Prices are rising, and living a consumer-oriented lifestyle has become a daily habit for many of us. If you don’t have good financial management, it’s no surprise that your money runs out quickly!
The solution? Many Gen Zs and millennials are now adopting frugal living as a way to save more. The goal is clear: to reduce expenses and be smarter with money.
But actually, the frugal living lifestyle has a more profound concept. So, how do you apply it? What are the benefits? For those curious, check out the explanation in this article!
According to the Oxford Dictionary, frugal means spending money minimally or consuming things in moderation. Simply put, frugal living is a minimalist lifestyle focused on cutting expenses.
Sounds simple, right? But don’t get it wrong, frugal living is different from just being thrifty. This lifestyle emphasizes more extreme savings, to the point where you’re willing to skip hanging out at cafes, watching movies, buying cute but non-essential items, and other simple desires.
But remember, frugal living doesn’t mean compromising your health or quality of life! This lifestyle still prioritizes quality of life but from a different perspective.
For example, you can save money while still eating nutritious foods like vegetables, fish, and chicken. However, the focus is on cooking at home rather than buying food outside, which is relatively more expensive. It’s not just cheaper, but healthier too!
Based on the concept we discussed, frugal living naturally has some goals it aims to achieve. Here are a few goals of frugal living you should know before you start:
The main goal of a frugal living lifestyle is to manage your salary more wisely.
By cutting down on daily and monthly expenses, you’ll have a better cash flow. Why do this? So you won’t be left wondering where all your paychecks go at the end of each month.
If you’re already stuck in a consumptive lifestyle, it’s time to consider starting frugal living! The goal of this thrifty lifestyle is to curb hedonistic and excessive habits.
Following every trend that comes along is never-ending! That’s why frugal living adherents aim to avoid FOMO (fear of missing out) or blindly following trends.
Frugal living strongly encourages people not to accumulate debt everywhere. That’s why you need to cut down on expenses and buy items according to your budget.
Having debt isn’t necessarily wrong as long as you can repay it on time. But if you keep paying late or even end up defaulting, it will impact your credit score evaluation. So, be wiser!
Frugal living isn’t just about saving money; it’s also about the benefits you’ll experience in the future. Here are some of them:
Frugal living suits those who love to find better deals. With this lifestyle, you’ll strive to find substitutes for expensive items with cheaper and higher-quality options.
Circumstances will push you to look for promos, use memberships, redeem points, etc. Without realizing it, you’ll have more alternatives to meet your needs and wants.
A significant advantage of frugal living is being more prepared when it comes to saving and having emergency funds. These funds are crucial for the future.
You won’t easily be tempted to use the savings you’ve set aside just to satisfy temporary wants. Your income will be more focused on essential needs.
Who doesn’t dream of achieving financial freedom? It’s probably everyone’s dream! This is a circumstance in which you live without financial worries because you’ve got guaranteed savings and emergency funds.
The best way to achieve financial freedom is to adopt a frugal living lifestyle.
So, interested in starting a frugal living lifestyle? If so, try applying these steps to make it more precise and directed:
Budgeting isn’t just for those who want to live frugally; it applies to all lifestyles! Monthly budgeting helps you avoid poor financial management.
Budgeting means keeping a detailed record of your income and expenses. List from the most primary and urgent needs to the least necessary ones. Ensure that no obligations are overlooked, like paying credit card bills or utility expenses.
Record all expenses, even the smallest transactions. This way, you’ll get used to saving.
If you’re serious about adopting frugal living, you’ll have to stop buying things just because they’re "cute." This lifestyle embraces minimalism, avoiding consumerist or temporary purchases.
Carefully choose what’s genuinely needed. An alternative is to use a credit card that offers plenty of benefits.
For example, Honest Credit Card users get special deals, like IDR 5K movie tickets at CGV every Thursday. These perks help you stick to your frugal living plan without sacrificing too much.
Also, you don't need to worry about becoming overly consumptive. The Honest app automatically records transaction details in real time every time the card is used. This way, you can quickly check and evaluate your transaction history to ensure it aligns with your needs.
Always allocate more money towards savings. Having a substantial amount in savings makes you feel more secure in the future. You don’t need to worry about expenses.
This can definitely be achieved if you start saving from now. In this case, you can apply the 50-30-20 rule. Allocate 50% of your income for essential needs (including bills, debt payments, etc.), 30% for other expenses, and 20% for savings/investments/emergency funds.
Remember to allocate, not just set aside! Separate the money early to make sure it’s used for its intended purpose.
Now that you’re familiar with the frugal living lifestyle, it’s the right time to start! It’s never too late to adopt a frugal lifestyle and build a healthy financial future.
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