Financial Tips That Do Not Require Frugality

PeopleImages / iStock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

The point of a savings account is to build it steadily, not diminish it rapidly. This may sound easier said than done, especially in this economy, but with a bit of finesse and a few fixes to your finances you could surprise yourself as to how quickly you reach your savings goals. All financial tips don’t have to revolve around living frugally, in fact, you may even benefit from spending a buck or two. 

Read More: 6 Genius Things All Wealthy People Do With Their Money

7 Best Savings Tips–Minus Frugality

Frugal living may save you money in the long run, but that’s not the only way to become more financially stable. Sometimes it takes money to make money, or just knowing when to invest and when to abstain can help you better reach your financial goals. Frugal living tips are worth it to help you keep from spending a lot, but here are some tricks that don’t require frugality:

1. Spend money on quality, not quantity.
2. Put your raise into an emergency fund.
3. Negotiate your bills to a lower payment.
4. Invest in your best asset: you.
5. Pay off debt before spending more money.
6. Allocate your paycheck into percentages.
7. Take advantage of compound interest by reinvesting.

1. Spend Money on Quality–Not Quantity 

Buying items that are so cheap may make you feel like you are getting a bargain, however, they are often inexpensive because they are not made well. For example, if you found a pair of shoes you liked for $20, this could be a great deal or it could mean they will fall apart in a few weeks.

If you have to buy five pairs of shoes a year because they don’t last, it may make more sense to buy one quality pair of shoes for $100 that will last you much longer. Though this is a more expensive price tag upfront, it saves you money and hassle in the long run. Other common examples of when buying quality makes more sense could include furniture, clothing or accessories. 

2. Put Your Raise Into an Emergency Fund 

If your job gives you a bonus or raise, instead of readjusting your budget for more spending, put the extra income into a savings account or emergency fund. You’ve already used to living off of what you were making so the extra wouldn’t hurt you to stash away for a rainy day. 

A high-yield savings account is a great way to earn some interest on the additional income while your other expenses stay the same. Emergency savings are a great way to put money away for situations such as:

• Unexpected job loss
• Medical emergency or hospital bills
• Long-term retirement goals
• House repairs
• Car maintenance 

3. Negotiate Your Bills to a Lower Payment 

It might come as a shock that not all of your bills are written in stone. The monthly expense of your credit card bill could have some wiggle room as you may be able to negotiate the amount you owe down, which is essentially free money. 

Though there are no guarantees that this will be available to you, however, it doesn’t hurt to call your credit card company and speak to a representative. Often you might be able to talk your way into lowering your APR or have any late payment fees waived. 

4. Invest In Your Best Asset: You 

Investing in yourself is one of the leading ways to make more money. However, it does mean spending money on things such as furthering your education or other training programs is a great way to develop your career.

Putting your money into making more money, may seem like the opposite of living frugally, but it can grow your earning potential exponentially. Making the most of your skill set is one of the main ways to turn your money into more money. Focus on courses or classes you are passionate about as this will only make enhancing your skills easier and more marketable. 

5. Pay Off Debt Before Spending More Money 

Paying down debts isn’t the most fun financial tip, but it is one of the most useful to help your finances. Focusing on efficiently paying off student loans, mortgages or credit card bills means you are lessening the amount of extra interest you are paying. Such tricks as creating a monthly spending budget can help you cover your expenses, but also show you where you have room to edit, save or splurge. 

Not only does lowering your interest payments but it can also improve your credit score. This means you could also save money on interest rates on loans you apply for down the road.

6. Allocate Your Paycheck Into Percentages 

Though there are many ways you can break down your budget into percentages one option is the 50/30/20 rule of budgeting. This advises you to allocate 50% of your paycheck for needs, including essentials like mortgage or rent and food. You then can use 30% of your income for discretionary spending and put 20% of your income every month into savings. 

If you want to get more technical with your budget percentages you could break down all of your expenses and spending needs. Here are some examples of what percentages might look like for you:

• Rent or mortgage payments: 25-35%
• Food or grocery bills: 10-15%
• Life, home our auto insurance: 10-25%
• Transportation or commuting costs: 10-15%
• Savings: 15-20%
• Entertainment and leisure: 5-10%
• Gym memberships or other health and wellness: 5-10%
• Personal expenses: 5-10%

7. Take Advantage of Compound Interest by Reinvesting 

There may be nothing better than sitting back and earning money on your money. Reinvesting is a strategy that lets you take advantage of compound interest. This means you would use the interest in dividends you earned from other investments and reinvest that money into buying more stocks, real estate or other assets. 

Frugal Definition: A Quick Take Just in Case

The word frugal is often equated with meaning cheap or thrifty. Though this may sound negative in some contexts, mostly it is about making savvy, if at times sacrificial, financial decisions. Here are some ways frugality is used for long-term savings goals:

• Living frugally generally applies to people who don’t spend a lot of money on food, clothing or housing. 
• A frugal lifestyle means you make savvier financial decisions and know where to save money and where to spend it.
• You opt out of or cancel unused or unnecessary streaming services or other autopay memberships.
• You frequent our local library instead of buying new books or renting movies. 
• You make frugal meals from grocery store items that were on sale or not name-brand. 
• You avoid extravagant purchases on your credit card when shopping online for big-ticket items like cell phones, kitchen appliances or electronics.

Final Take To GO

Making sound financial decisions doesn’t mean you have to skimp, scrimp and cut every corner. You can live within your means and still be able to invest your money by spending it on yourself or other investments. Frugal choices are fine for some, but this is the only way you can save money or grow your wealth. 

Share This Article: