Being frugal and being cheap are often thought to be the same thing, but this couldn’t be further from the truth. Living frugally is simply being careful with your money and prioritising your spending decisions.
It does not mean sacrificing quality and opting for the lowest price and lowest quality items or services.
Frugal living is the perfect practice if you’re looking to save for something specific, such as a deposit on your first home or upcoming wedding.
Regardless of your income, adopting frugal living will help you achieve your goals faster and puts you firmly in control of your finances.
It also helps you make the most of your salary and identify what is most important to you and your family.
Assess your spending habits
To successfully adopt a frugal mindset, you need to start by evaluating your spending habits and identify any areas where you can make improvements.
Tracking your expenses and applying budgeting strategies will help you cut down on unnecessary outgoings.
Your spending going forward should align with your personal values and priorities so it will look different for everyone.
Following the 50-30-20 budget rule is a great way to start getting on track and getting into the practice of monitoring your spending.
Practical frugal tips
You might be surprised how many areas across your life where you’re missing out on savings. From food shops and meals to bills and utilities, there are plenty of ways you can be frugal without making big sacrifices to your quality of life:
- Food: Naturally, eating is a necessity but with the right supermarket shopping tips, you could save £1000s a year. Meal planning not only helps you spend less money, but it also reduces the amount of food you waste. Following a carefully planned shopping list, you should also consider buying supermarket own-label products which are often better value.
- Bills and utilities: Household bills and utilities like gas and water typically take a big chunk of your income every month but shopping around for the best deals and being conservative with your usage can save you several pounds per year. Consider getting a smart meter or insulating your home to get your energy consumption under control.
- Transport: Driving more economically or opting for different modes of transport can save you hundreds of pounds a year in fuel costs. Running multiple cars can also see the costs piling up so swapping down the one can see your savings grow exponentially.
- Leisure: Living frugally doesn’t mean you have to stop having fun and there are plenty of free leisure activities you can be doing to save money. Take a trip to a museum, host a dinner party, or do your research before going out to find the best value deals.
Maximising savings and building wealth
Frugal living aims to maximise your savings and invest in long-term goals. When you get in the habit of saving, you can more appropriately manage your finances, including boosting your credit score to make yourself more eligible for loans in the future.
Making these financial changes won’t happen overnight, so try to stay motivated if you find that you’re not hitting your targets at first.
Automated saving apps can help you stay on track and give you a better overview of your situation.
