What is Frugal Living?
David Thoreau said that almost any man knows how to earn money, but not one in million knows how to spend it. The economic depression in which we are living is greatly due to the economic waste. By living frugally we can mange to have better today and better tomorrow.
Benefits of Frugal Living: The F of Frugal Living
Frugal living is about financial security, strength and peace. Financial security comes with having enough money to satisfy or cope with any emergency need in future. In present you might be having everything you need to feel great but what if you face any sudden problem in your family which needs to be fulfilled and you have no saving to cope with it! Remember there is a clear difference between need and desire. Needs are necessary to fulfill but desires can be or can not be important in your life. The problem arises when we are unable to separate needs from desires and every other item we see, on the TV, on a billboard or on a shop, we buy it. This love for products tend to cause waste of money and lack of saving. By simply resisting to your unnecessary desires you can save money for ensuring financial security.
We all have some short-term goals and some long-term goals in our life. Some long-term goals like buying a car or a house need more money and time to achieve. With frugal living you can save money for the attainment of these goals. By cutting unnecessary costs you can save money to fulfill any goal you have set in your life. Learn to say No to desires without which you can live.
Fulfilling your Dreams
We all dream to give our children the best education but the expenses of education increases day-by-day. Education can not be sacrificed on anything in life. Simply start spending less on clothing, housing and food (eating out etc). One can buy clothes from thrift stores and flea market. Do not think about what people would say if you will not wear fashionable attires. There is much more than clothing that you want to achieve. Do not discard seasonal clothes after every season. Rather store clothes and use them in the next season. This can save you enough money to fulfill any dream.
Family and Friends
Giving your loved ones all the money they demand may not be best for them on ther other hand money is one of the biggest reason for strained relationship with family and friends. When you decide to live frugally you enjoy your relationships in a better manner but do not forget to take your children, spouse or parents in confidence. Their cooperation will help you in achieving your goals.
In colleges and schools we learn what is finance but nothing about personal finance, personal finance is more than just maths and calculations. It is about how to handle money so if you teach your children how to handle money in early ages they will become better individuals later on. They will know how to spend money wisely and will not mess up their financial life. You do not need to tell them again and again the importance of living frugally rather show them how you enjoy your life and relationships while saying no to anything that is not needed.
Freeing from Debt
Debt is a curse far worse than cancer - a slow poison. I mean at first it seems good to have money for purchasing anything we want to have but as time passes and we have to repay the debt it seems like impossible. The reason is that we do not ever, ever, ever lower our standard of living, rather increase it. As a result saving is very negligible so repaying debt becomes impossible. We borrow from another place to give back the money to the first lender and so on but the burden of debt never ends.
One of the recent study indicates that 33% of debt on consumers is based on revolving debt - the credit card debt, while rest of 67% is based on automobile loans, student loans and even vacations. During young age or just after marriage we want to have everything that can give us pleasure from cars to houses and from vacation tours to fashionable clothing. Apparently we have the best lifestyle because we have everything our parents never imagined about but we have nothing in our pockets. After 5-6 years of marriage we become so much in debt that we have to sell everything or go in depression to repay the debt.
We forget that happiness can come in life without having latest model car, Rolex watch, spacious house and fashionable attires. Happiness can come by living together and enjoying little but beautiful moments of life. If you decide to save so money by living frugally you will save for coming years.
We all say that its inflation and recession time; we blame government for everything. Have you ever thought about your own lifestyle and have you ever tried to change it? Government is also part of us and if we want to get out of this inflation we should start respecting the use of money. Money itself is never bad but its use can be good or bad and who uses money! Of course we use it. We should know how to keep a control on signing checks and paying from our credit cards.
By simply living a frugal life I assure you that you will find peace in your life. Many of your problems will get solved automatically and you will have better relationships.
Common Misconceptions about Frugal Living:
To many people frugal living is about living a cheap, substandard and below average life that is only for poor. In reality it is far different. The word frugal came from Latin word "frugalis" which means temperate and useful. A simple meaning of frugal is avoiding waste. There is nothing about living poor or impoverished life.
Misconceptions about Frugal Living and Reality
Quality of life degenerate with frugal living.
By reducing the quantity you are improving the quality of life; by saving where you can save you can spend where you want to spend.
Frugal living is only for poor.
