We are no strangers to frugal living for beginners. In fact, when I quit my job more than five years ago, our household lost $60,000 a year. It was a huge hit and we had to make dramatic changes to our lifestyle.
I quit my job kind of suddenly to stay home with our 10-month old son who had chronic respiratory infections from birth. We didn’t really have a plan in place and had to figure things out pretty quickly.
We both had always made plenty of money and NEVER lived by a budget. When I quit my job, we had to create a solid household budget so that we could plan our expenses.
At the time, it was very stressful. But, now we are both very thankful for the experience because it gave us the opportunity to form a better relationship with money.
Having a budget for your household means having a way to make your money work for you. To leverage your paychecks into the lifestyle that you want.
A lot of people think of starting a budget as a bad thing. But, it really just means that you are being mindful of how you spend your money.
It’s the first step to holistic wealth management and a perfect place to start to form a good relationship with money. There are so many benefits to having a budget but, did you know that it can actually improve your overall health?
Think of it this way …
You go to your job every day and *mostly* hate it. Then, once a month you get a paycheck. You cash your paycheck and promptly take three $100 bills and rip them into pieces and put them in the trash.
Does that make any sense?
But, that’s basically what you’re doing each month when you don’t have a budget. Creating a monthly plan for your money and working to be a frugal or mindful of what you spend money on is part of living a healthy life.
As much as I hated budgeting, I definitely appreciate learning it because I have no stress about money in my life anymore. And, the more that I can reduce stress in my life, the happier and healthier I’m going to live.
What Does It Mean To Be A Frugal Person?
In our household, being frugal means being mindful of money and spending.
In other words, thinking about what we are spending money on BEFORE we spend the money. We don’t consider being frugal to be a bad thing.
That said, hubs and I would both rather not have to even think about money. If we won the lottery and didn’t have to ever think about how much we were spending … that would be ideal. It’s like, one less thing to think about!
But, since we don’t even play the lottery, I don’t ever see that happening. So, we follow our budget and work hard to be frugal.
I used to think that being frugal meant spending 19-hours a day clipping coupons and making your own cereal.
But, now I realize that working to be frugal really just means that I get to live the life that I choose.
For instance, if we went out to dinner three nights a week, instead of using meal planning and a grocery budget, we would spend anywhere from $60 to $100 per week.
That’s $240 to $400 per month just on eating dinner from a restaurant!
That might not seem like a big deal at first glance. But, when you think about how that could be four trips to the water slides this summer ~ it’s a huge deal.
I would MUCH rather take my kiddos on a Tuesday to the water slides and spend the whole day having fun and not fighting the crowds than grabbing dinner takeout from Roadhouse.
When you work to be frugal, you are basically buying yourself a lifestyle of your own design. Instead of being a slave to your job and living paycheck to paycheck, you are taking that money that you WORKED for and making it work for you.
What Is The Difference Between Frugal And Stingy (Cheap)?
I think there is definitely a line between frugal and cheap. And, I think people cross that line when they stop thinking about money as a tool that they can use to fund the lifestyle they choose.
When you are cheap, you would rather have the money than the experience.
When you are frugal, you are being thoughtful about which experience you would prefer.
Working freelance from home and having an irregular paycheck can be scary sometimes. But, I feel secure that we have a budget and that we think through any purchases that we make so we always have a plan B.
I choose the experience of having a flexible schedule and more freedom in my day over the steady paycheck and benefits of a typical 9 to 5.
So many people think of money as some kind of barometer for measuring their success in life.
I think it’s very easy to think of yourself as being better than someone else just because you have a bigger house or a nicer car.
But, if a person is living the life that they choose and is free of the burden of debt, they actually have MORE – regardless of their car or house.
And, by debt, I don’t just mean how many loans they have. When you are in debt, you are obligated to certain behaviors. You have to keep up appearances and maintain a certain lifestyle because you have allowed it to define you.
But, when you are working to be frugal you are making sound decisions about the lifestyle that truly makes you happy. And, that makes you debt-free in the sense that any loans you have are a choice and you are using them to leverage a lifestyle that you love.
