Michelle Mcgagh decided that she would not spend a single penny on things that are not necessary. This means no movies, no cab(no bus even!) and no meals in fancy hotels! She documents her experience in a Moneywise article which is of interest to all the people interested in frugality and financial freedom.
Some important tips she shares are
1. Check your spending :- Unless you know how much you are spending, you can not control it.
2. Needs vs wants :- Make sure you need the stuff you are spending your money on!
3. Set a goal :- This could be overpaying your mortagage or building the retirement account.
4. Pay yourself first :- Keep the long term money aside and then spend.
The other tips she shares are Pay cash, Get organized, Get others on board, Do not get suckered into deals, Look to the past and finally Get out of your comfort zone.
It is important that you need to be convinced of the necessity of being frugal and equally important is the organization you put around your efforts to get there.
Trent Hamm of Simpledollar.com suggests a middle path for people who want to achieve a life of financial freedom in this article. There is a general perception that you have to be either a complete miser or have to strike it big in some startup to achieve early retirement. What Trent points out is that it is possible to seek early retirement with normal income and normal lifestyle. Some interesting tips he gives are
1. Focus Your Frugal Efforts on Things You Don’t Care About (or Barely Care About). Do not deprive yourself of something that you really like.
2. Learn How to Cook Well Enough So That It’s More Convenient to Eat at Home. Do not waste food.
3. Scale Back Treats Until They Become Treats Again.
4. Be Organized in Your Thinking and Planning Every Time You Would Spend Money. Cut down on impulse buying. Always question every purchase.
5. Intentionally Move Your Hobby Time Away from Accumulating and Towards Doing Instead. As an example, read books rather than just buying books.
6. Do not look at your career as drudgery. Look at it as an opportunity to express yourself.
In short, a frugal life is a life driven by common sense that allows you to be more intentional, more active and more creative. Frugality is the bi-product of such a life.
A life in frugality starts from childhood and the habits that kids inculcate are small actions they take in their childhood. This article tells you about seven such skills or habits that you can help kids inculcate.
The article acknowledges that current generation is impatient, needs external prompts for self esteem and is low of social connection. It is interesting the way the article relates these traits to the financial wellbeing of the child. One example is the relationship of self esteem with consumption. If the kid looks for external validation for his or her self esteem, it is more likely that they would fall prey to the lure of advertising that promises you better looks, smarts or social life at a little cost of buying a certain product or service. Parents need to make sure that kids are confident as they are and do not look at external world to validate their value.
The article talks about other skills such as patience, self confidence, collaboration, creativity, negotiation, contentment and individuality, each contributing to a specific aspect of the kid’s future financial life.
In a great take of individuality, the author says, “In a world where consumerism and consumer debt is a way of life, choosing a different path takes a steely sense of self. Promoting a spirit of individuality in children helps them cope with — and even celebrate — being different. Point out how your family’s own spending and saving habits go against the grain and don’t be afraid to show the benefits (monetarily and otherwise) of your simpler, saner lifestyle. It will serve them well for the rest of their lives.”
This is important not only in the financial sense but also in the sense of building a great and happy life. Finding your own niche or corner in the world that behaves in a herd-like manner is not only important from a financial perspective but important in the sense of enjoying the life we have.