Many people see frugal living as the key to improving their personal finances and simplifying their life. After the Great Recession and the COVID-19 pandemic, more consumers were introduced to the idea of adopting a lean budget. This enabled them to lower their expenses and free up extra money, which could later be used to rebuild their finances.
When layoffs, furloughs, and business closures became widespread during the pandemic, many people turned to frugal living to avoid accumulating debt. The state of the economy after the pandemic gave more consumers the opportunity to reassess their financial position and practice smart spending habits. In a society that upholds consumerism, this was likely not an easy transition for everyone.
Contrary to popular belief, being thrifty is not about depriving yourself. If done correctly, it can help you enjoy life while leaving extra room in your budget for savings. Of course, it all boils down to your perception of what being frugal really is.
While people may have varying definitions, this lifestyle simply involves aiming to cover basic needs such as housing, groceries, and bills while cutting back on unnecessary expenses like excessively dining out or purchasing luxury items.
The first step to living a financially simpler life is to define your wants and needs. Unless you already have a firm grasp of what these are in your life, it may be tough to implement a no-frills lifestyle.
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Frugality is knowing what is necessary and what you can live without
For starters, a need is defined as something you must have to survive. Basic necessities include food, shelter, water, clothing, utilities, and healthcare. Wants are the other expenses you have in your life. You will likely find that you can, in fact, live comfortably without them.
While it is easy to define the two, it can often be hard to identify the lines that separate them. Food, for example, may be a “need” but eating at expensive restaurants frequently is not. To successfully live a frugal lifestyle, you must understand the difference between the two.
According to an analysis from the Bureau of Labor Statistics, the average U.S. household spends about $2,375 dining out annually. This averages almost $200 per month. There is no denying that food is a necessity; however, someone who practices simple living will cook more of their meals at home to lower this expense.
While there are categories in our household budget we should never sacrifice, that does not mean we should spend carelessly. As illustrated with the food category, there are needs that can wrongly be categorized as wants.
Let us go through three different “basic needs” that will help you live a comfortable life. Then, we will identify when they are necessities and when they become luxuries.
Housing is perhaps the most expensive part of your budget. This includes your mortgage/rent, utilities, repairs, taxes, etc. It can be tough to lower this expense but there is one simple trick – live in a smaller house. Of course, if you are a family of six or eight, you can only downsize so much.
But does each child need their own room? If the rooms are spacious enough, it may be more practical to have the boys share one room and the girls share another while you and your spouse live in the primary bedroom. That would mean you can all live in a 3-bedroom home. You may have to sacrifice your kids’ personal space but sharing rooms will ultimately benefit your family finances in the end. It may even save money for more comfort and personal space down the road.
Shelter is a necessity, but you do not need a big house if you do not have a large family—that is when it becomes a want. Unless you work from home and need an extra room for your office, you should try keeping the rooms to a minimum. Not only will it cost less in terms of mortgage or rent, but it will also lower your maintenance expenses.
2. Food and Water
The next category is food. We previously mentioned one example of how this need can sometimes become a want; however, there are other ways this line can be crossed. For instance, buying branded items can be considered a want if there is a cheaper alternative of the same quality. On your next trip to the grocery store, take a look at the store-brand items and consider purchasing those instead.
Wasting food is another thing to be mindful of. Frugal living frowns upon anything that is excessive to the point where it is wasted. You can save money buying groceries in bulk but if most of those items go to waste, you are not being careful enough in your spending.
This is another need that can easily become a want. Our clothing projects who we are, which may be particularly important for those who are building a career. While this is true, you cannot justify expensive clothing when more affordable options exist. You can find expensive lightly used brand names at a quarter of the price at discount stores, online, and consignment shops. Besides, there is a good chance no one will pay much attention to what you are wearing as long as you look put together while wearing it.
The same is true for your shoes. If those old winter boots are still clean and keeping your feet warm and dry, there is no need for a new pair. If you want to implement frugal living in your wardrobe, try styling several pieces of clothing to fit multiple outfits. All it takes is some creativity and DIY hacks to make your clothes look stylish while also saving money.
Other necessities follow the same pattern. Frugality is all about using your skills to make something yourself rather than spending excessive amounts of money on it.
How to transition to a frugal lifestyle easier
There is no doubt that transitioning to a frugal lifestyle can be challenging. If you are a frequent spender, it can even be painful. Research has proven that many people find shopping to be therapeutic. Retail “therapy” can give the brain a dopamine rush and help fight feelings of loneliness or depression. However, these temporary feelings of elation can quickly lead to financial problems like credit card debt if the spending gets out of hand.
If you adopt frugal living, you will find that buying new items will no longer be as common as it was before – which will lessen the thrill you might get from shopping. This can add to the difficulty of simplifying your life.
Despite that, there are two key things you should know:
Your situation is unique
While it’s encouraged to look at other thrifty people for inspiration, your own frugality should not be defined by what you see. Everyone has various unique needs based on their lifestyle. For instance, not everyone will consider a car to be a necessity but if you live in a place that lacks convenient public transportation, then it becomes a need and not a want.
You need to be true to yourself
If you think that a “want” is necessary to make you productive, it’s OK to indulge occasionally. Depriving yourself of the things that make you happy or productive might only do more harm than good in the long run. Do not frustrate yourself trying to live a frugal lifestyle that is not appropriate for your specific personality and situation.
Living a successful frugal lifestyle
When adopting a new way of life, it helps to surround yourself with others who are doing the same or are willing to provide support. After all, it’s easy to be swayed by the influences of society—especially on social media. When your close friends and family members are supportive of your simplified lifestyle, you are more likely to stay on track and ultimately achieve your financial goals.