Friday, December 18, 2009
Four Basic Rules of Frugal Living
I got this off the net once and I can't for the life of me remember where but it's a good list and worth sharing.
There are four basic rules of frugal living:
- Buy things cheap
- Make them last longer
- Use them less
- Turn them into something new
Beginning to live frugally won't exactly be hard, but it will take perserverence and determination.
Try these simple steps to get you started:
Look at Your Expenses .Scrutinize each and every purchase.
Think NEEDS vs WANTS.
Really think if you have to purchase this item.Is there something else you already have that could be substituted? Could the purchase be postponed?Keep track this month of EVERY purchase you make. Make sure you write down those small impulse purchases, such as snacks, drinks, magazines, and so on. They do add up!
Quit using them
Except for extreme emergencies
You have to decide what these are for you. Maybe close all but one or two. You can close the account with a balance due.This keeps you from charging more, though you still have to keep paying the debt.
Sit down and figure how much you bring in each month, or year and divide by 12. This is what you have to save/spend each month.
Figure out what expenses you can not eliminate (rent or mortgage, electricity,
phone, food for example) and start eliminating the others.
Do you need cable, movies out every week, meals out every week, so many extracurricular activies for the kids? Start eliminating and cutting out or cutting down on those and use the extra money to pay off the debt. Really look at your grocery budget. This is almost always a place where improvement can be made. Shop the sales.
Make a Plan:
Figure out exactly how much you owe. Start paying the debts with the largest interest rate first, putting all extra money to those first, while making the minimum payments on the others.When the highest interest rate debt is eliminated put that money to the next highest interest rate debt. Most importantly is to keep in touch with your debtors with any payment problems you have. They would rather hear from you than assume you are skipping out on paying them altogether.
Shop at thrift stores for next year's needs, stockpile things you always use, find
pantry space for good deals, think ahead for Christmas, etc.
Set a Monthly Goal:
How much money would you like to save this month?
How much do you NEED to save in order to start paying down those bills?
Review your goals with your spouse, and/or family members, to help get their support in reaching that goal.
Discuss with them the types of things that you can alter during the month to help you reach your goals.
Visit your local library and read every book, magazine, and newspaper articles you can
find about saving money, or do a search on the Web.
If you feel like you just have to buy something, buy these books -The Tightwad Gazette
books (a 3-book set) by Amy Dacyczyn, and Your Money or Your Life, by Joe Dominguez
and Vicki Robbins.
You can likely find them at the library, but for the long haul, I have found it helpful to
read and re-read them.
It is well worth the money, and you will spend countless hours reading helpful and fun
tips on living a frugal lifestyle.
The Envelope Budgeting SystemThis simple to use system is based on the Premise that all of your income gets allocated to one of three different budget categories.
1. Fixed ExpensesAre those which you have on a regular basis such as tithes, utilities, child care, mortgage, rent, credit, insurance and taxes, etc. These are considered fixed because you generally receive a bill for themand/or they are constant. The portion of your income that is designated to pay these expenses shouldbe put into your checking account each month.This is because you will most likely write checks to make these payments, and these funds will go in and out of your checking account quickly.
2. Savings Is the portion of your income that you should save each month for emergencies, short-term, long-term goals and retirement. These funds should be put directly into the saving and investment accounts that you have selected.
3. Non-fixed expenses Are all of the other things that you spend your money on such as groceries, entertainment, gifts, clothing, etc.
The amount you have available for these expenses is the difference between your net take home pay, fixed expenses and savings. Once you have decided how you want to allot this money, place cash into the various
envelopes.It sounds too good to be true, but it isn't. That's all there is to it-really!
If you have already done these sorts of things, and still don't have enough money to meet
more than the minimum, then you may need to consider more drastic measures, such as
trading down your car, selling something, moving to a less expensive neighborhood, orother.
General Frugal Tips
1) Instead of paying high prices for products that are easy to make, use these recipes to make them yourself: Make Your Own Products
2) Buy at thrift stores. A lot of nice clothes and kids toys can be found at those kinds of stores for a lot less than they would be at department stores. Keep your eye out for sales at your favorite stores too.
3) Buy gifts when you can get them cheap, not just when you need them. They might take up more room in your house, but it's better to get them on sale now, then to pay full price later!
4) Cancel all of your newspaper subscriptions and/or Cable TV.
You can get the news online and just buy the Sunday fliers for the money saving coupons
5) During the winter, wear sweaters and put sand snakes or small blankets near the doors to keep the cold drafts out. This will stop your heater from constantly being on, which can add up to a lot of money each month. Make sure you have plenty of warm blankets in your house and use them instead of cranking up your heater when you get cold.
6) During the summer, keep a pitcher of cold water in the fridge.You're family will be more likely to drink the cold water than the expensive juices, sodas, ice teas, and so on. Also make your own cool summer treats: posicles, smoothies, and slushies galore! :-)
7) If you use a dishwasher, make sure you fill it up all the way before you run it.
Don't bother wasting extra money for the dry-cycle....just leave the
door open when the dishwasher is done washing.
8) If you have extra Cola that is flat and needs to be thrown out, do not
pour it down the sink!Pour it down the toilet seat instead.
Swish it around with a toilet brush and watch how clean your toilet gets!
9) Recycle your jelly jars, baby food jars and any type of jar you find.
Turn them into mini-planters for growing herbs.
Many herbs are easy to grow yourself, and it will save you a lot of money from buying those pre-packaged herbs.
10) You can get furniture and other large household items you need much
cheaper by getting them at garage sales.
Any time a neighbor or someone in your town is having a garage sale, browse around and
look for other valuables too.
You might find something old, but still nice, and be able to sell it for much more.
11) Use a battery operated radio, a wind-up clock, and a manual can opener,
instead of paying for the electricity to use those items.
They are also good to have around the house just in case you lose electricity.
12) You really don't need a dryer.
Even if you live in the city, you can hang your clothes on a clothes line outside during the
summer, or even inside your house during the winter!
Not using the dryer at all, or not as frequently, can save quite a few dollars each month
on your electricity bill.
13) Get a bill consolidation loan at your bank.
It will likely save you a lot in interest, and reduce the bills to deal with.
14)Chop up your credit cards.
Maybe keep one, but keep it at your parents' house, or some other unhandy but safe spot.
15) Take your lunch to work/school, and break any latte/coffee shop/vending machine habits.
Think sitting in the park.
16) Avoid fast food.
Cut down or cut out junk food.
Make your own substitutions if you must. Cookies, cakes, brownies, popcorn.
17) Go through a few recent grocery receipts and use a hi-liter to mark all the non-essential
(read "junk food" and "impulse buy") purchases you've made.
This was a mind-boggling revelation to me!
Those things I felt I just *had* to have when I was standing in the grocery store
just look like money poured down the drain in retrospect.
Terrible nutrition and poor value.
We still slip now and again, but I am more conscious about those sorts of purchases.
18) OAMC - this has saved me tremendous money on my food bills.
19) Grow your own garden.
Even if it's only a salad garden in containers, you can save quite a bit and have healthier
20) Popcorn - Cheaper than chips and healthier too.
A great cheap snack.
Carmel corn is super too.
21) Cook with powdered milk:
It's SO easy to mix up a cup of milk when you need it, no one can tell you've used it when
you just cook with it, and it saves.
Not only is it cheaper than fresh milk, but it saves me trips to the stores (where I always
seem to buy more than just milk).
22) Make more things from scratch. I save a lot by making my own homemade
versions of many things - hot cocoa mix, fudgsicles, pancake syrup, choc syrup, salsa,
dried onion soup mix, etc. Many more things.