by EG Miller

Created on: August 13, 2010

 I became frugal, not by nature, but by circumstance. When my husband became disabled and was unable to make the same kind of income he had previously provided, our annual income was cut in half. In raising two small daughters, it became necessary for the four of  us to learn radical ways to scale back yet at the same time create a great quality of life. Here are my tools that I still use, even though our circumstances are not as dire anymore.

1.  Don't Borrow:  Money that is. Everything else, is OK. If you need a hedge clipper just once every three months, maybe you can trade mowing your neighbor's lawn to use them. I know it sounds harsh, but really the first and best rule, is to live within your means. This means, never ever borrow or pay credit on anything, if it can possibly be avoided. If you haven't earned it, don't buy it.  If you do have credit cards, stop using them, immediately. Put them in your ice tray in the freezer, and only dethaw in the event of an emergency, even then. It is questionable. If you have savings or certificates of deposit at your local bank, you can actually borrow from yourself at about 5% interest instead, and in the worst case scenario, if you become unable to pay back the loan, you've only foreited your own money, less the interest.

2. Don't Spend Money: What does this mean? It means, if you have discretionary income that is above and beyond your budget, then do yourself a big favor and either 1) save it or 2) use it to pay down debt. In either case, you will be making yourself wealthier in the long run and able to spend your money on the things that really matter later: education, family vacations, and giving to charity. It also means prevent impulse spending on small things by planning how much you will pay in advance for things like clothing, gifts, groceries and other discretionary items.

3. Don't Waste Anything: This includes money.  Whether you lump your errands together or carpool when you drive your car, use energy efficient lights and unplug electronics in your home to reduce energy consumption, or go off the grid completely by getting solar panels for your home, all these savings will add up. Wasting money also means being conscious of paying your bills on time to avoid late fees and/or penalties. You can also save money by buying only those groceries you will actually eat, going to the local farmers markets

• 1
• 2
• 3
• Next Page >>