Well over the years of altering my lifestyle to be a bit more frugal and in line with my personal values I’ve noticed a few rules of thumb about living a frugal life.
- Cut the Obvious. If you don’t love it and you don’t need it, then don’t buy it. Cutting your spending is basically summed up in that phase. If you don’t love the item in question and you really don’t need it, that is your major hints that you can easily survive without it. So do your pocket book and yourself a favour and don’t spend the money.
- Cash flow is King. Having more cash coming in to your house than is leaving is key. The more excess cash flow you have per month the more choices you have. So in order to do that avoid monthly payments where possible, instead save up for the item in question and pay cash. Also then avoid any balance on your credit card and then your line of credit. In the end you even want your mortgage gone.
- Wants are unlimited. You will never satisfy all your wants in life. It is never going to happen, you will always want more. So instead of trying to fill them all, deal with your needs first. Then save up and buy a few of your most wanted of wants. Luxury can be ok, as long as you still know its a luxury.
- You don’t deserve anything. Contrary to your own belief you don’t actually deserve anything. You don’t deserve your car, your house or even you clothes. You are gifted to have them. Respect and treasure them as you should. After all recall the billions of people that live in huts in the world and who’s primary worry is about having enough food to eat for themselves and their families. So in that light remember to not get sucked into the fact you ‘deserve’ those new shoes or a computer.
- Some Emergency Cash is Required. So after years of only keeping a line of credit for emergencies I am even breaking down and putting aside some cash into a fund. Why? I realized you can’t pay your minimum balance on your LOC with more cash from the LOC. It creates a nasty cycle. So some cash in reserve is required. How much depends your own situation and your expenses (NOT your income).
- Happiness can be free. Some of the best moments of your life don’t have to cost a dime. Don’t worry about what your are suppose to have, but rather get what matters most to your life. Find someone to share your life with, have kids if you want to and be yourself. Life’s too short to waste it on pretending to be something you are not.
If you can master those skills you are well on your way to finding the frugal way, which is full of life, happiness and contentment. It’s knowing what is ‘enough’ for you.