Do you want to achieve financial freedom and improve your standard of living?
Do you want to take charge of your life and master the art of managing money?
All you have to do is emulate the good financial habits of frugal people.
One thing frugal people know how to do is manage what they have and live within their means.
Not everyone will be ready to forego a life of luxury just to be comfortable but the fastest way to wealth is through proper management of personal finances.
Most people remain poor because they’re living a luxurious life that they cannot afford and this leads to mismanagement of funds.
They live paycheck to paycheck while struggling to get out of the rat race but they find themselves trapped because of the same bad financial habits they have.
Accumulating wealth takes a lot of hard work. Being rich doesn’t happen overnight unless you win the lottery.
But if it doesn’t happen, you have to invest several years of hard work into a career and be disciplined about saving some portion of the money you earn.
People who are genuinely committed to growing their wealth usually have frugal lifestyle habits that make saving money a little bit easier.
By implementing some of these good financial habits in your own life, you can increase your savings, become more disciplined and enjoy an abundant life.
If you’ve been struggling to put your finances in order and live a financially stable life, it’s likely that you’ve been handling your money poorly.
When you don’t take care of your money, it won’t stick around for long and you’ll find yourself trapped in an endless cycle of financial stress.
To help you become financially free, I’m going to share 15 healthy financial habits of frugal people that you can emulate to organize your finances.
15 GOOD FINANCIAL HABITS OF FRUGAL PEOPLE
#1 Follow a strict budget
Frugal people always set and follow realistic budgets. They know how much money comes in and where it goes every single month.
The problem most people have when it comes to saving money is lack of self-control and discipline.
When you spend money without a budget, you won’t achieve financial freedom because you’ll keep wasting money endlessly.
If you don’t keep track of your finances, your money will evaporate into thin air and you won’t be able to give an account of how it was used.
If you want to be financially stable, challenge yourself to create a simple budget and follow it strictly.
You can decide to use a paper budget or a budgeting app to keep you accountable.
#2 Limit your spending
One interesting thing about money is that it’s very hard to earn but really easy to spend.
It could take you several months to save $5,000 in your bank account but if you walk into Target or Walmart, you can exhaust that same amount of money on purchases in a few minutes.
The key to being rich is to watch your spending habits.
Don’t buy things you don’t really need in your life and stop buying things simply because they’re on sale or you’re being offered a huge discount.
Only buy relevant items you need at the moment or things you can’t survive without. Stop indulging in impulse purchases to feel happy.
#3 Buy groceries in bulk
It seems cheaper to buy items in small quantities because of the price but in the long run you’re spending more money.
The best way to save costs is to buy imperishable groceries in bulk at discount stores. You’ll save yourself a lot of cash this way due to the discount offered for bulk purchase.
This doesn’t mean you should go on a shopping spree. Figure out all the necessary groceries you consume everyday at home and buy them in large quantities.
For instance, you can buy more toiletries and food items because you’ll need them often. In the long run, you’ll discover that it’s cheaper to buy things you need in bulk.
#4 Avoid using credit cards
It can be really tempting to spend money when you’re out strolling or sightseeing around the neighborhood.
To avoid falling into the same money-spending hole every single time you go out, don’t use credit cards when you shop and leave your wallet at home when you’re going for a stroll.
When you shop for things you really need, always pay with cash. Before you leave the house, write a shopping list with projected prices and carry just enough money to pay for the items.
These are some of the good financial habits most frugal people have that prevent them from wasting money on unnecessary things.
#5 Have a side hustle
Most side hustles require a lot of money to start up but you can easily access alternative credit loans that will enable you create a business from your hobby.
Living on only one source of income can be detrimental to your financial growth. What happens if you lose your job tomorrow?
Frugal people always have a side hustle as a plan B to generate additional income for themselves without having to depend solely on an employer.
If you want to experience real financial stability, find something you enjoy doing and turn it into a money making machine. You’ll have extra money every month with a side hustle!
#6 Prepare home cooked meals
Do you often need food when you’re out of the house? Start cooking your own meals and package them in a lunch box so you don’t need to buy food in a fancy restaurant.
One of the biggest money wasters is buying food and beverages outside instead of preparing them at home.
If you enjoy getting together with friends for sodas, coffee, or sushi twice a week, you would end up spending around $10-$30 each a week.
What you should do instead is pick up everything you need to make food and drinks at the grocery store then host a backyard movie night at your place.
You can also brew great-tasting coffee from the comfort of your home with a programmable coffee maker.
Apart from the money saving aspect, home cooked meals are often healthier and more nutritious than takeouts.
#7 Save money regularly
Developing a regular saving habit requires a lot of compromise and discipline on your part.
Most people who live paycheck to paycheck often have pending expenses and debts every month. This frustrating cycle never allows them to save a dime for the rainy day.
If you find yourself in this cycle, I’ll advise you to create realistic financial goals and try to achieve them one after the other.
Make sure you clear all your immediate debts first before setting a savings goal you want to achieve.
