If your income increases, it's tempting to change your lifestyle and start spending according to your new income. But if you're used to living frugally, it's worth sticking to your old spending habits and maintaining a frugal lifestyle once you're better off financially. Here are some reasons why …
1. Rainy Day
'Saving for a rainy day' was a habit our grandparents practised, and it's a good philosophy to adopt. You never know when you're going to need that umbrella! If you stick to a frugal lifestyle even when you have more money, you'll be able to save plenty should you need it in the future. At any point you could find yourself unemployed or have hospital bills, so save as much as you can.
2. Maintain Good Spending Habits
However tempting it is to splurge when you get a pay rise or bonus, resist the urge to spend. Just because you've got it doesn't mean you have to spend it. It's wiser to maintain sensible spending habits instead. Watching your savings account go up can be just as satisfying as shopping!
3. Good Example
If you have kids, sticking to a more frugal way of living when your income rises will set an excellent example to them. People often learn their financial habits from an early age, so show your kids that saving is smart and don't give them everything they want. Teach them how to budget and explain how saving their money will give them more options in the future.
4. Don't Need to Spend
It's tempting when you have more money to immediately increase your spending. But just because you're now better off does not mean that you have to award yourself a 'better' lifestyle. Most of what people buy isn't necessary. Use more discretion as to what you spend your money on, and consider whether you really want or need something.
5. Income May Drop
It's important to remember that what goes up, may come down again. No job or income is 100% safe, and your income may drop again if you or your partner loses your job or has to reduce your hours. So if your new-found prosperity doesn't last, and you've stuck to a more frugal lifestyle, you won't have to change your spending patterns or feel deprived.
6. More Meaningful
Living frugally is a lot more meaningful than spending wildly. It doesn't have to mean depriving yourself of anything fun or frivolous, but instead focusing your spending on the things that matter to you most. Most frugal people value inexpensive or free pleasures, and don't need to buy things to make them happy.
7. Need V Want
When your income increases, you might decide that now you can afford lots of things that were out of your budget before. But you managed perfectly well without these things when you couldn't afford them, so why do you need them now? Apply the 'need v want' principle and you'll realise that you want something rather than need it.
Living a frugal lifestyle doesn't have to mean you're deprived in any way. Instead it's a more creative and meaningful way of living, where you avoid supporting a pointless consumer lifestyle. Even if circumstances don't dictate living frugally, it's still a worthwhile way to live. What's your favorite frugal tip?