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Frugal Living Tips that Save Money

When we were looking at our budget and ways to cut costs to get our debt paid off, we realized that we had to go back to “Grandma’s way of doing things” and live more frugally. I quickly adopted these 10 frugal living tips and continue to use them to this day as we save for our future.

saving money

Use Coupons Wisely

Instead of clipping coupons for everything, I now only clip coupons for items that I use and redeem them when the item is on sale to maximize my savings. I’ve also started using many rebate apps that are available online or on your smartphone. My favorite include Checkout 51 and Ibotta.

Plan Your Meals Before you Shop

Every week I’ll sit with the store ads and look at what’s on sale. I’ll then plan a week’s worth of dinners based on what’s on sale and what I already have on hand in my pantry, fridge, and freezer.

If you can, be sure to plan meals where you can use one main ingredient two or three different ways. One of my favorite frugal meals is picking up a whole chicken and making roasted chicken one night, using the leftover meat to make Chicken Fried Rice the next night, and then using the carcass to create my own chicken broth which I then turn into homemade Chicken Noodle Soup.

Try a “Meatless Monday”

Speaking of planning your weekly meals, try going meatless at least once a week. One of the most expensive ingredients we buy on a weekly basis is meat. By trying different meatless meals, we have been able to slash at least $25 a month from our grocery budget.

Prepare Lunch the Night Before

pack your lunchIf you’re like me, you probably will hit snooze one or two times in the morning, making getting up and getting ready to go to work a little more stressful and busy. Many mornings I didn’t have time to put together a lunch, so I’d often find myself heading out to pick up a sandwich or some soup.

I quickly changed my ways after looking at our spending, and I’ll now pack my lunch the night before. Packing your own lunch could save you up to $1800 a year if you are used to grabbing something on the go every day.

Buy Clothes on Consignment or at the Thrift Store

When buying clothing gently used or second hand, you want to be on the lookout for quality pieces that are in great shape and will last. Look for quality name brand clothing that is well made or clothes that look as if they haven’t been worn or still have the original tag attached. Thrift stores will also have monthly or weekly specials, so be sure to get familiar with the sales schedule and visit during their discount days so you’re getting the best deals that you can.

Plan Nights In with Friends

No need to go out and spend a ton of money in order to enjoy an evening with friends. Plan a games night and invite everyone over. One of our favorite things to do is to host a dinner club with a group of close friends. Every month we select a theme and each family will bring over a dish making for a cheap and easy night in with friends.

Cook From Scratch

Some of our favorite things to make from scratch include bread, pancakes, pasta sauce, hot chocolate mix, and chocolate chip cookies that replaced the prepackaged lunch snacks that we used to buy. Not only has my food bill gone down, but so has the household waste that our family produces since we’re not throwing out all of that extra food packaging that comes with the prepackaged foods.

Group Errands Together

Saturday is errand day, and I’ll map out my route making sure that I can get all of my stops made in one trip. This has helped to save us a lot of money on gas each week.

DIY Car Maintenance

There are a lot of quick fixes and maintenance items that you can do yourself, even if you don’t consider yourself to be that handy. Checking the oil, changing the air filters and windshield wipers, and checking the air pressure in your tires are simple things that can be done with minimal effort, but can save you money in the long run.

Dump the Gym Membership

This was one of the first things that we did when it was time to tighten up the budget. Instead of paying for our monthly gym membership, we’ll go for a walk or a jog. There is also a huge variety of exercise videos that you can stream on YouTube for free.

Your Turn

  • What’s your favorite money savings tip?
  • How do you save money?

Time for a Financial Check-Up

In order to make sure that we’re in good health, many of us will be sure to check in with our doctor for a yearly once-over. The same is true for your finances. If you want to make sure that all is well on the money front, it’s equally important to complete a yearly financial check-up.

I always do my financial check-up at the beginning of a new year, but any time of year will work. It doesn’t take long, and is relatively painless, but checking in with your financial big-picture once a year will give you a great reference point as to where you are now and how far you’ve come when you check in this time next year.

Step 1: Check your Credit Report

It’s important to check in with your credit report once a year just to make sure that everything that is listed there are debts that you yourself have signed up for. This will help to make sure that there hasn’t been any fraudulent activity under your name.

It will also give you a sense of where your debts lie. Listed you’ll see any loans that you’ve taken out and have paid off or in the process of paying off. You’ll also see the last reported balances on any rotating debts like credit cards or lines of credit.

Checking your credit report is fast, easy, and more importantly free. Equifax and TransUnion are two of the most popular websites that you can use. Just simply enter in your name, address, and social security number, and within seconds you’ll have access to your credit report.

