Saving money and paying off debt are some important things you think about on a daily, but most of you find it difficult to achieve or lack the desire to do so. To live frugally and save money does require you to sacrifice some things, such as your social time and your buying impulsions. Of course, this does not mean you should become a hermit or exclude yourself from having fun with your friends and family. In addition to your fear of missing out on worldly activities, being labeled a cheapskate can be damaging to your social networking efforts. As a millennial, you have to figure out how to have a fun-filled life while, at the same time, safeguarding your financial wellness.
For one thing, you don’t need to have a cushy six-figure salary to pay off debt or to live comfortably. You do, however, must learn how to live frugally and save money by making responsible choices when it comes to your spending. You would be hard-pressed to find other millennials without student loans or some significant financial debts, such as a car loan or credit card bills. Not only will you want to travel and have fun but also obtain a mortgage, get married, or start a family. If you think about all that as well as retirement, it may be overwhelming. In essence, saving money is no longer an option; it’s now become your obligation. That’s why it’ll be beneficial for you as a millennial to adopt a frugal living early on in your life. (See also: Smart Ways to Save Money Using Social Media)
What Does It Mean to Live Frugally?
Frugal is about spending less on things you don’t need so you can spend it on things that matter most, such as investing or paying off debt. Secondly, it’s about being financially responsible. Frugal living isn’t about being cheap; in fact, it’s about considering money-saving options such as buying more groceries so you spend less money eating out or buying fast food. To live frugally is to invest your money instead of letting it lose its value sitting in a bank account.
- Frugal living means you’ll live as a minimalist. The fewer obligations you, have the better you’ll feel. For the most part, you don’t have to own a lot of things to be happy. You only need the bare minimum to live. The more minimalist you are, the more money you’ll save.
- Simplicity is too regarded as a way of frugal living. You don’t need to own a Balenciaga to look rich. The more modest you live in life, the more money you will save.
- Being an environmentalist can help you live frugally and save money. As you buy second-hand goods, you help reduce waste and make a tremendous impact by being eco-friendly.
Ultimately, anything that will help you become financially independent and free of debt is considered frugal living.
Why Should You Live Frugally?
At first, you may feel overwhelmed and have doubts. These feelings are normal when trying out something new. As you make progress, you will get accustomed to spending money on things that are most important to you. You will have more money saved for activities, emergencies, early retirement, and so on. After all, to live frugally and save money will empower you to get rid of some financial habits that are costly and could lead to devastating consequences. With a frugal lifestyle, you’ll be able to live more peacefully and meet like-minded people that will help you grow as a person.
14 Tips for Millennials to Live Frugally
If you want to start obtaining good habits to live frugally and save money, then here are the tips you should be following:
Learn to Say “No, Thank You”
Having friends means you’re probably saying “yes” to a lot of things that involve you spending money. Every time you say yes to your friends for an activity, you know you cannot afford, it impacts you considerably. Sooner or later, you must learn how to say no. Though you’re having a good time in the company of friends, it is your bank account that suffers. Saying no does not mean you’ll appear cheap or come across as being arrogant; on the contrary. It means that you are in control of your finances. (See also: 10 Steps to Achieve Financial Independence Retire Early)
No matter how much, or how little, income you earn, make saving an automatic process. As soon as you start earning income, it’ll be helpful if you set aside a percentage or a fixed amount to be reserved for your short- and long-term goals. The amount can also be based on how much you can actually save money without feeling too constrained or lacking the necessary funds for essential purchases. For example, start by putting away anything from $20 to $200 per month. Sure, it may seem like a challenge, but if you’re serious, this can be achieved by adopting an “out of sight, out of mind” mentality.
Cut Out Unnecessary Expenses
When creating a budget, you’ll need to determine which expenses are important as well as which can be destructive to your frugal lifestyle. There are expenses that can ruin your savings and budgeting plan. Though some expenses may seem as they’re necessary, your job is to cut out the costly and excessive ones. This means any spending that is optional. Such spending includes going to the movies on a weekly basis, eating out of the house daily, and shopping for clothes you don’t at the moment. Expenses can differ from a person to person. For that reason, it’s up to you to determine what expenses are holding you back. As soon as you’ve figured them out, you’ll need to cut them out immediately.
Create a Frugal Budget & Maintain It
After you’ve established your monthly income and expenses, it’s time you create a budget. To start, create a budget based on the 50/30/20 rule. This rule states that you should save 50% of your income, spend 30% for mandatory expenses, and leave 20% for extracurricular activities. Your budget should also include your short- and long-term goals you aim to achieve. Be sure to track your banking activities so you can get a precise understanding of your financial picture. As can be seen, as soon as you are aware of your spending habits, you can quickly maintain an accurate budget and be in full control of your buying impulses.
