There are basically two ways to get more money (without a heavy dollop of luck helping out along the way). These ways are thus: 1) Earn More, 2) Spend Less. I’m normally skeptical of frugality as a committed lifestyle, because it would be so much easier to achieve your financial goals if you simply increased your income. Frugality, as it is discussed on the internet, usually revolves around a monkish lifestyle, where you don’t buy or do much.
This lifestyle isn’t sustainable for most people. For those that do it, more power to you, but I’d still recommend trying to increase your regular income.
However, self deprivation is not the only aspect of frugality. In fact, I think it is the least important aspect. The most important aspect is price consciousness. If you can become intimately aware with the price you pay for the stuff you need, you’ll start to get a discount in life. Here’s how it works.
Perhaps you remember a situation when you were a child: going to the grocery store with your mom, dad, or other guardian. If this person was price conscious, you might have seen them looking for something as simple as a can of beans, then carefully pick the one with the lowest price per ounce.
“Come on!”, you may have thought in your tiny brain, “there’s barely any difference between $0.49 and $0.59. I’m bored! Let’s go home!” However, because you were small and ignorant, you failed to realize that the difference in this price is actually 16.9%.
If an investor were to make 16.9% in returns in a given year, he or she would be pretty pleased. But you can achieve these kind of returns in your daily life, if you simply make a habit of saving in every situation. If you are able to save 10% or more on most items you buy – BAM – you’ve achieved a 10% discount on life.
There are endless opportunities to find these savings. Rather than stick with the car insurance company you’ve always used, look for lower prices. QuoteWizard did a study on which companies have the lowest rates, and by choosing one you can save a surprising amount every single month. The same goes for utilities, internet service, groceries, and anything for which you can find a discount or coupon.
In the end, making a habit and a hobby of saving is a great way to have more money left over. This will potentially increase your savings rate, help you pay off your debt faster, save up for an investment, and many other profitable applications. But you’ve got to make sure that it becomes a regular part of your life.
If you really get in step with this active side of frugality (the passive side being avoiding any and all expenses), you will realize that it doesn’t take a lot of time or effort to do so. Savings are there to be had. In most cases it will take, at most, 10% more effort than it would to absentmindedly buy what you want at any given price. In the end, you’ll save a lot of money and have more money left over after making ends meet.