Ever wonder how ultra frugal people live?
What do they do on a regular basis to save money?
And how can you develop these frugal habits so that you can save money to get out of that endless money pit?
Living frugally doesn’t necessarily mean being cheap. There is a HUGE difference. In fact, being cheap might actually cost you more money in the long run. And no one likes a cheap friend. So what’s the difference?
Frugal people think long term while cheap people think short term.
Think of it this way, if I were to buy a baby bottle brush at the dollar store I would spend $1. If I were to purchase a quality baby bottle brush, it might cost more like $5.
Now, that dollar store baby bottle brush is only going to last you a month or so because they start to fray or the handle breaks easily. In the course of a year, you will have spent anywhere between $6-$12 dollars.
The quality brush will last you the entire year or more. This is how being cheap will end up costing you more money in the long run.
Now you can see that to save money you have to be frugal, not cheap. To be frugal, you’ll have to think like a highly frugal person.
Below are some frugal habits of some pretty successful people that will get you on your way to living a frugal life so that you can slay your financial goals, whatever they may be.
14 Frugal Habits to Start Today
1. Live Below Your Means
Frugal people don’t spend more than they can afford. They are honest with themselves about their financial situation.
Many times, people think they deserve more than they do and base it off of material possessions.
But the thing is, success is not measured by the car you drive or the type of house you live in. It’s not based on the size of your T.V. screen or your fancy barbecue pool.
If you can’t afford it, then wait until you can.
Frugal people don’t have over-sized homes and cars that they can’t afford.
The general rule of thumb is that your vehicles should not be more than half of your annual salary and your monthly mortgage should be less than 30% of your take-home pay.
This means if you bring home $50,000 per year, the total value of your vehicles should not be more than $25,000 and your monthly mortgage payment should not be more than $1,250.
2. Shop the Best Deal, not the Cheapest Price
People who live a frugal lifestyle often choose QUALITY over QUANTITY. Like the analogy above, buying dollar store items because they are cheap won’t necessarily save you money in the long run.
However, don’t neglect the dollar store all-together because there are items that are worth it. More on that in another post at another time.
3. Have a Budget
Budgets are not only for people struggling to control their money. Even the richest people in the world adhere to a budget.
While you may think of having a budget as restricting, think of it as a guide.
Here’s the thing.
When you budget, you tell your money where to go. You create your game plan. Don’t wait to be in the gutter with $5.32 in your bank account with 2 bills to pay and an empty gas tank.
Keep it simple.
Good ol’ pen and paper does well for me. But there are really good budgeting apps that work if you need something on the go. The most common are YNAB, Mint, and Every Dollar.
If you are an excel person, then Google sheets can work really well for you on the go. AND it’s free!
4. Learn to Say “No”
I know it’s hard when the deal is just too gosh darn good but seriously mama, just say “no”. At least for a little while.
How many times have you bought something and it just ended up sitting in the back of your closet or the highest shelf in your cabinet?
Highly frugal people think before they buy anything. Instead, give yourself two weeks. If in two weeks, you can still justify that you need that item, then go ahead and buy it.
But if not, then you just saved yourself some moolah. You’re welcome.
5. No More Debt
Cash is King, my darling.
BUT, that doesn’t mean that you should restrict yourself to using only cash. I personally use my debit card for all my purchases, and I rarely carry cash. However, I still pay for my purchases in full.
This is one of those frugal habits that many people have the hardest with. But frugal people don’t borrow money they don’t have.
Usually when you borrow money, you have to pay interest. This is unneccesary money lost if you would have just saved and paid for it in full.
Because you put that $1200 new computer on your credit card, it now turns into a $1400 computer. Do you like to throw money away? Didn’t think so.
6. Plan and Analyze Every Purchase
They don’t just go out and buy things all willy nilly. Nooooo… Frugal people make sure to plan their purchases well in advance.
If there is a purchase to be made in the near future, you better believe that a frugal person has done the research for the best deal. They know where and when to buy. They also know how many discounts they can use to get the best price.
7. Have Safeguards
Don’t be fooled. You may think frugal people have no money because of the car they drive or the clothes they wear but most frugal people have multiple savings accounts.
They may have small savings account for the immediate but small emergencies, a moderate emergency fund for a long-term crisis like a job loss or injury preventing them from working, and various cash-flow accounts for travel and Christmas are just some of the safeguards to have in place.
In order to prevent a financial crisis when Murphy comes knocking on the door, frugal people know that they need to prepare for the unforeseeable future.
8. Don’t Boast or Brag, or Do
Most frugal people are secretly rich but you will never know.
You won’t hear them bragging about how much they paid for something. They know that the price of a material item doesn’t increase their net worth.
Instead, you might hear a frugal person brag about how much they saved.
“Ooh, I like those shoes!”
“Thanks, paid $10 bucks for them! They would have been $90, but I scored a pretty sweet deal.”
9. Pick Pennies Off the Sidewalk
“See a penny, pick it up. All day long, you’ll have good luck.”
Okay, maybe not ALL frugal people do this but you get the idea, right? Don’t let the money go to waste. Every penny saved is important and every little bit adds up.
This is actually one of the frugal habits I enjoy!
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10. Always Look for Cash Back
Frugal people are always looking for the best deal. They use multiple tactics to stack deals, coupons, coupon codes, and cash back to maximize their savings.
11. Do It Yourself
One of the most common frugal habits of people who have financial independence is the fact that they would rather learn a new skill than to pay for someone else to do it.
I’m currently in the process of learning to cut my kids’ hair so that I don’t have to spend $50+ every time I take them to the barber. That’s $450 saved per year.
12. Use Every Last Drop
This goes back to Grandma’s way of saving money. Frugal people love to make use of every bit of their money.
This includes rolling their toothpaste tube to make sure they use every last bit or cleaning up the tube if it gets clogged before tossing it out.
Another example is adding a bit of water to dish soap to make it last longer.
Wearing their clothes until they sprout holes, and using their vehicle until it completely dies are more examples of the very habits that frugal people inhibit to save money.
13. Track Your Spending
They look at their bank account and statements as often as they can. Frugal people know exactly how much they are spending, how much they have in their bank account, and they know exactly how much is left in the budget.
Frugal people also habitually check their statements as a safety measure to prevent fraud. If they notice a purchase they did not make, they immediately catch it and dispute it before any other transactions can go through.
I feel like this is one of those frugal habits that don’t get enough credit.
Check out: Mint.com
14. Continue to Learn About Money
Frugalists (is that a word?) constantly learn about money. They read books, websites, and blogs to learn more ways to save money, make money and build wealth.
This is to make the most of their money. They learn from other like-minded people and become inspired in their new knowledge to keep them on track and keep up with any changes that come up in the financial world.
Frugal people are always looking for every way to make the most of their money to make it last and work for them. They surround themselves with knowledge and people that build them up.
So if you want to save money and build wealth for you and your family, then perhaps you should take up some of these frugal habits.