Frugality by definition is the “quality of being economical with money or food: thriftiness.” By nature, the very art of being frugal requires some forethought and planning. For instance, it is not frugal to eat lunch out every day of the week – on the other hand, it is frugal to brown bag it most days and perhaps enjoy the occasional lunch out with co-workers. But, you see, to be frugal in this instance requires planning.
You have to get your food, make your food and remember to take your food to work with you. Yes, it is much easier just to eat out and not think about it, but you will spend more money this way and also end up with an expanding waistline if you are not careful.
So, what does frugality look like? What can we learn from these people often labelled as “penny pinchers”? The truth is people who focus on saving money in life end up saving quite a bit. Follow this smart saving up with a smart investment plan and you have the secret to getting ahead. Here are five habits of highly frugal people:
Frugal people think about the end result
Frugal people are able to see that there is an end goal to work towards. Most frugal people have financial freedom in mind when they pinch their pennies. They may want to travel, start a new career or business or just have a nice thick security blanket.
A significant number of people value time over money and this is a driving force behind their frugality. They work towards gaining more time to do as they wish and to them, the sacrifice of things along the way is worth the time they will gain.
Frugal people take charge of their money
Frugal people are proactive; they take charge of their money and their spending. They monitor their spending ( yes, this means keeping a budget and receipts, etc.). They work hard to think about ways to spend else. This takes time, but it is worth it if your goal is saving and financial freedom. Also, many frugal people not only save money but they learn how to creatively generate more so that they can save. Some start side businesses or do away with television watching to earn a little more cash for savings. Frugal people know the inflow and outflow of their money and monitor their budget very closely.
Frugal people stay positive
Many people acquaint frugality with loss or a “less than” life. Unfortunately, this is the way that our society conditions us to believe. However, the truth is, people who are frugal often see saving money and thinking ahead as creating a win-win situation – They are excited about their financial freedom and see that the choices they make about their money have not only financial benefits but also other benefits.
Take for example people who decide to stay home for dinner instead of eating out often. They begin to cook more and eat together as a family they gain not only a fun time together but also become healthier. Another example might be buying a smaller house – of course, it will save money, but it will also take less time to clean and maintain – that is a bonus.
Pay yourself first
While you may pay your bills like your mortgage, car, and electric bills first, frugal people pay themselves first. If you pay yourself first such as into a savings account or retirement fund, you demonstrate the importance of your financial stability. Putting your savings first helps you to balance the rest of your budget. If you are trying to figure out how much of a house payment you can afford, make sure you include your savings plan first.
Frugal people don’t care about what other people think
Yes, being frugal may mean that your friends, coworkers, and even family find you strange. They may encourage you to spend and not be such a “tightwad.” Frugal people stay strong and committed to their goal, they don’t rationalize their behavior or justify anything, they just do it. One of the best things you can do is surround yourself with like-minded people – people who are also thinking about their future and saving for financial security.
Action Item: If you desire to be more frugal and work towards financial security, get your mind around your goals first and work from there. Stay strong, don’t compromise and remind yourself daily of the benefits of being frugal.