Achieving financial freedom requires more than just a steady paycheck. With the right tools and habits, you can achieve your financial goals even if you don’t have a six-figure salary.
Living a frugal lifestyle is one of the best ways you can build wealth. But living frugally doesn’t necessarily mean selling all your possessions and never having fun!
Here are my favorite frugal living tips that will help you build wealth without making you feel like you’re making a sacrifice.
Start Investing As Early As Possible
My friends always ask me how I can afford to invest. After all, I have student loans and a mortgage along with all my other typical expenses. My response to them is that I can’t afford not to invest!
The earlier you start investing, the more time your money has to gain momentum through stock growth, dividends, and of course, the power of compound interest.
There are lots of great tools out there to help anyone start investing no matter how tight their budget is. For example, you can start investing with Stash for as little as $5.
Or if you really want to make things simple, try Acorns, the app that rounds up your purchases to the nearest dollar so you can invest with just your spare change.
For more serious or seasoned investors, try a tool like Ally Invest or TD Ameritrade. No matter what tool you use, it’s important to start early so your investments have time to grow.
Make Savings Automatic
Don’t make things harder for yourself than you need to. To achieve your savings goals, one of the worst things you can do is mix your savings in with your checking account. Instead, set up an additional direct deposit to your savings account.
This is where the phrase “out of sight, out of mind” couldn’t be more relevant. It’s much easier to save money when you’re automatically putting it into your savings account.
Budget Like You Mean It
Maybe this isn’t surprising, but living frugally means using a budgeting method that works for you. For some people, digital budgeting tools like Personal Capital or Mint help them keep their spending in check. For others, it’s a cash envelope system or paper and pencil budget worksheets.
Whatever works for you, commit to it and stick with it. When used consistently, your budget not only will tell you where your money’s going but also show you where you might be able to make cuts.
You can also lean into your budget to set aside money for the future. Whether you want to take a vacation, pay off a credit card, or just treat yourself to a fancy latte, your budget is the best tool to get you there.
Note: If you are trying to reduce your expenses, look into the Trim app. Not only will it help you find recurring expenses you can eliminate, but it will also negotiate lower rates on things like cable, internet, and insurance.
Travel Smart
You know better than to take a vacation you can’t afford. But there are lots of times when travel isn’t exactly optional. Whether you’re traveling for a family function, or for a work opportunity, or something else that’s important, make sure you use tools to travel frugally!
Instead of a hotel, check out local options through a site like Airbnb. You’ll likely have a lot of great options that are not only cheaper but give you a fun way to experience your location.
And this isn’t 1995, so ditch the traditional rental car. Instead, rely on Uber or Lyft, which are not only affordable but also help you save money on things like valet and parking. Or if you really do need a car, check out innovative options like Turo – a peer-to-peer car sharing service.
Note: If you’ve never used Airbnb, you can sign up and receive a free $40 credit to use on your first booking.
Be Open and Unapologetic
This is one of my favorite frugal living tips because it is so empowering. If you’re working toward your financial goals, don’t keep it a secret! Tell your family and friends that you’re trying to spend responsibly; that way, they won’t be surprised when you turn them down for dinner out and instead invite them over for a drink at home.
If you’re being pressured to buy something you know you don’t need (or want), don’t be shy about saying, “No thank you, it’s not in my budget” rather than trying to come up with some creative excuse.
Living frugally isn’t something to be ashamed about, and the more people you have supporting you, the more likely you are to achieve your goals.
Living frugally is about so much more than just cutting out unnecessary spending. It comes down to being in control and developing long-term savings, investing, and budgeting habits that make your life easier. Even if it’s tough at first, it’ll certainly all feel worth it once you reach your financial goals!
