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If you don't make a concerted effort to live frugally, money has a habit of vanishing as soon as it hits your bank account. And given that personal finance is rarely part of the school curriculum, a lot of folks feel lost when it comes to living on a budget. But the internet has answers. In a recent Reddit thread on r/Frugal, the forum's penny pinchers shared their best frugal living tips.
Saving money starts with "self-reliance," a Redditor explains, adding that it pays to limit unnecessary purchases like Starbucks coffee and going to the nail salon. Instead, make your coffee and do your nails at home. Put differently, know the difference between "wanting and needing" a service, product, or experience.
Related: The Definitive List of Things You Never Need to Buy
If there's one tip that consistently came up on Reddit, it's that frugal living necessitates a budget. The first step is tracking your expenses, which you can do using a spreadsheet or on an app like Mint or YNAB. "Know exactly how much you spend in every category. Those 'small' daily expenses like eating out can add up to more than you remember," one comment reads. Once you've figured out your expenses, budget every last penny. You can do this physically — in envelopes à la Dave Ramsey — or use tools like YNAB, which allow you to apportion your funds.
Related: 31 Simple Ways to Save Money Every Day of the Month
While the government may cover some of your expenses if you are too sick or injured to work, oftentimes the payments aren't enough. That's where supplemental disability insurance comes in. You can sign up through your employer or directly with an insurance company for disability coverage, which will help make up for lost wages. One Redditor shared a story about an injured colleague who received 80% of her income thanks to supplemental disability insurance.
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While credit cards can lead to high-interest debt, savvy consumers can also take advantage of their cash back benefits. If you have a big purchase on the horizon — or just want to make most of your payments via credit card — you can earn a significant percentage back on your purchases. That said, only use the card if you're sureyou can pay the bill at the end of the month.
It literally pays to have money if you harness the power of compound interest. If you've forgotten what compound interest is, know that it's simply the interest you earn on interest. If, for instance, you have $1,000 in a high-yield savings account with 2.5% interest, you'll have $1,284 in 10 years. "Remember that it’s one of the few free meals in life," a Redditor writes.
Not only will planning ahead help you prepare for big purchases, but it will also stop you from "spending loads in a mad panic," as one Redditor put it. Plan ahead for meals, shopping trips, the holidays, and other major expenses to keep your budget and spending predictable.
One novel planning strategy is to pay "fake" bills. In other words, put away money for expenses on the horizon such as a doctor's visit. It'll both help you build up a solid savings and anticipate upcoming bills.
You can't compare prices if you don't already know what things cost. Knowing prices will "help you recognize good deals and not impulse buy," a Redditor writes. Since most stores post their prices online, the internet is an excellent resource for price comparisons.
Thrifty living comes along with its own anti-consumerist ethos. Do you really needthe latest smartphone, or is it simply a manufactured desire? One Redditor seems to suggest the later, reminding readers to appreciate what you already have and "forget about consuming addictions/distractions."