If you want to better understand how to manage your money, get inspiration from the frugal habits practiced by the haves. Contrary to many people’s belief that the rich always spend extravagantly, they have adopted frugal habits that help them ensure they don’t end up broke again. After all, they also started somewhere save for those who were born with a silver spoon in their mouths. The secret to their riches is always ensuring that their expenses never surpass their income. Here are some of the habits you should also adopt.
Live Below Your Means
Some people are always fascinated with the thought that they will earn more money in the future that they end up spending all they have at the moment. This cycle will keep repeating itself and in the end, you will have no savings to your name. Imagine getting a call at work that your child fell your home balcony three stories up and he is at the hospital in a comma. If you have no savings, this means that you will start looking for loans to foot the bill for your son’s medical bill. Worse things can also happen.
This is why it is better to live below your means by saving more and spending less each month. To live this way, your expenses have to be less than your income after taxes. Make a habit of saving no matter how small the amount might seem. Your ultimate goal should be to at least save half of your income. This way, you will always have a safety net to fall back to when SHTF.
Always Be on the Lookout for Freebies
You will find numerous freebies online at all times. You only need to have a hawk’s eye to spot and use them to buy a number of things. Ranging from free beauty products samples to discounted meals, you can always find some freebie online. Some of the biggest celebrities like Beyonce prefer using free gifts she gets from different designers and jewelers. These free samples can really last you a long time which means that you will be able to save more money.
Get a Side Hustle
You can never have too much money and the only way to increase your income is by earning more. Although this might sound ridiculous, it is very easy to do. Thanks to the internet, you can now get a side hustle that does not take half your day. There are numerous clients looking for freelancers online to handle their projects. Whether it is writing, graphic design, doing deliveries or even marketing their services, you will never lack something you are qualified for.
While your regular income takes care of all your bills, you can use the income from your side hustle to cover the extra things like vacations, buying that nice car or just treating yourself after a long day at work. You can also add the income from your side hustle to your emergency savings. Actually, there are people who survive on their side hustle income and save all the money they get from their regular jobs.
Differentiate Between Investing and Spending
Although these two involve using your hard earned income, there is a big difference between them. Most wealthy people spend their money on savings while the poor do so the other way round. Buying a nice car is spending unless you plan on using it on your business. Spending has short-time rewards while saving comes with long term rewards. When you invest in an asset, it is definitely going to grow in value and also provide you with a steady income. This cannot be achieved from spending as you will just get instant satisfaction that will not last. The importance of differentiating these two ways of spending your money is that you will be in a better position to balance your short and long term goals against your buying decisions.
As you adopt these frugal habits from the super wealthy, remember that frugal living does not mean sacrificing your current happiness for a blissful future. All you need to do is balance by making the right choices based on your priorities. You should never be at the mercy of your income. Let your money work for you and not the other way round. Are you a frugalist? What are some of the frugal habits you practice? Let us know below.