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Frugal Living
Tip - Giving Yourself A Reason To Save Money
Jonni Good
In the US and much of the Western world, we equate money with happiness,
even though our personal experience seldom gives us reason to believe
that the old saying "you can't buy happiness" is anything less
than true. We assure ourselves that if we only get a raise or get a better
job or win the lottery, all of the stress of daily life will disappear
and we'll have time for those things in life we really enjoy.
This would be true, at least partially, if making more money allowed
us to have more money in the bank. However, each raise in pay also raises
our desire to spend, so a promotion at work can actually put us farther
into debt. How many people do we know who bring in over $100,000 a year
who are still living paycheck to paycheck? How many lottery winners end
up in bankruptcy court, wondering where all the money went and how they
managed to make such a muddle of this windfall that should have set them
up for a lifetime of financial security?
An option to spending as much or more than you make every month is to
live frugally - and it's refreshing to see the increase in interest in
the voluntary simplicity movement. Being intentionally frugal can actually
bring you the financial security that a high-paying job cannot. In fact,
if you go one step further to voluntary poverty, as I have, you may be
able to quit that job and actually do something that could really make
you feel fulfilled.
The one frugal living tip that makes the biggest difference is to simply
keep track of everything you spend for at least a month. You probably
won't keep it up for much longer than that, but it will give you an idea
of where your money is going, and whether or not the money you spend on
each item is really giving you the satisfaction you're paying for.
However, just keeping track won't help much unless you have a vision
of another way of life that would really give you pleasure or contentment.
Saving money for it's own sake feels like a sacrifice, but saving money
so you can retire early and start that little farm you've always wanted
would be a goal worth working for. Creating that goal may take some true
soul searching and many deep conversations with your family.
When you come up with a goal you all agree on, decide how much time it
will take to get there - this time frame is important, and you should
be as realistic as you can. Do you want to own your own home without a
mortgage? Will it take 5 years of frugal living? Or 10? Would you like
to retire all your credit card debt? How long will it take?
Once you have that goal in mind, the best way to start putting money
in the bank is to notice where you're spending your money now.
One thing most people discover is that the simple act of jotting down
the $3 you spend on coffee every morning, plus every other small or large
expenditure, will magically cause you to have money left over that you
ever had before. Keeping track causes us to be mindful of our choices,
and even without adding up any numbers or making any deep decisions, we
save money by spending more consciously.
Once you have at least a few weeks' worth of figures, you're ready to
get out the calculator. Divide the items on your list into any categories
that seem reasonable - such as lunch at work, utilities, dog food... Then
add up the columns to see how much you really spend.
Then, go one step further to give yourself a true shock - multiply the
amount you spend on each unnecessary category, like your morning coffee
at Starbucks, by the number of months you think it will take you to reach
that long-term goal.
If you spend $3.50 each working day at the local coffee shop, it doesn't
seem like a very big deal. Multiply that by the average of 20 working
days a month, and you may be startled to realize that you spend $70 a
month on coffee that you could make yourself in your own kitchen. But
the real eye-opener comes when you multiply that $70 times the number
of months you need to reach your goal of financial security.
If you are willing to spend 5 years in frugal living to pay down the
mortgage on your house or pay off all your credit cards, multiply your
monthly coffee money by 60 months, and you'll see $4200 on your calculator
screen. That 's enough money for a down payment on a reasonably priced
house, or to buy a good used car for your teenager. It's also enough to
pay at least several month's mortgage payments, or to put in the bank
for a medical emergency. $3.50 isn't an important amount of money, but
to almost anyone I know, $4200 is a serious amount of cash.
Do the same calculation for everything on your list that isn't truly
necessary, and you may discover that you can reduce the amount of time
you need to reach your long-term goal by several years or more. If your
credit card debts are weighing you down and causing daily stress, this
simple frugal living tip could lead to a complete elimination of debt
in just a year or less. In my mind, that's more important than a fancy
cup of coffee.
Jonni is the author of the new ebook that shows exactly how she went
from being flat broke to owning her own home in just 5 years. Learn how
to buy a house
without going into debt at http://www.BuyAHouseWithCash.com
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