Last Updated on August 13, 2021
Frugal people often get a bad rap due to the misconceptions that have been attached to this way of living. Some may say frugalites are too cheap for opting out of expensive restaurant dinners; others may think they have a constant obsession with garage sale finds.
Despite these mixed opinions or perceptions, frugal living is not actually about living with complete restrictions or without any worldly possession.
Rather, being frugal is about being prudent with your money through careful planning and spending. It also means being resourceful and making the most of each dollar—every transaction serves a meaningful purpose.
What does it take to be frugal?
Grit, determination, and a whole lot of patience! To be frugal, one must acknowledge that resources in this life are finite and scare, so there is no room for wastage.
Before we proceed, a disclaimer: no one ever got rich just being frugal. Like minimalism, the after-effects of living a frugal lifestyle will help you manage your money better, but it doesn’t mean you are guaranteed to be a millionaire.
But being frugal will help you cultivate meaningful habits that could help you deal with debt. If you have plans to retire early, being frugal is one huge step in that direction.
You keep more of your money
The biggest benefit of frugal living is being able to save more money. Let’s say you are used to spending S$20 for lunch (total of S$100 weekly)—cutting this in half can help you save S$50. It may seem small, but it adds up.
Besides the actual cutback in cost, the other big win you will get is the mindset shift that you will experience from reducing your spending in the first place. Now, when you go out and about to buy necessities, it’s not just about buying the cheapest item on sale, you also start thinking about whether the item is necessary and how you’ll use it long-term.
Although everyone loves a sale, it doesn’t mean discount purchases are automatic wins. A bargain buy is still useless if you don’t end up using the item in the future.
A bargain buy is still useless if you don’t end up using the item in the future.
Frugal living isn’t just about saving money; it’s a lifestyle habit that helps reduce your overall spending and helps you manage your impulses better.
Reduce your spending not out of cheapness, but because you understand your own needs and wants.
It helps you make better financial decisions in the long-term
Those who live frugal lifestyles refuse to live paycheck to paycheck, and rather take each day one day at a time. For these folks, life is about achieving that long-term gain rather than the short-term joy, so they will always have the bigger picture in mind when making decisions.
Perhaps you’ve been driving your banger for years. It makes sense to replace it if it’s starting to cost you more on repairs, but if it isn’t, there’s no harm in saving that cash for something else. After all, a car is not an asset but a liability.
Being more frugal could help you achieve the dream you’ve envisioned 10 years down the road. Remember, short-term gains are important, but having a sustainable future is the bigger overarching goal.
It doesn’t mean one should stretch themselves too thin. But rather, make wiser choices when it comes to money management and spending.
At the end of the day, frugal living isn’t just about saving money – it’s part about learning and practising superior money management skills so you can live a good life.
Lesson: Improve your financial decisions so that your money is working in your best interest, not the other way around.
You can find contentment and happiness
For most people around the world today, achieving true and complete happiness is a major life goal.
Sure, not many of us truly know what will make us happy, but it’s been widely reported and studied that contentment is one of the keys to happiness.
When you are content, your happiness does not depend on others or your worldly possessions, but on what you feel from within. It’s not about relying on external validation or physical means, but on what your inner soul tells you.
Living a frugal life is one way to learn contentment.
Because you are not living paycheck to paycheck or constantly chasing after the latest new trend, you tend to be more at ease and happy by just being with yourself.
Don’t live paycheck to paycheck or constantly chase after the latest new trend.
People who are frugal havehey learned to improve their mindset and their circumstances. They choose to spend only on things that bring meaning and joy to their inner soul.
Lesson: Choosing to spend your money on worthwhile things takes conscious effort.
It fosters creativity and innovation
Let’s say you can only spend S$100 on food, gas and other necessities this week. How will you do it?
Being frugal pushes you to think beyond your comfort zone and your usual boundaries. If you were so used to spending a lot in a certain week, being frugal will force you to think of creative ways to spend so that you can still fulfill your necessities without going above your budget.
Anyone can spend with a limitless budget, but only frugal people are selective enough with their purchases. These folks go the extra mile to research alternatives to the items they need. This could sometimes manifest as endless garage sale visits, buying during massive knockdowns and sales, or reusing and recycling items. Living frugally will teach you how to look for cheaper alternatives.
Before making any purchase, always think about whether that item is something you can make from scratch, is something that is already on hand, or is something that you can just pick up at a thrift store for a cheaper price. It takes more effort – and thinking – to be frugal, but it also helps develop your creativity.
Lesson: Being creative with how you spend will help you find ways to spend less, and it also pushes you to think outside of your usual mind frame.
It reduces a big stress on your life
One of the biggest gains of living a more frugal life is that it helps reduce your overall stress.
Let’s be frank, the world is already stressful as it is, from the pandemic to thinking about paying off your debt, to managing your boss at work. It’s a tough world out there.
But to add to the mix, everybody has money worries—even people who have a lot of it.
Everybody has money worries—even people who have a lot of it.
In Singapore, money is the number one source of stress, especially among millennials. About 53% of Singaporeans say that money is the top source of stress in their lives, with that number increasing to 63% for millennials.
So, imagine living a life where you don’t have to be at the mercy of money. You could also have more self-control over your life and finances. But of course, not everyone is privileged enough to live this life as many struggles to meet ends meet.
Lesson: Having less in life may help you achieve better clarity and purpose. Studies have proven that, in essence, the less clutter, the less worry, right?
How can I start being frugal?
Just saving money doesn’t equate to being frugal. Instead, being frugal also requires you to commit to several small financial habits. Some of these include budgeting, cutting your daily expenses, lowering your monthly bills and embracing DIY projects.
Though saving and spending less than you usually do are the two key practices and behaviors that make up the core of living a frugal life, being frugal is also a mindset.
You can start your frugal journey by looking through your budget to see where you can cut back a little more. Start small and cut back gradually as it may be more effective in the long run.
For example, if you are used to spending S$30 weekly, try reducing it by S$5 and see if you can stick to that for the next three months. You don’t have to downsize your life immediately. Scroll down to see more tips on how to live a frugal life!
It starts with the basics. Create a well-planned budget to reduce your spending and stick to it! A budget helps you be more disciplined in achieving your goals of spending less, paying down debt, and saving. Here are some simple steps to creating a budget:
- Total your earning
- Assess your monthly expenses
- Test your spending habits by subtracting your monthly expenses from your earnings.
- Restructure your budget
- Try your budget out
- Assess your budget
- Tweak your budget where necessary
Pro tip: Try the Planner Bee app for this!
Live below your means
Creating a budget isn’t enough. After that, the next natural step in your frugal journey is to start living below your means. That probably means saying goodbye to usual Friday night outings or those usual dinner dates and café hopping for a while.
Living below your means enables you to save more money for unexpected expenses or events. It also helps you get through your days better if you are living paycheck to paycheck.
Soon, you will be able to start saving money immediately, pay off debt, and have some peace of mind.
Eliminate wasteful spending
Reclaim your power and take charge of your finances. It is your responsibility to ensure that every dollar counts.
One of the best ways to save up on cash, especially when things feel particularly tight is by eliminating wasteful spending.
Break away from having a “the latest and greatest” mindset.
You can do this by reducing your overall expenses: bring a packed lunch to work, be a bargain shopper, and change how you view and think of money.
This goal is to break away from having a “the latest and greatest” mindset to having a “we’ll work with what we have” thought process.
One of the biggest reasons to have savings to fall back on is in the event of a financial emergency. Saving money can also help you pay up large purchases, reduce debt, and provide you with a sense of financial freedom.