Being a renter comes with a much-desired sense of flexibility, in terms of not only housing, but also budgeting. Seeing as you are not tied down by costs such as property taxes, maintenance, repairs, or home insurance, you can design a budget to maximize your savings. Of course, you can save even more by adopting a more frugal lifestyle.
If you’re thinking of trying out frugal living, we have some tips to get you started. Here are the areas where you can cut down on spending most efficiently and redirect the money towards savings:
As far as housing expenses go, rent is the most important cost to budget for each month. Ideally, you should spend about 30% of your income on rent. If you are someone who can work remotely and you are not dependent on location, think about renting away from expensive city centers and closer to suburbs, or even consider relocating to a different area where rental prices are lower.
If location is important for you, then consider the size of your rental apartment. If you are working from an office and you spend most of your time outside of the home, you maybe need fewer rooms. If you need more space, consider renting with roommates so that you can split the costs.
The best-case scenario varies from situation to situation, so it’s important to really take the time to evaluate your individual situation and decide which areas you can compromise on and which are your true needs when it comes to housing.
The cost of utilities will vary based on a number of factors, and—assuming they are not included in your rent—they are usually the second most important monthly cost you need to cover as a renter. As such, learning how you can cut down on your utilities is paramount for maximizing the amount of money you can afford to put aside. To do this, stay mindful of your consumption habits:
Most of your electricity needs go towards cooling, heating and appliances. One way to regulate this amount is to invest in a smart thermostat and adjust the temperature depending on the seasons. Set it a bit higher than usual during summers and a bit lower during winters. Just a few degrees are going to make a significant difference on your bill at the end of the month. Besides the thermostat, ensure the seals on your windows and doors are properly fitted.
Additionally, you might want to invest in smart power strips that can cut off power to appliances when they’re not in use. Some appliances or electronic devices are going to enter standby rather than shut down completely, which still consumes a significant amount of electricity. So, either invest in smart devices, or make it a habit to unplug the appliances you are not using.
Another utility you can cut down on is your water bill. By adjusting your water consumption, you can easily reduce the price you have to pay for it. From taking shorter showers, to washing low-maintenance clothes at a colder, shorter cycle, the choices you make daily can help regulate your consumption though better habits.
Besides your direct use of water, be mindful of how much your dishwasher and washing machine are using. Most likely, they both have an eco-friendly or economic program which you can use to reduce the amount of water these appliances use.
When discussing food, it’s important to understand that this cost is split between groceries and dining out. Often, if you want to save more money, it’s easiest to start by reducing the number of times you go out to eat. This does not mean that you should not do it at all, but rather that it’s best to limit dine-outs to a few times per month.
Instead, try to orient yourself when buying groceries and cook more on your own. This is not only a great skill to have, but it can also turn into a hobby you can perfect, and it has a delicious result. Planning is key, so whenever you’re going to the grocery store, perp a list of things you actually need. Don’t go shopping when you’re hungry, always have a snack or a quick bite beforehand so you won’t be tempted to impulse buy a lot of food you don’t need.
Usually, the costs that are easiest to cut down and end up drilling a whole in our budget are the small ones: the money we pay without thinking on a daily basis. These costs include a cup of coffee and pastry on your way to work, snacks, water, and other quick buys that you could instead bring from home. Get a reusable water bottle, fill it before leaving home or work, and keep it in your bag at all times. Wake up 10 or 15 minutes earlier, eat a quick bite and make yourself a cup of coffee (which you can take to go in a reusable cup) to save a little more. Pack yourself a sandwich or a snack if you know you get peckish during the day.
These are all small habits that can help you consume less, save more, and have an overall better flow to your day. You get to build and enjoy your own morning rituals rather than hastily drinking some (probably expensive) coffee and eating an often-underwhelming snack. And these are just some examples.
We encourage you to take your time and try to catch yourself in the act with these impulsive day-to-day purchases. At the end of the month, these tiny costs will pile up and you will be able to put more money aside.
When you decide to go frugal, it’s important to remember to keep everything in balance. There’s no need for you to go to extreme lengths for a budget, especially in the beginning. That might make you frustrated and have the opposite effect, sending you down a spending spree. Start with small habits that you can solidify into your everyday life and build on them.
Also, try to write down the amount you spend each day, and if you stopped yourself from buying something one day, keep track of that too. What gets measured gets done, so it might be a good boost for you to see how much you manage to cut down from your spending. It’s all a journey, so start with the first steps. Good luck!