How to live frugally in 2018

Today we have a guest post from Lauren over at Brit On A Budget who is one of the best money savers out there and has got some great ideas for how to live a much more frugal 2018! 

When someone is frugal, it means that they spend less money than the average person. Most people believe that to achieve this lifestyle you need to deprive yourself of necessities and cut out the greatest pleasures in life (i.e chocolate) however, it can be achieved by making the most of your money and being careful with it so you can afford what you really love. 

To achieve a frugal lifestyle, it is important to live below your means. This is the foundation on which financial freedom is built. To do this, you should look at your spending habits and which areas you need to cut back spending on. If you want to live below your means, you have to know what your means are. To work out how much you have to spend a month, you can use a method called “backwards budgeting”. This is where you write down your monthly income, then start by subtracting each expense you pay each month. If you get to a negative number, you are spending too much.

Meal planning can help you save hundreds of pounds per month on your groceries. This is because up to 20% of household food ends up in the bin, therefore by meal planning and using your leftovers and being less wasteful in general you can achieve a frugal lifestyle.

You can also save money on your food shop by growing your own food and shopping seasonally. This also reduces the amount of takeaways you have a month, and helps you to save on petrol by reducing the number of trips you take to the supermarket. 

Additionally, buying a new car is one of the LEAST frugal things you can do. Although you may want a safe and reliable car, new cars do not offer these any more than a used car would. You should also consider that the moment you drive your new car away; it will depreciate by as much as 11% of its value. This means that if you buy a £30,000 car, it will lose as much as £3,300 in value just by driving it home. After 1 year, the value will have decreased by 25% which means the car you paid £30,000 for will now be worth £22,500, and after 5 years it would have decreased by 63%, giving it a value of £18,900. 

Some examples of billionaires that drive cheap cars include:

• Warren Buffett (CEO of Berkshire Hathaway) bought a Cadillac XTS, worth $45,000 in 2014
• Mark Zuckerberg (CEO of Facebook) drives an Acura TSX, worth $30,000
• Ingvar Kamprad (CEO of Ikea) drove a 1993 Volvo 240 GL, which was worth around $22,000
• Steve Ballmer (CEO of Microsoft), drives a Ford Hybrid Fusion that retails for around $19,000

Following this, you can live frugally by owning a modest house. Again, one of the richest people in the world, Warren Buffett, still lives in a house that he bought for $31,500 more than 50 years ago. Not only are small homes more energy efficient – as they have less space to heat and cool – they require less cleaning and maintenance. A smaller home will also require a smaller mortgage, which means you will have less debt in the long run. 

You can also live a more frugal life by taking packed lunches to work. Although spending £5 a day on lunches may not feel like you are spending a lot, this equates to around £1000 a year – money that you could be using to pay off debt or to book a holiday!

Sticking to drinking water can also allow you to live frugally as soft drinks and alcohol may be delicious, but leaving these as a treat on the weekends can help you to save lots of money!

Hopefully, this article will have given you some ideas on how you can live well for less!

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