Some people pick up frugal habits early, learning from their parents or grandparents. Others may develop the habit of frugality after going through financial troubles.
Frugal people’s view of money is different for many reasons, the topmost of them being that managing money effectively is the key to financial freedom.
Whatever the reasons, the point is that being frugal about money is the prudent thing to do, and it is a habit that can be learned.
Moderation in spending is a habit that can help you attain your financial goals if you make it a part of your life on a daily basis.
Some of the wealthiest people in the world remain conservative spenders, even when they are worth billions.
Here are six common practices that frugal people follow that keep them on a strong footing financially.
Live below your means
Frugal people, even if they are rich beyond imagination, do not believe in splurging. They just spend according to their needs and not their means.
They mostly live in modest houses, travel by economy class, and own ordinary cars. The CEO of Berkshire Hathaway, Warren Buffett, one of the richest persons on the planet, has lived in the same house for decades.
Be cost-conscious when shopping
Frugal people spend money consciously, and cautiously. They think carefully before buying anything and do not indulge in impulsive shopping.
Being cost-conscious involves putting careful thought into the need for the purchase and trying to find out if there is a way to acquire the item or service for less.
Weigh quality and price
Being frugal and being cheap are completely different. The main concern for cheap people is price and they are always willing to sacrifice quality in favor of low price.
Being frugal, on the other hand, is all about striking a balance between quality and spending. Frugality involves understanding the true worth of purchase and knowing when it is alright to sacrifice a little quality to conserve money.
Spend less on brands and labels
The smart rich do not give importance to branded clothes, designer shoes, or fashion labels to the point of going berserk over them.
Frugal people do enjoy finer things that life has to offer, but only if these things are truly worth the experience that they are seeking, and not just because of the label.
They like to spend on things that can keep them wealthy, not what might make them look rich.
Having a habit of saving money provides a solid foundation to the habit of frugality, the two go hand-in-hand. Frugal people realize the importance of having a savings plan that is consistent and rational.
Most frugal people treat savings as an expense that needs to be taken care of like any other bill, and not as an afterthought. They save first, and pay anything else later, including mortgage payments or rent.
Look for frugal fun
Entertainment does not need to burn a hole in your pocket. There are endless possibilities for having fun without breaking your budget.
Frugal people realize this and seek fun activities that are free or inexpensive, like a day at the beach, a hiking excursion, skating at the local ice rink, and BBQ or monthly game night in the house.