Here is how a frugal lifestyle can simplify and enrich our lives. The Merriam-Webster defines “frugal” as – characterized by or reflecting economy in the use of resources while some of the synonyms include economical, thrifty, provident a stark contrast from the word “Cheap” which is also used to describe people with similar attributes but has a very negative or derogatory trait to it.
About the author: Saket Dhotre is an engineer and MBA with 10 years of experience in the IT sector. He is a long-term student of personal finance and loves travel and everything tech/
A change in mindset is required about frugality. It should be an individual’s sought after trait & really means that you are able to reap maximum benefit from the money, time & energy you have invested in something & hence offers great value to you.
Media & Marketers have made people believe that buying more is good & is the only way to validate our lives & meet the society’s benchmark of exotic vacations, bigger houses (not necessarily homes), fancier cars & latest gadgets and flaunting it on social media to meet this goal post which keeps on shifting higher & higher but doesn’t necessarily equate to happiness in any way.
With so much irrationality being served on a platter for consumption by the media there are many marquee names who have achieved great heights with the exact opposite mindset by simply valuing money & its consumption. Warren Buffet is a classic example with a net worth of $80 Billion who once said “I have everything I need to have, and I don’t need any more because it doesn’t make a difference after a point.”
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What this means is that living frugally does not necessarily mean just spending less cash but instead requires changing one’s mindset from being consumer-driven to value-driven. And this is where a behavioural change is required as our mindset is a coherent reflection of our behaviour. Listed below are some of the changes you can undertake in your life to adopt this mindset
1. Less is More
“There’s no place like home.” and what better place to start than your home to undertake this transformation. Minimise the physical clutter in your home & sell, donate, discard items that you haven’t used in the past year which means you don’t need it anymore. The lesser the clutter in your house the less likely chance you spending on home decor. Sounds weird but is True. Try it!
2. Ten Second Rule for Online Purchases
Remove the ease of purchasing from your online transactions. A simple way to do this is to remove all the stored Cards & Banking Information/Passwords from shopping sites. This will suddenly make it a little harder to make the impulsive purchase & give you some time which we call the 10-second rule to evaluate your every purchase. As you try to get your sign-in information & look for your card details force yourself to think about whether the purchase is worthwhile & adds any value to you.
3. Limit Social Media
This is easier said than done but limiting social media consumption can greatly change your mindset towards spending. The constant pressure which an individual is subjected towards by the social media ads, so-called Influencers & your supposedly well-off peers on display 24×7 can influence your spending patterns to do things that affect your financial well-being in the long run. Instead, limit the websites & profiles you actively use & you will unknowingly save a lot of money due to possible bad decisions influenced by marketers.
4. Value your Purchases
Learn to value your purchases and figure if it has created any lasting value for you. This can be analysed in 2 simple ways – For goods, evaluate the item if it has been useful to you after a month or so. In case of consumables & experiences just ask yourself if it has created a positive memory or helped strengthen your relationship with others or created some form of lasting value.
Do this exercise on an ongoing basis which will then inculcate a habit of judging beforehand if the purchase will create any lasting value & the purchases which are not necessary. With this kind of mindset, you will learn to make better purchasing decisions on auto-tune mode.
5 Start saying “No”
This is the most commonly doled out advice by all the financial advisors but makes a lot of sense specifically when Frugality is the virtue you are trying to imbibe. We frequently come across people-pleasing friends & family who say “Yes” to everything only to end up complaining about the same thing later. To add to this spending money on people or things which really do not matter or add any value to your life is strong enough to say a big & loud “NO”.
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