For two years now, we’ve lived quite frugally because of some life circumstances and choices. Such as a child. And a husband getting his PhD. While I start my own business. Go big or go home, baby.
This foray into living more frugally didn’t just start after Gabe and the PhD pursuit, though. I grew up with incredibly frugal parents (who don’t need to be) and a father who is a financial expert, so I had to hear financial advice since I was, like, in diapers. I’ve also known for a few years that venturing into working for myself was something I was interested in, so I made the conscious decision to live within our means with some room to spare. Room that would eventually allow us to pursue our dreams (like a PhD, self-employment, and part-time work).
Between that and never having two full-time incomes between us in our five years of marriage, I’ve learned a thing or two about how to thrive on less money.
I’m not sharing these because I think I have all the answers. Or that I think everyone should do all of these things. I’ve just had several folks ask me how we manage, so I wanted to share a few things that we’ve found important.
My Tips for Living More Frugally:
– Do what works for YOU. I’ve tried the popular cash-envelope system and it was a giant failure for us. Cash seems to burn a hole in our pockets – we spend cash much more quickly than credit cards. Credit cards are not evil. Credit cards are awesome if you pay them off in full each month. We get about $50 every two months to Starbucks via our Discover Cashback rewards. FREE COFFEE. (I could save them and do something really big, like take a vacation, but I have a short attention span.)
– Spend less than you make. Don’t borrow to make up the difference, if you can avoid it. If you have bad credit or no credit you may want to look into personal loans for people with bad credit.. This way you can pay for school and other expenses. Use Hulu and/or Netflix instead of cable. You’ll save a lot of money, probably watch less TV, and definitely have fewer commercials that make you want to buy more stuff you don’t need. Like a Dairy Queen Blizzard.
– Do not buy new cars. Buy a used car two or three years old and pat yourself on the back for saving a ton of money. New cars are not an investment. They lose 11% in value the moment you drive them off the lot.
– Learn how to cook. You’ll eat out less, buy less (expensive) convenience foods, and eat healthier.
– Don’t go shopping if you don’t want to spend money. Period. (And if you go to Target, stay out of the clothes section!) If shopping is your hobby, find a new hobby that doesn’t involve the accumulation of new stuff. The retail therapy bug will slowly wane.
– Less disposable, more reusable. Aside from saving money on the products, this also means you make fewer runs to Target to pick up diapers, paper towels, etc – thereby saving yourself the collateral damage of just being at Target. (Your shopping bill increases 11% the moment you walk in the door.) (I totally just made that up.) (It’s probably more like 30% for me.)
– The best budget is the one you use. I use Mint. I’ve also used PearBudget and Excel spreadsheets. I’ve had a budget since I was in 8th grade and made $100 a month babysitting. I’m a bit of a Budget Person, but I understand that some people are not. Join Mint. They do all the work for you of tracking your money. But do track your money so you know where’s it’s going. If you like charts and graphs, Mint has all kinds of fun tools to see how your spending or income has changed over time, how compare to others in your area, and so on.
– All of that said, pick your priorities and indulge. It will make you feel like you are living comfortably and not penny-pinching. Penny pinching isn’t much fun. Our priorities are: good coffee, fresh produce, and friend time – which often means going out to eat or somewhere fun. We hardly feel like we are scrimping because we aren’t thinking about how much it sucks to have just one car or how nice it would be to have iPhones.
And that, my friends, is how we manage to live on our tiny incomes and stay happy. I know lots of you are one-income families or live in pricey cities – how do you do it?