Can we humans ever stop complicating things? You will hear all sorts of things about living frugally which will only make you confused. The whole idea of such a lifestyle is to make things simpler. So stop contemplating silly suggestions and hold tightly to the following five rules as that is all there is to frugality:
Become a Calculator and Count Your Money
This is the core of living frugally because you need to know how much money is coming and how much money is going. This is how you set up the base. You should be accurate with the numbers and know how much you make in a month and how much is spent on what. Without this knowledge, you can never really create a budget for yourself. And remember the devil is in the detail.
Spent a Little Less Than Your Ability
If you already spend within your means, that is great. But to really get the wheels going on the saving run, you must spend below than easily can. The extra money that you will have will gradually add to your long term wealth. You should be able to do that and save money most of the times. If you are not able to achieve lower spending, maybe it is time to cut down some expenses or perhaps make some extra cash.
Invest Rather Than Spend
Investing is not essentially the same as spending. The difference is in the life of the return you get. You spend money on a perfume which lasts about a month or two and you invest in an in-house garden which keeps giving you fresh basil for years. The value or return on investment may increase with time whereas with spending it will most likely decrease. Of course, you cannot live without spending and no one is asking you to. But in some matters, choose to invest where you know the outcome will eventually save you money. It can be anything from clothes to tools around the house.
Don’t Compromise on Quality
Most people think that living economically means to find the cheapest things. Well, to some extent it is but quality can play a big role in helping you save money. The goal should not be to find the lowest price but to find the best value for money. Which is better, buying a jacket every winter or buying a good quality jacket that lasts for quite a lot of winters?
Separate Wants From Needs
If only everyone understood the difference between wants and needs, we would not have high debts. Now that so many different kinds of gadgets and machines are out there and the marketers really just putting it in your face, ask yourself do you really need it? Our needs are pretty simple and yes sometimes we do want things, but it is up to you to decide what you are going to spend your money on.
These rules are not just for people who have embarked on the frugality journey, they are for anyone and everyone. It can lead to a balanced lifestyle and give you financial stability.