Are you the kind of person who rolls their eyes when people start talking frugality? Do you cringe at the thought of being frugal? Well today I’m sharing some tips especially for you–tips to help you make progress toward your financial goals without making you do those frugal things you hate.
Somehow “frugal” for you got a bad rap. Maybe you’re tired of people telling you NO–no Starbucks, no eating out, no cable. Well, I’m not going to tell you NO today. But I promise that if you follow these three tips, you can transform your finances, way more than random little ideas to stop doing this or start doing that.
If you’re new here, I must confess that frugal is kind of my jam. I love helping people save money and live frugally so they can pay off debt and reach their financial goals.
But I know not everyone loves frugality like I do. And that’s okay! You can still reach your financial goals without becoming extremely frugal.
Sometimes people think frugal has to look a certain way, which might be the reason you’ve been turned off by frugality.
For me being frugal means being intentional rather than wasteful with your resources. It’s a mindset that isn’t just about money, though there are often financial implications. Everyone’s frugal looks different.
So the tips I’m going to share with you aren’t to “do this” or “stop doing that.” That’s right, I’m not going to tell you to wash out your sandwich bags or cut your paper towels in half. I’m not going to tell you to use public transportation or stop eating out.
Of course you can do any of those things, but only if you want to.
These three tips might not sound super valuable at first , but I promise they’ll actually have more earth-shattering results than any super frugal hacks I could give you.
Here they are, my three NOs.
I told you I’m not going to tell you NO, so here are my three KNOWs.
1- Know Your Reason
2- Know Your Priorities
3- Know Where Your Money is Going
These three KNOWS are like a formula for effortless frugality. In just a few minutes you’ll see how the formula can work for you!
1. Know Your Reason
You’ve got to have a reason. Most people aren’t just frugal for the fun of it. (Though if you’ve ever bragged about a good deal you’ve snagged, you know that it can be fun.)
But if you want to improve your money situation, you need to have a goal. What do you want with money right now? What’s your biggest objective currently?
- Do you want to pay off debt?
- Save for a down payment?
- Invest more for retirement?
- Get a month ahead of your expenses?
This reason is going to be why the rest of this matters. If you don’t have a reason to change or be more frugal… I mean adjust your money habits…then you just won’t change. You need a reason that will motivate you to do something different.
2. Know Your Priorities
Being frugal is very relative. One person’s frugal is another person’s craaazy. That’s because we each have different priorities. Let’s take a look at what your priorities are and aren’t and then I’ll show you how you can majorly use this to your advantage.
What do you value? What is most important to you?
It might sound silly to have to think about this because of course you know what’s important to you. But here’s the thing–everything can’t be equally important.
It’s easy to spend money and say “this is important to me” every time. I could easily justify getting fancy ice cream every day if that were the only requirement.
Being “important to you” isn’t enough because unless you’re just spending your money completely thoughtlessly, then you probably are already spending your money on things you value, at least somewhat.
Your money is a finite resource. Using some of it for Priority B means there is less of it for Priority A.
When you prioritize, you’re deciding what important things are more important than other things.
I learned this lesson really well when we were paying off six figures of Mike’s law school student loans. We worked really intensely for several years to pay off that debt. At the time it was our number one financial priority, after paying tithing. I weighed all other financial decisions against the priority of becoming debt-free. I would literally ask myself if whatever I was going to spend money on was more or less important than getting out of debt.
It’s not always so black and white, but getting in the habit of mentally checking your spending against your priorities (and then not making excuses and justifications when the answer doesn’t match your desire for instant gratification) will allow you to make huge financial strides. Don’t give up what you want most for what you want now.
Now let’s see if you’re putting your money where your mouth is in…
3. Know Where Your Money is Going
In order to be frugal (even without being “frugal”) you have to know where your money is actually going. Sometimes money has a way of slipping through your fingers with nothing to show for it. You know the feeling–your paycheck just seems to disappear.
I know this isn’t a glamorous or exciting tip, but if there is one thing you can do to get a better handle on your money, this is it! You don’t even have to do anything about it right now. Just humor me. Without even consciously doing anything else, this one activity can make a difference.
Sit down at your computer and look at your bank and credit card statements for last month. Lump the similar transactions together. How much did you spend on eating out? How much did you spend on clothes? How much on transportation? Try to be specific enough to have an accurate picture–don’t lump “Amazon” into one category if you buy groceries, home decor, and tech gadgets all on Amazon–but don’t drive yourself crazy itemizing everything either.
If you don’t feel like last month was a good representation of your habits, look at another month or two.
Now, put your spending categories in order. What are you spending the most on? How does your actual spending line up with your priorities? Was there anything that was off? Any high spending areas that didn’t match up with your priorities?
PUTTING IT ALL TOGETHER
Okay, you want to know how the three knows–knowing your reason, knowing your priorities and knowing where your money is going–can make frugal living easy? The trick is to spend on your priorities and save on the things that aren’t your priorities.
Bam! That’s the key to effortless frugality. Splurge on the things that matter to you and save (or even scrimp) on the things that don’t matter.
Let me give you some examples from our family:
One of my non-priorities is fashion. Maybe you’ve noticed! I mean, I like to have clothes that match and are in good repair, but I am not into brands and having the latest trends. Since fashion isn’t a priority for me, I can get away with spending very little on clothes. I buy most things second-hand and keep them for a long time, and that suits me just fine! Would I like to have nice new clothes in the latest fashion? Sure maybe, but it’s definitely not a priority for me, so I choose to not spend much in the clothing category.
Now an example from my husband Mike. He’s one of the most frugal, low maintenance people I know. He isn’t fussy about most things. He’s not concerned with having expensive clothes, he’s never paid to have his hair cut in his life, he’s not a restaurant goer, he’s not concerned with what he drives, but he won’t skimp when it comes to computers.
He buys all the components separately and puts the computer together himself. He would rather be frugal in lots of other categories and spend lavishly on his computer things. When we were first married, he would try to explain to me why this part or that was better and why we should splurge on this component for whatever reason, but I have learned to just let him go wild when it comes to computer stuff and appreciate his frugality in other areas.
Here’s one more example that involves both me and Mike. This should ring a bell for anyone who’s been following me for little while. In the past couple of months we have spent over $6,000 on getting a garden going. And we aren’t even done yet! We’ll be putting even more money in as we set up our orchard and continue putting raised garden beds on our newly terraced hillside.
When given the option to spend $6,000, most people probably wouldn’t hire a bulldozer and go buy lumber and dirt and fencing, but we did because it aligned with our big-picture priorities. To put that into perspective, $6,000 is more than our family of eight spends in an entire year on groceries! But we did it and don’t regret it. We spend less in lots of areas that aren’t high on our priority list so that we can spend more on categories that matter most.
How about you?
Have you caught yourself spending on things that AREN’T your priorities?
Sometimes a look at your budget shows you that you’re spending a bunch of money on stuff that doesn’t really matter to you.
Maybe you really, really, really hate cooking dinner, but you don’t really care what you drive. Go ahead. Spend money on pre-made foods or eating out. But don’t also go buy a new car every five years! Think how many more times you could eat out by paying cash for a reliable used car, or even just by reducing your car payment by half. If you really don’t care what you drive, don’t spend a bunch of money on some car for other people to look at. Enjoy dining out instead. That’s your priority.
Or maybe your car is really important to you (like Mike’s computer) but you care much less about where you sleep. If you reduced your rent or mortgage, you could more easily afford the vehicle you really want.
Or maybe you don’t care much about what you drive, or where you sleep, and you don’t mind cooking dinner, but you love to travel! You could reduce your rent or mortgage and lower or get rid of your car payment, and reduce your eating out expenses, and go anywhere you want next year.
The secret to effortless frugality is to know. Know your reason–what you want from your money. Know your priorities. And know what you’re actually spending money on. Then you can make adjustments so that your spending is aligned with your priorities. It’s actually easier than what you’re doing now, and you get to do what you care most about. Just spend on things that matter to you, and save on things you don’t care as much about.
So what are some non-priorities for you where you can ruthlessly cut your spending? I’d love to hear in the comments below.
Today I’m excited to be collaborating with a really fun YouTuber, Wendy Valencia! If you don’t know Wendy, she and her husband are also working to pay off six figures of debt. She has a big heart and an interesting backstory about how they got the debt. She shares her personal finances and really takes you through her journey, sharing the wins right along with the challenges, all in a lighthearted and humorous way. Go check out her channel and tell her I said hi!
In fact, today Wendy is having a fun discussion about the differences between between being frugal and being cheap! Maybe what has turned YOU off from frugality is that you don’t want to be seen as cheap. Well she’s sharing lots of frugal vs cheap examples in her video below!