Yahoo Finance I Only Spent $2,000 a Month — Here’s 6 Things I Learned
The lifestyle of a two-story colonial with a white picket fence, SUV and dog named Fido isn’t the only way to live — even if it’s the one that many Americans unthinkingly assume.
If you’re willing to live on an extreme budget, many seemingly “impossible” options open up to you. You could work part-time, setting your own hours, perhaps working remotely. Or you could work full-time in your dream career. Or you could reach millionaire status within a few short years.
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But those more obvious benefits form just the tip of the proverbial iceberg. “It’s not for everyone, and it does take a certain mindset to achieve,” said Christian Simmons of Launch That and Annuity.org. But he added that it just isn’t as hard as most people assume. “Others I’ve spoken to who tried out extremely frugal lifestyles often talk about how the frugal living didn’t bother them.”
Brian Meiggs, founder of MeiggsMedia, has lived the extreme frugality lifestyle. “Living on a limited budget teaches you invaluable lessons about financial discipline, prioritization and creativity.”
What are some of those invaluable lessons? As you start toying with the idea of “what if,” consider some of these hidden benefits and lessons from a lifestyle of extreme frugality.
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Greater Spending Awareness and Intentionality
One of the greatest budgeting challenges that many of us face is simply all the unintended spending. Your budget can look more like a leaky sieve than a watertight bucket.
“When you live on an extremely tight budget, you become acutely aware of your spending habits and can identify and eliminate unnecessary expenses,” explained Meiggs. “This heightened awareness fosters a more intentional approach to spending, helping you distinguish between needs and wants and making it easier to avoid impulse purchases.
“By closely monitoring your finances, you can better allocate your resources to what truly matters.”
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Resourcefulness and Self-Sufficiency
Meiggs continued, “Living on a tight budget encourages a mindset of resourcefulness. You learn to make the most of what you have, finding affordable alternatives for your needs. This might involve learning new skills, such as cooking at home instead of dining out, or discovering the benefits of second-hand shopping.
“Resourcefulness also means becoming more creative in solving problems, whether it’s repurposing items you already own or finding low-cost ways to entertain yourself and your family. Over time, this mindset not only stretches your budget further but also instills a sense of accomplishment and self-sufficiency, as you realize you can thrive without constantly spending money.”
Little Luxuries Are Enough To Make You Feel Rich
Certified financial planner Kyle Luetters at Moneta has not only worked with countless clients on extreme budgets, but he’s lived on one himself. “My wife and I had to be extremely tight with our finances while we started my practice, while she came home to be with our first-born child.”
One of the recurring themes that appears over and over is that a single small indulgence is often enough to add that needed richness and texture to your life. “Pick one thing to not completely get rid of or, at least, compromise on. Think of it as one little luxury.”
Clarity on Financial Goals
Luetters noted, “Extreme budgets are sustainable usually for a period of time; not indefinitely. Typically, the extreme budget lasts until a goal is met. Without this, there is a burnout that typically occurs from saying ‘no,’ so often with no end in sight. Be extremely clear on what the goal is and what success will look like.”
That way, you can track your progress toward it, to boost your confidence and motivation along the way.
Habits Last, Both Good and Bad
People struggle so much with extreme budgets in the beginning, because they require you to break all your bad financial habits.
“In the end, old habits die hard,” Luetters said. “There may be some stumbling and mistakes at the beginning of living on an extreme budget, yet some have no choice.”
But the same holds true on the other side of extreme budgeting. “The habits formed during your frugal budgeting days don’t necessarily go away. They stay intact over time. It’s a product of going through the experience that changes a person or a couple.”
And that means the good financial habits you form keep paying real dividends, even after you ease up on the pressure.
A Frugal Lifestyle Can Be an End in Itself
Brenda Christensen, founder of Stellar Public Relations, certainly doesn’t have to live frugally anymore. “I started an Inc. 500 tech startup and exited at $100 million, but we bootstrapped in the beginning. Our big splurge was a potted palm for the office lobby purchased for the then-obscene — to us — sum of $25.
“Old habits die hard, and I rarely splurge on anything — I’m the Warren Buffet of tech. I don’t live in a mansion and drive only one car. It’s served me well, and if it ain’t broke, don’t fix it.”
She added, “The riches of life are from living simply. I still buy off-brand and no designer clothes in my closet, cut my own hair and make my own beauty and cleaning products from essential oils that not only work better, but are better for you.
“Several of my mentors also live extremely simple lifestyles. Billionaire Alfred Taubman drove a station wagon to work, and another billionaire boss, Terence Hui of Concord Pacific, drove a minivan. I later discovered it was armored, as kidnapping risk was high.
“The power of simple living was true for them, and as their protégé, it’s true for me, as well.”
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