Living Frugal is Hard

A key to financial security is living frugal.  In the 1996 classic "The Millionaire Next Door" the authors found some interesting information regarding millionaires.

• 75% of millionaires never pay more than $199 for a pair of shoes, and 50% pay less than $140
• 50% of millionaires pay less than $235 for a watch, and only 25% ever pay over $1,125 for a wristwatch
• 70% of millionaires never paid more than $29,200 for a new vehicle, and only 5% ever paid more than $57,500 for a new vehicle
• 1% of millionaires have vehicles that are at least 2 years old, 12.4% three years old, 6.3% with vehicles at least 4 years old, 6.6% with vehicles at least 5 years old, and 12.3% with vehicles that are six years old or older

How do you live a frugal lifestyle?

A frugal person has skills that help him or her gain benefit of the money-saving opportunities in life. Below I have listed several traits found in frugal shoppers.  By incorporating these into your life, you too can become a frugal shopper.

1. A frugal person studies other people. There are probably people near you living a good life on half of what you make. Learn how others do things, so you'll know your options.

2. Frugality requires knowledge of values. It's hard to get a huge deal on a car if you don't recognize what a big deal is. Start enlightening yourself on prices, especially before you're ready to buy anything that costs a lot.

3. Frugal shoppers pay cash. Things are cheaper when paid for in cash instead of credit. Want that new patio set? The cost divided by the number of weeks you can wait to get it equals how much you need to set aside each week. You'll not only save on interest when you pay cash, but you'll often get a better price.

4. A frugal shopper looks for alternatives. Maybe you'd have just as much fun taking that discounted trip to the Bahamas as you would going to Jamaica. If you happen to enjoy pizza just as much - or more, skip the expensive restaurant and call Dominoes.

5. Frugal shoppers tell people what they need. Just mention it in conversation. Do you know how many people get free or cheap things, just because they talk? 

6. Do the math. You didn't really save $400 on that car if it costs you $500 more in gas each year. Also, be aware that some stores are cashing in on shopper's assumptions that larger is cheaper. Yes, the gallon of pickles might actually cost more than four-quart jars. Be ready to do the math if you want to be a frugal shopper.

Begin practicing some of these things and you could begin your journey to becoming a millionaire next door.