financially frugal

I’m often called a penny pincher.

I’ve also been told my wallet squeaks when I open it.

I’ll accept it, I’ll concede:  I’m frugal; I’m a tightwad.

It’s a learned habit that has served me well.

Starting off as a single mom at nineteen, I had an instinctual reaction from birthing a child: my son became my priority in practical money matters.  That was my start to becoming financially practical.

I won’t tell you that I perfected financial skills in that twenty-plus years since, but I will say that I feel confident that we can weather difficult situations because I know how to be frugally flexible.

Frugal flexibility means that you have firmly set your priority expenses and always pay those items as soon as your money is available; then you prioritize those needs that remain, and those things that you want, to appropriately divvy the money from there.

This means becoming practiced at making solid choices and having a realistic idea of what your wants and needs are.

Here’s my favorite starting tip:  MAKE A LIST.

First list those things that don’t allow a choice, the monthly have to pay list.

Below that, make a list of the immediate things that you need.

Below that, make a list of the immediate things that you want.

Were you honest with yourself when writing those lists?

Let’s practice:

Static Priority Expenses:

1. Rent/Mortgage
2. Utilities (gas, electric, water, trash)
3. Vehicle Payment
4. Food
5. Babysitter fees
6. Gas

Needs:

1. Credit card payment
2. Clothing
3. Household supplies
4. Savings account
5. Emergency items
6. Insurance

Wants:

1. Savings accounts
2. Emergency items
3. Cable TV
4. Internet
5. Snacks
6. Dining out
7. Entertainment
8. Clothing
9. Furniture
10. Jewelry
11. Art
12. Cappuccino/Soda
13. Smokes/Snuff
14. Alcohol
15. Décor
16. Outdoor Furniture and décor
17. Garden flowers

finances

Here’s the basic concept:

Pay that first list.

• Get those priority items paid.  No getting around that.

Now, how much do you have left?  Will what’s left pay everything on that second list?

•  No?  Then assess what can be held for the next paycheck from that second list, you now have to be frugally flexible.

1. Do you have a particular clothing need?
   • Can it be covered by shopping at Goodwill or a garage sale?  Make your money stretch by bargain shopping.
2. Can it wait until the next paycheck?
   • Push it back and make the same choices next time.
3. Are there household supplies that can wait?
   • Hold them on that shopping list, unless there’s a great sale on those items to help make your money work for you.

• Yes?  That’s terrific, and you now have the option to make great frugal flexibility choices here.

1. Shop for affordable and practical clothing:  clearance racks, seasonal sales, or secondhand/consignment shops are great alternatives.
2. Pay more on that credit card or that vehicle loan if it’s high interest so that you can eliminate that expense in the future.
3. Stock up on household items that are on sale, so that you can free up money for other things next paycheck.
   • This same method works for your stockable food items.

Now you have the third list to consider.

• If all your money was used on the first two lists, your choices are obvious.

1. You have to make your situation work for your budget.
   • In order to have things that you want, you’ll need to find ways to lower your priority expenses and free up some “fun” money.
   • Or accept that you are only able to meet your needs, and find free entertainment alternatives to suffice.

• If you have some money for that third list, let’s stop and reassess first.

1. Could you make your money work for you?
   • Is it possible to use some of that money to apply to credit cards on the second list to pay them down
   • Could you apply extra money to mortgage or vehicle loans on your first list to pay them down?
   • Can you reduce your future expenses and free up money that could be used for other items:
     1. Build up a savings account
     2. Stock up on household needs
     3. Create a vacation fund
     4. Establish a plan to buy one big ticket want every year or two
     5. Develop a drastic scheme to pay off your big expenses and retire early

There’s your start; there are your basic questions and lists.

Practice thinking about your needs and your wants and your goals.  It’s easy to find frugal flexibility when you practice.  :)

Later!

Dreamin’ Girl