Frugal living goes beyond being cheap; it’s about making mindful financial choices that emphasize long-term security over immediate indulgences. With over 37 million Americans facing poverty, which accounts for more than 11% of the population, mastering frugality and effective budgeting has never been more crucial.
Understanding Frugal Living
For many, especially those raised in economically challenged environments, money-saving practices become instinctive. Insights from financial experts Peter Niebling and Hunter Garnett reveal nine frugal habits they acquired during their upbringing that continue to foster financial stability today.
1. Buy Older, Used Vehicles with Cash
Hunter Garnett, founder of Huntsville Personal Injury Lawyers, learned the importance of purchasing older, used vehicles outright, avoiding the costs associated with auto loans. This approach has allowed his family to circumvent the interest on car loans while significantly reducing auto insurance expenses. “I still drive a 2000 Toyota Tacoma,” Garnett shares. “Despite earning a high income, we continue to pay cash for used cars.”
2. Maximize Credit Card Rewards
While credit cards can lead to debt, when used responsibly, they offer worthwhile rewards. Garnett emphasizes only using credit cards for purchases that can be paid off monthly to avoid interest. “We earn significant cash back—around $800 in our first year by leveraging fuel rewards,” he explains. This strategy exemplifies how savvy budgeting can lead to impressive savings.
3. Use It Up, Wear It Out
For Peter Niebling, who grew up in a limited-income household, the principle of “using it up and wearing it out” has been vital. This philosophy promotes repairing items rather than replacing them, which can save substantial amounts of money. “I constantly apply this principle to my life, and it prevents unnecessary expenses,” Niebling states.
4. Shop Secondhand for Apparel
Frugal families often gravitate towards purchasing secondhand or off-brand clothing. Garnett notes, “Most of our clothes come from thrift stores or online marketplaces like eBay.” Buying pre-owned not only saves money but also fosters a sustainable approach to fashion.
5. Create Thoughtful, Budget-Friendly Gifts
Gift-giving doesn’t have to break the bank. Garnett highlights his family’s creativity in making personalized gifts rather than buying expensive ones. They often source materials cheaply or utilize what they have at home, showcasing that thoughtful gestures can come from the heart, not the wallet.
6. Establish Budgets Early On
Understanding the significance of budgeting can minimize financial struggles. “I learned to distinguish between needs and wants early in life,” Niebling says. By maintaining a disciplined budget, he has effectively managed his finances and avoided unnecessary debt.
7. Cook at Home to Save Money
Eating out often leads to inflated food expenses. Niebling highlights the habits from his childhood of dining at home regularly, promoting healthier eating. “Home-cooked meals not only save money but also contribute to a healthier lifestyle,” he affirms. This approach continues to benefit him and his family.
8. Eliminate Unnecessary Subscriptions
With household expenses, eliminating non-essential subscriptions can lead to savings. Garnett mentions that even in a more financially secure position, his family opts out of cable subscriptions, redirecting those funds towards more necessary items.
9. Lower the Thermostat and Use Space Heaters
Utility bills can accumulate quickly, especially in colder months. Garnett and his wife have saved money by regulating their home’s temperature, keeping the thermostat lower and using space heaters in specific rooms. “This simple adjustment has significantly reduced our heating bills,” he says.
These frugal habits illustrate that living within one’s means can lead to substantial financial stability. By prioritizing smart spending and creating sustainable practices, families can thrive financially, regardless of their past circumstances.
This article originally appeared on GOBankingRates.com: 9 Frugal Habits Learned From Growing Up Poor.
The views expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
