10 Habits of Frugal People in 2022

This is the digital nomad quest podcast with Sharon Tseung. teaching people how to build passive income, become financially free and design their best lives. Hey guys, Sharon from digital nomad quest, and today we’re gonna go over 10 habits of frugal people. So I consider myself pretty frugal. And it’s really helped me with my financial freedom journey. Now, the wealth creation equation is basically your income minus your expenses, and all of that times your investments. So obviously, if you have more saved, you’re going to be able to invest that money and then create wealth. Now, I would say being frugal is more about getting the most value out of things versus just like clipping coupons. It’s way more than that. And it’s more about stretching your budget to its fullest potential. So frugal people tend to adopt a wide range of daily habits, which is why I wanted to go over this today. So let’s just get right into it. Habit. Number one is frugal people prefer reliability and quality. So again, you might think that frugal people are all about just getting the cheapest thing out there. But again, it’s more about value. So frugal, people will prefer to buy things that last a long time, it makes way more sense to buy something that will actually last versus buying cheap things that break easily, and you have to keep purchasing it over and over again. So for example, many people prefer MacBooks over other brands because of his durability. So I myself have switched to Apple products with my phone and my laptop, and they’ve lasted a long time. So that’s kind of why I did it. And it’s consistent in its quality. So I know what to expect every time I get an Apple product. And usually, for frugal people, trends and brand names don’t actually matter a lot to them, they just want something that will last and actually do its task and they will pay more for that now have a number two is they wait for sales. So frugal, people will choose not to buy things when they just come out, they usually wait till the price goes down, they wait for 1050 or sometimes even 70% off items. To be honest, when I shop, I get a lot of things in the sales section or in the clearance section. I love when they have the taken additional 50 off on an already reduced price. I love looking at those bargains. Because to me if it looks good, it’s durable, it’s high quality, I’d rather get it at a lower price. So if you’re going to do this, you usually want to have self control and you usually want to be able to compare quotes. frugal, people know that with a little bit of research, they usually can get things a lot cheaper. And as another example, I recently booked a cruise for our honeymoon, it was five nights two people for $500, which is basically $50 A night and I did that by shopping around a lot. And even for cruise excursions I booked tours at the destinations themselves instead of booking through the cruise line because it was a lot cheaper that way I paid $150 Also for a flight from SF to Milan and also for Prague to Hong Kong. It was like this package deal I saw on slick deals. So I’m all about comparing prices and getting the best rates because it really adds up. If you don’t do that even for our wedding, we actually spent around $13,000, whereas the national average is $28,000. And we know people even spending six figures for weddings because in the Bay Area is a lot more expensive. So to wrap it up basically frugal people look for sales and they look to compare prices have a number three is they track their daily spending, if you find you’re running out of money a lot, it’s probably from impulse buying. So if you track your expenses, you’re actually going to be really surprised on how you’re spending your money. You might have subscriptions you’ve forgotten about you probably buy things that you forget that you spent on and if it’s not a necessity frugal people usually unsubscribe to things that are unused, they like to figure out how much they’re spending in a day so that they can reduce their expenses if

