Living Frugally isn’t easy. However, if you are truly determined to make the switch, you are sure to find it rewarding! You’re going to have to cut back on expenses, move some money around, and acclimate to a different “normal.” Take it slow, make baby steps, and never doubt your progress. Have patience with both with yourself and the process, and you’ll be living a happy and frugal life in no time!
How to Embrace Frugal Living
Letting go of “Stuff”
Transitioning into the frugal living mentality from consumerism can be difficult. Chances are as you begin you will struggle with comparing yourself to others. It will become painstakingly obvious that some of your friends are making less money than you, yet spending more. You might notice that they have a newer car than yours, or their apartment is nicer, or they go out to eat a lot more than you.
Your first reaction is probably to feel jealous. It’s okay to feel jealous, but recognize that jealousy for what it is and move past it. You can’t constantly compare your lifestyle to others or you’ll never be happy! There will always be someone earning more than you, spending more, and living an easier/better/cooler lifestyle than you.
When you start to feel that jealous reaction, remind yourself why you became frugal. You are pushing for a larger goal. Whether that goal is early retirement, a down payment on a house, or a financial safety net for your family. Persevere and don’t lose sight of the prize!
Remembering Why you Switched to Frugal
The majority of Americans are living paycheck to paycheck. Many also have debt that lowers their spending power significantly. This is often overlooked, but credit card payments include interest on top of principle. Now I want to be clear that not all debt is bad debt. However, when consumers choose not to have a rainy day fund or foot massive bills with their credit cards, they’re setting themselves up for failure. They are buying into a system designed to suck money out of them and keep them poor, all for the sake of having material things.
Instead, we frugal living devotees choose to save money instead of spend it. If you’re really financially savvy, then you try and operate more like the system than the poor souls slaving away inside it. Instead of borrow money for things we don’t need, lend money for a profit in the form of stocks, bonds, and real estate!
To do this takes a surplus of cash, which you can acquire by adopting the frugal mindset. The idea of having a frugal mindset is to only buy the things you need and to take pleasure in that. Just because you’re frugal doesn’t mean that you can’t have nice things though. It means spending your dollars where they count, and not on whatever frivolous thing catches your eye at the mall.
Laying a Base for Becoming Frugal
To adopt the frugal mindset, I first recommend doing something counterproductive. Look at all the things you use for an extended period of time on a daily basis. Make sure you’ve spent enough money on them. That’s right. An article about being frugal is telling you to potentially spend more money.
This varies widely from person to person, but here are some examples that apply in many situations. Chances are you have a bed with a mattress; you’re not sleeping on a mat on the floor. Barring people who travel most of the week, you spend 8 hours of sleep in that bed just about every night. Therefore, it makes sense to spend a good sum of money on it since you use it every day. Your sleep will actively affect your productivity, mood, etc. Personally I like the tempur-pedic mattress, but that might be a bit steep for some, so just find a happy medium that works for you.
Another situational example would be a heavy-duty cast-iron skillet. If you enjoy cooking, it makes sense to spend some cash on good culinary equipment. Obviously don’t go too crazy with this. But if owning a nice crock pot, sous vide setup, or meat smoker will entice you to cook your own food more often, it’s probably worth it. Nice kitchenware have the added bonuses of lasting a long time and make cooking more enjoyable. If you find yourself nodding in agreement to all this, then chances are there is a wise and exciting purchase in your future!
Finally, I’ll present one that is a grey area in minimalist circles. A suit with good construction, quality material, and tailoring to fit your body is an expensive ask. However, with proper care, the suit should last a decade or more. In addition, suits are typically worn to important meetings, events, and interviews, so looking nice matters. Looking sharper than the competition, though vain, can often yield dividends. I like suit supply , but really any suit with good material can be tailored to look nice. I believe that formal clothing can definitely be argued for in the “spend on quality and make it last” camp.
Where the Real Saving Starts
There is a flip side to spending big on your needs in the name of frugality. That is that you have to cut out your wants. If you go to the mall to check out an amazing sale and you find a $100 item for 50% off then you just saved yourself $50 right? NO! That is only true if the item is a need and you had to buy it in the first place.
If you could continue living a happy and fulfilling life without that new purse, that eighth pair of shoes or that awesome back massaging chair, then you lost the $50 you spent. Think about spending in this fashion rather than of “gaining” the $50 you saved.
That’s not to say you shouldn’t buy anything. It still makes sense to buy clothes that you need, a new pair of running shoes, or a new laptop when yours breaks. The important thing is to separate the wants from the needs before you start shopping. That way, you won’t be as easily swayed to turn your $50 cart into a $500 one.
By spending big on things you’ll actually use, and cutting out spending on things you won’t, you may incur high initial costs, but your overall cost of living will go down. The goal is to lower your long term expenses so you can put your extra earnings away rather than spend them chasing the high of owning something new.
Establishing the Frugal Living Mindset
When you look at money, rather than thinking of it as a means to get a bunch of cool stuff you don’t need, imagine a vehicle that will take you from your current financial position to a better one. Use your money to buy time and security, not trinkets that will provide you short term pleasure. Build your nest egg, and when you do you’ll build confidence around money with it. Additionally this interesting study shows that using your money to buy time rather than stuff actually does make you happier!
Unexpected one-time expenses like a blown tire or a trip to the doctor won’t cause the same level of anxiety that it once did. The cost is now a drop in the bucket rather than your last sip of water in the desert. You can always go back and buy the trinkets once you’re FIRE’d, but you can never get back the time or un-feel the stress.
An Added Benefit of Frugality
Remember the old adage a penny saved is a penny earned? Yeah, that’s not really true. Due to our graduated tax system, a penny saved is actually worth more than a penny earned. You don’t have to pay taxes on a dollar that you save, while an extra dollar that you earn will get charged at your personal highest marginal rate; 37% to federal alone if you’re in the highest tax bracket. Add on state and local taxes and you might only bring home $0.50 of that dollar. So there you have it, a penny saved could be two pennies earned or more!
If you’re still struggling to find places to save, checkout one of my other posts: