Over the final ten days of this year, we’re going to finish off this series by looking at ten tactics that demonstrate how you can transform all of the little savings you’re getting from frugality into life-affirming changes.
The first step, though, is figuring out how much all of these frugal changes is actually saving you.
Whenever I make a frugal change in my life, I want to directly see my return on investment. I want to know exactly how much I’m saving because of this move and whether that change was worth it.
For example, let’s say I make a batch of my homemade laundry soap. I can make fifty loads’ worth of laundry detergent for about $1.12 and fifteen minutes of effort. At the same time, I can buy about fifty loads’ worth of Tide at the store for roughly $8. I’ll save $7 on that exchange while investing about 15 minutes of effort.
If I do that six times in a given year, I’ll have saved $42 on laundry detergent over the course of that year (along with an hour and a half of effort, spread out over the year). Given the performance of the homemade soap, I’d happily say it’s worth it.
So, I’ll add that $42 to the list.
How much am I saving by switching my gas purchases to Sam’s Club? $25 a year, let’s say. How much am I saving by cooking my own beans at home roughly once a week instead of buying cans? $40 a year, let’s say. You set your thermostat two degrees higher in the summer and two degrees lower in the winter and you find that you’re saving about $20 per energy bill, or $240 per year.
Whatever tactics you choose to use, if you keep track of what they save you, you’ll find that they really start to add up.
I highly recommend estimating annual savings from your frugal choices, then adding those savings up. You’ll directly see how much your choices are actually saving you, and you’ll probably be surprised as to how much it is.
Now, take that money and apply it to genuine change in your life. Keep living your life as you live it now, but use that money to pay off debts, to build up an emergency fund, and to start saving for retirement.
As the debts fall away, you’ll have fewer and fewer bills and thus more money to use to target other debts. When emergencies happen, you no longer have to rely on credit cards to fix the situation and can use an emergency fund to handle it, saving you from even more debt and even more interest lost to the banks.
Those little changes you make at home are the catalyst for all of these things. The first step is to see how much impact those little changes really have, then resolve to take that money and use it to create real lasting change in your life.
This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere.