One of the keys to gain control of your finances and pay off debt – apart from creating a budget and sticking to a debt repayment plan– is learning how to live frugally. The term “frugality” is often associated with pinching pennies and depriving yourself of things that bring you joy, when in fact the opposite is true.
Frugal living isn’t about living as cheaply as you can. Rather, it’s about making mindful choices that allows you to save money so that you can pay off your debt faster and enjoy the small – and big – things in life.
To live frugally, you just need to keep a simple personal finance mantra in mind: spend less than you earn. Achieving this can be done through a combination of rationalizing your spending and cutting your expenses in different areas of your life.
Here are some frugal living ideas you can incorporate in different areas of your life so you’ll know how to live frugally and save money.
Transportation and Housing
- Go with one car. The average person spends over $9,000 per year for the privilege of driving their own vehicle – we’re talking about one vehicle here. Many families have two cars. For these families, even if they’ve paid off one vehicle, the cost of insurance, fuel, parking, repairs and routine maintenance can quickly add up. If it’s possible, consider taking public transportation to work. It’s 80% cheaper than owning and using a car. If you live close enough to work, you could also consider walking or biking. If two cars are necessary, consider trading in your car for something more fuel efficient. Instead of an SUV or larger car, consider getting a smaller, sub-compact vehicle that is good on gas.
- Consider downsizing your home. Just because you can afford a larger house or an apartment in the city centre doesn’t mean you need to. If you can comfortably live in a smaller home or in an apartment just outside the downtown core, you could save thousands of dollars a year.