3 Basic Rules to Live a Frugal Life

Living a frugal life does not mean that you suffer a Spartan existence and barely scrimp by. It simply means you are careful and smart with your budget and aren’t wasting money on things you don’t need. Although it takes some effort and planning, anyone can embrace a frugal lifestyle by following 3 simple rules.

1. Determine the difference between want and need. Everyone knows what makes up the basics of life’s necessities: food, water, shelter, clothing and proper healthcare, but very few recognize that their other “needs” are actually wants in disguise. The ability to distinguish what we need from what we want is a key element of frugal living.

Knowing the difference between a want and a need does not always mean you must deny yourself anything that doesn’t fall under the food or shelter category. Frugal living includes prioritizing what you enjoy and making wise financial decisions for such “extra” purchases.

For example, frugal television viewers carefully research cable packages and choose the deal that gets the most bang for their buck. Rather than rushing out to buy that bright and shiny new TV they see advertised, a wise spender resists the impulse buy, realizes their existing set still works fine for now, and puts that new TV on a wish list to save for.

2. Create & stick to a budget.

A frugal lifestyle demands a carefully monitored budget. Every expense should be planned for and recorded in spreadsheet or accounting software. Getting your finances in order requires discipline and forethought, but it is a crucial factor in creating healthy spending habits.

In addition to your regular bills, don’t forget to account for the unexpected expenses (like a safety net) and personal savings.

3. Live within your means. This goes hand-in-hand with recognizing the difference between a need and a want. A frugal person lives within their means by accepting their current circumstances and not buying all the “stuff” that they can’t afford. Resist the temptation to compare yourself to others. Life is not a competition, so focus on your needs and what you have – not your friends or neighbors.

Avoiding debt is a huge part of living frugally. While a credit card may seem harmless – hey, I’ll pay for it next month – living off credit can be extremely dangerous. One credit card purchase today, three tomorrow…before you know it, you’re in a mountain of debt. Nothing chokes the life out of frugality and financial security like credit card interest.

To be fair, it isn’t always easy to be frugal in today’s world of ever-changing technology and modern conveniences. You may think you think you must have the latest and greatest (what cat owner doesn’t want that nifty self-cleaning litter box?) but with a set budget, careful planning, and a little bit of willpower, anyone can enjoy living a frugal life.