3 Budgeting Tips To Live A More Frugal Lifestyle
Do you find yourself spending more money than you save? These are three budgeting tips to live a more frugal lifestyle.
In a consumeristic culture, you are taught to consume and buy things that you do not need. When you start looking around, it is no surprise that you have purchased something you never even used. You can begin to live a lifestyle you control rather than having things control your lifestyle. A good starting place is to live a frugal lifestyle. These are the three budgeting tips to live a more frugal lifestyle.
Track Your Spending
First, you must track your spending. You need to know exactly where every cent that you make is going. You can start by looking at your receipts and bank statements. This will help you to understand where your money is going. You will then have a better idea of your expenses.
You can then identify expenses that you don’t need. You can cancel any unnecessary subscriptions that do not benefit you. For example, you could cancel Netflix or have a subscription to a magazine you never read. You may also spend too much money going out or buying a six-pack every weekend.
By tracking your spending and knowing what you are buying, you can identify things that you do not need and can cut out. The money you would spend on purchasing a six-pack every weekend is money you could save. A good way to start tracking your expenses is to create a budget.
When I was in college, I did not track my spending. I would go to bars on the weekend to watch sports. I thought I needed to be social or go out with friends in my twenties. You may have an area where you specifically spend too much money that you know you need to cut back on, but you think you must do it for some reason. Don’t succumb to social or peer pressure like I did. It is best to focus on yourself and start to get your financial life in order.
Create A Monthly Budget
Second, create and follow a monthly budget. A budget is an essential tool to begin to live frugally. A budget is valuable because it helps you to track your spending, live within your means, and set money aside to save.
You want to ensure your expenses do not exceed your monthly income. You can identify your fixed expenses, including rent or mortgage payments, groceries, and utilities. You could set aside some discretionary spending to cover categories for things you may enjoy doing, such as eating out, going out with friends, or entertainment.
You could start by following a simple budget. You could use the envelope method. With the envelope method, you only pay cash for things. You can no longer spend money once you run out of money in a category. You will have to wait until next month to do it. You could also use a simple app on your computer or phone to track your receipts from stores, restaurants, and online purchases.
Some popular online and app budget apps are You Need A Budget (YNAB), Mint, Rocket Money, Empower, and EveryDollar.
You ultimately need to figure out what works best for you to keep track of your expenses to follow a budget. It may be on your phone. It could be on your computer, and it could be on an app. It could be writing everything down. It would help if you decided what works best for you.
Eliminate Unnecessary Expenses
Third, eliminate unnecessary expenses. Once you know how much you spend and where you spend your money, you can start cutting back on things you do not need. You could decide that rather than going out to eat at the office or ordering delivery when you work from home to pack or make your own lunch.
Another way to save money is to purchase generic brands at the grocery store or off-brand clothing brands instead of name brands. You could review your subscriptions and cancel any subscriptions you don’t need or don’t improve your life.
By knowing where you are wasting your money, you can practice financial self-discipline to rearrange your financial habits. You can then start to put the money that you would spend on unnecessary things into your savings account to begin building it up.
You could choose to spend less on discretionary spending to start saving or investing some of your money. You can then work to build up an emergency fund to cover yourself if something unplanned happens to you. You could start putting some money into a high-interest savings account to accumulate more interest than a traditional savings account. You could invest money by learning new skills, starting an online business, or investing some of it in the stock market.
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Summary
You can decide how granular you want to get with your budget. The more specific you become, the better you can identify wasteful expenses. But you must track your monthly spending, start a budget, and eliminate all unnecessary spending. Once you get your financial house in order, you can move on to more advanced personal finance topics like saving in high-interest savings accounts and investing.
You must have the foundation down first. That requires having and following a budget.
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