Frugality can become part of your everyday routine. Don’t believe us? Check out tips on how to cut expenses from Mrs. Frugalwoods.
Looking to improve your finances? It all starts with spending less money.
Remember: It’s Not About Money at First
Sounds strange, but it’s true: Budgeting and financial planning don’t actually start with your money. It starts with your goals. Identify what you want out of life—where you’d like to be in five or 10 years—and write it down. The act of putting pen to paper makes these goals seem more real and more attainable, so go ahead and commit in ink!
Once you know what you truly want out of life, you can orchestrate your finances to follow. If you have a partner, it’s crucial you have this conversation together. I find that long-term goals help keep my husband and me on the same page financially, and also with our lives and relationship more generally. How you manage your money will dictate the type of life you’ll have, so it makes sense to intertwine the acts of budgeting and long-term goal setting.
OK, Now It’s About Money
After identifying long-term goals, the next step is to track spending. I’m often shocked when I see my entire month’s spending all in one place! It’s so easy to brush aside expenses throughout the month as no big deal, but when we’re face-to-face with the total, it’s surprising how quickly all those $5 purchases add up. Plus, if I don’t know how much we’re spending every month, it’s nearly impossible to set savings goals. Tracking expenses identifies our baseline.
What’s Easy to Eliminate?
Now that we know where we’re spending our money, it’s time to pluck off those easy-to-eliminate expenses. Anything that you don’t use on a regular basis and anything that’s not in line with your priorities needs to go. Prime candidates for elimination are things like monthly subscription services (Bark Box, cable), takeout meals, and to-go coffees. Any expense I come across that I forgot I even had (or can’t recall what it’s for) definitely needs to go!
How Much Should You Save?
It can be challenging to start making these cuts, so I like to motivate myself with a bit of good old-fashioned math. For anything I’m debating eliminating from my budget, I first identify how frequently the expense occurs—is it weekly? Monthly? Daily? Then, I multiply to reveal how much I’m spending on the item in question every single year. So, for example, if I spent $75 a month on cable, that’s a whopping $900 every year. While $75 doesn’t sound like a whole lot on its own, $900 does. It’s a simple technique, but I find it helps me understand the trade-off between saving and spending more clearly.
Can You Curb Impulse Spending?
After deciding what I want to remove from my monthly budget, I like to put a few systems in place to ensure I won’t backslide on my promises to save more. Here are my favorite strategies:
- Delete any and all shopping or deals apps from my phone. If I can’t see it, I won’t buy it!
- No browsing through stores (online or otherwise) “just because…” That’s a surefire way to buy stuff I don’t need.
- Institute a 72-hour waiting period before buying any non-necessities. I don’t allow myself to buy anything right away (except for necessities like groceries and medicine). If I see something I want, or think of an item I need, I have to write it down on a list and wait a full 72 hours before buying it. This waiting period lets me cool off and gives me a chance to reconsider whether I really need the item. Most impulse buying happens before we’re able to fully consider the ramifications of a purchase. If we force ourselves to wait three days, that’s a pretty good amount of time to think things over. What I find, more often than not, is that I decide I don’t really need the item after 72 hours and simply delete it from my list.
Let’s Evaluate Your Groceries
With food being a necessity, it’s easy to gloss over a line item like groceries. However, expensive food is not. One of the most significant ways my husband and I reduced our spending was by economizing our grocery shopping. Take a careful look at what you’re buying at the store each week and ensure you’re not wasting any food, buying mostly raw ingredients and cooking from scratch, and shopping from a list created in advance.
Let’s Seek Out Cheaper Alternatives
For everything that I don’t want to give up, I brainstorm to see if I can figure out a free or cheap alternative. My husband and I love date nights—we used to go out to a restaurant, have a few drinks, and enjoy our time together. Not something we wanted to sacrifice! However, we really wanted to start saving those extra hundreds of dollars every month. So we began a tradition of date nights at home. We set aside our work, turn off our phones, and enjoy dinner and drinks together.
Sometimes my husband feels fancy and whips up a delicious meal, other times we just pop a frozen pizza in the oven, open a few beers, and play Scrabble. We realized that what was important to us—spending quality time relaxing and talking together—didn’t need to happen in a restaurant. We could create that special time for a fraction of the cost at home. Now that we have a child, our savings with these at-home date nights is even greater since we’d have to pay for a babysitter, too!
Other examples in my family include making our own coffee at home, watching TV for free through our Roku, and shopping used whenever possible.
Always Weigh Time vs. Money
Are there instances where you can trade a bit of your time in order to save money? While you have to carefully consider whether this trade-off is worth it, the savings can be tremendous and the time outlay insignificant.
For example, I love to do yoga and it wasn’t something I wanted to give up when my husband and I first started out on our extreme frugality journey. But I also couldn’t justify spending $18 per class. I inquired at my yoga studio and learned I could volunteer at the front desk for around 30 minutes a week in exchange for a few free classes. A perfect trade-off for me!
Reduce Your Expenses…Forever!
By carefully combing through our expenses and identifying what we can eliminate, substitute, or trade our time for, my husband and I have been able to save more than 70 percent of our income. The wonderful thing about this is that, for the most part, we only had to make these changes once. Now, we reap the benefits of lowered expenses for the rest of our lives. This is also a virtuous cycle: the less money we spend, the less money we need, and the more money we save.
What we’ve found is that, once you eliminate an expense—such as restaurant meals—you’re likely to adapt and build new, more frugal habits. There are so many alternatives to spending money, and I find I enjoy the creativity involved in building a frugal lifestyle.
Grownups, how do you plan to save money this year?
Mrs. Frugalwoods writes at frugalwoods.com
about her journey to financial independence by age 33
and a homestead in the woods with her husband, daughter,
and greyhound Frugal Hound.
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