I had to adopt a strict savings plan when I lived in New Mexico. My starting salary as a junior civil engineer in 1994 was around $26,000 a year, just above the poverty line at the time. I had to adopt a frugal lifestyle to survive and set aside money for investing in the future. The things I learned back then set me up for success now and I want to share these tips with you.
It starts by making small changes to your daily habits at home that maximize your savings potential and create a financial buffer for investments. Here are five simple ways you can be frugal at home, and allow yourself to grow your wealth and achieve financial independence.
Create a Budget and Track Your Expenses
The first step to frugal living is creating a budget and tracking your expenses. By having a clear understanding of your financial situation, you can identify areas where you can cut back and reallocate those funds to your investment goals.
Start by listing your monthly income and expenses, and then look for non-essential items that can be reduced or eliminated. Tracking your expenses also ensures you stay accountable and stick to your budget.
This tip may sound boring but it's invaluable. Remember, every dollar you earn and keep is building your wealth army in the future.
Embrace DIY and Home Maintenance
When I lived in New Mexico I rented an apartment so this wasn't an issue but now I own a house and have owned rental properties so embracing a do-it-yourself (DIY) mindset is crucial to saving money.
Learn to tackle basic home maintenance and repairs, like fixing pipes, leaky faucets, etc. You can save significant money by doing it yourself instead of hiring professionals. The best part is that numerous online resources, such as YouTube tutorials and blogs, can teach you the skills you need to handle common home projects.
Cook at Home and Meal Plan
There's nothing more pleasurable than going to a nice restaurant with friends, family, or a lover. I enjoy good conversation over a good meal but eating out or ordering takeout can quickly drain your wallet. Save money by cooking at home and planning your meals in advance.
Meal planning helps you avoid impulse purchases and minimize food waste, allowing you to stretch your grocery budget further. Opt for affordable, nutritious ingredients and learn to cook simple, delicious meals that can be prepared in bulk and frozen for future use.
Save on Energy and Utilities
This is a big one in our family! Reducing your energy and utility consumption is an excellent way to save money and be frugal at home. Simple changes, such as turning off lights when not in use, using energy-efficient appliances, and sealing drafts, can result in significant savings.
Consider investing in a programmable thermostat to regulate your home's temperature more efficiently. We have 4 zones in the house and I turn down the heat to 58F during the night and when we're not around. That's saved us a ton of money and heating oil. Also, unplug electronic devices when they're not in use to prevent energy waste.
Practice Minimalism and Avoid Impulse Purchases
This tip is the biggest mind shift you have to go through. Practice minimalism! Frugal living often goes hand-in-hand with minimalism, focusing on reducing clutter and unnecessary possessions. By adopting a minimalist mindset, you can avoid impulse purchases and save money for more important financial goals, such as investing.
Do yourself a favor when considering a purchase, ask if it's truly necessary and if it aligns with your financial priorities. This approach can help you make more intentional spending decisions and promote a frugal lifestyle.
Being frugal at home doesn't have to mean sacrificing your quality of life. By implementing these five simple strategies, you can save money, reduce expenses, and allocate more funds toward investing and building your wealth.
I did just that and started investing in stocks and coins about 6 months after I moved to New Mexico. That set me up for the lifelong joy of making money through investing in assets. Happy saving!