If you’re like me who is used to spending most and sometimes even more than what we earn, read on. I’ll be sharing some tips on how you can achieve a frugal lifestyle.
The best thing that I have learned in 2020 is to have ample savings in the traditional banks or in digital banks to help me and my family sail through financial hardships or financial emergencies. We all know that the minimum wage in the Philippines is not as high as in other countries. Most of the time, it’s very hard to save money in the bank because of the increasing price of daily commodities.
However, there are still tons of ways to save money despite our low salary. And of the best ways to do so is by living a frugal lifestyle.
Frugality is not being cheap nor it’s about skipping meals just to be able to save money. Being frugal is about making the best of what you have and focusing on the long-term value of your purchases instead of the outright monetary cost. It’s about resourcefulness and mindfulness at the same time.
Identify Needs vs Wants
Unless you’re homesteading or growing your own food, we all need money to buy our daily needs such as food, water, and other modern conveniences such as appliances and mobile phones. And fortunately, in the era that we live in, there are tons of choices on almost everything.
An example that most millennials can relate to is the mobile phone. The newly released flagship or the top-of-the-line mobile phones of the leading brands will set you back to more than P50,000 or more than $1000. But, thanks to the competition, there are available mobile phones in the market that can do almost everything that expensive phones do for a fraction of their price.
Buying based on your need and not based on what you want is already a big step towards living a frugal lifestyle.
There are certain expenses that can be planned ahead such as the weekly trips to the supermarkets, holidays and festivities activities with the family, etc.
If you plan ahead, you can save a lot of money without sacrificing the quality of the items that you will buy. An example of this is buying Christmas gifts as early as possible. Once we hit October, most items in the physical stores and online stores get a bit pricier in lieu of the buying spree for the Christmas holidays.
Set a Budget
Setting a weekly budget can help any family stay on track with their financial goals. Sometimes, the main reason why we overspend on almost everything is that we don’t really have a budget to follow. I’ve seen this in many people including myself. I have lived most of my younger years not using any budget or thinking that my entire salary is my budget.
If you have not created a budget yet, I suggest that you start by listing everything that you spend your money on.
For single people, it’s a bit easier to create a budget since you’re only budgeting for one person. It gets tricky for those who have their own family as you have more family members to think about.
Start by listing your basic expenses such as rent, water, internet, electricity, and other applicable utilities (like heating), groceries, transportation allowances, etc.
Once you have finished your initial draft, try to find opportunities where you could cut costs. An example of this is switching from your preferred brand of toothpaste to a cheaper brand. Or perhaps, downsizing your internet or phone plans if you know that you are not using it that much anyway.
Track Your Expenses
Once you have created your budget, just keep track of your daily, weekly, and monthly expenses. To be honest, if you’re new to budgeting or following a budget, there’s a tendency that you don’t follow it since it’s not yet embedded in your daily habits. One of the best ways to ensure that you follow your budget and you stay on your financial goal is to track your expenses.
Tracking your expenses will immediately let you know if you’re overspending.
Prioritize Saving Money
Savings should be incorporated into your budget. A part of your salary should go automatically to your savings and whatever is left should be the money that you will budget for expenses. However, since we’re talking about doing this the first time, I placed this as a separate category to put emphasis on it.
To help you save money, your savings account should be separate from your payroll account. Sometimes, we have the tendency to spend everything on the payroll account because we forget that some parts of it are actually are our savings.
If you put your savings in a separate bank account then there’s a bigger chance that you won’t get to spend it. Out of sight, out of mind, as they say.
Indulge in Activities that Don’t Cost Much
In my younger years, I would consider myself a frugal person when it comes to my day-to-day life. However, my weekend activities or my entertainment costs were the activities that always broke my budget. Try to identify if you’re also in the same situation.
Are you also a frugal person except on a Friday night or a Saturday night?
One night out could sometimes cost more than the weekly grocery budget of a single person. Imagine the cost of the taxi fare back and forth to your house, the alcoholic drinks, dinner with friends, after-party coffee, and so on. You get the drift.
If this is what keeps on breaking your budget and if this activity is what’s keeping you from saving money, then I suggest that you find less expensive activities to keep yourself entertained on weekends. I know that we all work so hard from Monday to Friday and we want to relax from Friday night until Sunday, but this should not be at the expense of your hard-earned money.
