5 Frugal Rules to Set For Yourself

These are 5 rules that I have set for myself that have helped me do more with what I have. Even with a low income, these rules can help you make the most of your income so that you have more to enjoy later.

1. Live below your means

This is a virtue that my father hammered into my skull from day 1. In today's economic environment, it is easy to think that you can afford something that many of us actually can't. 
For example:
Statements like...
"You can afford the monthly payment"
"Take a little out of savings and replenish it next month"
"You'll never get an opportunity to do this again"
These statements may be true, but they are used to make you think you can afford something that you can't. The simplest way to look at it is that you want to have a personal net profit every month. 

Net Profit = Revenue - Expenses

Tracking your spending will help you find your monthly revenue and also see your monthly expenses. Cut out the unnecessary spending and make real time decisions with your personal net profit in mind. 

2. Only take on 1 major debt at a time

When I say "major debt", I mean things like...

Student Loans
Car Payments
House Mortgage
Engagement Ring Financing
Large Credit Card Purchases

My rule of thumb is that a major debt is anything that would take six months or more to pay back. Debt in general is something that you'd like to avoid if possible altogether. Our generation likes simplicity, if you can pay something in full up front, you don't have to worry about that payment in the future and you will be saving yourself money on interest. 

3. Be smart with credit cards

If you are going to use a credit card, I have two rules that keep me out of trouble.

1. Use a credit card with benefits that are important to YOU!

Don't sign up for a travel card if you never travel. Don't sign up for a gas benefits card if you don't drive. Look at what you already spend money on and if there is a card that will benefit you in those areas, go with it!

2. When starting out, only use the credit card for one recurring expense.

This includes things like gas or groceries. Don't start using your card for everything right off the bat. Those purchases add up quickly and seeing money in your bank account makes you feel like you can keep spending it. This will help you start to build credit as well. I personally have always used a credit card for gas. It saves me a small percentage on gas and also has allowed me to build a fairly good credit score at a young age. 

4. Only use 1 monthly streaming service at a time

Netflix, Hulu, Amazon Prime, Playstation Vue, HBO Go, Sling TV, Spotify, Apple Music, Lifetime On Demand, the list goes on and on. 
So many people I know have subscriptions to multiple different streaming services and have no idea how much they are spending every month. 

In my family, we have 5 different people who pay for different services and we all share. My parents have Netflix and Playstation Vue for TV, my sister has Apple Music, and I pay for Hulu and Spotify. When it comes down to it though, we naturally get on kicks for each one and don't even use the others. They will also let you cancel your monthly subscriptions any time and pick them back up later if you want. I recommend picking one streaming service to start off with that you know has shows and movies that you want to watch on it and only using that one service for the month. At the end of the month, decide if you want to keep that service for another month or if you want to use a different one. There is no shame in having no streaming services. 

I recommend the Hulu/Spotify student package that ends up being only $4.99/month for students. You get music and TV shows and movies all in one package.

5. Avoid recurring payments

The perfect example of this is an engagement ring I just bought. I saved up money for about 4-5 years while in school to purchase an engagement ring. Many places offer financing options, but this includes interest and also has you paying for it for months. When you pay monthly, you also tend to buy something out of your price range solely because you can afford the monthly payments. Save yourself the headache and save before a big purchase so that you can enjoy the purchase instead of suffer little losses every month for months and months. 












Comments

Post a Comment

Popular posts from this blog

Affordable Kitchen Reno

Image
My wife and I moved into our first house in May and immediately started doing our own updates. Because we spent most of our savings buying the house, we wanted to keep the updates as affordable as possible. The kitchen was fairly builder-grade with the classic metal sink and all white appliances. Here is what it looked like before we started.  We took down all of the cabinet doors and painted them glossy white. We ordered some really affordable pulls from Amazon. They were $30 for 25 pulls!  We ordered some Feather Finish concrete and watched a ton of YouTube videos to learn how to concrete our countertops. While we were going, I made the call to go ahead and concrete our metal sink too. I hadn’t seen anyone do it but I thought it was worth a shot.  By the end of the project, we ended up only spending about $200 on pulls, concrete, polyurethane to seal the concrete, a $70 sink from Amazon, and a nifty new soap dispenser. Here our our final results!
Read more

Gym Membership vs. Home Gym

Image
The Cost of a Gym Membership in 2019 The average cost of a gym membership in the United States is as much as $600 a year. This is for your run of the mill average gym. Then if you get into the specialty gyms like CrossFit or PureBarre that you need a coach and classes for, your annual cost goes even higher. If you are a member of one of these gyms, I challenge you to make a working list of the equipment that you use at your gym and, in a separate column, whether that equipment is critical to your routine or if you could do without it.  Building a Home Gym After you have made this list of what is critical to you and what isn’t, you can start looking at the cost of this equipment. I recommend looking for secondhand equipment on resale sites like Facebook Marketplace, EBay, Craigslist, etc. I personally built my last home gym for only $250 solely on Facebook Marketplace. This was my breakdown: Bench press/leg press with about 300lbs of free weights: $100 Power Tower ...
Read more

Newest Side Hustle

Image
 So my newest side hustle endeavors pushed me towards something I really enjoy: Woodworking. My wife's grandfather clear cut an acre or two of his land and harvested a bunch of black walnut trees. When I was over there, I asked what he was going to do with the wood. He told me he would use some here and there but I was welcome to as much of it as I wanted. I used some of it to make Christmas presents over the holidays. One of my favorite gifts was a charcuterie board that I gave my mom. I did a quick google search and discovered that Black Walnut charcuterie boards were going for a whole lot more than I realized. I decided to make a few different ones and list them on Etsy. I have never used Etsy, but they make it quick and easy to set up a shop. They also are very clear about their fees and costs of selling. Here is a link to the fees that they charge for selling on the platform. https://www.etsy.com/legal/fees/ I also used to have some luck on eBay so I went ahead and posted them...
Read more