How to Forget the Joneses and Embrace Frugality Instead

Embrace Frugality

Have you been quick to dismiss frugality? If you’ve found yourself trying to keep up with the Joneses, it’s easy to think frugality restricts us. We’re conditioned to spend our money on the newest things to hit the market in order to appear “cool.”

(Apple Watch, we’re looking at you.)

We don’t think twice about how it affects our financial future because we’re so focused on the present.

Unfortunately, that often ends in a story of debt, living paycheck to paycheck, or not having enough saved up for retirement. That’s where forgetting about keeping up with the Joneses and embracing frugality instead comes into play.

Put the Focus Back on You

Chances are, your friends are so absorbed in their own lives, they’re not taking the time out of their day to think about how your bank account is doing. They’re not checking in with you to see if you’re maxing out your 401(k). After all, do you?

You’ve probably heard it before, but no one will care about your money — meaning, money in the bank, in your retirement accounts, and what you have invested for your future — as much as you do. In most cases, trying to keep up with your family, friends, and colleagues isn’t going to lead you in the right direction when it comes to being financially responsible.

The first step in fighting the need to keep up with anyone else’s spending is to simply put the focus back on you and your financial situation. Stop caring about what others are doing, and create a list of priorities and goals for yourself.

Your Financial Future Does Matter, Even Now

It’s easy to live in the moment and give into impulse purchases, or to think, “oh well, I get paid next week.” But that’s the wrong way of thinking about things.

You need to start considering how your larger purchases fit into your financial plan. (And if you don’t have a financial plan, now is the time to make one!) This is where that list of priorities and goals factors in. Will buying a $3,000 TV cost you down the road? Does that eventually translate into working for an extra year and delaying retirement?

Start thinking about how your purchases affect your finances, both in the present and the future.

Frugality Probably Doesn’t Mean What You Think It Does

Frugality is a mindset, and it simply means being financially responsible. It’s not about cutting back all the time, or going crazy clipping coupons (unless, of course, that makes you truly happy and fulfilled). It’s about focusing on what’s important to you and spending intentionally on those things. In that way, frugality allows you to live the life you want to live.

Notice there’s nothing in there that says to deprive yourself. Being a tightwad isn’t the same thing as being miserly. You can absolutely spend your money, but the key is doing it in a way that makes you happy.

Think about where the majority of your money goes. Do you spend on things that make you happy? Or are you spending on things because that’s what’s “socially acceptable?”

For example, do you have a cable subscription so you can keep up with the shows everyone in the office loves to talk about, but don’t actually enjoy watching them? Do you get your hair and nails done every other week to look a certain way, even though you’re perfectly happy doing without? Did you lease a $300 per month vehicle because that’s what everyone in your family does?

Start thinking for yourself and stop following the herd.

Are You Being Wasteful?

Sadly, sometimes keeping up with the Joneses results in a lot of waste. Look around your house. Are there any items you bought just because everyone else did that are now collecting dust?

The fact is, fads change, and they change quite often. Buying into them only creates waste, especially when you’re buying things for extrinsic reasons. If things don’t actually matter to you, or they aren’t valuable in your eyes, then don’t buy them.

Purchasing new things constantly pulls you into a cycle of waste (and sometimes, debt). There will never not be a time where nothing new is being promoted in the media. You need to pull yourself away from the allure and go back to that list of priorities and goals.

Ask yourself if the item you’re considering buying will actually be useful to you. If you don’t think you’ll use it more than once, or will lose interest after a month, hold off on the purchase. There’s no point in bringing more stuff into your house that will just become clutter in a matter of months. That’s the definition of throwing money down the drain.

Embrace Frugality

It’s time to embrace frugality and forget about keeping up with the Joneses — or anyone else, for that matter. It’s time to make a choice: a secure financial future, or a future where your financial freedom is uncertain?

There are far too many individuals stuck in the second situation, being forced to work a few extra years (or never being able to retire), simply because they weren’t financially responsible years ago. Don’t let that be you.

It comes down to this: embracing frugality and intentional and meaningful spending will give you wealth, and keeping up with the Joneses won’t. It’s an easy choice, but a difficult battle. One worth fighting to win.

