Being frugal means you need less; when you need less, you spend less.
When you reduce your expenses, you have more money left over in your own pocket. Getting frugal is the easiest way to free up your income to save for a house, pay off debt, or invest in your retirement.
When you do begin to cut expenses, you’re taking advantage of the first and easiest way to build wealth. If what you spend is less than what you earn, you will have a surplus.
The simplicity of this equation may help to explain why there is so much great information out there on how to be frugal, how to save money on this, that, and the other, and how to pinch pennies without driving yourself (or your family) crazy. All you have to do is reduce your spending, and just like that, you’ve increased your wealth!
But if you’ve started out attempting to maximize your wealth by creating a surplus in your budget, you’ll get to a point where there are no more expenses to cut.
You’ll become such an amazing budgeter that the only things you spend money on are things that are truly important and meaningful to you. Being frugal and mindful about how much money you spend won’t be enough to create the kind of significant wealth that allows for financial independence. So what’s a smart, sensible, and frugal individual to do when you’ve squeezed every last “extra” dollar from your budget? [Read more…]