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Whether people have developed frugal habits out of necessity from living through tough economic times, or by choice, deciding frugality is the key to a better financial future; saving money and living on less are the key factors which determine those habits found common among frugal people.
Whichever situation fits more closely to your own, adopting frugal habits can help both with managing financially in the short-term, and planning for the long-term.
Here are some of the best frugal habits for saving money and keeping healthy finances.
Frugal Habits For Happy and Healthy Finances
1. Keeping A Budget
Probably the most common habit among frugal people is keeping a budget. They know their money, what’s coming in along with what’s going out and budget accordingly.Practically anyone can set up a monthly budget template with relative ease. This helps with tracking, managing, and optimizing cash flow and expenses for each month of the year.
There are a few different budgeting methods people use, and what works for someone else might not work so well for you, so it might take a little while to find your preferred style and get into the swing of it.
2. Account for every penny
Frugal people know that every penny counts. They value each and every penny, whether spending or saving.
How easy is it to buy a coffee out, thinking it’s okay because it’s only a couple of pounds? But say you did that every work day, that couple of pounds turns into nearer a hundred over a month! It’s small things like that which really add up over time.
In the same way, you might not think it’s worth saving just a few pennies where you can, but over time, those few pennies can really build up and make a substantial difference.
3. Save up in advance
Frugal people eschew today’s culture of being able to have what you want whenever you want it with easily available credit. Instead they prefer to buy things when they can afford them, choosing to save up in advance.
Obviously it’s not always possible to avoid borrowing money, especially in the case of home buying and mortgages, but generally speaking, it’s a good frugal habit to steer clear of debt.
4. Always research
Research is key! Knowing when a bargain is actually a bargain is a vital tool in a frugal person’s arsenal. Never accepting the first price is the best price, or the more expensive brand is the better, a frugal person will make sure they get the best bang for their buck.
Some tools which help find a bargain:
Honey – a browser extension which automatically finds and applies the best discount codes
CamelCamelCamel – a handy price comparison tool
(If you’re in the US, Rakuten is a popular Cashback site with hundreds of retailers available.)
5. Weigh Options
Another frugal habit is always considering implications and being intentional with money.
A non-frugal person might see something they like, check they can afford it and buy it. A frugal person might see the same thing, but wait and consider whether they really want or need it, and if the money would be better used elsewhere. They may still choose to go ahead and buy, but they will have made sure to weigh the options first.
The same is as true for bigger decisions as for small ones. For example, we moved house to live closer to my husbands workplace. This means he can walk to work so has no commuting costs – a frugal choice. But we also chose to move to a bigger house to have more room for our 3 children – a lifestyle choice.
The long term implications are that we have a slightly longer mortgage – but our other frugal choices will help us make overpayments to shorten it as much as we can.
Being frugal doesn’t mean compromising on everything – it just means thinking things through.
6. Shop second hand
Second hand doesn’t mean second best! Choosing to buy second hand not only saves money, it’s more eco-friendly too. You can pick up some great quality pre loved clothes, furniture, toys and more by searching you local charity shops and using Facebook and other online marketplaces.
7. Avoid waste
A frugal person hates seeing things go to waste. They try to use up the last drop of things like toothpaste, soap, creams etc and try to make sure they don’t throw away food unnecessarily.
8. Repair before replacing
Frugal people prefer to try and fix something before rushing out and buying a new one. Loads of things can be fixed yourself with a bit of research.
Whilst it’s great to DIY where possible, knowing your limitations is also key – it might be more cost effective to pay a plumber to fix your heating system than to attempt something specialist and increase the damage in the process!
9. Live within your means
Frugal people always try to live within their means. They know when to say no and are comfortable doing so. They steer clear of credit and debt where possible and live according to their income and savings goals.
10. Meal planning
Planning meals in advance is a great frugal way to keep costs lower. It means spending on what you need and less on impulse, leading to lower grocery bills and less food waste.
Read more: How to start meal planning >>
11. Forward planning
Frugal people are forward thinking. They see their frugal lifestyle as a means to achieve their long term goals.
This could mean anything from putting those extra pennies save into a retirement fund or pension, making sure you have an emergency fund saved up for any unexpected expenses or trying to pay off debt faster.
Whatever your financials goals, adopting frugal habits can help reach them.
12. Enjoy low cost leisure
Frugal people choose frugal fun! There are loads of less expensive ways to enjoy leisure time. Sometimes it might just be making an easy swap. For example:
- Heading to the library instead of the book shop
- Inviting a friend over for coffee instead of going out to a coffee shop
- Choosing a staycation instead of holidaying abroad
- Using discount and deals when visiting the cinema
- Choosing a picnic or bbq with friends instead of a restaurant meal.
13. Cost conscious, not cheap
Have you heard the saying ‘buy cheap, buy twice’? Being frugal is not about always choosing the cheapest option. It’s about weighing up how much something costs and thinking about how long it will last.
For example, say you have a choice between two pairs of shoes. The first pair are low cost at £12. The second pair are higher quality, but cost £30. The frugal option would be the first pair right?
Because actually the cheaper pair might only last for two months before wearing out and the more expensive pair are made of stronger stuff could last a year or more. The frugal option then becomes the more expensive pair, because they need replacing more often.
Sometimes a higher initial cost pays off in long term savings; frugal people consider cost effectiveness when making decisions.