We would all like to believe that there is a direct connection between making more money and saving more money. But, that is not the case. In fact, nearly seventy percent of Americans live paycheck to paycheck and (get this!) that includes forty-nine percent of those making $100,000 or more a year.
Clearly, saving money is NOT something reserved for those who make a lot of it. The truth is, there are some very specific ways that frugal people view money which make it easier for them to save a buck.
It’s time to tell the truth, reveal the secrets, and tell you how frugal people consistently save money every single month.
For an in-depth discussion of the strategies discussed in this article, watch the video below. You’ll gain ideas for incorporating these habits in your weekly and monthly routine.
1. Know How Much You Make and Spend
You need to know how much comes in – and how much goes out every, single week. Have systems in place to track your money.
We use EveryDollar, Dave Ramsey’s FREE on-line budgeting app. There is a paid version, but we’ve never seen the need to pay for it. The free version will work just fine.
2. Know What Items Should Cost
When it comes to buying an “unknown”, unless that product is clearly a screaming good deal and has “bargain” stamped all over it in big, bold letters, reserve judgement (and your dollars) until you’ve done a little investigative work.
In addition to this, it’s equally important to know what you are willing to spend, research before we buy, track price so you get the best deal at the best price.
Make use of browser extensions and apps designed to help you save money.
3. Plan Ahead for Purchases
When it comes to buying items, frugal people like to have their purchases planned – regulated – and routine. They tend to buy the same kinds of items at a constant rate. It’s very unusual that a spontaneous purchase is made.
By reducing money waste you’ll save more money and do it on a regular basis.
4. Look for Creative Ways to Save Money
There are a surprising number of ways to reduce your cost of everything from your utility bill to your grocery bills. Be willing to dig and find new ideas and fresh motivation for cutting your monthly expenses.
Never spend money for the sake of spending money. Having said that, it’s inevitable that you must sometimes make purchases. however, when you spend money, do it deliberately, and with forethought. Do research on makes, models, and prices.
5. Buy Quality
Buy fewer things and spend money less often. When you do make a purchase, look for quality-made items with a generous warrantee.
Whenever possible, pay less than retail. Look for a good deal with coupons and discounts. Always ask if there is a discount for paying cash.
6. Be a Mindful Buyer
Mindful buyers don’t get happiness from spending money. They decide much space things are allowed to take up in our lives and how much cash they are willing to dole out to acquire those items.
Merely taking a few minutes every month to make these two decisions will allow you to stop being afraid that you’ll miss “the next, big deal”, because you already know exactly what you’re looking for and how much you will spend.
Finally, look for reliable sources of information and get a well-rounded look at how far dollars are currently stretching.
7. Have a Savings Structure in Place
Whenever you are living on a budget, it’s critical that you have a number of frugal habits which you use every week. For instance, it’s always best to have your paycheck automatically deposited, rather than cashing it on payday. That’s a sure-fire way to wind up “rewarding” yourself with a restaurant meal or an evening out on the town.
The other side of this equation is to know what percentage of your income is dedicated to paying the bills which meet your basic needs. By allocating whatever is left over to your short, medium, and long-term goals. Then, automate money to also fund these goals each month. You’ll make quick progress and be able to track how close you are to meeting each goal.
8. Find Value in Saving Small Amounts of Money
Rather than discounting and ignoring the value of small amounts of money, take the time to do the math. Remember, if you reduce a monthly bill by as little as $15 a month, over a period of twelve months, it will swell to $180 in the bank.
If you apply that same strategy to ten similar bills, in a year you’ll have nearly $2000 extra dollars to put toward your goals, like saving for retirement, taking a special vacation, or paying off debt.
9. Don’t Compare Yourself to Others
There are few things more damaging to frugal living motivation than the habit of comparing the way you choose to spend money with that of others. There will always be people around you who own the biggest home on the block or the shiniest car on the lot.
By not comparing yourself to others, you’ll not only gain confidence, you’ll also joyfully stick even more closely to your financial goals.
10. Don’t Give Up
Despite your best intentions, you may find that a plan you have made doesn’t work out as you expected. When that happens use this three-step process:
Don’t panic. Pause what you are doing and take a deep breath. You need some time to decide on your next plan of action.
Evaluate the strategies you have been using. Did they help you reach your goals? Are they costing your more money every month than you are saving? Do you want to keep the strategies in tact or change them?
Devise a new plan of action which takes into account what worked (and didn’t work) with the previous strategy that you were using. Try the new plan for ninety days and then reevaluate its effectiveness.
Ready for more tips and inspiration?
Get a copy of our free resource, “10 Ways to Radically Reduce Your Expenses”.