Frugal Living For Beginners
So, if you are ready to move towards holistic wealth management then, your first step is to start a budget.
Make sure that you know the bare minimum amount that you need to make each month to cover your living expenses.
The next step is to learn to be frugal.
You need to learn to think about spending money before you spend it and make sure that what you are spending it on is going to get you closer to your goals.
View Being Frugal As A Good Thing
Well, you’ve made it to this point in life using certain spending habits. How’s that working for you?
My guess is: not great since you’re reading this post.
So, why not try something else!?!
Accept that being frugal is not a bad thing. It’s not a last-ditch effort that only losers use when they’re broke. Learning to be frugal is a tool that anyone can use to improve their life.
Change your mind about what learning to be frugal means and own it.
Your spending habits have not been working for you. And, now you’re ready to embrace a more holistic way of managing your income and debt.
If you don’t change your mind about what it means to be frugal – you’re going to have a much harder time with this process.
Learn to be frugal and use it as a tool to achieve your goals. It’s really just another skill and we could all use more skills, right!?
Reassess Your Car Payment
When I quit my job to stay home with our son, the first thing we did was get rid of our second car. We didn’t need it. Only one of us was leaving the house to go to work at the time. And, if I wanted to take the kids somewhere, I would just drop hubs off at work and take the car.
Getting rid of our second car meant getting rid of the $500 payment and that made a big dent in our debt to income ratio. Again, we were desperate because I quit my job pretty suddenly. So, I’m not saying you HAVE to switch to a one-car household.
But, I am recommending that you take a look at your car payments and see if there is any room to reduce the total amount that you pay. Keep in mind, when we got rid of our second car payment we also reduced the car insurance and gasoline bills for the month.
Experts recommend that your total monthly vehicle expense (including maintenance, insurance, gasoline, and oil changes) not exceed 10% of your gross monthly income.
So, if you make $40,000 a year, that’s $3,333 a month. Your total vehicle expense should not exceed $333. That means the car payment, insurance, gasoline and oil changes should not exceed $333 a month. As a general rule. Of course, if you can get a hooptie for a couple grand and not have a car payment, at all … that would awesome!
Set A Clear Line Between Need And Want
It is very easy to feel like you need everything – especially when you’re in the habit of spending money without really thinking about it.
We humans are very good at justifying pretty much any decision that we make.
When you are learning to be frugal you have to set boundaries around your needs. In other words, you have to set a clear line between needs and wants.
When you have your household budget designed and in place, you need to follow it.
If there is a purchase that you want to make but, it isn’t on your budget, you better make damn sure it is truly a need and not a want.
The easiest way to do that is to ask yourself three questions before you make a purchase:
How Many Hours Of Work Does This Cost?
This is a very powerful question, especially when you are working towards a goal. Suddenly, every hour that you work outside of the home is more weighted – it has some baggage.
For instance, imagine you have made your household budget and calculated the minimum monthly income you need to make. Let’s say that amount is $3,000 a month.
For every purchase outside of that $3,000 a month minimum – you are adding time to how many hours you have to work.
Obviously, if you work a 40-hr week or are a salaried employee, you’re not *literally* adding hours to your work schedule. But, if you think about it that way, you may find that in a few years you could only work part-time and still have plenty of money.
Will This Purchase Help Me Reach My Goals?
There are some purchases that will help your cause and some that won’t.
For instance, I had to buy a new laptop when I started my virtual assisting business and it cost me $900. Does everyone need a $900 laptop to start their VA business? Nope.
But, I knew that I would be working with some design software that would require a hefty hard drive and processor. Making that purchase has helped my business because I’ve been able to take some web design projects that made me a couple of thousand dollars each.
Plus, I’ve had the same computer for three years so, I definitely got my money out of it.
If you’re thinking about making a purchase that will not help you reach your goals – stop and reevaluate. Plan for short-term sacrifices and long-time gains.
Which Bills Could Be Paid Using This Money?
