Beneficial Money Habits of Frugal People
Frugal spending habits can be liberating, according to those who embrace a more minimal lifestyle.For most of us, being a consumer is an automated routine: we buy the $3 cup of Starbucks coffee without thinking about it, we buy the new car even when the used one will save us five figures and we order takeout even as the ingredients for that healthy dinner we had planned to cook languish on the kitchen counter.
Then there are the super-frugal people out there and, given the number of blogs dedicated to minimalist living that keep popping up, their numbers are increasing.
Work + Money asked a variety of converts who have fully embraced the frugal lifestyle for their best tips, and most of them can be implemented with a little planning and discipline.
"You come to terms with living with less," said J.R. Duren, a personal finance expert at HighYa.com, a consumer-focused website. "I'm not saying that frugality leads to minimalism but it does make you rethink how much stuff you actually need to enjoy life."
These are the people who think about the implications of every purchase they make and seemingly make a game out of finding ways to not spend money.
You may still be a consumer, but with the following tips, at least you'll be a conscious consumer.
Limit Lifestyle Inflation
Getting a raise or finding a better-paying job doesn’t mean you should automatically ramp up discretionary spending in your monthly budget, says consumer and savings expert Andrea Woroch.
"You may be tempted to spend more and increase your overall living expenses," Woroch said. "Frugal people continue sticking to their tight budgets even when they make more money. This way they can spend money on more meaningful things like a memorable family vacation instead of fancy cars or designer clothes. They also use the extra income to boost savings."
Renegotiate Bills
Duren recommended working with a service like BillFixers, which will renegotiate your bill with your cable, satellite and Internet service providers. They'll take half of the savings they get for you for the first year.
You can also call each provider individually, but sometimes it makes sense to outsource to the people who have the expertise to get you the best rate while simultaneously saving you time.
Try Apps
Another service Duren likes is Earny. The app makes sure you automatically get refunds on purchases you make when the store has a price drop policy. It can also help you collect refund checks from the credit card companies you do business with.
Never Buy a New Car
Alfred Morris finished the second year of a two-year contract for the Dallas Cowboys in 2017 that paid him $3.5 million, plus a $1 million signing bonus. Yet the running back still either rode his bike to practice or drove a 1991 Mazada he had bought for $2 from while in college.
The moral of the story? There are people who look like millionaires because they buy the latest model of the most expensive car they can possibly afford. Then there are people who are millionaires because they saved to get there and they hold onto their money even after they are wealthy by every definition.
Dealer Pre-Owned Programs
New cars are bad investments. Everyone knows they lose value as soon as you drive them off the dealer's lot. Most car makers now offer certified pre-owned programs, or you can find a mechanic you trust who will look over a car you find for sale by owner online.
Max the Miles
The other thing to keep in mind is most later model cars are built to last for 200,000 miles or more with regular maintenance. Get the oil changed regularly or, even better, learn how to change it yourself to save a few bucks, and follow the manufacturer's recommended maintenance schedule. Even a used car you get a good deal on can last you for years.
Plan Weekly (Or Monthly) Menus
Almost all of the frugal people we talked to mentioned meal planning as a key part of their strategy to eliminate waste and needless spending. This means mapping out a week's worth of meals or more, setting aside some time on a non-workday to prep food for the coming week, and finding ways to reuse last night's leftover roast chicken in tonight's chicken Cobb salad.
Woroch noted that Americans throw away about $165 million of uneaten food each year.
It's all about planning.
"This is an important strategy for all consumers to adopt. Buying food you fail to eat is often a result of poor planning and impulse purchases," she said.
An added benefit? People who plan meals spend less money on takeout because "there's nothing to eat at home," which almost always means healthier food options.
Be Smarter at The Supermarket
Sonya Sigler and Keir Morgan have three sons between the ages of 16 and 20, so their food bill can quickly get out of hand. While a lot of frugal people Work + Money spoke with recommended buying in bulk at wholesale shopping clubs like Costco, Sigler said their home's limited storage space doesn’t make that a feasible option.
Instead, the family has adopted a "just in time" strategy for buying food at the supermarket.
