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Sunday, March 7, 2010

Frugal living

Life is a choice. Some people spend their money to enjoy every bit of their lives whereas some people choose to live simply. The choices that we made greatly affect our lives and our financial security.
The experience of financial crisis in 1997 and financial tsunami in 2008 have taught many to live frugally and to set aside some money for emergency such as lose of job, sudden sickness, etc. Despite this, many are still wondering how to live frugally and to most people, it may seem impossible, for them frugality means deprivation. However, frugality does not mean deprivation, it means living below your means.
With the money that one earn, how can one live frugally?
By taking the following steps, one may be able to live a frugal life:
1. Assess income

Determine how much income we actually earn is very important. It will determine how much money we can spend every month.

2. Determine expenses

It is important to see where your money go every month. By tracking our monthly expenses we will be able to see what areas we are over spending and what areas we should spend more.

3. Make a budget

By bringing together income and expenses, we will be able to make a budget that will sustain our living and yet not deprive us from enjoyment. It will curb overspending and help us to shape good spending habit.

Though following the budget may be difficult initially but we will get used to it after several attempts so start your frugal living today.

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