Foreword
Today, frugal has an entirely different meaning than it did years ago. People actually live, but they are trying to spend money on things that are priorities, and spend less where they can. People have different goals – some have had to take lower paying jobs and are struggling to make ends meet. Some want to be able to stay at home and raise their children. Some people just want to step away from our consumer driven society and live a simpler life. Others have specific dreams of owning a home or achieving financial independence. Then there are those of us stuck on a financial merry go round, and we just want off.
No one wants to spend any more than they need to spend. Even so, sometimes it’s difficult to find the best way to achieve your goals. Everyday retailers and manufactures are pulling out all the bells and whistles to entice you to spend your money. It's hard to know when you are getting the best deal for your money.
Whatever the reason is, you have picked up a copy of this book to try to do something different in your life. While this isn’t the be all - end all
of all of frugal living books, it does examine how to best exploit market cycles to spend less for the things you need or want. It examines how to time and anticipate your needs so that you spend the smallest amount necessary to achieve your goals. I’ve also outlined practical tips and ideas about using technology to save money and earn money - including an entire section on coupons in our digital age. It examines many items that have multiple uses, and finally it examines practical, old fashioned, tried and true methods, hands-on tips and ideas to save money and live frugally. Ultimately, it’s about living well, without breaking the bank.
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January
One of the biggest secrets about living frugally is planning. Successful people have goals and make plans to achieve those goals. Think about the goals you would like to accomplish this year. Do you want to get out of debt? Is there a family vacation you have been dreaming about? Do you need to pay off your student loans? Do you need to start a college fund for your kids? Have you started a retirement fund yet? Perhaps you want to be a stay at home parent, or start your own business. Maybe you just want to buy a new car or that big flat screen TV you have been salivating over. What are your life goals this year? What are your financial goals this year? Now is the time to ask yourself these important questions!
Here's the plan, and yes, you actually have to have a plan:
Step 1. Write down your goal. If you don't write it down, it’s just a wish. You can't build a foundation for a castle in the sky. The purpose of writing down your goal is to make yourself accountable. After you write down your goal, you need to look at it weekly to remind yourself of what you are doing and why you're doing. Sometimes goals require uncomfortable sacrifices and if you have that reminder in front of you, it allows you to stay focused on what is important to you.
Step 2. Write down what it will take to accomplish that goal.
Does it mean picking up an extra shift or working a second job?
Does it require giving up your daily trip to Starbucks for a Venti Mocha?
Does it require you to start living a more frugal lifestyle?
How much do you need to save to accomplish your goal?
How long will it take to achieve your goal?
Where are you going to save your money?
How much time or money are you willing to sacrifice each week to achieve your goal?
Step 3. This is the moment when you must do the hard work. Unless you want to be like Sisyphus, rolling a rock up a hill, only to have it crash back down on top of you, you have to be ready to put your plan into action. While I recommend creating a budget, I understand that not every situation allows for that. At the least, you need to know how much you earn and prioritize your spending from there. It will help to look at your past spending to see how you have spent your money. This will take about 2 hours of your time, but it is worth every second. It never hurts to do a financial checkup, even if you do budget your expenses.
First, pull your bank and credit card statements from two months last year. Try to avoid choosing a holiday month, as it won’t be an accurate representation of how you spent your money for an average month. Now divide your spending into categories: housing, utilities, transportation, insurance, medical, entertainment, food, clothing, savings, and miscellaneous.
What do you absolutely need to pay every month?
How much can you reasonably set aside to achieve your goal?
What are you spending money on each month that can be eliminated?
Is there a way to reduce or consolidate what you have to spend?
Once you are aware of where your money is spent, you can take it a step further. Become conscious of how you're spending your money.
Think about what you are purchasing and why?
Is there a more affordable way to achieve what you need?
Can you borrow the item or barter for it?
Do you have a coupon or discount?
Can you survive