In this economic recession we all have responsibility to put our efforts in reducing economic wastage. On the other hand if you are rich today do you have assurance that you will have similar circumstances forever!
Frugal living tips can only be followed by nerds.
Being practical in life does not mean that you are a nerd. Spending your money wisely is the best practice.
Frugal living reduces fun in life.
Fun is not something that can only be achieved by money. Money can not buy love or relationships. With meager resources you can creatively plan fun activities on weekends and vacations.
Frugal living causes social problems.
Those who really love you will not boycott you on money and those who don't are not worth wasting money.
Frugal living makes you a penny-pincher.
To some extent being stingy is good and frugal living does not encourages hoarding money. It is just about spending money where it should be spent.
Assess your own Lifestyle:
By assessing your own lifestyle you can know how you can change your habits and adopt a frugal lifestyle. There are certain points to consider while reevaluating your lifestyle.
Your Priorities in Life
What is your first priority in life? Education, housing, food, clothing or debt repayment. Think about it! It will help you in knowing where you stand. If you have a heavy debt on your shoulder that you have to pay: it means that you have not used money wisely in the past. Food, housing and clothing are essential needs but these needs should be fulfilled in simple manner as the requirement is. When we spend money on designer clothes, big houses (regardless of how small our family is) and use to dine out every other evening we are not fulfilling primary needs but our fake desires that causes financial problems in future.
Percentage of Money you Spend on each Item in Budget
Even if you are not among those who have a written plan you do know what percentage is going on each item in your budget. I know about families who spend more than 30% on clothing (this does not include other accessories and personal products). When we spend carelessly on unnecessary needs it shows that we are having severe problem with money management.
'Nerds follow written plan" that is what I hear from people if I ask them to make a budget. This is not reality, a written plan saves you from many problems. You know how much you have to spend on each item in the budget and how much you have to save. Even if you do not follow it like a sacred revelation, you still get some benefits. You know about your own finances and money remains in your control.
If you do not make budget then look back at your financial situation and you will find mess in it. Either you will be spending more on one item while neglecting other or else you will be spending lavishly on any thing that comes to your mind.
Accountability of your Expenses
Are you accountable for your expenses to anyone? In teenage people spend without any plan and as a result few years after that they have no saving. Its better that you keep yourself accountable to your parents or elder siblings so that you know about your finances.
Not everything we possess is of importance in our life. Start from your kitchen how many items or products are unnecessary. Our love for stuff causes too much damage to our financial progress. As it is said that we are not recognized by how much we own but how much we refuse to own in exchange of money.
Money Owed to Others
If you have to repay debt then it is definitely a sign of poor lifestyle. Many families seem rich and prosperous due to their apparent living standards but they do not have any savings rather they have to pay heavy debts because they borrowed money to enjoy high standards.
How to Take Start?
Some simple steps can lead you to enjoy a prosperous life today and peaceful life in future.
Its enough, I Need no more!
Learn to say No to your excess needs. "I do not need another pair of sandals as I have one before", its difficult in the beginning but once you develop habit of living frugally it will give you peace of mind. The depression and tension reduces with this approach.
Break the Bondage of Stuff
We love to have every stuff that we see on window displays but we can not afford all so why spend lavishly on these things. Buy as much as is required in genuine any shopping beyond that limit can cause wastage.
Reevaluate your Values
Where does your values lie, think about it too! We all value friendship, love, health, peace and security. Are we fulfilling these needs from money, I think most of us don't. We can not buy these values from money but we can provide security for these values by saving money, by keeping ourselves free from debt and by spending on the right place. Frugality does not abstain you from spending on your loved ones just be a conscious consumer.
Keep your Expenses below your Budget
By keeping your expenses below your budget you will ensure that you do not need ebt at any stage of life as you have enough saving.
Make a Written Plan now
You did not think about making a budget before but if you want to live frugally you need to have a budget. Make a budget and follow it. Your written plan will be the first step to cut down extra costs.
Be Accountable to Someone
Ask anyone who is sincere to you to check your spending pattern every on and off. We forget our resolutions very soon but if there is someone who checks where we spend and how we spend we will be more alert and responsible.
Repay the Debt
If you have to repay any debt then your budget should allocate enough amount to debt repayment. Your first priority should have to be repaying the debt.
Save as much as you can
Do not pass a stingy life but save as much as you can to ensure future security.
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