Money Matters, Simplified.
6 Tips on Frugal Living
Need to squeeze costs and live frugally? It's all about smarter money management.
Tue, 07/14/2009 - 10:09 by Jaspreet Virk
The most important part of frugal living is ensuring that every penny counts You might think that prudent living is about having less and doing less, but it is actually doing more with what you have.
Benefits of Frugal Living
1. Smart Spending: It allows you to judiciously utilize your money to get the best deal on everything that you purchase.
2. Fulfilled Dreams: With frugal living you can save money to achieve your dreams like buying a home, joining college etc.
3. Stress-Free Living: Living within your means leads to prudent spending; and prudent spending means less debt and a stress-free life.
Here are a few guidelines to trimming your expenses:
1. List your Expenses
To begin with, document every dollar that you spend over a period of time. Once you list all the expenses, estimate how much you spend on each item on your list over a particular time frame.
2. Segregate Needs from Wants
Prioritize your expenses. Look at your expenses to determine which items satisfy your needs and which fulfill your wants. Before making any purchase ask yourself, “Do I need it or can I manage without it?”
If expenditure on necessities (food, shelter) cannot be reduced, cut down on your wants (entertainment) to compensate for the needs.
3. Set a Budget
In order to regulate your finances, it is important to budget your money. For information on how to prepare a budget, click here to read '5 Pointers to Plan Your Budget'
After planning, ensure that you stick to your budget.
4. Pay in Cash
Avoid using credit cards because every time you pay through your credit card some costs kick in. Apart from this, credit and debit cards encourage you to spend more by giving access to more capital.
Pay in cash to keep track of your spending and to ensure that you stick to your budget.
5. Open a Savings Account
No matter how much you earn, put aside a little every month and deposit it in your savings account that gives you periodical returns while you save.
6. Cut your Expenses
The final and the most important step to frugal living is to ensure that every penny counts.
Look for alternatives. For example, if you have a car and that is adding to your expense, you could choose public transportation or go for car pools etc. Buy commodities on discount or prefer stores that offer best deals.
Prepare food at home rather than eating packaged food. This is better, both for your budget and health. For more information on how to cut costs, click here to read '10 Ways To Cut Household Expenses'
Frugal living is not possible overnight. Trying these news steps over the weeks will ensure that you get used to living life differently.