Remember, you’re thinking in the context of having a healthier relationship with money and more freedom in your life. So, you’ve created your household budget and you know what your list of required bills are for each month.
This purchase that you want to make – how many of those bills could be crossed off of the list with that money? Because you’re going to have to hustle harder and work more hours to earn the money to pay those bills either way.
So, is this purchase worth it?
Are you willing to trade those hours of hustle and that group of bills for the item that you want to purchase?
Minimize All Aspects Of Your Life
Changing your perspective about money and viewing it as a tool that you can use to reach your goals will naturally lead to minimizing your life.
When I worked outside of the home, I would stop at the mall on my way home from work and spend $200 on clothes just because I could.
I think back now and kick myself for not being smarter about how I was spending my money. Maybe I could have quit my job sooner.
Now, when I think about $200, I think about a hotel room downtown and going to the Saturday Market. Or, I think about a camping trip to Yellowstone. There’s so much that we could do with $200 to make memories and spend time together.
Make a list of activities or trips that you and your family would enjoy. Price each one to see how much money you would need. Keep that list on the fridge so you can see what else you could buy with the money you are mindlessly spending.
Learning how to be frugal and spend or save money with intention improves your life in so many ways. But, this relationship with your money also improves your overall physical, emotional, and mental health.
4 ways budgeting is good for your health
When I was diagnosed with adrenal fatigue and panic disorder, there were a lot of changes that I had to make in my life to reduce physical, emotional, and mental stress as much as possible.
I had to change my diet so that I was eating more vegetables. I had to change my sleep habits so that I was getting enough sleep. I had to make sure I was drinking enough water every day. And, I had to prioritize self-care.
But, the one thing that I was doing right, was that I had a healthy relationship with money.
We had started our budget out of necessity because I quit my job to stay home with our little guy.
But, little did I know, that when I did that I was also taking a big step towards having a healthy relationship with money, which would benefit my overall health in so many ways.
Control over money
While my physical health was in shambles, my emotional health was fractured, and I was slowly losing control of my everything – I still had a good handle on our money. I didn’t worry about how we would pay bills if I had to cut back on my hours.
I knew that we had money in the savings account to cover my therapy and doctor visit copays. I knew that I could cancel a couple of luxury items each money in exchange for out-of-pocket expenses to the naturopath.
I had the resources to manage my illnesses because I could afford them and I knew that without worry.
Reach money goals
By the time I had reached my rock bottom, my husband and I had reached our money goals. We had paid off almost $10,000 in debt, we had an emergency fund saved up, and had money in the bank set aside for our upcoming move.
We had been working on those goals for about 16-months before I cried uncle and could manage day-to-day anymore. So, our finances were in really good shape.
If we hadn’t been budgeting for as long as we were, I’m not sure I would have gotten well as fast as I did. I wouldn’t have had the big picture information about where our finances were and how I could move things around to prioritize my health.
Gives you the power to prioritize your spending
A major part of my healing journey included big changes in my diet. In fact, I eat a completely clean diet now with very little deviation.
Every now and then I like to have treats but, they’re things like coconut milk ice cream sweetened with stevia. No one else in my house eats the same diet that I do. In fact, I have two extremely picky eaters and my daughter has decided she’s vegetarian.
So, my grocery bill is pretty big. I can’t buy bags of dry beans and noodles and feed a family of five on $200 a month. But, I’m 100% okay with spending extra on good, wholesome food.
And, since I have a solid budget, I can afford to spend extra on our groceries.
Puts you in charge of how much money
My husband and I own our business and work freelance for online business owners.
If I take a look at the budget and realize we need to make more money for an upcoming event or because I want to increase the grocery budget, we just go get another client.
Having a budget puts us in charge of our money and allows us to prioritize and AFFORD exceptional health.
We can move money from one line item to another. Cancel this subscription to start that one. There are endless ways that we are in charge of our spending and saving.
The control that you feel from being in charge of your money gives you self-confidence, motivation, and courage. Those emotions are crucial to making the lifestyle changes necessary to improve your overall health and happiness.