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Top Frugal Living Tips To Follow In 2021

The pursuit of some level of happiness in life is a primary life aim for most people in the Western world today. Simple living is often touted as a technique to achieve happiness, or at least a level of contentment from which happiness and joy might rise up, for those seeking happiness. And because of the current pandemic situation, a lot of people found themselves without a job and being forced to move back in with their families, or moving to a smaller house or apartment in the suburbs or even the countryside, where the cost of living and housing is much more affordable than in big cities. But what does it really mean to be frugal? Are there any disadvantages to practicing it? Let’s talk about some frugal living tips you can follow. Let’s define the word first.

What Does “Frugal” Mean?

Let's start with the most fundamental definition of frugality: "the smart management of material resources, particularly money." We are frugal when we make cautious decisions about how we spend our money. We're being frugal when we conclude that spending $100 on something moderately attractive isn't a good idea. We are being frugal when we shop around for a better deal.

In that sense, practically all of us are frugally inclined in our daily lives. People are constantly making decisions about when it is OK to spend money and when it is not.

What distinguishes frugality from ordinary living? Frugality is a deliberate effort to be more efficient with your money than you might otherwise be. When you decide not to buy a fancy new $300 item that you don't actually need, you're engaging in everyday life; we all do it on a regular basis. When you make the effort to figure out what the most cost-effective package of toilet paper is so that you may make the best decision now and in the future, you're practicing frugality. You're being frugal when you take any extra step that you wouldn't have taken before to be a little more efficient with your money.

Pros And Cons Of Being Frugal

Human beings differ from other living beings in terms of their emotions and nature, since every human being is unique in terms of nature, and frugalness is one of many human natures. Being thrifty is essentially about saving money. Being frugal entails saving money in many aspects of life, including food, luxury, and living expenses, among other things. Being thrifty is in a person's nature, and it becomes a habit as they grow older, which is why people find it difficult to break the tendency even when they have plenty of money. To learn more about this subject, take a look at the following reasons.

Pros Of Being Frugal

  • Create a Savings Habit

The most important benefit of being frugal is that it develops a habit of saving money, which is important because most people find it difficult to save money and end up taking on too much debt, which forces them to pay debt and interest for the rest of their life. Saving money is easy to understand but difficult to put into practice, and thrifty people develop this skill, providing them an advantage over others in terms of money management.

  • More money to put into savings and investments

Despite the fact that this is the most crucial benefit of modest living, it is worth mentioning. If you live a frugal lifestyle, you will have more money to save and invest. The principle is simple: the less money you spend, the more money you keep. This translates to more money saved, invested, and a constantly improving financial situation. Consider Warren Buffet, the financial legend who clearly understands the value of frugality. Instead of spending every last penny on short-term advantages, he understands how to hold, manage, and spend money in ways that benefit him in the long run.

  • Retirement At A Younger Age

The best part is that if you live frugally before retiring and make it a point to get out of debt, live within your means, save, and invest, your investments will be large, and you will be able to enjoy a more sumptuous retirement lifestyle. Simultaneously, because you have a practice of living frugally, your retirement costs will be small if you continue to live a frugal lifestyle into your golden years. This increases the amount of money you have set up for retirement.

  • Increased Risk Tolerance

When it comes to investing, the larger the risk, the higher the possible payoff. And your ability to bear danger improves naturally when you live frugally and within your means. This is due to the fact that you are more likely to have more assets accessible as reserves or in a variety of investments, allowing you to take on a bit more risk when investing. You don't have much room for financial mistakes if you're living beyond your means, making multiple loan payments each month, and having little or no savings.

Consider diversifying your portfolio with higher-risk investments if you live frugally, debt-free, and within your means.

  • A greater capacity for generosity

True frugality necessitates a focus on generosity. The main difference between frugal and cheap people is that frugal people are generous.

A cheap person is willing to put another person's financial well-being on hold in order to improve their own. A thrifty person, on the other hand, is willing to cut back on their spending in order to give liberally and meaningfully while remaining within their financial means.

Cons Of Being Frugal

  • It Can Be Embarrassing in Social Situations

Another consequence of being thrifty is that it can be humiliating for both the individual and their family. Some scenarios, especially while negotiating social situations, may need financial prudence. Because the misconceptions about frugality and cheapness are so tightly linked, it's understandable that some social judgment will be out of your control at times. However, based on your priorities, you can pick how much flexibility to exercise. It may be worthwhile to spend a bit more on something once in a while if it means a lot to someone.

  • Getting Sucked Into the “Cheap” Trap

We can sometimes go too far with a new passion, hobby, or habit, just as we can with any new pastime, hobby, or habit. It takes some time and practice to understand how far and wide your thrifty habits should reach in order to keep you on the budget track and avoid being cheap. Similarly, adjusting your habits to apply to specific situations will take time and effort. At the end of the day, make sure your frugal decisions are positive, necessary, and valuable.

