Learning how to live frugally can be difficult in a culture where we’re taught to want to have the latest and greatest things.
Since the post-WWII economic boom, our economy has hinged on how much we spend. Now, we’re facing a lot of economic pressure, from increases in debt to lower wages.
That may drive you to start your own business. If you find yourself in this situation, you’ll have to adjust your spending. That can be hard when you appreciate the finer things in life.
How can you live a frugal life when you have expensive tastes and you’re getting your business off the ground? Read on to find out.
1. Pay Off Debts First
Debt is a killer for anyone, whether you’re an entrepreneur or not. Your first step to living a frugal life is to pay off your debts as soon as you can.
Once you pay off your debts, you have money that you can invest in your business or set aside for an emergency fund. The bottom line is that you’re able to use those funds into building a better, more secure future for yourself.
2. Know What’s Important to You
It’s all too easy to spend money on things you don’t need. You can go online, see an ad or a sale for something and not even think twice about buying it.
When you prioritize what’s important to you it becomes much easier to discern what you want in life and what is a throwaway purchase.
An example would be if you know that having a reliable car is important to you. You may prioritize expenses around maintenance or getting a car that is less expensive but still reliable.
3. Find the Balance Between Time and Money
As a new entrepreneur, there are going to be some things you’ll want to spend money on because it saves you time.
It will be tempting to do everything yourself and bootstrap your business. That can be good in some respects, but incredibly damaging in other respects.
Let’s say that you don’t know anything about building a website. The bootstrapping mentality would suggest that you build the website yourself. That can be a great thing if you know a little bit about building a website.
However, if you don’t have the knowledge, you’re going to spend time learning and then build the site yourself. You have to weigh if that time is better spent on getting clients. If it is, then you may want to consider outsourcing to someone with the expertise to get the job done right.
4. Go Through Your Monthly Expenses
There are always expenses that you can cut out of your budget. You have to be honest with yourself when you go through your expenses.
Take a look at each expense and see how it’s adding value to your life. Of course, there will be things like utilities that are necessary. You may be able to reduce those expenses a little bit by using fewer resources or calling the cable company to get on a lower plan.
5. Take Advantage of Free Entertainment
People who are hesitant to learn how to live frugally usually think that they have to give up their quality of life to do so.
You may have to give up some things and curtail your impulse buys, but that doesn’t mean that you can’t enjoy life in the process.
Take the time to learn about fun events and festivals that are happening in your community. Check with your local chamber of commerce, library, and your municipality’s recreation department.
As the weather gets warmer, many areas have free movies in the park, music events and much more. Get outside and take advantage of them!
6. Cook at Home
Another way to live frugally is to cook at home. If you go out for one meal a day and spend $10, that can mean $3,650 a year. Some people who go out to eat all the time wind up with over $30,000 in debt.
Here’s another benefit as a business owner. When you eat at home, you’re likely to eat much healthier. That can translate into being in better physical condition to handle the rigors of entrepreneurship.
If you can cut back on the times you order out, you’ll be able to trim your budget and your waistline.
7. Have an Exit Strategy for Your Business
What’s your plan for your business? One way to start a business and live frugally is to have an end game in mind. That will give you the added motivation to do the hard work of living a frugal lifestyle.
How do you see yourself building your business? Do you see yourself building a business so you can sell it and exit gracefully? Do you see it going public?
You’ll want to build a vision for your business, no matter what kind of business you have. For example, if you build a manufacturing business and want to sell it, you’ll be able to reap the rewards of your hard work.
8. Spend Your Time Wisely
One component of frugal living that’s often overlooked is time. When you work an 8-5 job, you go to work, come home drained, and plant yourself in front of the TV for a few hours.
Frugal living gives you the opportunity to spend your time wisely, especially as an entrepreneur.
You’ll soon find that your time is better spent learning a new skill such as SEO rather than watching Netflix.
How to Live Frugally
When you’re starting a business, there are going to be a lot of challenges ahead. You need to be financially secure to survive. It can mean a big adjustment in your spending habits, especially if you are accustomed to having a nice salary.
That’s the main reason why you need to learn how to live frugally. The good news is that with a little discipline, you can live a frugal life and enjoy a nice lifestyle.
Would you like more tips on entrepreneurship? Read this article that shows you how to screen employees for your business.
