How to Live frugally

Whether you’re struggling with a subsistence income or living a fairly comfortable life, sticking to a budget will help you better manage your money. That’s because it helps you better understand what you’re spending and know what needs to be cut. Budgeting isn’t always fun, but financial freedom is definitely worth the time to review your spending habits and create a realistic plan for money management!

Table of Contents

Set a budget

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Make a rough budget by subtracting expenses from income. To start budgeting, you need to add up all your earnings for a month. Next is to calculate the average cost for 1 month and any other money you have spent. Finally, subtract your expenses from your income to see if your outflows exceed your earnings. ^{[1] X Research Source}

Your income may include money you earn through work, contributions from family or others, and any payments or financial assistance you receive.
Your expenses will include bills like rent or mortgage and insurance, and expenses like food, clothing, books, and entertainment. Some of these expenses are fixed monthly (like rent), while others need to be averaged out (like food).
Try the following spreadsheet to create a rough budget: https://www.consumer.gov/content/make-budget-worksheet

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Set a spending limit based on a preliminary budget. Once you know roughly where your money is spent, review how you spend it. If there are certain areas where you are overspending, try cutting back gradually so that your budget is a little more generous. ^{[2] X Research Source}

Try breaking down your expenses into categories to see what you spend. For example, you could list expenses like rent, phone bills, and other utilities under the “Utilities” category. Expenses like food and restaurant meals can go under the “Food” category, and things like clothes and school supplies for the kids can go under the “Children.”
Unless you need to drastically cut costs, it’s best to start with small, achievable goals to save money. For example, if you find yourself spending too much on a live streaming service, you could start by canceling the channel you’re least using instead of cutting it all off at once.
When setting a budget, you should try to prioritize the things that you find most important. For example, while you probably don’t go out to restaurants and bars every night, if you can’t live without these things, you can find another item to cut back on, like canceling your TV package. cable.

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Track your spending to make sure you don’t go over your limit. It’s not enough just to set a limit, you also have to keep track of what you’re actually spending to make sure you don’t exceed it. The best way to do this will depend on what works best for you – it might be easier if you write down each item every time you buy, or you can look at your bank and credit card statements. at the end of the month to find out what you’ve spent. ^{[3] X Trusted Sources American Psychpogical Association Go to Source}

One benefit of keeping a record of all your purchases is that it’s easier to remember exactly what you bought, although many people find this tedious.
It’s important to know where you’re spending your money to avoid accidentally overspending.

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Set aside a portion of your budget for discretionary expenses. You will have a hard time living on a budget if it makes you feel like you’re not enjoying life. If possible, try to set aside a little money each month for your favorite things, like a night out with friends or buying new crafting materials. ^{[4] X Research Sources}

In fact, living on a budget can help you have more money to spend on things you like, because you’ll be less likely to randomly spend money on things you don’t really need.
You should be realistic – if you don’t know how to set aside an arbitrary amount in your budget, you should let it go.

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Deduct money from each check transferred to a savings account. It can seem hard to save when you’ve spent according to plan, but a small amount of money to save for emergencies or unexpected expenses will be your savior when you need it. Every time you receive a payment, you should deduct some to transfer to a savings account. Even if it doesn’t seem like much, you’ll soon see it add up! ^{[5] X Research Sources}

Start by setting a reasonable goal, such as saving 200,000-400 thousand per week for a few months. Once you feel more comfortable, you can challenge yourself to increase your savings, if possible.
Even just starting to save 100-200 thousand per month is still better than nothing.
Finally, you should try to save enough money to spend 3-6 months in case you can’t work.

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Try the envelope method for cash management. If you mainly use cash to pay for your expenses, it can sometimes be difficult to know where you spend your money. One way to keep track of cash is to divide the funds into different envelopes. Write on each envelope the name of each expense and use only the amount in it. ^{[6] X Research Sources}

For example, you could put on the envelope items like “Food,” “Clothes,” “Medical,” and “Restaurant.” If you’re going to have lunch with friends, you’ll grab an envelope that says “Restaurant.”
Don’t borrow money in other envelopes if you’re overspending, or you could miss out on other expenses by the end of the month.

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Schedule your bills to remember to pay them on time. Buy a calendar, planner, or download an app that keeps track of each monthly bill and due date. That way, you won’t accidentally forget to pay your bill and have to pay extra late fees and other penalties. ^{[7] X Trusted Source US Consumer Financial Protection Bureau Go to source}

Late payments can also hurt your budget in the long run. They can lower your credit score, which means you’ll pay higher interest rates on things like car loans or mortgages, and higher interest rates mean more monthly payments. also higher.

