How Much Money Can You Save by Being Frugal? (Experian)
For many people, being frugal may come easy or natural, and they may have been taught to run a tight financial ship at an early age. Others, however, may not have enough in savings to cover a routine car repair. But rest assured—it’s never too late to learn how to save money by being frugal.
You can live frugally (and happily) and save money along the way by doing things like sticking to a budget, trimming your daily expenses, lowering your monthly bills and embracing DIY projects. Living frugally can help you keep your finances in good shape and prepare you for tough financial periods. Read along to learn how you can achieve that.
Create a Budget and Stick to It
Want to live the frugal life and spend less money? If so, the first step you should take is creating a budget[1]. A budget can put you on the path toward frugality by helping guide your spending and saving habits.
Why is building a budget important? Here are five things a budget can help you do:
- Pay off debt. A budget can help you figure out how much money to allocate toward paying off debt and how long it’ll take to accomplish that. Paying off debt will save you money on interest that you’d otherwise pay to a lender.[2]
- Live within your means. If you’re spending more money than you’re taking in each month, you’re not alone. A budget can help you flip that scenario and leave you with some financial wiggle room at the end of the month. When money is less tight, you can focus more clearly on paying your bills and taking care of other financial needs.
- Save money. A budget gives you a cleaner picture of your finances, including how much money you can afford to designate toward savings. Following a budget can help you put money away in an emergency fund, set some aside for your child’s college education, save for a down payment on a home or use it for other purposes.[3]
- Reach your financial goals. Do you dream of retiring at 55? Are you itching to travel around the world? Do you want to wipe out your student loan debt within two years? A budget can help you prioritize your saving and spending so that you can get closer to attaining your short-term and long-term financial goals.
- Cut back on financial fights. It’s no secret that many couples argue about money. Setting up a budget can reduce the financial tension between you and your partner by enabling the two of you to see eye to eye on how you’ll spend and save your money.
How Do You Create a Budget?
To get started with budgeting, you’ll want to figure out your income, analyze your expenses, establish financial goals and monitor your spending. Creating a budget[4] could be as simple as writing down this information in a notebook or plugging it into a computer spreadsheet.