"This means that we operate on a just in time basis by meal planning and using what we have in the cupboards, fridge, or freezer to develop those meal plans. We make a list and buy just what we need in time for those planned meals," Sigler said.
Other tips the family incorporates into their strategy include looking for two-for-one sales and manager's specials.
"Certain grocery stores near us have manager specials or Friday specials and we look at what is available and what we generally like to eat," Sigler said. "When there are meat specials, we tend to buy those items, given the three teenage boys who tend to eat like a lawnmower went through the kitchen."
Buy Quality Items
Think frugal people only look for the cheapest version of whatever item it is they need to buy? Think again. That $80 vacuum cleaner may seem like a great deal and a big savings, but the $150 model is likely to last longer and may even have warranties the cheaper version doesn’t have.
More expensive appliances also tend to be easier to repair, whereas the cheaper items are designed to be thrown away when they break.
Read online reviews carefully before making a purchase and figure out what is and is not covered by any warranty.
In most cases you don’t need to buy the most expensive version of the item, but you probably want to avoid the cheapest.
"I learned that lesson at home, watching my parents replace cheap appliances and items over and over again. Need a new vacuum? Get the cheapest one. Old microwave broke? Get the cheapest one," said Mike Beck, the general manager at EasyLLCFile. "In the end, I can confidently say buying the cheapest items usually ended up with a net cost of the same or greater than a high-end product."
The Online Shopping Ban
Jennifer McDermott is a consumer advocate for Finder.com who analyzes data to help consumers make better decisions with their money.
She knows online shopping sites are designed to make impulse purchases as simple as a screen tap, so she has banned online shopping in her own life and recommends others do as well.
McDermott takes her online shopping restrictions seriously. She has installed the Icebox app for Google's Chrome browser that hides the "buy it now" button on shopping sites to give her a cooling off period before making the online purchase.
This forces McDermott to research the best price for whatever item she is looking for and think about whether the item is something she really needs or just something she wants.
Cash Is King
McDermott never uses a debit or credit card to make purchases.
"A quick swipe makes it too easy to make an impulsive purchase," she said. "I carry cash for anything and everything I need to buy so that every time I am leaving the house, I am budgeted for that day’s spending right down to the dollar."
When Luciana Torous opened 3 Leaf Tea, she knew she would have to live frugally to get the business off the ground. A tip she got to separate her cash for the week into piles — one for gas, one for food, etc. — ended up helping her manage her money and stick to her budget.
"Once I'm out of cash, I'm out! I don't allow myself to use a credit card," Torous said.
Return Unwanted Gifts
McDermott did research for Finder.com and found that more than half of all Americans have at least one unwanted gift languishing in a closet. If you're never going to wear the snowman socks Aunt Esme gave you for Christmas or use the "Brew Your Own Root Beer" kit from Cousin Jeremy, return them.
"While I am very gracious when receiving gifts, I have no qualms returning them for something I actually need," she said. Unwanted gifts are "a waste for both recipient AND gift giver. Take it back for a return and put the money towards your savings."
Jamie Harper, a blogger who writes about traveling with a family of six on a budget at Fly By The Seat of Your Pants, takes that advice one step further and applies it to purchases she makes for herself.
"Return everything you don't use within a week," she says.
You Don't Need the Latest and Greatest of Anything
Because the latest is often not the greatest: just ask anyone who has stood in line to buy the newest model of their favorite smartphone only to find it riddled with bugs.
"Our priorities say if it works, it's fine — new is irrelevant," said Jamie Thomas. She is the executive director of Motley Zoo Animal Rescue, a nonprofit in Redmond, Wash. "New is nice sometimes, but it comes at a cost beyond the price tag."
That's why Thomas is still rocking the iPhone 6s and her husband has a very modest phone for his work ("He wishes he could go back to his flipphone," Thomas said).
Along those lines, the frugal people we talked with never, ever buy new cars. They look for pre-owned cars in good condition. But they don't stop there: they scour secondhand shops and Craigslist for the tool or appliance they need. The simple repair to get that lawnmower in someone's trash running again may be a 99 cent part and a YouTube instructional video away.
Closing Thought:
"We'd much rather go on a three-week vacation than get a newer car or buy a fancy couch," Thomas said. "The 'things' we treasure most are our memories, not out possessions.