Step 2: Calculate your Net Worth

When calculating your net worth, I always start with listing down what we own. I start off with the liquid assets which includes our checking account, savings accounts, and our emergency fund. I also list the current balances on any investments such as our retirement funds and education funds, as well as the current worth of my pension. The last thing I list are the major assets that we own including the resale value of our home and two vehicles.

Once you’ve figured out what you own, the next step is to add up what you owe. Included in this list should be any outstanding debts such as credit cards, student loans, lines of credit, or medical debt. The other debts to include here would be the outstanding balance that is left on the mortgage and car loans.

To calculate your current net worth you simply take the amount you own and subtract the amount you owe. Whatever is remaining is your net worth. I like to compare our net worth year over to year to see the progress that we’re making.

One thing I did notice this year was the substantial increase we saw in our net worth once we finished paying off all of our consumer debt. It’s amazing to see just how much your net worth grows when you can keep your money for yourself, rather than giving it to the bank in the form of payments.

Your Turn!

  • How often do you check in with your finances?

Staying Motivated While on a Budget

Regardless of whether you have just started budgeting, or have been budgeting for a while, staying motivated to make and stick with a budget month in and month out can be tricky.  Let’s be honest, putting self-imposed limits on our own spending isn’t always as glamorous as the vacations we see people taking and posting on social media. Not to mention we live in a society that is filled with temptations and surrounded by impulse purchase items that are strategically placed to part us with our hard earned money. achieving success

We always start budgeting with the best of intentions – securing our financial future. But keeping the big picture in mind can be difficult. Let’s look at some strategies that you can use to stay motivated to stick with that budget.

Track your Progress:

Paying off debt? Saving for a vacation? Paying off your mortgage early? There are plenty of printable charts and graphs that are available online that you can use as a visual reminder of just how far you’ve come, which in turn will motivate you to go even further.

Take it a step further and put that chart or graph somewhere where you will see it everyday. Watching the debt that you owe go down or your savings go up is a great reminder as to why you started budgeting in the first place and will motivate you to stick with it.

 

Treat Yourself Every Once in Awhile:

Now I’m not talking about going out and blowing the bank, you do want to keep it modest, but set an increment where once you’ve reached it you’ll give yourself permission to go out and treat yourself to something nice. So maybe after every $1000 of debt that gets paid off, you can pick up your favorite specialty coffee or treat yourself to a nicer cut of meat on your next grocery trip. The key here is that no matter what modest treat you choose, you are rewarding yourself for a job well done.

Read Some Financial Blogs, Watch Financial Vlogs, or Listen to Some Financial Podcasts:

Even though my husband and I have finished paying off all of our consumer debts and student loans, we still listen to Dave Ramsey podcasts to help keep us on track. There’s nothing I’ve found more motivating than listening to hard working people scream at the top of their lungs, “WE”RE DEBT FREE!!” While cooking dinner, I’ll also hop onto YouTube and see what my favorite financial YouTubers are up to and what financial progress they are making.

When trying to stay motivated, I’ve found that it always helps to surround yourself with like minded people who are also working diligently at either paying off debt or saving for their future. If you can’t find people in your everyday life who are motivated and sticking with a budget, we are lucky in this day and age to have such a great virtual community of financially like minded people that can motivate us.

Create a Vision Board:

Remind yourself of your budgeting why by creating a vision board of what your financial goal looks like. If you are saving up for a big vacation, find pictures of your destination and create a collage and post it somewhere where you’re going to see it on a regular basis. If you’re looking to pay off debt, create a collage of what your debt free future looks like. Having a visual reminder will help you keep the bigger picture in mind as you work towards reaching that goal.

Don’t Get Down on Yourself:

We are all going to have setbacks. Life is going to happen and sometimes that will mean that you have to go over budget or dip into that savings that you’ve worked hard to build. The important thing is that you don’t let it get you down to the point where you feel like giving up altogether. Yes it’s painful when you are faced with expenses that you weren’t anticipating, but don’t let that stop you from keeping your head up. Keep moving forward knowing that it will get better and that the end goal is still achievable, even with the occasional setback.

Your Turn!

  • How do you keep yourself motivated while on a budget?

3 Easy Ways to Pay off Your Mortgage Early

My husband and I have been following Dave Ramsey’s Baby Steps for the last 3 years. We have worked diligently at paying off all of our consumer debt, building our emergency fund, saving money for both our children’s college education and our retirement, and now it is time for us to also look at ways that we can pay off our mortgage early.

Because we have sacrificed a lot of the “fun” stuff to make the progress that we have, we want to be sure that we leave some wiggle room in our budget. As a result, we wanted to look at three simple and painless strategies that we can use so that we can still reach the goal of paying off our home early while leaving some money for “fun” as well.

Throw Found Money at Your Mortgage:

Found money is that money that you may not have anticipated or put into your monthly budget. A tax return, overtime pay, extra income, or inheritance is often money that is outside of your regular budget and therefore is not needed for your monthly expenses. Since it’s money that you weren’t really counting on, why not consider throwing it at your mortgage?