There are tons of other activities that you can indulge in that will not break the bank.
Look Amazing for a Fraction of the Price
If you’re working in the corporate environment, then perhaps you’ve heard of ‘Dress for success.” Sometimes, we get judged by other people based on what we look like. It’s a sad reality in some work environments and in my past work experience, I noticed that it’s true.
However, you can look amazing without spending that much money, and the keys to looking great include:
The Right Fit
If the clothes fit you perfectly, then you will look great no matter what brand you wear. It should not be too tight nor too loose and your clothes should allow you to move freely and comfortably.
Know Your Style
If you know your style, then it will be very easy to build your own capsule wardrobe. It will be very easy to mix and match and you will be able to maximize the cost per wear of your clothes since they complement each other really well.
Know Where to Buy
There are shops and stores that sell amazing clothing pieces for less than the usual retail price. Some of them may include thrift stores and surplus shops. If you know what to look for, then you might even get a chance to score authentic designer pieces for a very small fraction of the retail price.
Eat Well and Eat Healthily
Contrary to popular belief, eating well and eating healthily does not need to be expensive. There are tons of available recipes online that can help you prepare healthy inexpensive meals for you and your family.
In following recipes, especially if you’re following recipes from international writers, bear in mind that some of their ingredients may not be available in our country. Or if they’re available, they might be very expensive, because they are imported. You can substitute local ingredients to help save you some money.
Feel free to experiment in your kitchen and let your creativity flow. Focus on nutritious food
You can also keep yourself fit without paying the expensive gym fees. There are tons of physical activities that will not cost you that much money such as walking, jogging, or cycling. Staying fit also does not need to be expensive.
Be Strategic on Your Purchases
There are a lot of ways to maximize your limited resources and one of these is by being strategic in making your purchases.
Buy at the Right Time
Avoid buying during the holidays or during peak seasons. Everything seems to be expensive during those times. Some classic examples of this include buying gifts from October to December or buying school supplies from May to June. Prices tend to be higher because demand is higher.
Utilize Reward or Cashback Credit Cards (with Caveat)
If you’re an impulsive buyer then forget about this. However, if you are well-disciplined in handling money then I suggest that you consider taking advantage of various financial tools such as credit cards, cashback apps, and more.
For example, GetGo, the frequent flyer program of Cebu Pacific has partnerships with various establishments including Robinsons Supermarket and Department Store. If you buy from Robinsons using your cashback credit card, and by presenting your GetGo card, you earn cashback on your credit card and, you earn points on your GetGo account that can be redeemed for a free flight in the future.
There are numerous points generating or cash back programs that you can use to earn points without spending extra on your purchases.
Buy Items with High Resell Value
I like leather bags and I’ve bought numerous leather bags in the past. I find them nice and sturdy. However, leather bags are expensive even from unknown brands because the material and labor costs are expensive. If you have a budget of $100 or approximately P5000 for a leather bag from a less popular brand then consider buying a second-hand designer bag as well.
This price point may not be possible in some countries especially in the West, but in the Philippines, it’s very possible. I have bought authentic Bottega Veneta bags for that amount and I know that I can even resell them higher than that.
Opportunities in buying cheap authentic designer goods are seldom but they do exist. The best way to find one is to constantly check second-hand markets such as eBay, Carousell, and Instagram.
You can also apply the same strategy to clothes and other items.
Only Keep What You Use
This is one thing that I have learned in my experience of hoarding stuff in the past. I have kept so many things during my younger years that ended up collecting dust in the closet or have been eaten by moths or other insects. Keeping only what you use in your house will free up some space in your home.
You may sell the stuff that you don’t use anymore to recover some of your cash or you may donate them to charity so they can be still be used by other people.
I believe that a clutter-free home promotes a clutter-free mind. The less we have, the less we have to think about. Things eat some of our precious time and money for their upkeep and maintenance. It does not really make sense to spend time and money on things that we don’t use or don’t even intend to use in the future.
These are just some of the basics of living a frugal lifestyle. Start building these habits and you’ll be able to save your hard-earned money in no time.How to Achieve a Frugal Lifestyle Click To Tweet
Do you have additional tips and suggestions on how to achieve a frugal lifetsyle? Feel free to leave a comment below. Thanks!