The first month of 2022 is already over. Some of you may be doing great with your new year resolutions and some of you may be just settling down after a beautiful holiday season. Whatever may be your financial situation, the Frugal February challenge is worth trying.
The first step is the easiest and the most crucial. When you track your expenses, you know your financial situation more clearly than before. You will see where the money is going out. This may seem like an insignificant step, but many people are actually shocked when they visualize their financial situation. It also puts things in perspective and makes us think about the future.
While tracking expenses, pay close attention to essentials like:
Groceries: you will see how much money is going twice or can be avoided.
Take out: Americans eat out about 5.9 times a week. Try to avoid eating outside often.
Electricity and gas: Trying to cut down on your electricity and gas bill.
This might sound funny, but you will be surprised when you see your bill after simply turning off lights and other devices when you don’t use them. You can also replace conventional light bulbs with energy-saving LED bulbs that cost very little. Even lowering the thermostat by just one degree will make a big difference in your bills.
Try cooking your favorite dish at home instead of takeout. See if you are making most of the streaming service or are using it once in two weeks? You can find an alternative to pay for a movie only when you watch it. Avoid shopping for wants. You can also review your insurance, plans, monthly dues, memberships to check if you are missing out on promotions and discounts.
If you have successfully saved a lot of money, you can save the money in a high-yield savings account that earns interest. You can also consider building a retirement fund in a retirement account or an emergency fund that you can withdraw from easily. The Frugal February Challenge is simple but rewarding. Are you up for it? If you conquer this, move on to the No-Spend Challenge and rule your finances.