Three Tips for Transitioning from a Budget to a Frugal Lifestyle

So you’ve used the envelope system, cut down on all your major expenses and come up with a game plan. You’re trimming your discretionary expenses like groceries, clothing, prepping, and so forth by finding cheaper ways of procuring some things and making the greatest possible use of sweat equity. Now what?

A budget is a short term plan in the sense that it’s not a static thing. Life will happen. You will have unexpected expenses and your specific long term and short term goals (you have those, don’t you?) will need to be adjusted. The changing of the budget shouldn’t change your emphasis, though. To achieve and maintain the ideal of financial readiness, you’ll need to realize that budgets will need to be flexible without compromising your newfound frugal lifestyle.

Tip #1: Remember That Your Budget Is Distinct From Your Income

By all means, you should be trying to make more money and to diversify your income streams as part of the separate ideal of independent income. However, whether you manage to make more or have some setbacks and make less, your budget reflects the bare minimum you need to live on and to achieve your goals and those things don’t change. In the worst case, your non-essential goal provisioning may go unrealized, but certainly as things get better you should not start to spend more.

This also means that your monthly allocations, as you’ve determined them to be from the bare minimum you need to live on, aren’t keyed to when the money comes in. Perhaps your major income is sporadic; certainly any moonlighting or eBay sales you get will be. After the first month or two, you should have enough liquid savings as part of your emergency fund that this is easy. Withdraw your minimal essential allocations and put them in your envelopes at the start of the month. If you’re going to make additional purchases beyond your minimum (because life should be fun and you should find cheap things to do for fun), those should, however, be reflective of your income in the month – set a monthly income goal for yourself with specific reward points. If you don’t do well this month, then you don’t get the rewards. That’s good both for your short-term drive and also preserves the commitment you’ve made to yourself not to touch your savings for anything but life essentials.

Tip #2: Sit Down With Your Family And Review Your Status At Month End

A frugal lifestyle can’t be maintained by just one person in a family environment. Everyone needs to be accustomed to it and find reward in it. And that’s just it; there should be an established system of goals and rewards, but everyone should set their own goals and rewards. There needs to be consensus among the parents regarding each other and of course oversight of the children. Everyone, parents and children, can have fun and spend money on non-essentials, but everyone needs to contribute to budget maintenance and the frugal lifestyle. Saving money should be a family system, just like home maintenance and parenting in general (everyone needs time to themselves).

So, at the end of each month, everybody goes round table and the numbers are gone through. Folks who met their consensually approved goals get their consensually approved rewards in the next month. Folks who didn’t, don’t. Unexpected and necessary expenses are drawn from everyone’s rewards – one person doesn’t get docked just because it was his or her dog that went to the vet. This helps children become self-realized adults who can act on their own initiative and associate work with reward, and helps the family as a whole stay more in tune with the realities of the situation, work together to prevent the entire burden being on one person, and just be closer as a unit.

Tip #3: Leave Room For Spontaneity

A frugal lifestyle incorporating a family system of goals and rewards works to keep things progressing and livable, but there needs to be a bit of room in the budget and the calendar for the family to just get out somewhere and have some fun. Even a day at the beach could use a stop at the ice cream shop, and you can’t leave a kid (or for heaven’s sake, your spouse) out of a scoop of pecan ice cream just because he or she didn’t meet his or her self-defined goals. You’d be an ass for even thinking of it.

No sir (or ma’am), everyone gets in on those things because that’s how families should be. So set aside a bit of cash and time, and when the time comes figure out a way for everyone to enjoy the cash. There’s lots of fun to be had on the cheap if you look for it. Check out frugaldad.com’s tips for cheap family outings this Halloween.