they can. Like when I was on the cruise, I actually had a lot of fun just tracking how much I was spending and how much I wasn’t spending basically because I was saving a lot doing certain saving tactics. If you want to start tracking your income and expenses, you should definitely check out Personal Capital, which I’ll link in the description below is definitely a great tool to help you build your net worth and track it as well as your income and expenses so you understand your cash flow, understand your spending habits and things like that. And it can really help you improve your finances have been number four is frugal people tend to buy in bulk, whether it’s food or household products, they’re usually okay with giving up storage space to save money, they might shop at buying clubs at Costco or discount stores to save money. So because of this, they will really understand how much they should be spending on certain items like toothbrushes, toothpaste, toilet paper, and things like that. And because of this, they’ll know when it’s a good deal. So they will buy in bulk if necessary. Because these items are things they know they’re going to spend no matter what because over time it’s going to be used so you might as well buy in bulk, but at the same time not all bulk purchases are smart purchases. So if you’re going into Costco and you see that there’s something that you might want but you have to buy like 10 of them that doesn’t mean it’s a good purchase because you don’t even know if you’re going to use all that it really depends on what you’re buying and how big your family is. Habit number five is they usually prepare their meals at home. Now to be honest, Shawn and I actually eat out quite a bit because for us we enjoy experiences we enjoy going out and spending time with each other. We also don’t like trading time for washing dishes and cleaning and cooking, but we’re gonna try to cook more because of health reasons. And obviously you save so much more money if you actually cook at home all the time. One of the biggest money wasters is honestly food and beverages. According to this Food Network. Article 82% of the meals Americans eat are prepared at home, which is a much higher percentage than a decade ago, it saves a lot of money prepping your meals and packaging them into reusable, microwave safe containers. And in general, obviously, it just costs a lot less to prepare your meals yourself. Habit number six is frugal. People are always learning about money. Frugal people will use the free resources out there like YouTube and things like that to learn more about money. So they’re reading and discussing with their peers. They’re looking at things online, and they’re experimenting with their investments. And with budgeting by constantly keeping up with things they can understand how to get the best deals, how to save more money and how to invest that money. They’ll also learn how to grow their income so they can put more of that back into their investments. Habit number seven is they usually choose to live in smaller homes. According to this article, about 56% of Americans now say they would live in a tiny home tiny homes have become more and more trending because it supports people who want to live that minimalistic lifestyle, they understand that smaller home can be liberating because it forces you to have fewer belongings. And it reduces the amount of time cleaning and has less maintenance. And also if you choose to live in a smaller house, you’ll have a lower cost of living less expenses, like your mortgage and things like that. And that way you can keep life simple, you have less expenses and you need less to live on. So for me, for example, I used to think I wanted to live in a big house but actually enjoy being in a smaller home because first of all, if I am living in a bigger home, I’ll probably feel more lonely and scared to just walk around a big house. But then obviously it’s also about reducing expenses like right now we move to Dallas and we’re Airbnb out our property in the Bay Area and it makes up for both of our mortgages. Being able to live in a smaller house actually allows us to have a more minimalistic approach to life having number eight is they find new uses for old items. So for example, old shoe boxes can be used as drawer organizers. Plastic bags can be used as storage for small items. And brown shoe polish can actually be used as a quick fix for blemishes on woodwork and furniture and things like that frugal, people are creative with how they use their items. And they really want to avoid waste. So they’ll find different ways that they can keep using certain items if they can. And as another example of not being wasteful, frugal, people like to take their food home as leftovers if they don’t finish it at a restaurant. And that leads me to Habit number nine they do embrace it, do it yourself lifestyle. So on average US household spent $8,305 on home improvement $3,192 on home maintenance and $1,640 on home emergencies. So that can all add up. So frugal people like to try to learn how to fix different things so that they don’t need to hire someone to help out. And they’ll typically call a repair person if they don’t know how to fix things themselves. Another example is when you own a car, a simple oil change can cost up to 70 bucks with a professional so these things can actually add up. So if you know how to do these certain DIY things, it can save you a lot of money. So in order to do this, a lot of people I know actually learn on YouTube and on Google to see how they can fix different things themselves. Like replacing flooring in the bathroom, I know a couple of friends who are trying to do that themselves right now. So these habits actually teach you a lot too as well as lets you save money. And last but not least have a number 10 is they like to think long term brutal, people are always thinking about the long term costs and not just the upfront ones. So as an example, sales and marketing pros love to try to upsell you and get you to focus solely on the upfront costs of things. They’ll say things like this Jacuzzi can be yours for four to $5,000. But in reality for owning a jacuzzi, that might increase your bill to an extra $100 a month and not to mention the maintenance costs that come with it. So they will think beyond just that simple pleasure. And even with pets, they might think is it worth it to have a pet or not. And it’s based off of those long term costs that you have to think about so frugal people ask when they are trying to buy something if it’s worth it if it’s going to prevent them from saving money? Or is it going to prevent them from doing something that’s going to give them more value. And I feel like that applies to a lot of things. If you’re thinking with patience and delayed gratification you’re gonna get a lot further in life, for example, with entrepreneurship union know that you have to think long term with things because it takes time to build a business. So I think the whole thinking long term is really beneficial to all aspects of your life and

in personal finance, the average person will impulsively buy but frugal people will think about if it’s going to benefit them long term. So hope you guys enjoy these 10 habits of frugal people. Let me know if any of these resonated with you. I think I do most of these things, but I don’t do the DIY stuff as much. I am trying to do more of that because I want I learn more in terms of home renovation and that’s more of like a real estate related thing. And I would also say that in terms of cooking, I don’t do it as much as I should but I do want to do it more for health reasons and obviously to reduce expenses if I can. So I hope you guys enjoyed this episode, please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.

Transcribed by https://otter.ai