When my wife and I first made a commitment to be more frugal, we did so for the reason that many people do: We were in financial trouble. The greatest initial benefit of frugality is that it cuts your expenses and makes it easier to keep the bills paid, get rid of debt, and ultimately save for our future. Over time we have achieved these things. We got out of our debt crisis, bought and paid off a house and started saving for retirement.
Of course, the challenge of frugality also became clear. Modern life is full of expensive temptations and treats, and there can be social pressures to enjoy them too. There is also a fear of being “cheap” where our desire to be more frugal negatively affects our friends and family.
Initially, we only stuck to frugal living because of our immediate financial goals, but over time we began to appreciate the many hidden benefits of frugal living. Here I am going to discuss seven hidden benefits of living frugally.
No. 1: Frugal living is good for the environment
One aspect of spending less money is that you accumulate less Stuff and with fewer services. Frugality is not minimalism, although they have similar practices and often lead to the same result: fewer possessions. Less material means less fossil fuel goes into making the goods you use and bringing them to your local business or home.
The EPA estimates that in 2018, the most recent year they have statistics for, the average American generated 4.9 pounds of solid waste per person per day, about a third of which is recycled or composted. The remaining waste is disposed of in landfills and other waste storage facilities. For a family of five like ours, that adds up to 8,900 pounds of waste a year, of which roughly 5,800 pounds went to landfill.
What about fossil fuels? The EPA estimates that the average American used 305 million BTUs of energy in 2019, and more than half of it was wasted.
There are tons of simple thrifty steps that can save money, reduce energy consumption or waste generation, and have minimal negative or even positive effects on our lives.
For example, it’s actually quite easy to save money on home energy use with these year-round energy saving tips, most of which have no impact on daily life once you get started. You’re only saving money by lowering energy consumption, which is good for your wallet and the environment.
It’s also easy to just buy less physical goods. A simple choice, like simply giving yourself a “wait” on any non-essential purchase – if you want something, just wait a few days before buying it, then consider whether you want it, or borrow it, or not can buy used elsewhere. This simple step alone, if consistently applied to your life, will save you a lot of money and waste, while still having everything you really want.
# 2: Frugal living can reduce stress
According to a recent Capital One CreditWise survey, 71% of Americans identify money as the number one cause of stress in their lives. Money was cited as a stressor for more people than any other life factor in the survey. Simply put, Money creates stress.
Frugality is a great solution to this stressor. To find easy ways to spend less money, you don’t have to make more money. If you focus on frugal steps that don’t interfere with your lifestyle, it won’t affect the things you enjoy doing either.
One practical way to do this is to make some specific frugal changes in your life, such as: B. switch to cheaper car insurance or reduce your energy costs and calculate how much you will save with this step. Instead of just spending it, put it aside on purpose automatically for a financial goal. So if you save $ 40 a month on insurance and find that you are spending $ 35 less on your electricity bill, you now have $ 75 a month that you didn’t have before. Increase your monthly pension contributions by $ 75.
What if you do that? You will feel less financially burdened by retirement and in no way negatively affect your daily life.
# 3: Frugal living can improve social relationships
One of the most powerful ways to save money is to share things. Share possessions, share activities, share ideas. Share babysitting responsibilities with the parents of your children’s friends. Share gardening tools with your neighbors – they’ll borrow your shovel, and a few weeks later you will borrow their rake. Share your meals with friends by enjoying a potluck dinner.
What do these things have in common? They are all Social. They involve interacting with people – your neighbors, your friends, people in community groups, and so on.
One of the most powerful things I discovered in our early thrifty days was how much I enjoyed participating in community groups. I started attending presentations over lunch at a local library. I started attending a local chess club and community board gaming group. I started volunteering. I’ve only tried things just to see what was interesting. Some of them didn’t click, but some of them did click. Not only were they free, they also helped me make friends and make many acquaintances in the community.
You can also socialize frugal projects. Let’s say you prepare meals in advance so you can store the meals in the freezer to reduce food costs. Instead of spending a boring afternoon at home alone, do it with a friend. You can invite them to help, or you can agree to do so with a distant friend where you voice chat and talk while you both prepare food.
# 4: Living frugally can give you a sense of purpose
For many, the initial attraction of frugality is that it is a practical strategy for attaining immediate financial goals. When you’re in financial straits, it’s time to look for clever ways to cut expenses so you can pay the bills.
When you see these steps succeed and you begin to develop frugality into a normal habit, it is easy to ponder how these steps can be applied to larger goals. What about the payout? all of your guilt What about an emergency fund? What about saving for retirement or putting those savings up? What about a deposit?
Frugality is a tool you can use to start cutting away those big life changing things. When you start to see the connection between a simple act of frugality, like getting a book from the library instead of Amazon, and the big goals you have in life, it gives much deeper meaning to your daily choices. You feel that the decisions you make about grocery store choices are really important with a broader purpose in mind, and that’s a strong feeling.
# 5: Living frugally can give you more time for the important things
Many people find frugality to be time consuming, but projects like clipping coupons don’t have to be part of your frugality. You can just skip the time consuming and enjoy the frugal aspects that also save time.
For example, if you want to buy less, you simply spend less time shopping. A good example is my own commute. When I was a large overspender, I would often stop at the bookstore or go to the electronics store on the way home. This meant that while I was commuting, I often burned an hour or more of extra time, but also spent time.
What has this time become? Some days I read a good book. Other days I would take my kids to the park. The point is simple: it came at a time that was worth more to me than the time I spent in a store looking for things to spend my money on.
# 6: Living a frugal life makes it easier to help the causes that matter to you
Frugality cuts this like a hot knife through butter. Simply finding ways to spend less will give you the resources you need to donate to causes that are important to you.
It’s nice to know that you’re promoting a cause that is close to your heart, but it turns out that contributing to charity has a whole host of additional life benefits, including health benefits and a lasting feeling of joy. This feeling can be brought about simply by being a little frugal and giving some of the fruits of that frugality to something that matters to you.
# 7: Living frugally can help you retire earlier
For example, let’s say you’re 25 years old and you find a way to easily cut your monthly expenses by $ 100 without really affecting your life. You decide to contribute to retirement with an aggressive investment that delivers an average annual return of 9% over the long term. By the age of 65, you have an additional $ 468,000 in your retirement fund.
What about inflation? The CPI calculator has increased $ 150,000 to $ 450,000 in the last 40 years, meaning you can still have the cost of living an average American household in this account for several years after the inflation. One hundred dollars a month in frugality gives you the power to literally retire Years sooner than before if you are starting young.
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