-series part 2
Being frugal can be a life choice or a necessity. Frugal people often start out on the frugal path out of necessity and it then becomes a habit that they chose to continue with. I started down the frugal path when I was teenage single mum on benefits/welfare.
I had to be frugal for a long time until the point came when I realised I didn’t need to be frugal but wanted to. If you can live your best life by saving some of your hard earned money each month why not be frugal?
Being debt free is a great place to be and often you strive for years to get to that point. Once there you don’t want to slip back into debt by making financial mistakes.
I am not a frugal queen as I have to occasionally concentrate on sweating the small stuff as a way to keep my frugal muscles strong.
The 1st part of this frugal mini series looked at the financial actions fabulously frugal people always take. Today we will look at the opposite, what frugal people never do with their finances.
If you are already a frugal King or Queen then you will probably nod in agreement as you run through this list. If you are still developing your frugallness then this list should help you build your frugal muscles.
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15 things fabulously frugal people never do with their finances
Buy more house than they need
Have you seen the programmes where a couple are looking to buy a house and stipulate that they need at least 4 bedrooms? For 2 people? Who don’t have children? That’s not a need, it’s an absolute want. Frugal people recognise the difference between want and need and don’t buy huge houses. Huge houses cost more in so many ways:
- to buy
- bigger mortgage payments
- higher utility bills
- furnishing every room
- time spent cleaning
The bigger the house you buy the more money and time you have to spend on it. Frugal people recognise that a house is a home and a roof over your heads. What they don’t want is a millstone around their necks.
Let the bank decide how much to borrow
Buying a house is the single most expensive thing you will likely do in your lifetime. The credit crunch is long gone and house prices in the UK are still way too high for most first time buyers.
As a result your mortgage is likely to be far higher than those people who bought 20+ years ago. And you’ll likely stretch it over 30 or even 35 years as opposed to the traditional 25 year mortgage of yesteryear.
The banks will often surprise you with how much they are willing to lend you based on your income and affordability. Frugal people don’t let the banks decide how much they will borrow. They decide how much they are willing to get into debt for.
Fitting in with not buying more house than they need frugal people don’t take on more mortgage debt than is necessary.
Forget where they spent money
With contactless payments it is very easy to forget when you have bought something. Because contactless is all about quick payments you often don’t hang around to pick up the receipt. Your bank statement, should you look at it, doesn’t always show contactless payments for up to 48 hours so these spends can be very much hidden.
Frugal people always know when and where they have spent money. They are highly likely to pick their receipt even if it’s for just £2. They track their spending so they know what they spent last month and the month before.
Have large cable bills
These days with all the different sports channels and movie packages you can easily spend a fortune on cable/satellite TV. Not so frugal people. For those who do have a TV they cut their viewing costs to the bone. Cable channels are not paid for – there’s plenty of free channels to be had.
You can watch TV for free, you might not be able to watch the latest programmes and films but frugal people may well make that choice. Netflix is shared amongst family members if taken out.
You can save £100 a month by not paying for cable/satellite. That’s £1200 a year or £12000 over 10 years – not to be sniffed at!
Only do the 9-5
Most of us have a day job that may well be a traditional 9-5, shift work or something else. Frugal people recognise that having your 9-5 is not the end of your earning potential. There are other earning options out there and they take advantage of them.
Whether that is a part time job/side hustle that takes you back out of the house. Or it might be earning money from home, possibly online. Related posts:
Take out extended warranties
These days whenever you buy any electrical item you are presented with a hard sell on an extended warranty. I recently needed a new kettle and so checked Argos. For every kettle over £10 I had a pop up window encouraging me to purchase a 3 year extended warranty.
|Kettle cost||Warranty price|
|£10 – £14.99||£2.59|
|£15 – £19.99||£6.29|
|£20 – £29.99||£7.99|
|£30 – £39.99||£10.99|
Seriously? Those warranty prices are upto 1/3 the price of the kettle. Frugal people put money aside to fix things or buy replacements. If you bought warranties for every electrical item you’d have a lot less money to play with.
Apart from their mortgage interest frugal people make a point of never paying interest. If you are paying interest it means you have had to borrow money in order to buy something.
Save up your money for the widgets you need to buy, do without until you have saved enough. If you know you are going to need to replace your car in 3 years time. Save up the money between now and then.
