Frugal living has increased in popularity since the COVID-19 pandemic hit. But actually, frugal living can be adopted at any time, not only during the pandemic. Even after the pandemic is over, you can continue living frugally to reduce expenses.
Reduce Expenses With Frugal Living
Frugal living emphasizes awareness of spending and prioritizing the use of money. Not prioritizing lifestyle or momentary pleasures, frugal living is about using money wisely and making the right financial decisions.
What is an example of frugal living? For example, the spending budget for hepi-hepi, which is Rp 1 million a month, can be reduced to Rp 500 thousand. The Rp 500 thousand can be used to grow emergency savings.
Because, who knows when an emergency will happen? The COVID-19 pandemic is an example. A frugal person recognizes the difference between needs and wants. Having an emergency fund is a necessity, while shopping for fun is a want.
Is being frugal the same as being stingy? Totally different. If someone is stingy, they don't want or hesitate to spend money, even on important things. Meanwhile, being frugal prioritizes quality.
For example, there are 2 types of fans. Fan A costs twice as much as fan B. Fan A lasts for years, while Fan B only lasts for a few months due to its cheap price.
A stingy person will buy fan B because it is cheap, but a frugal person will choose fan A. A frugal person realizes that if they buy fan B, then a few months later they have to spend money again to buy a new fan. This does not actually save money.
Furthermore, before spending money on something, a frugal person must know its use for sure. The more useful the thing they spend money on, the more useful the value of money will be.
For example, a frugal person will choose to save for retirement rather than buying a number of new clothes if the old clothes are still in good condition. By saving for retirement, they will be able to retire comfortably and not burden the family such as children and grandchildren.
Start Living Frugally By Managing Finances With Jago
Jagoans who are interested in trying frugal living still need to manage finances, and you can start with budgeting. Budgeting allows you to know for sure where your money goes.
To separate your needs and to budget, you can use the Jago Pockets in the Jago application. For payments such as monthly bills and daily necessities, you can create Spending Pockets. To build an emergency fund and start saving for retirement, you can create Saving Pockets. After that, you just allocate the budget to each Pocket.
Spending also needs to be monitored so that when something doesn't go according to the budget, you can find out the cause and decide what to do. Is it because you can't resist the urge or is it because you want to help a friend by lending them money?
Those who don't have the Jago application yet can download it here.
