When I learn about financial independence, I have started to adjust my life according to this new goal. What I didn't know is the life that I am living in now is call frugal living. Frugal living means adjusting the priorities of life by focusing more on things that are important. As a husband and a father, my top priority would be to provide for my family, both now and also in the future.
But how does frugal living works?
Frugal living works in 3 different areas:
- Smarter Money Management
- Smarter Spending
- Smarter Lifestyle
Smarter money management
When you know what is going on with all your money, you would be able to make smarter decisions. You will know if you should save or spend it. You would know if that something is really worth your money or not. And the only way to know what is going on with your money is to have a cash flow records (aka track your money).
Record all the money that comes in and go out. Over a month, you will find some surprises on where did your money went to. And you will start to be more mindful of how you are spending. That is what we call smarter money management.
Smarter spending
As mentioned, once you know where you are spending your money, you would be more mindful of how much you are spending. You would start to look for alternatives whereby you would still get the same result but at a lower price. This is what we call stretching the money.
You will also start looking for possible ways to get cashback, discount coupon, rebate, and up to possible buying in bulk and stockpiling certain items that you found at an unbeatable price. Another way of smart spending is when you know when you would not spend it. When the purchase doesn’t fit into your budget, you would wait until the item goes on sales before buying it. That is what I call smarter spending.
Smarter lifestyle
Do you know that the supermarket/hypermarket/retail stores are charging you RM0.20 for each plastic bag that they provide for you? It may not seem much but if every 3 days, you would go for grocery shopping, 1 one year, you will be paying RM24 just for 1 plastic bag. What if you are taking 2 plastic bags? That is RM48! So, instead of continuing using plastic bags, use a recycle bag. It is much more convenient and cheaper and stronger too.
Also, instead of eating out every other day, cook the meal at home and enjoy the more wholesome meal. Have fun during the process. Or bring your lunch from home and you can skip driving out of office to buy your lunch. That is what we call a smarter lifestyle.
Why Live Frugally?
Frugal living unlocks a world of possibilities. You can pay off all your debts, pay for your child's education, retire early, travel the world, etc. It may not be an immediate result but eventually, you will get there.
Are you with me?
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