I’ll be frank – Saving money is HARD! It’s harder when you have low income and have a bad habit of overspending. If you find anyone recommending you to follow a frugal living lifestyle casually are either insanely headstrong or casting their opinion. And you know what? Opinion is not an advice…
So, who am I to recommend you ways to save money? Who am I to recommend you frugal living tips? Yes, I have practiced, and still practice frugal living and minimalism, but I still prefer the ways of the experts.
Hence, in this post, I’ll list down the 10 best frugal living tips Dave Ramsey would recommend you. And, if Dave Ramsey recommends a financial advice, you can be rest assured that it’s going to be the perfect one.
(1) Stop Impulsive Spending
One of the primary reasons why most people fail to save money is this one. Impulsive Spending. Impulsive spending has nothing to do with your finances, it’s actually a habit issue. In fact, even some millionaires have impulsive spending bad habits which cause them great financial damage in the long run.
Having this bad habit is worse if you’re suffering from financial issues and don’t have enough savings either. What can you do then? Dave recommends that you become accountable. Accountable does not mean punishing yourself for not saving money, but a harsh reminder that you have done something REALLY wrong…
I’ll be honest with you… It’s pretty easy to embrace bad habits, but breaking them is an absolute nightmare. I started developing impulsive habits as well. The book Atomic Habits helped me recover from it.
I’ll recommend you to read Atomic Habits. It’s a great book and will help you at every point of your life. No matter whether it’s financial, emotional, or relationship issues.
(2) Embrace Budgeting
While starting this post I thought to include Budgeting as the first thing. But you know what? If you are suffering from a bad financial habit, no matter how strong and strict your budget is, you’ll end-up breaking it in no time.
Hence, it’s better if you start working on your bad financial habits, and simultaneously work on creating a good financial budget as well. It’s absolutely essential to create a good budget. In fact, it’s the base of everything.
Before you jump to the next section…. Take the most time before creating a budget. Read books, as on public forums, contact financial gurus.. Do whatever you have to, but try creating a good budget. Dave Ramsey has put a lot of emphasis on budgeting. And, I strongly feel he is super-accurate. Why, even billion-dollar companies follow a strict budget. What do you think a CFO (Chief Financial Officer) does?
(3) Use Cash Envelopes
Dave Ramsey is the OG, so I won’t take any credit from him. But trust me, even before reading Dave’s books I have seen my grandmom and mom practicing this simple technique. Isn’t it surprising how our intuition can do wonders?
Anyways, I won’t talk a lot about this since there’s nothing much else to talk about… Here’s how the technique work: Once you’ve created your budget, buy a bunch of envelopes big enough for your dollar bills. Now, if you have alloted, let’s say, $1,000 for grocery, write “GROCERY” on an envelope and seal pack it with $1,000.
Repeat this for everthing… While it seems easy, the real challenge is to stick to the budget allocation. It’s HARD! If you’re not aware enough, you’ll unconsciously spend more than what is in the envelope.
Initially, it’ll be hard to follow such strict financial budget. But, within a few months you’ll like the idea once your start seeing positive results.
(4) Avoid Falling In Debt
I HATE the term “debt.” Unfortunately, today more people are in debt than ever before. Surprisingly, it’s uncommon to not have any debt… Depending on how you use it, debt can either be an asset, or the worst liability you’ll ever handle in your entire freaking life. A debt can literally destroy a person’s life if they are not aware of the consequences.
Dave is strict about debt. His top priority is to get rid of all the liabilities as soon as possible. Because, once all your liabilities are gone, your assets will automatically start growing. I cannot agree more with Dave here. Apart from accumulating assets after debt payment, the other thing you’ll inevitably earn is peace of mind.
Peace of mind is an intangible asset, so not everyone talks about it. But, liabilities can cause emotional issues, and finally lead to physical diseases. Hence, if you’re under debt now, then you should prioritize debt payment as much as possible. Get rid of the negatives and you’ll left with option but the positives only.
(5) Buy Used
The “used-products industry” is a billion-dollar industry. But, how can an industry, so mundane, have a billion-dollar market? Because, sadly enough, not everyone is rich enough to buy new. Buying new is often a special occasions for some people. Plus, there’s money to be saved.
