If there’s one goal that’s shared by virtually everyone, it’s wanting to save as much money as possible. Earning money isn’t always the issue; it’s keeping what you make in reserve. Savings are the most basic form of financial security, but due to the cost of rent, mortgage payments, utilities and other necessities, you’d be amazed at how many people struggle to keep it. However, this is where living a more frugal life comes into play. Frugality is often chalked up to people being cheap, but is that really such a bad thing? In this post, we’ll be going over what you might not know about frugal living.
Helps You Save Money
This might come off as obvious, but being frugal is heavily misconstrued. Yes, it helps you save money as being frugal basically means curbing your spending. But this is actually a benefit and not a deterrent. Being frugal doesn’t mean cutting yourself off from the world financially; it’s just a way to become more structured with your hard-earned money. It’s eye opening how much money is spent on splurges and things people don’t need. Down the line this frugality can help you invest your money, make large purchases such as homes and college educations, or simply fund your retirement.
You’ll Have an Easier Time Paying Things Off
Being frugal can be so much more than just saving every cent. It can also make it far easier to tackle bills and debt payments. Take student debt, as student loans are the most common form of debt next to mortgage payments. It’s so easy to accumulate, yet can be incredibly difficult to pay back because there’s so much. You might be thinking that it’s possible to delay a few payments if need be and you’re correct in that most people are able to ask for an extension on their student debt payments. However, this isn’t always going to be manageable as the longer you delay, the more the interest rates pile up.
Interest rates are an extra amount of money that’s applied to the initial payment. It’s based off of a percentage of the original price. Interest rates can get out of control relatively quickly if you’re not careful. Fortunately, this leads us to another benefit of being frugal: making it easier to refinance student loan. Student loan refinancing is a process where you take your current debt and turn it into a new one. It can be used for an additional degree or a way to build up financial security. However, this isn’t something anyone can do on a whim. You have to meet a few requirements first, like having a good credit score and showing enough savings. Make sure to check with your lender, so you understand how to proceed.
Frugality Can Change Your Mindset
Change is something a lot of people become nervous about. It’s understandable as change means walking into unknown territory. Fear of the unknown is normal, but when it comes to having financial stability, it can hold you back. Frugality, however, brings about a good change as it opens your mind to how expensive some things can be. It also helps you develop skills, like critical analysis and adaptability. You adapt to the overpriced merchandise by clipping coupons and collecting on deals whenever they present themselves.