Maintain discipline

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Learn to refuse and stay away from temptation. The opportunities to spend money in this day and age seem endless. If you want to stick to your budget, you have to have willpower and discipline. This is not always easy to do, but always keep your goal in mind whenever you get the urge to buy something you don’t really need. Also, make it a habit to say no from time to time when your friends ask you out, especially if you tend to overstretch when you go out. ^{[8] X Trusted Source American Psychpogical Association Go to Source}

You may want to avoid places that might tempt you to overspend, especially in the beginning. If you shop a lot online, try unsubscribing from promotional emails so you don’t feel like you’ve missed something.
When you go out to play, bring cash and only spend it when you can.
Try repeating the “mantra” every time you want to spend money. For example, if you’re saving up for travel, your mantra would be “Sea vacation!”

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Automatic money transfer to a savings account. Each week, transfer a certain amount from the check you receive directly into a savings account. You’ll find it much easier if you don’t see it in the first place. ^{[9] X Research Source}

This also applies to retirement and health care accounts, if applicable.
If you get paid in cash, get in the habit of making a savings deposit as soon as you receive the money – preferably before you spend the money on anything.

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Set challenges for yourself. If you want to manage your money even better, try challenging yourself, such as bringing your lunch to work for 30 days or skipping buying new clothes for 3 months. Sometimes you just need an extra push to change a habit. ^{[10] X Research Source}

Try telling a friend about the challenge you’ve set for yourself to hold yourself accountable!

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Avoid using credit cards unless you can pay back the amounts spent. When you buy something with a credit card, you usually won’t have to pay interest if you pay it off each month. However, if you only pay the minimum payment amount, you will continue to be charged interest each month until the payment is completed. ^{[11] X Research Source}

A credit card is easy to overspend because it feels like it’s free. If you have a hard time controlling your spending, it’s better not to use a credit card at all.

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Keep trying, even if you mess up the plan. While it’s important to spend money responsibly, don’t blame yourself if you occasionally miss out on spending. Even if you’ve made a big mistake, try to focus on the future and keep going step by step until you reach your goal. ^{[12] X Research Source}

Remember that it takes time to form a habit, so don’t get discouraged when it’s hard to reach your goals. Sometimes this is a sign that you need to change your budget instead of adjusting how you spend it. Continue to evaluate and adjust your financial plan each month.

Find ways to save money

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Compare prices before shopping. The internet makes it easier than ever to see the price of an item in different stores, so you always have the opportunity to get the best deal. You can compare prices on everything from food and school supplies to phone plans to car loans, so use your available resources to avoid overspending. ^{[13] X Research Source}

Try searching websites like Google Shopping, Shopzilla, and Bizrate to compare prices from different retailers.
You should also compare different products and weigh the pros and cons of each to make sure you get what’s worth the money.

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Often cook at home. Even if you don’t think you eat out often, you’re probably spending more money than you realize on things like fast food and convenience store snacks. To avoid this, plan your meals in advance and go to the grocery store once a week to buy all the ingredients you need for each meal. ^{[14] X Research Source}

Take advantage of coupons to save more. In addition, you should also calculate the use of one ingredient for many meals.
If you have the opportunity to buy meat or a certain product at a cheap price, you should buy a lot of it and freeze it for later use.
Turn cheap ingredients into delicious dishes! For example, you can turn ramen noodles into a delicious meal by adding fried eggs and finely chopped scallions..

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Buy used and liquidated items whenever possible. You can save a lot of money if you don’t mind buying used stuff instead of buying new. Try going to thrift and consignment stores to see if there’s something you’re looking to buy. You can also grab a bargain by shopping for out-of-season clothing in the clearance section of your favorite stores. ^{[15] X Research Source}

Look for “free shipping” deals when you shop online, or use a membership coupon that comes with free shipping.
Be sure to check online resale and auction sites! However, you should be cautious before meeting a salesperson to buy something – it is best to go with someone you know, and leave immediately if you have a bad feeling.

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Cancel your cable plan if you use multiple streaming sites. If you spend most of your time watching shows on Netflix, Prime Video, or Hulu Cancel, you may find it perfectly fine without cable. Canceling cable TV is an increasingly popular option to save a little more money every month. ^{[16] X Research Source}

On the other hand, you may find services like internet, cable, and phone bundles more profitable. In this case, you can cancel streaming services that you don’t use often.

Steps

Set a budget

Maintain discipline

Find ways to save money

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