  • It's Difficult to Break a Bad Habit

The main issue with being frugal is that it is exceedingly difficult to break free from it once it has become a habit. Even if one has enough money and does not need to be as frugal as they formerly were, old habits die hard. To help keep things real, know your financial goals and consult with a professional financial planner to acquire additional clarity on your money. Yes, there are numerous advantages to remaining frugal even after accumulating "enough" income. However, it is important to avoid the situation of having enough money but being too frugal to enjoy it even a little.

Top Tips On Living The Frugal Life In 2021

Dad doing household chores while daughter observes
Dad doing household chores while daughter observes

This one is straightforward: if you are frugal, you will have less of a need for money. If you don't need money as much, you won't need to labor as much (particularly stressful work). The less time you spend working, the more time you have for fun. Of course, this assumes that leisure delivers greater enjoyment than labor, but obviously, if money isn't an issue, a person can choose to work. If you're financially secure, you have the option of working if that's what you like. Now let’s look at some things you can personally do to live more frugally.

Make A Game Out Of It

It always feels nice to find a great deal on something you desire, regardless of how much money you have.

Angela Marchi and Bob Weidner, a millionaire couple, prefer to shop at outlet stores for bargains because they despise paying full price. Weidner enjoys playing a game with his friends when they go shopping: how many goods can he buy without spending more than $100? We can nearly guarantee that making a game out of frugal spending and saving would make it more enjoyable. To help you get the most out of your money, set challenges for yourself and your family.

Buy Modest Brands Of Vehicles 

What is the first indicator of someone who has recently received a large pension check or a windfall?

A dazzling vehicle.

Any armchair financial advisor (‘hem, usually your father or grandfather) will tell you that buying a car is a bad investment. Since I was old enough to understand what money was, every adult in my family has told me that a car loses value as soon as you drive it off the lot. Many customers, though, will go to the Mercedes dealer first if they have additional cash. Make sure you don't make the same mistake.

Take a cue from Dallas Cowboys running back Alfred Morris, who rides his bike or drives a used 1991 Mazda to work. Giovani Bernard of the Cincinnati Bengals goes even further: his rookie year, he rented a house close enough to the stadium to walk to work, and he borrowed his girlfriend's mother's van when he needed a vehicle.

Spend On Extravagances Selectively

Rather than buying goods, many self-made billionaires choose to spend their money on experiences. Instead of expensive automobiles and large homes, this means travel and hobbies. Many people tell us about retiring early to travel or pursue other interests.

Those experiences, to be sure, come at a price that not everyone can pay. These thrifty retirees, on the other hand, are opting to spend their extra cash wisely, on tales and memories to share with friends and family rather than on flimsy objects. We constantly urge that you spend and save your money sensibly – being thrifty doesn't have to mean never spending it. It just entails being selective about when and how you indulge.

Ignore The Celebrities

What makes you happy is more important than keeping up with Joneses, Kardashians, or whoever is leading the continuous race today.

And, for the love of God, don't Instagram before you go shopping!

Don't compare your life to the photographs on Instagram and Facebook of your pals. Even while we all know they were hand-picked to show ideal perfection, we nevertheless hold them up as an unreachable goal.

Save The Majority Of Your Earnings

Jay Leno, the former host of The Tonight Show, is known for his (relative) frugality throughout his life. Leno is said to have saved every penny of his NBC salary during his 17 years on the network. He supported himself with personal appearances, endorsement deals, and stand-up comedy, which he continued to do on the weekends despite taping the show five days a week. While it may appear that a celebrity has the rare luxury of saving their entire paycheck, the habit most likely began before the millions started flowing in.

“You know, when I was a child, I always had two jobs, and I would bank one and spend the other,” Leno told fellow comedian Jerry Seinfeld on Seinfeld's show Comedians in Cars Getting Coffee. Then, when I got "The Tonight Show," I just kept doing it."

Could you survive for a few years on the revenue from a side hustle or part-time job? Sticking to a stricter budget and setting aside a portion of your pay from full-time work could help you get closer to financial independence.

Make Better Decisions, Not Necessarily More Money

Self-made billionaires amass riches through saving, investing, and managing money properly, rather than by earning large incomes.

Consider the following: To retire comfortably at 65, a 21-year-old liberal arts graduate with an average beginning income of $36,000 would need to save only $25 a week in an IRA. In most weekly budgets, that is neither fantastic pay nor a significant sacrifice. Knowing what to do with that modest sum of money, on the other hand, can have a significant impact.

