Financial freedom isn’t about winning the lottery or inheriting a fortune. It’s about adopting smart, frugal habits that can help you save and grow your wealth over time.
Hi, I’m Lachlan Brown, founder of Hack Spirit and a mindfulness enthusiast.
I’ve learned that the path to financial freedom doesn’t require a six-figure salary, but rather a mindset that values financial stability over material possessions.
In this article, I’ll share some frugal habits that can accelerate your journey to financial independence. These habits are simple, effective, and practical – no gimmicks or get-rich-quick schemes here.
So if you’re ready to take control of your finances and start building your wealth, keep reading. It’s time to learn how to live frugally, not cheaply.
1) Track your spending
It’s amazing how liberating it can feel to know exactly where your money is going. This is something I’ve learned the hard way.
Most people underestimate how much they spend. And when you don’t know where your money is going, it’s hard to take control of your finances.
That’s why tracking your spending is one of the most crucial frugal habits.
Start by keeping a record of every cent you spend for a month. You’ll be surprised at how quickly those little purchases add up.
Once you see your spending habits in black and white, you can start making changes.
This isn’t about cutting out all the fun from your life. It’s about recognizing where your money is going and consciously deciding what’s worth it and what isn’t.
By bringing awareness to your spending habits, you can start directing your money where it needs to go, instead of wondering where it all went.
Track your spending today. It’s the first step towards financial freedom.
2) Prioritize needs over wants
This might seem like a no-brainer, but it’s something that took me a while to fully understand and apply in my life.
A few years ago, I found myself eyeing a shiny new laptop, even though my current one was functioning perfectly fine.
It was a classic case of want over need. And let me tell you, the price tag was far from frugal.
However, I took a step back and asked myself: “Do I really need this, or do I just want it?” I realized that while the shiny new gadget was appealing, my older laptop was still fulfilling my needs just fine.
By choosing not to purchase the new laptop, I saved a significant amount of money that I could then allocate towards my savings and investments.
Prioritizing needs over wants isn’t about depriving yourself. It’s about making smart decisions that support your long-term financial goals.
Every dollar you don’t spend on a non-essential item is a dollar you can invest in your future.
So the next time you’re tempted by an impulse purchase, ask yourself: “Do I really need this?” Your path to financial freedom might depend on your answer.
3) Embrace minimalism
Minimalism isn’t about living in a barren home with only a chair and a lamp. It’s about eliminating the unnecessary so that the necessary can breathe.
In my journey towards financial freedom, I’ve found that embracing minimalism not only saves money but also brings a sense of peace and clarity.
In fact, I discuss this in detail in my book titled “Hidden Secrets of Buddhism: How To Live With Maximum Impact and Minimum Ego”.
I delve into how the Buddhist concept of non-attachment can be applied to our material possessions, leading to a more mindful and financially secure life.
When you start to let go of things you don’t need, you realize just how much money you were spending on maintaining, replacing, or upgrading those items.
The money saved can then be redirected towards your savings and investments, accelerating your path to financial freedom.
But minimalism isn’t just about saving money. It’s about finding happiness in simplicity and creating space for the things that truly matter in life.
Give it a try. Start small. Maybe get rid of a few items that you haven’t used in a while. You might be surprised at how freeing it feels.
And remember, every step, no matter how small, brings you closer to your financial goals.
4) Practice delayed gratification
Delayed gratification is the ability to resist the temptation for an immediate reward in order to wait for a more valuable or substantial reward in the future.
It’s a critical skill when it comes to financial freedom.
From a psychological perspective, people who practice delayed gratification are more likely to succeed in their long-term financial goals.
This is because they’re able to resist the pull of instant pleasure in favor of a bigger payoff down the road.
Here’s a practical way to apply this concept: The next time you’re tempted to make an impulse purchase, take a moment to consider the long-term implications.
Will buying this item now prevent you from saving or investing that money for a more substantial benefit in the future?
One classic example is choosing to cook at home instead of eating out. It might require a bit more effort, but the money saved can significantly contribute to your savings over time.
As psychologist Walter Mischel, famous for the Stanford Marshmallow Experiment, once said, “The ability to delay gratification is critical for a successful life, predicting higher SAT scores, better social and cognitive functioning, a healthier lifestyle and a greater sense of self-worth.”
So, the next time you’re faced with a spending decision, remember that patience truly is a virtue. Practice delayed gratification and watch your path to financial freedom become clearer.
5) Don’t always go for the cheapest option
Wait, what? Isn’t being frugal all about spending as little as possible? Not necessarily.
While it may seem counterintuitive, sometimes spending a bit more upfront can save you money in the long run.
This is particularly true when it comes to items that you use frequently or that are meant to last for years.
Consider this: a cheap pair of shoes might save you money now, but if they’re poorly made and wear out quickly, you’ll end up having to replace them sooner than a higher-quality, more expensive pair.
The same principle applies to many things in life, from appliances and electronics to furniture and even car repairs.
In essence, it’s about value over cost. It’s about investing in quality that will last, rather than opting for the cheapest option without considering its lifespan.
This doesn’t mean you should always buy the most expensive option. Instead, research and assess the value of each purchase in terms of its durability, functionality, and how often you’ll use it.
As the old saying goes, “Buy cheap, buy twice.” So make sure your frugal decisions are also smart ones that will benefit you in the long run.
6) Set financial goals
Setting clear, achievable financial goals is a crucial step towards financial freedom. Without a specific target in mind, it’s easy to lose sight of why you’re saving or investing in the first place.
Whether it’s saving for a down payment on a house, paying off student loans, or building an emergency fund, having a concrete goal can motivate you to stay on track and make smart financial decisions.
Remember to make your goals SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
This means not just saying “I want to save money,” but “I want to save $10,000 in two years for a down payment on a house.”
Having clear goals also makes it easier to track your progress and celebrate your achievements, which can further motivate you to stick with your frugal habits.
7) Learn to DIY
I can’t tell you how many times I’ve saved money by learning to do things myself. From fixing a leaky faucet to cooking my meals, DIY skills have been a game changer on my path to financial freedom.
The internet is a treasure trove of resources and tutorials on virtually any topic you can think of.
With a little patience and a willingness to learn, you can pick up skills that can save you significant amounts of money over time.
But it’s not just about the money. There’s a certain sense of satisfaction and pride that comes from learning a new skill, from solving a problem with your own hands.
Of course, there are times when hiring a professional is necessary, but before you automatically reach for the phone, consider whether it’s something you could learn to do yourself.
Plus, you never know when these skills might come in handy in the future.
8) Automate your savings
One of the most effective ways to ensure you’re consistently saving towards your financial goals is to automate your savings.
Setting up automatic transfers from your checking account to your savings or investment accounts takes the decision-making and effort out of the process.
It’s a simple way to ensure you’re paying yourself first, rather than waiting to see what’s left over at the end of the month.
By automating your savings, you’re also removing the temptation to spend that money on non-essential items. Before you know it, your savings will start to grow without you even thinking about it.
Automating your savings can be a game changer in your journey towards financial freedom. It’s a simple step, but its impact can be massive.
So take advantage of this tool and make your money work for you.
Final thoughts: It’s about choices
The journey to financial freedom isn’t always about earning more. More often than not, it’s about making conscious, informed choices.
Each of the frugal habits shared in this article represents a choice – a decision to prioritize long-term financial stability over short-term gratification. It’s not always easy, but the payoff is worth it.
Financial freedom isn’t an overnight achievement. It’s a process, a series of choices that add up over time. The key is to start where you are, do what you can, and always strive for progress, not perfection.
