How to Be Frugal – 5 Easy Steps
How to Be Frugal – Learn How In 5 Easy Steps
Renowned CPA and widely acknowledged financial expert, Clare K. Levison, launched her new book “Frugal Isn’t Cheap.” She explains that knowing how to be frugal in your financial decisions doesn’t mean that you have to compromise on your lifestyle. The book contains practical advice along with real-life case studies to infuse a completely new sense of financial management, so that you can save a considerable amount of money without affecting your way of living.
Levison explains that people should understand the principle of how to be frugal by incorporating frugality in their financial decisions. They can not only save money, but also have a much better lifestyle. She goes on further to clarify the misconception that frugal financial decisions don’t create any limitations or misery in your life as most individuals think. Once you are able to relieve yourself from the temptations of possession and material consciousness, you get the avenues of leading a more soul satisfying life by spending time with your friends and family.
Levison declares she launched her book to encourage rationality as the permanent force behind the spending behavior so that people can lead a better life. The key to leading an emotionally satisfying life, and thus real fun and motivation of life, revolves around decisions on how to be frugal. The reduction in materialistic consciousness brings financial liberty. The financial freedom eliminates any need in getting money from the banks, credit-card companies or even your parents to meet your financial obligations. Levison suggests the following five tips for living a frugal life:
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1. Find a way to save every day
Levison suggests that people should make it a habit to save money on at least one thing each day. She explains, if you have your own style and self-confidence, you will realize that there is no need to accumulate brand name clothing and shoes, which may have already found their way to your closet. The $15 sweater purchased from the consignment store or bought on sale probably looks just as good as any other and you learned how to be frugal.
Levision suggests numerous methods such as renting DVDs instead of buying them or spending money on movie tickets. You can also save a lot of money by avoiding designer clothes. She advises keeping your savings in a separate container, so that when you see the amount of money saved during the week, it will boost your confidence and motivation to save more money. Debit card users can also get similar results by realizing the savings generated from their checking account at the end of the week.
2. Start an automatic savings plan
Levison suggests that once you have realized the potential of saving each day, you should move ahead to save some percentage of every paycheck. She recommends saving 20 percent out of every paycheck, but that might be a big bite to begin with for most individuals. We suggest that you can start with a lower percentage and gradually increase it attain 20 percent. If your budget can handle that amount.
Levison recommends a $1,000 emergency fund for individuals having any debt obligations rather than holding the entire extra cash as savings. She suggests that you should divide the money that you can save on 50-50 basis to be channeled equally for creating emergency fund and meeting debt obligation. Once the $1000 emergency fund is created, all your savings should be channeled to eliminating debt.
3. Make a list of goals
Levison suggests that you should make a list of goals that you wish to achieve in your life, such as starting your own business, remodeling your home, buying a new home or perhaps a retirement condo in Florida, or simply to learn how to be frugal in your daily living.
She explains that awareness of your goals in life lets you remain focused on achieving them. Your savings are meant to create long-term investment for your future.
She suggests that your short-term goals for fun and entertainment like vacations, etc. should be meted out from the savings of an entertainment budget. This could be accomplished by fewer restaurant meals and other similar items. However, you need to be very cautious of spending all your savings on short term entertainment. Levison emphasizes that the principle of how to be frugal implies generation of long term wealth.
4. Find a way to increase your income
Levison suggests that you can lead a simple life if you can get rid of your materialistic wants and desires. This will allow you to generate extra income by selling items on eBay or Craigslist that you no longer need in your simple lifestyle. You should consider freelancing or perhaps some type of contract work to generate extra income. She recommends that the extra income should go to your direct savings.
5. Become a bargain hunter
Levison suggests that you should develop a habit of finding the most rational and economic options regardless of the amount you are going to spend. Learn how to be frugal in all you do.
She mentions the use of generic medicines as one of the tips to start your savings and suggested channeling the difference in cost to your saving’s. Some other tips on how to be frugal include shopping deals and inexpensive hotel rooms when going on vacation. She reminds us that getting in the habit of choosing economic and rational products or services, will show up in greater savings when we purchase expensive items such as cars or a home. She explains that the ability to rationalize our expenses will allow us to generate greater sums of money over time and pave the way to long-term financial independence just learning how to be frugal.