And guess who loves saving money? Dave Ramsey. In one of his interviews he expressed his mindset towards buying used items. The person who asked him questions was ONLY buying new, unused products. Without taking even a moment, he recommended the person to visit thrift stores more often.
When I learned about this first, I took the idea way too literally and visited some thrift stores. Looked for some items but didn’t like any. I thought Dave was just yapping and buying used doesn’t work. My stupid brain couldn’t understand that he was just using thrift store as an example.
You can buy ANYTHING on second-hand (used product). Wheter it’s clothes, cars, bikes, etc,. You name it… I have bought way too many used items, and they are working just fine. Try it for yourself and see whether you like it? I would say that if it saves you money, then you should continue doing buying used products.
(6) Emergency Fund
Emergency is one word nobody likes to hear. Unexpected events and emergency go hand-in-hand. The insurance industry makes billions of profits every year with this one word – “Emergency.” So, what are you doing to handle such situations?
How adamant are you to face an emergency right on your face? The sad thing is… Most people aren’t. Most people have a mental breakdown when they experience an unexpected event, an emergency. What can you do to keep yourself safe? How can you cushion the impact when it suddenly comes?
By preparing for it. There’s honestly no other way to face an unexpected event. Here’s how you can do – Allot a small portion of your monthly income towards an Emergency Fund. How big this fund should be? The bigger it is the better, but the funds should be enough to carry you for at lest six months.
That means, even if you don’t have any income source for six month, you won’t have to worry for anything. It’s like the grace-period we get with credit cards. I have experienced the pangs of being broke for way too many times, so I know how powerful having a financial emergency fund is. You’ll feel upsurd, but at present my emergency fund has ballooned to 2 years. So, if today I go complete broke, I’ll have enough money to sustain myself for two freaking years.
I live frugally, and seldom overspend, so I did not take too long to create a 2-year emergency fund. And, yes, I have taken inflation into account. Even an unacceptable 10% inflation won’t dent my emergency fund…
(7) DIY Repairs
Young boys learn DIY repair from their dad, and the cycle continues for generations. In fact, us humans are hell bent of fixing something by ourselves before calling an expert when things go seriously wrong. Fortunately, most of the DIY repairs are successful.
While we enjoy successfully fixing something by ourselves, one thing we unconsciously do is save a hell lot of money. Because, even a sanitation pipe fixation can cost your $300. So, try to repair at home. Of course, when something’s unfixable you have to call for an expert.
(8) Use Discount Sites
I’m sure you have bought something from Amazon. What’s the highest discount you have got? The highest I’ve got is 75%. Now, do you know that there are other websites too that regularly offers 80% discount on most products? If you know, then what’s stopping you to buy from them? If not, then you should try their services.
You might have heared about “discount coupons.” There are websites completely focused on crawling the internet and providing you the best discount coupons. Bookmark such websites and keep going back from time and again. I’m sure you’ll get good offers at some point of time.
(9) Auto-Saving
Now that we are reaching the end of this post… It’s time you learn the real secret of never going broke. Auto-saving. It’s just a fancy way of say that you save money unconsciously. And, it’s one great way to save money for a better future.
What’s good about this type of saving is that you have no control over it. Without you know anything, your money is deducated from your bank account and invested somewhere good. Most people use this technique to invest in mutual funds, high-yield savings account, and stocks.
Dave Ramsey always recommends auto-saving. Though he may use other terms, but at the end of the day what he wants to say is that automatically saving money will help you in long term, and also increasing your emergency fund.
(10) Start Side Job
Yeah, yeah, I know. Earning money does not link to saving money. But, wouldn’t saving money be a great experience if your income increased too? You might have heard about website like Swagbucks that helps you earn money by completing easy tasks.
What’s more, the thing about side hustle is that there’s no limit to how much you can earn. It’s pretty much endless. For example, blogging was once treated as a side hustle. But, in the past few years blogging has becoming a lot more than just a side hustle. Bloggers are earning millions every month from ads, affiliates, sponsorships, etc.
I won’t lie… I have earned good money from blogging too… Haha.
