Although Benjamin Franklin is well accredited for being the Father of many different ideals and processes, one of the most underrated practices that he developed through his youth and practiced throughout his life is the idea of staunch frugality. Lest we forget that he is the man who championed the phrase, “A penny saved, is a penny earned!”
While the idea of thrifty spending may have been a bit more simple in the 1700’s as purchasing access was nothing like what we have today, the principles of thrift have not entirely changed all that much. In this blog we will look into five techniques that are more inline with today’s world and reveal how to trim the fat around your budget to save more of those precious pennies!
Define a Goal and Budget
Saving will always be easier if you have a defined goal for why you are doing so. Principally, your goals should be based on clearing any debt that is currently keeping you from building a nest egg. If your goal is to become debt free then set a clear amount that you will need to save each month and build your budget around that. If you are fortunate enough to be clear of debt than physically sit down and bluntly define why you want to save. As you parcel out your ‘why,’ your ‘how’ will become that much more important and achievable.
As for budgeting, I can not stress enough how useful the phone and computer applications make this in our world (oh how Mr. Franklin would love the convenience!). Define an upcoming month as your ‘strict observation month’ as you need a starting point for your financial analysis. During this month, track where every single dollar goes in your spending the second after you spend it. I use an app called Spending Tracker that allows me to easily categorize spending into things like, ‘Grocery,’ ‘Utilities,’ ‘Rent,’ etc. once you have a whole month to examine it makes for an easier platform to see where you can cut back on overspending. If you don’t know where your money is going how can you possibly expect to keep more in!
Online Shopping and Cell Phones
Resist the urge to online shop! There is a reason that it is so easy to just click a button and have something delivered to your door – the companies want you to spend more money! As you find yourself opening your browser of choice to shop for new online goodies ask yourself these two questions:
1) Is this really something that I need right now?
2) Do I want this thing more than I want to achieve my financial goal?
Another important technological suck on the budget is the cell phone bill. Overages, specifically with data, can double or even triple your original cell phone bill and leave you with an empty wallet. Utilize the data tracker that is available through most of the service applications to know exactly where you are in your usage and do not go over. If you find that you are getting close each month, see if there is useless usage that can be cut out throughout your normal day and eradicate the waste.
Electricity, Water, and Air Conditioning
Inside the home, as lights and televisions are left on, water is left running, and AC is cranked, there are dollars flying out the window constantly. Set new rules in your house to turn off lights unless the room is being used and to turn the television off unless someone is watching it.
As for water use, try to limit your showers and also turn off the water while you are brushing your teeth as it was estimated recently that leaving it running wastes more than one gallon of water every single night (that’s 30 gallons over the course of a month – 360 per year!).
Air Conditioning can also be a major drain especially for those who live in the South and have poor insulation. Try to turn the AC up every time you leave the house and up as much as you can bear it at night. If your AC unit is constantly whirring this is a good indication that the wallet will be hurting when the utility bills come.
Shop Store Brand
When you are doing your grocery shopping, do your due diligence to inspect the ingredients of every product you buy as there is almost always a cheaper alternative. The ingredients are what you are buying, not the name on the box, so pair your favorite foods with the store brand alternatives to see that you are in fact paying more for the exact same products. With one of the major budgetary strains being the grocery store, this small oversight can lead to all kinds of money waste over the long term.
If you find yourself answering yes to the question of, ‘do i really need this,’ then see if there is a better alternative to the purchase. If you live in a major city then chances are your local thrift store has more higher end clothing than most of the brick and mortar stores where people spend money on new threads.
If you happened to be in more of a rural area there are still hidden gems to be found, although you may have to look a little harder. Do not let the cultural stigma of ‘used’ taint your desire to spend money and achieve your goals. Often times the hunt for finding what you want used can lead to the discovery of new cool, interesting, and cheaper things anyway!
There is money to be found in every budget and with a few easy thrifty steps, even the tightest of budgets can be happy. Sit down and define your goals and then create the habits that help you to accomplish those goals that leave you with a plentiful wallet full of pennies saved!