To enable you save money monthly, pay yourself first as soon as your check comes in. Don’t jump into a spending spree; pay yourself first!
#8 Have an emergency fund
Aside from regular savings, frugal people also set aside an emergency fund for urgent expenses that are not planned.
This is necessary to help them sort out important financial problems before their salary is paid.
Life has ups and downs; it’s your responsibility to be ready for any emergency.
Setting aside money in emergency funds can become handy when you want to offset some urgent bills like paying to fix a leaking roof, visiting the doctor when you’re sick, stocking up on supplies during a crisis etc.
Having an emergency fund can help you in unforseen circumstances.
#9 Invest in profitable ventures
When it comes to investments, there are many fraudulent schemes that promise great returns to investors.
Frugal people know this and they’re careful enough to do a proper research before putting their money into any investment opportunity.
When they find a genuine investment that seems profitable, they invest in it no matter how small they can afford.
Being financially stable is often as a result of having multiple streams of income.
If you have spare cash that you don’t need urgently, invest in a profitable venture and let your money work for you.
#10 DIY handmade gifts for your loved ones
Have you considered how financially stressful holidays are and how much you spend on gifts for your loved ones?
Frugal people never buy souvenirs or gifts for their loved ones; they prefer to make handmade gifts with cheap supplies they can get without a hassle.
If you want to start saving money for your future, stop buying souvenirs and expensive gifts you can’t afford.
Instead of buying things people do not need for birthdays and holidays, give them thoughtful gifts made with love from you.
They’ll appreciate your thoughtfulness and the effort you put in to create something beautiful for them.
#11 Repair before buying new things
This particular habit is really common with frugal people. When something breaks down, they don’t throw it out immediately and get a replacement.
They assess whether it’s possible to fix it first and get in touch with a handyman or technician to see what can be done to extend the lifespan of the item.
Frugal people also love buying quality secondhand items to save costs. If you want to be frugal, don’t buy a new appliance as soon as it’s broken.
Try to access if fixing it would be a better option and look out for quality used products that are sold at auctions for cheaper rates.
#12 Live within your means
The number one problem people have when it comes to managing money is living a luxurious life they can’t afford and trying to please people with exorbitant purchases.
The truth is, when you compare yourself to others, you’ll end up struggling to be like them and living a totally fake life that doesn’t bring you happiness.
If your long-term goal is to be rich, you need to learn how to live within your means by budgeting carefully, paying with cash when you shop, allocating some portion of your income to savings or investments and saving ahead for big purchases.
#13 Learn how to say “No”
When you make the decision to become a frugal person, not everyone is going to understand and support your new frugal lifestyle.
For that exact reason, it is really important to learn how to say “No” and stand on your decision firmly.
If your friends and family members ask you to go out to dinner, for drinks or to go shopping with them, kindly say “No” if it’s not in your stipulated budget for the month.
It’s crucial to understand that you don’t need to please others and end up broke halfway through the month.
Sometimes, you could compromise a little by inviting your loved ones for a much cheaper get together at home. Just remember that if it’s way above your budget, don’t do it to please anyone.
#14 Plan ahead for big purchases
People often go into debt because they don’t plan ahead for a big purchase and they find themselves in a huge pile of debts every year.
Financial planning is very important to frugal people and they don’t execute any project without proper planning.
If you want to move to a new apartment, buy a new car, replace your TV or travel to the Maldives on vacation, start saving money ahead of time.
Don’t wait until the deadline is close before scrambling for a quick loan. Always prepare for big purchases to avoid getting into debt.
#15 Keep upgrading your money skills
If you want to master the art of managing money, you need to keep learning all you can about finance.
Frugal people constantly want to upgrade their financial status through reading, discussion, and experimenting with investments and budgeting schemes.
Learn all you can to help you hone your frugality skills and keep you focused on your long-term money goals.
The journey won’t be an easy one because good things never come easily.
Connect with like-minded individuals, read up about finance, follow top finance blogs and increase your chances of becoming financially stable.
Do you want to stop stressing about money all the time? Maybe you’re tired of living paycheck to paycheck and just want financial stability in your life.
If you’re ready to create financial security for yourself, these good financial habits will enable you to start accumulating wealth and organizing your personal finances.
All it really takes to be financially stable is a little bit of discipline and a lot of focus on what’s most important to you.
Always start or end the month with savings, then create a shopping list of necessary items you can’t live without and lastly, avoid using credit cards to purchase items.
When you apply these good financial habits of frugal people, you’ll be on your way to an abundant life with little or no financial crisis.
Recommended Reading:
Budgeting 101 for Couples: 5 Actionable Tips to Try
How to Manage Your Finances as a Couple
7 Ways Couples Can Remain Financially Stable During A Crisis
About The Author
Jennifer Dagi
Jennifer Dagi is happily married to her best friend and the love of her life.
As a relationship coach, she is passionate about helping couples build healthy and happy relationships.
She strongly believes communication and intimacy are the most important ingredients for building a successful relationship.
Join her on a fabulous journey to improve your love life one step at a time and don't forget to subscribe for weekly blog updates.