If you take out a car loan you’ll be paying X per month for 3-5 years. Save X for 3 years before you buy that car and not only will you not pay any interest, you’ll earn it instead on your savings!
When you are conscious about your spending and every penny you earn has a job, you are less likely to impulse buy. Shopping as a leisure activity is dangerous to your purse.
Frugal people have financial purpose in their lives. They earn money for a reason. They save money for a reason. Buying something which hasn’t been carefully thought about, researched and price compared is not something a frugal person does.
Upgrade their mobile phone every year
First off frugal people are very unlikely to buy their mobile phone (if they have one!) as part of a monthly package deal. If they do they will have worked out it was cheaper to buy this way. I bought my mobile phone without a package and pay for a sim only deal.
When you are on a monthly payment plan which includes the handset you do not need to upgrade just because you are entitled to one. Indeed its not a free upgrade, it’s a costly way to keep you paying that same monthly fee.
The alternative is to switch your monthly plan to one that doesn’t include a phone. These can start from just £5 a month at GiffGaff. Frugal people keep their phones until they no longer work. Then they replace them with something that doesn’t cost £700 or £40 a month.
Spend money instead of time
Time is something we often have plenty of. We might not use it efficiently but we all have 24 hours in every day. Frugal people always spend their time wisely to ensure they don’t spend money unnecessarily. Frugal people don’t outsource chores they are perfectly capable of doing themselves. Chores such as:
- gardening/yard work
- washing their car
- basic DIY
Overuse heating and aircon
We are lucky in the UK in that our weather is usually fairly mild in comparison to some countries. We don’t need air conditioning as standard and we can have many months where we don’t need to run the central heating.
Frugal people take active steps to keep their electricity and other utility bills to a minimum. They despair when they see bedroom windows open on a cold winters day. They know the central heating is on and the heat is flying straight out of that window!
Frugal people never put the heating on at the first sign of the seasons changing. They know once the heating is on, it will likely stay on until the following spring. Frugal people also keep the temperature down low, although I think Tanja and Mark are seriously hardcore!
It’s all about layers in the winter – the more the better and closing curtains in the summer.
Max their credit cards
Credit cards are a great tool much used by frugal people. What they don’t do is max out their credit cards and end up with interest payable. Credit cards are a tool to be used for you. Not something for you to end up paying for the privilege of using. Frugal people don’t pay for privileges.
Use vending machines
Ever stayed in a hotel and there is a vending machine in the lobby? I swear the chocolate in those machines talk to me – even through 2 floors of the hotel.
Have I ever given in and bought something from a vending machine? Not in the last 20 years. Have you seen the price of the chocolate in those machines?!
When I know I can get 4 chocolate bars for £1 from my local shop, I am not prepared to pay £1 for one bar just because it keeps talking to me!
Frugal people never give in to the instant gratification that vending machines offer. They come prepared, they have snacks in their bag or they know they can wait until they get home. They recognise that they don’t need whatever is in the vending machines.
Get rid of stuff they could sell
One man’s rubbish is another man’s treasure. You will be surprised what can be sold on Ebay or Craiglist these days. Frugal people don’t automatically throw their stuff away. Whatever they buy you can bet they make fine use of it.
When it comes time to get rid they will look at selling it on to someone else. Every penny counts as the saying goes so if you can make a few pounds selling your old stuff you can bet a frugal person is going to do this.
If this fails they will seek out a charity shop/thrift store to keep that item in circulation rather than ending up in landfill.
Buy newest and latest
We live in an age where technology is moving so fast that things you bought a few months ago have been superseded by the next best thing. Have you seen the size of televisions you can now get? I still have the 1st TV my parents bought (it’s in the attic for nostalgic reasons). I think its a 12” black and white Sony TV. For many years a large TV tended to be in the 28-32” category. Now you can buy 75” televisions.
Frugal people aren’t against buying large TVs but what they refuse to do is get rid of perfect good, working items just because something new, bigger and better comes along. If your TV is broken and cannot be fixed then chose your next TV based on your budget. Don’t get suckered into thinking bigger is better.
At the time of writing the most expensive TV at Argos was £3600. That’s the cost of a small car! If you invested that for 10 years instead and gained 6% each year you would have £6,549 (excluding investment fees).
How frugal are you? Do you follow these frugal must never do’s?