7 Ways to Financially Prepare for a Baby

Financially Preparing for a Baby

Preparing for a baby takes a lot of work and energy — both spent on practical matters and things just for fun. It’s easy to get lost thinking about what colors to paint the nursery, how you’re going to afford to buy everything your baby might need, and trying to brainstorm the perfect list of names.

And of course, there’s the financial changes that come with a growing family. There’s no avoiding the fact that kids cost money — but that doesn’t have to be something new parents panic over.

Whether you’re expecting right now or planning for the future, you can start financially preparing for children. Use these 7 ideas to get you started.

Establish a Baby Savings Fund

Even though you may have a separate emergency fund established, you should consider saving up extra in light of your new addition.

What if your car were to break down, or your roof were to have a leak — along with unexpected expenses for your child? Your emergency fund could get depleted quickly.

It’s a good idea to save extra once you have someone who depends on you and the care you provide. You don’t want to have to worry about whether or not you can afford to fix, replace, or purchase something you didn’t plan on during a time that’s supposed to be happy and positive for  your household.

Adjust Your Budget

With any major life change, you should rebalance your budget. Adding a new family member to the mix is going to increase your expenses, so you’ll need to account for them.

Diapers, formula, daycare, furniture, and clothing are going to be new expenses for you. Write down a list of what you need and what you’ll likely want and estimate how much these new line items will cost.

It’s important to do this as soon as possible.  You might need to cut back in other areas, and that will be easier to do now before you have your hands full with the new addition to the family.

Figure Out Your Income

Will the amount of money you have coming in change once baby is here? Has one of you decided to become a stay at home parent, or will you be taking additional unpaid time off?

Nail down how much you’ll have coming in during and a few months before your baby is born, and don’t forget to check your projected budget against this number.

Also, it’s extremely important you review your employer’s policy on maternity and paternity leave as they all differ. This can greatly influence how much you’ll need to save up.

Knowing how much you have to live off of goes hand in hand with adjusting your budget. If your salary is decreasing, you’ll need to learn to live on less. Saving becomes even more important.

Review Your Spending

If your income and expenses are changing drastically, and you’re finding that money is tight, you might want to think about cutting back on some luxury expenses. These include things like going out to eat, beauty appointments that occur every month, and buying clothes and accessories.

You can also look at cutting cable, exchanging a pricey gym membership for a cheaper one at a smaller organization, or calling service providers to negotiate cheaper rates.

Put the extra money you “find” in your budget toward your list of baby necessities or savings.

Keep Your Baby Purchases in Check

The “fact” that children will cost $245,000 to raise gets thrown around a lot. Children do cost more money, but the total cost is within your control. Children cost as much as you spend on them.

You don’t have to go overboard when buying things for your kids, especially when they’re newborns.

Focus on getting things second-hand, whether they’re hand-me-downs or from garage sales. Babies grow fast! It’s not worth the money you’ll spend to buy them, say, brand new clothing when they’ll grow out of it in a few months.

Review Your Health Insurance Coverage

You’re going to be incurring a decent amount of medical costs throughout a pregnancy if you’re not covered appropriately under your insurance.

Review your health insurance plan and see what it covers, and what it doesn’t. If your spouse has access to another plan through work, check to see if their coverage is better.

This will be helpful when figuring out how much you need to have in your baby savings fund.

Consider Life Insurance and Estate Planning

Do you and your spouse have adequate life insurance coverage? This is an important factor to consider when bringing a child into the world. Life insurance is a necessity when you have others depending on you.

Something happening to you or your spouse means loss of income and loss of help with childcare. Both are equally important. Life insurance will allow your financial situation to remain stable throughout rough times.

Additionally, consider estate planning — yes, even if you’re younger. This will ensure your children are taken care of according to your wishes should something happen.

Otherwise, it’s up to the courts to determine their fate. Don’t let others decide what kind of future your children will have.

Get to Planning!

Hopefully you have more than enough time to create a plan and see if it works for you before your baby arrives. By following these seven tips, you should be in great financial shape when your child is born. The goal is to enjoy parenthood without any major financial issues getting in the way!