Changing your spending habits can sometimes be a bit overwhelming. Many of us are wired to spend money. We live in a society that is hyper-consumerist and mastering frugality always means making huge “sacrifices” from our urge to spend.
Developing frugal habits is a process. You have to make the first step and with repeated acts, you will slowly fortify this into a solid habit that puts you in a stronger financial position day by day. To be thrifty, all you have to do is work on your spending habits and the savings will naturally ensue.
Here are some simple steps on how you to cut down on the spending bug and live a more frugal lifestyle.
How much are you spending on your grocery?
Most of us may not realize it but groceries are some of the biggest expenses. The little daily expenses add up to quite some good amount of money. Unlike a mortgage or a car loan, it is not necessarily a fixed cost. The flexibility of the grocery expenses means that it is fairly easy to readjust your budget and save money on these unlike the other fairly fixed-cost expenses.
Cutting money on your grocery expenses can also be highly motivating since it will give you instant results. By making a few daily cuts, you can begin saving some money immediately which you can channel into long-term savings or investments. However, don’t do it to the point of deprivation.
Avoid compulsive consumption
Don’t just flash your money on every shiny object. Being frugal requires a change in mindset. By being more aware of your spending habits and recognizing where you are wasting your money, it’s possible to begin making the much needed cuts in spending and give your savings a boost.
You need to construct a delicate trade-off between saving money and your need to enjoy “the good life” and acquire the things that you can afford. If you are currently paying subscriptions that you are no longer using, it may be time to cut these out. The commonest culprit is gym membership. Other areas where you can squeeze out significant savings include costs of eating out, Uber and cable TV subscriptions. Be creative in how you spend your money. It is possible to meet most of your wants without necessarily spending a fortune.
Start prioritizing your financial goals
The moment you start earning, you should have developed a definite plan on how far you want your money to go. How much do you plan to set aside for your superannuation? How much investment do you plan to hold? Will you have any emergency fund? Do you plan to buy a home or commercial property? Work out your goals and priorities and start spending money on those that matter the most.
Squeeze the savings out of your bills
Once you have taken care of your immediate bills, work on your long term bills. Various long-term financial obligations can tie up your money and diminish your capacity to save. When it comes to meeting your financial goals, do not just “set and forget”. Keep searching and negotiating for better deals as these will pay off over the long term, boosting your financial position. If you are looking for a service, shop around and find the best deals that will help reduce your bills.
Develop a savings plan
Saving money is the surest way to build wealth and a strong financial position. The problem is that most people can barely master the willpower to start setting aside some cash. Saving money is exceedingly difficult because it is a proactive step. It is something that you have to take the initiative to accomplish. Every few weeks or on a monthly basis, you have to remember to cut into your budget and set aside some cash.
Your money saving plan should also include an emergency fund that will cater for the unexpected financial upsets or emergencies.
Pay off your debts
It is hard to be frugal and to save some extra cash if you are forking out a significant amount of money in paying off your debts. There are various measures that you can undertake in order to get out of debt.