Brandon Sutherland was able to retire at the age of 32 by investing as much as he could from each paycheck. On the interest from his investments, he expects to survive for at least 30 years. Brandon is a standard college graduate who hasn't benefited from any unusual circumstances. He was only willing to put up to 70% of his salary into living the life he desired as soon as possible.

Practice Delayed Gratification

You must give up the habit of impulse buying if you desire to be economical.

Being thrifty entails getting the most bang for your buck. You must thoroughly vet your purchases in order to do so. Among the questions you should ask yourself are:

  • Is this something I really need?
  • Will I use it frequently?
  • Have I done any price comparisons?
  • Is it because of a fleeting emotion that has piqued my interest? Will I still desire this next week/month if I'm hungry, angry, envious, or proud?

Allow yourself time to compare pricing, come to grips with any emotional impulses, and determine whether or not the thing has true value. Don't hurry into buying something simply because it's on sale; just because it's inexpensive doesn't mean it's good. Take some time to think about your possibilities. Also, be wary of lifestyle creep.

Work Up A Sweat!

Two people running outside with masks on
Two people running outside with masks on

Healthcare expenses are one costly financial drain that individuals are aware of. Wouldn't you be intrigued if there was a method to save money on your medical costs by doing some planning ahead of time?

Regular exercise, believe it or not, is an important aspect of the frugal living lifestyle. It's not enough to eat healthily. Make time in your hectic schedule to exercise for 30 minutes five times a week (for a total of 150 minutes). Take a walk to the end of the street and back, for example. If you want to add even more value to your exercise, pair it with activities that will benefit you. Work up a sweat when cleaning your bathroom, for example. It's a great sensation twice over!

Reuse, Repurpose, Recycle

Reduce reuse recycle green sign
Reduce reuse recycle green sign

Take another look at anything before you toss it out to see whether it still has worth in some form or another.

Another approach to get more bang for your buck is to reuse or even buy second-hand things. Please double-check that they are safe to reuse, especially if they will be used to store food or water. If the item still has some use left but you don't see yourself utilizing it anytime soon (clutter alert! ), consider selling it or gifting it to someone who could benefit from it.

The least preferred choice is recycling. While we are all aware that recycling is beneficial to the environment, it is unclear how much of our recyclables are actually recycled. Furthermore, the recycling process consumes energy, so it isn't entirely green. Instead of recycling objects that still have some utility left in them, give them out. However, if the item has lost its usefulness, it should be recycled. To improve your game, make it a habit to think about all of these things before you buy anything. Look at the packaging of an item the next time you go shopping and evaluate whether you could reuse, repurpose, or recycle it. It's a win-win situation when you can save money while also benefiting the environment.

Meal Planning And Preparation To Make Bulk Purchasing Easier

Person planning meals for the whole week
Person planning meals for the whole week

This one addresses two topics: how to take advantage of the lower pricing you get when you buy in bulk and how to save time. Time is, after all, money!

Purchasing in bulk is usually less expensive. Do a price comparison when you go shopping and see for yourself. Compare pricing based on the amount of weight. While we don't recommend buying sacks of groceries (there's a fine line between being frugal and going too far), buying enough to last several meals would be less expensive than buying a single dish multiple times.

But how can you figure out how many meals to buy? This is where meal preparation comes into play. Make a monthly or weekly calendar structure. After that, load it with the meals you want to prepare. Then, see what common ingredients several of these meals have in common. Instead of buying a single carrot, you could seek a half kilogram bag of carrots. As you go through the ingredients you'll need for the week, make adjustments to your meals. When it comes to cooking, you have the option of prepping your meals in order to prepare several meals worth of the same dish at once or doing your prep work ahead of time. You can prepare your workday lunches in advance and store them in the refrigerator or freezer. With the latter, you may clean, chop, and portion the ingredients for your recipes for the following week so that you can just grab and toss in when it's time to cook.

Remember that the more actual food you cook (as opposed to manufactured food), the better nutrients you'll be providing for yourself. No more medical bills!

Conclusion

Practicing these tips can reap numerous rewards for you and your family now and in the future. It's easy to make the transition from your current lifestyle to one that is more frugal. It is entirely up to you to decide how quickly or slowly you wish to adapt to the new lifestyle. Start with a few suggestions and see how comfortable you are with them.

About The Authors

Habiba Ashton

Habiba Ashton - BCS Growth Fund (Israel) L.P., a private investment fund specializing in investments in technologically focused businesses with high growth potential, employs Habiba as an analyst. Mrs. Ashton served as an analyst and information manager at the Israel International Fund, the first Israeli venture capital fund designed specifically for Japanese corporate investors, prior to joining BCS. Habiba graduated with honors from Israel's College of Management with a B.A. in Business Administration.

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