Frugality and financial restraint is an art that not everyone can master and there are many reasons to live frugally even when you don’t have to. However, when you compare it to painting, sculpture and cooking, you realize that it is something that we can all learn with long term practice. On the other hand, sometimes we can’t succumb to the temptation of a rich latte or cappuccino at Starbucks way to work, even when we propose to lead a thrifty financial life and save a little more.
In order to master this task, it is important that every decision you make for your money is made consciously. Above all, these decisions must be based on your financial goals. For those who want to start taking financial habits in this direction, these are the tips you should consider:
Know your goals
If you want to start being more frugal, you have to first know what you are saving for. It could be to be comfortable in your retirement, or start your own business, or cancel your mortgage, etc. Having a clear financial goal (or more than one) will help you make better decisions.
Do it gradually
While you are motivated, the process will be more effective if you do it gradually. Do not come home and tell your family that from this month, there will only be a 50% allocation of money to the family’s welfare! Embracing financial moderation is achieved with practice. You should give yourself time to identifying unnecessary expenses and allocate resources basing on priority.
Agree with the family
If you already have a couple or family, you have to achieve harmony together. It is useless to want to make more effective use of your economic resources if you or others like you are not committed to reinventing their financial lives. Have a common agreement about the goals and above all, understand that every one of those involved have to make changes and sacrifices required, but to a common benefit of all.
Make a budget
A budget is the best financial planning tool. There is need to have a plan for each obligation; because frugality is not about staying until dawn making calculations. Simply seek paying yourself first and then live with the rest. For that first, you have to determine how much you want and how much you can save each month and then be sure to keep that money, whether in a savings account, your pension or invest. Once you’ve taken care of that, the remaining money is what you use to cover expenses.
The principle of frugality is very simple: you must make the difference between your needs and desires and consume intelligently. You must ask yourself this question before every purchase: is it what I really need? However, be careful not to confuse frugality and greed: A frugal person is not afraid to spend money, if the need is real. The miser does not like to spend money, even if it is a necessary purchase. Frugality is not austerity. You should not stop spending money, but you must spend it effectively according to your needs.