Changing your attitude is one of the most direct ways of changing your life. It is true when our elders say that noone else is responsible for what happens to you but you. So, instead of complaining about things which you don’t like in your life, you can take the required steps of altering your lifestyle. Though you won’t be surprised to know this, this also has a direct relation with your finances.
Are you tired of living paycheck to paycheck? Have you been regularly cutting off on your phone expenses or making lame excuses about skipping dinners with friends and family? If answered yes, it’s high time you adopt a frugal lifestyle by following some thrifty rules. Let’s take a look at some of the best ways in which you can lead a frugal life.
- Know your dollars: You should be ridiculously well-acquainted with the exact amount that you make in a month, the amount that you spend and where each and every dollar goes. These are some of the baby steps to frugal living. Without having this basic knowledge on your money, saving money and successful budgeting will be a far-distant dream.
- Stay within your means: When you’re a beginner, living within your means is definitely going to be a great start but there’s a subtle difference between living within your means and living below your means. The latter is where the actual magic happens. The extra money that you generate is the capita for saving and this is the main thing which drives long term wealth building.
- Know the difference between investing and spending: You may feel that spending and investing is the same thing but they’re entirely different. Investing happens when you dedicate cash for some tangible asset like your home, job training or shares in mutual funds. Spending on the other hand is using cash for something that will depreciate in value and not offer you any kind of long-term benefit. Dinners, a new summer wardrobe are some such expenses. Being frugal needs you to understand this difference.
- Wants and needs are different: There is a thin line between what you want and what you need. Needs are necessities, things which you can’t do without and wants are things which you don’t need but you wish to own. Before purchasing anything, check whether it is a need or a want.
Currently, when we speak about frugal living, all we do is talk about some baby financial steps. It seems that through the past few generations, people aren’t using common financial sense and hence they perhaps need to buck up with their money decisions.
Amit Singh is a founder of Theinternationalfinance.com he share his immense knowledge of Finance in this blog.