Start Cooking Meals at Home
People love having the freedom of going out to eat at a restaurant or buying fast food. Though it’s a satisfying feeling to eat out once in a while, doing it frequently without regard to your savings will do more harm than good. That is why it’ll be worthwhile for you to learn to cook and prepare meals at home. For most people, cooking will be a learning experience, but it also can be relaxing. In the meantime, your frugal living and delicious cooking will help you save money over time. As you explore new recipes and new techniques, you may also discover a new you. (See also: 12 Frugal Living Tips to Help You Save Money)
Re-evaluate Your Bills
Take time to read over your utility and credit card bills. By doing so, you will get a better understanding of how much you’re spending. You could also discover unreasonable charges or incorrect billing. Do some research and compare similar services. Someone might be offering better features at a more affordable price. Sure, it might seem like a hassle at first, however, re-evaluating your bills will allow you to figure out where your money is going. In fact. the changes you need make to anything can help increase your savings in the long run while you comfortably live frugally.
Live Frugally With a Roommate
If you’re living in a big city, like San Francisco or New York, it can be quite expensive having your apartment. You can reduce the cost of living by finding a roommate or two who are reliable and trustworthy. Asking your friends or searching online can be a great start. Getting a roommate will help you learn how to adapt with others, share house chores, cook meals together, and share the cost of the rent. It’s a win-win situation. Plus, you can get a new friend whom you can have fun with and start to live frugally and save money together. However, as good as that might sound, be sure to conduct your inquiries and determine if they will be a right fit into your frugal lifestyle.
Reading can have a tremendous impact on your financial mindset. Within books exists a goldmine of information that is waiting to be discovered. They can help you learn a lot of new topics, as well as, change your perspective on the economic landscape. This holds true when you start reading finance-related books and publications. Countless of finance books contain carefully curated advice you can utilize to happily live a frugal lifestyle. You’ll be surprised at how it can affect your thought process for the better. It considerably improves your chances of paying off all of your debts. (See also: Personal Growth for Better Money Management)
Use a Budgeting App
Budgeting apps are also incredibly useful, especially when you’re first starting off or if you’re not too good at making calculations. Some apps will guide you on how to become better at managing your money and determine which expenses you need to cut. For example, BudgetPolitan will teach you how to analyze your income and provides a comprehensive picture of how well you’re performing financially. You’ll be empowered to live frugally, saving more money and following a personalized budget. Additionally, you’ll know the exact date of when you’ll reach your financial goals.
Improve Your Credit Score
A credit score presents lenders a full review of how responsible you are repaying your debts. Therefore, having a good credit score plays a vital part in your financial life. It impacts your purchasing power, interest rates, employment, and financial opportunities. Stay in the habit of continuously increasing your credit score. Be sure to pay your bills on time and keep your credit card balances low. Pay off your smaller debt if you can. Your smaller bills do matter a great deal and will considerably help grow your credit score.
Generate Passive Income
There may come a time where having a full-time job will not be enough. You will need the extra money that your job won’t give you. That’s why you should be looking for other sources of income like buying rental properties, freelancing, and so on. Other means for passive income, includes coding, blogging, taking surveys, affiliate marketing, social media marketing, etc. Find out what you’re good at and use your talents to generate the income you need. Having multiple sources of income will certainly help you live frugally and save money stress-free.
Invest Your Money
Investing can be one of the best decisions you can make in life. At first, it’s hard to know what or where to start investing your money, but it’s easy to get started. Whether it’s investing in stocks, mutual funds, or low-cost index funds, investing is a great way to make use of your money and grow your savings. Generally, most people start investing when they have extra money to play with, but as a millennial, it’s best to start early. Much like your savings, you should research the different investment options and turn it into an automatic routine. Starting young prepares you for the future and builds up a sizable portfolio sooner rather than later. (See also: Key To Achieving Financial Independence Is You)
Invest in Yourself
Investing in yourself is vital. Consider taking courses to learn new approaches, to enhance your skillset and to live frugally and save money. Obtain the aptitudes to start a unique project or to create a business within your community. You can achieve more than you think you’re capable of only if you start now. So, what are you waiting for?
Your Budgeting Partner
These approaches can seem quite daunting, especially when you’ve just started thinking about how to live frugally and save money. There is no right or wrong time or age to start building up your savings. In fact, it’s never too late to start, but the earlier the better. That’s why creating a budget plan now will make your frugal lifestyle much easier. So, what is the perfect plan for you?