In the fast paced life of today’s world, we have pretty much everything at our fingertips. While that is fantastic in so many ways, it can also be really financially problematic. This land of instant gratification can make it so easy for our money to slip right out of our hands. And when that happens, all of our hard work to become financially fit goes out the window with it. So, here are 4 great ways to help you stay frugal with your money. Even when Amazon Prime day is lurking around the corner!
#1 Pay off credit card monthly
Even if you prefer to pay cash whenever possible, using a credit card is just much easier to get things in life done these days. In fact, approximately 80% of us prefer a credit card over cash for transactions, and most retailers prefer this method of payment as well. But, paying with a credit card for the majority of your purchases can also make it extremely easy to rack up credit card debt.
The best way to avoid this is to make sure you pay off your credit card(s) in full every month. When you do this, you avoid any interest charges from accruing. Plus you will still get to take advantage of the credit card rewards, which makes it more like free money.
I suggest checking your balance weekly so that you know exactly where you’re at with your spending. We do this every Sunday when we have our budget meetings and it helps us stay frugal.
#2 Open a high yield savings account
No matter what your debt-to-income ratio is, there is always room to save something. It could be as little as $20 a month, but that will add up over time. We’ve found the best way to bulk up our savings is to switch to a high yield savings account.
A regular savings account at the bigger banks are typically giving out minimal interest on your money. Not even enough to keep up with inflation. But, the high yield savings account with MySavingsDirect that we use is currently giving us 4.35% interest on our money. While that may not seem like a ton, even this little bit helps us to stay frugal by saving a little bit more each month.
Every week when we have our budget meeting we discuss how much we can put in there. But for those who get a regular paycheck, putting a specific minimum amount in each month can really help boost your savings faster.
#3 stay frugal by determining Needs vs wants
Setting up your financial goals and a good budget are good first steps. But staying on track can certainly be difficult when life happens, or a really good sale on something you’ve been eying. This is the time for you to dig deep into needs vs. wants.
Determining if the item/service is a need or a want can help you be more disciplined about your money and stay frugal. Before you pull the trigger on anything, it’s good to think long and hard about any purchases.
If it is a need, then go ahead and do it. But if the item is actually something you want instead, it’s usually best to hold off. If you still want the thing after you’ve really thought about it for some time, and it’s within your budget, then go for it.
But just remember that every “want” you purchase can derail you even a little bit from overall financial freedom. So, it better be something really good!
#4 avoid peer pressure
In the game of financial freedom, you aren’t even necessarily your own worst enemy. Friends and family can play havoc with your own personal finances if you let them.
We all want to have a good time with our friends and family, but it doesn’t have to kill you financially to do so. This is the part where you should budget for some fun and entertainment in your monthly budget. Once you decide how much that monthly allowance is, don’t go over it. Having this in place ahead of time will help you feel more freedom to relax and have a good time, while still staying frugal.
stay frugal summary
Overall, there are plenty of great ways to help you stay frugal if it’s really that important to you. And I think, for most of us, that’s the case. But we also don’t want to live life only to reach certain financial goals. We have to enjoy living life at the same time. Everything in life is about balance, and frugal finance management is no different. So, to help keep yourself on track, you should:
- Pay off your credit card monthly
- Consider opening a high yield savings account
- Determine your needs vs. wants
- Avoid peer pressure like the plague
When you can do all of these things regularly, the balance you seek between enjoying life and creating wealth should be much easier to come by.
What are some of your best tips and tricks to stay frugal?