Refinance with a Shorter Term:

Another simple way to make sure that you pay off your home early is to consider refinancing it at a shorter term. According to our latest mortgage statement, we currently have 16 years remaining if we follow our scheduled payment plan. When our mortgage term ends in the next year, we are going to be looking at refinancing on a 10-year amortization schedule.

With no debt payments, we have the extra cash flow to afford the slightly larger monthly payments. It will also ensure that we are shaving at least 5 years off our mortgage repayment plan. With this move, our mortgage is guaranteed to be paid off 5 years before we retire, meaning that we’ll have 5 years with a full income to continue to stockpile cash before we bid our careers goodbye.

Switch to a Bi-Weekly or Weekly Mortgage Payment:

Another way to ensure that you pay off your mortgage early, without much effort needed, is to consider switching to a bi-weekly or weekly mortgage payment, rather than making one monthly payment.

If your monthly mortgage payment is $1200, your bi-weekly payment would be $600. The magic is that instead of making 12 mortgage payments for a total of $14,400 per year, you would now be making 26 payments for a total of $15,600. Without even thinking about it, you end up making an extra mortgage payment every year.

We currently live in our forever home and are looking forward to the day when we can say that we own it outright. Living without a mortgage payment would not only give us tremendous peace of mind, since we would no longer owe anyone anything, but it would also mean that our incomes are completely freed up to build wealth and give generously.

Your Turn!

  • What would motivate you to pay off ALL of your debt?

Prepare to Invest

Whether you want to save for retirement, pay for your children’s college, or buy a new house, making the right investment choices will allow your money to make you even more money in order to fund your goals.

Now that my husband and I are on a solid financial footing, we are ready to start investing. There are times when this process has seemed intimidating, but thanks to a great, and patient, advisor we feel more prepared and sure that we are going to be making the right decisions.

Set Your Financial Goals:

You’ll want to sit  with your investment adviser and review a list of your financial goals. Based on your prioritized list and the time frame that you have to meet that goal, your adviser will then begin the work of coming up with some investment options and be able to give you a monthly amount that will need to be invested.

Learn About Your Investment Options:

There are many options available when it comes to investing. The long list of possibilities includes stocks, mutual funds, savings bonds, annuities, exchange-traded funds, money market funds, and U.S. Treasury securities. You may also be interested in investing in real estate, precious metals, or commodities.

With so many options available, it is important to educate yourself on the risks of each type of investment and make sure the risks are appropriate for you. We all love the idea of our money working for us, but it’s also important that you can sleep easy at night knowing that you are comfortable with the investment strategy that you have selected.

Gauge Your Risk Tolerance:

How much risk you are willing to take on depends, for the most part, on how much time you have before you’ll need the money. If you are not retiring for another 30 years, it would make sense to take a riskier approach and perhaps consider investing in more aggressive funds or forms of investment. Time is on your side, and you are in a better position to weather the ups and downs that the market presents.

If you need the money in 5 years or less, you would be looking at a less risky investment such as a bond or a money market account. Although these don’t have the high rates of return that a more risky investment would have, you are much less likely to cash out at a loss if the market takes a tumble.

Diversify Your Investments:

We’ve all heard the phrase, “Don’t put all of your eggs in one basket.” By diversifying your investments you are safeguarding your money. The idea of course being that if one investment loses money, the other investments make up for those losses. In the case of a down market, although your investments may suffer, they won’t suffer as much as they would if you weren’t diversified.

don't put all your eggs in one basketI had a former co-worker learn this lesson the hard way. When the tech bubble was going strong, he invested all of his money earmarked for retirement into tech stocks. When the tech bubble burst, so did his dreams of retirement, and as a result had to continue in the workforce past his original retirement age.

Be on a Solid Financial Foundation:

Before you start investing, you want to make sure that your financial foundation is set. You want to be on a monthly budget with a positive cash flow so that you know how much you have to invest each month.

You also want to make sure that your consumer debts and student loan debts are paid off, freeing up even more cash flow to save and invest with. Last but not least, you want to also ensure that you have an emergency fund with three to six months worth of expenses in place so that if the unexpected happens, you are not pulling money out of your investments.

Don’t Forget to Ask Questions and Educate Yourself:

With the internet and Google, it has never been so easy to find information, but sometimes that information can be as overwhelming as the thought of investing if you are just getting started. The Securities and Exchange Commission has a lot of great information if you are in the beginning stages of investing.

Also consider asking for referrals to a trusted financial adviser. Ask family, friends, and colleagues if they work with someone that they trust and recommend. My Dad’s advice when it came to looking for a good financial adviser: Don’t invest with anyone who has a smaller net worth than you.

Your Turn!

  • What is your biggest financial goal?
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