10 Frugal Money Rules To Live By, According to Kate Kaden
Being frugal is about making intentional choices with your money, not depriving yourself. According to a recent video from frugal living expert Kate Kaden, small habits can make a big difference over time.
These frugal money rules can help reduce unnecessary spending while keeping financial goals on track.
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1. Live Below Your Means
Kaden said to know how much your monthly paycheck is and spend less than you earn so debt does not accumulate.
Making small changes, such as spending less on takeout and specialty coffee drinks, can help you save up to $50 a week, according to Champlain College. Setting aside $50 each week and earning a 6% annual return can grow your savings to about $63,000 over 15 years.
2. Credit Card Rule
Kaden advised to never pay for an item with a credit card if there is not enough money in your account to cover the cost.
Keep your credit card spending in check by limiting your spending to only a few things like gas or groceries. Use mobile alerts or budgeting apps to help stay aware of the credit card limit. Because credit card interest rates often range from 20% to 30%, only use them for purchases you can pay off quickly, unless it is an emergency.
3. Pay Bills on Time
Know when bills are due and pay them on time. Kaden suggested using autopay or setting reminders on a calendar to help stay organized when paying bills.
You can make a list of bills to be paid each month in a notebook or spreadsheet. Review each bill’s statement to stay on track and spot issues. Write the due date for each bill on a calendar or set auto reminders. Know if there is a grace period in case you can’t pay by the due date. Take time to review and pay the bills each month. If you set up autopay, check your bank account each month to catch billing errors or low balances.
4. Check Accounts Daily
Kaden advised to spend at least 10 minutes daily checking accounts (e.g., bank, credit card and retirement).
Experts note that checking your accounts regularly will help you monitor your money and stay informed about any suspicious activity, extra fees or charges that occur.
5. Track Every Dollar Spent
Know where every dollar is going by recording dollars spent with a spreadsheet, website or a notebook, Kaden recommended. Track your spending to stop “wasteful spending” and to be able to redirect your money towards bill paying or savings.
6. Unique Monthly Budget
Kaden suggested creating a monthly budget based on the needs and expenses for that particular month. Budgeting can help you develop good spending habits and stay focused on short and long-term financial goals.
7. Execute and Adjust the Budget as you Go
Kaden said she spends five to 10 minutes each day checking her budget, tracking her spending and making adjustments to stay on track.
When changes in income or expenses happen, your budget will need adjusting. If you review your monthly budget regularly, you will be able to keep track of how much money is being spent or if you need to make a change.
8. Always Have a Savings Goal
Kaden noted that having a savings goal you care about helps keep you committed to saving. A savings goal will give your money a purpose and help you stay focused on saving.
9. Plan for Retirement
Kaden advised viewers to contribute to a 401(k) account, 403(b) plan or Roth IRA each month to build their savings over time.
Have a goal of saving at least 15% for retirement. Check to see if your employer offers a 401(k) match, and if possible, contribute enough money to make the match.
10. Giving to Charitable Causes
Kaden said following these frugal money rules can make monthly giving possible, even if you begin by donating just $5 or $10 to a cause you support. Giving to charity can help improve your life by giving you a sense of fulfillment and inspiring others to give as well.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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