6 Things Frugal People Do Differently That Can Help Pretty Much Anyone Get Out Of Debt
You can build real financial freedom, no matter where you're starting.
Maria Markevich | Shutterstock Most people can relate to the paycheck-to-paycheck life. Every week barely scraping by, hoping that nothing big happens that will require you to go into debt — or further into debt — just to get by. If you're in this position, the idea of having a comfortable amount of savings feels like a far-off dream. The good news? It's not.
With 25% of U.S. adults under age 40 carrying student debt and 60% of credit card holders carrying debt month-to-month, the debt crisis is real and people need real solutions.
Financial expert Rose Han was once just like so many of us: $100,000 in debt, spending like there's no tomorrow and slogging away at a job she didn't love. Until one day she realized it didn't have to be that way. Now she's a financial expert helping others. After listening to Han on the Getting Open podcast with Andrea Miller, I teased out six unique ways she freed herself from financial ruin that just might help you.
Six things frugal people do differently that help them grow their savings
1. They look for freedom rather than instant gratification
The first thing frugal people do differently that helps them grow their savings is that they look for freedom rather than instant gratification. Sure, it's tempting to fit into society's standards.
Most people are led to believe that happiness comes from living an aspirational lifestyle. Whether that means an Ivy League education, fancy vacations, or a dream car, those pricy purchases appear to bring happiness. But that's a myth.
Buying yourself into debt is asking for disaster as bills start piling up. Interest rates keep people from seeking the financial freedom they've always wanted. After all, the majority of credit card debt in the US is accruing interest at a startling average rate of more than 20%, which is nearly twice what it was in 2013!
Yet, arguably, it's human nature to seek instant gratification through destructive means such as overspending.
Miller brought this up by stating, "I'm astounded by, especially, how many young people spend so much on Uber Eats... It feels like that feels if you could just reduce your Uber Eats bill by 50%, that would be money in the high-yield savings account."
It may seem obvious to Miller, but Han, a younger member of the Millennial generation, has a different perspective:"Yeah, I know, and it sounds obvious, but also sometimes it's not so easy because a lot of times behind the spending is a deeper dissatisfaction that's driving that spending."
So, while it might be tempting to spend that money on clothes and food, as Han said, "I really encourage people to get in touch with why they're spending that in the first place."
2. They do a spending audit every three months
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If someone were to ask the average person, "How terrifying is it to open your bank account at the end of the month?" most people might cringe and refuse to answer.
It's unfortunate, but many people go through the month feeling as if they're living paycheck to paycheck. When the balance starts to dwindle at the end of the pay period, many ask, "Where did all that money even go?"
This is why frugal people do a spending audit every three months. Sure, it might be a little terrifying at first, but simply going through those spending habits might help people recognize where they can and can't cut costs.
Han suggested, "So I like to take people through a process called the spending audit. And that really involves just going through your last three months of spending. And I say, go analog, print it out, because doing it manually is there's something really healing about that."
And while it might feel tedious, if people truly want to save money, then taking two different colored highlighters, highlighting what felt good to spend money on, and what didn't align with their goals, is truly the best way to get back on track.
If you aren't into the analog life, you can download from your bank in "comma delineated" format, save to your desktop, and then upload in Excel or Sheets, then start organizing, marking each type of purchase.
As Han pointed out, looking through these audits will typically reveal a pattern. If people find themselves spending a bit too much on Uber Eats, for example, saying to themselves, "Maybe I can meal prep every Sunday," is a huge start to gaining financial freedom and cutting costs. Other common sources of spending too much? Online shopping, TV and other subscriptions, an extra drink or two with dinner or multiple pricey coffee drinks daily.
3. They see through celebrity and influencer lifestyle lies
Nowadays, it's all too common for people to chase a lifestyle they'll never have. From taking out massive mortgages on the most expensive homes to buying Chanel purses, there's nothing people won't do to chase the influencer lifestyle.
However, a thing frugal people do differently that helps them get out of debt is that they see through celebrity and influencer lifestyle lies. No, they aren't dropping $1,000 on a new pair of red bottoms every week, and it's likely that influencer isn't, either! Influencers and celebs are given a ton of stuff for free, borrow items or simply take pics and video in stores.
Frugal people know the truth and instead of accruing a ton of credit card debt, they use that sports car or Louboutin money towards their savings or to pay off their credit card debt.
As Han explained, she's encountered so many people playing influencer and taking out loans that they can never pay back. It's unfortunate, but according to Han, "A big reason for it is there's a lot of pressure to keep up with the Joneses."
Social media has a way of making people feel awful about their lives. From Target hauls to endless amounts of Korean Skincare, people are led to believe that not having that a Laneige lip mask somehow makes them less-than.
So, if people want to break free, then follow what frugal people do and refuse to buy into the celebrity and influencer lifestyle lies and learn to be happy with what is authentic to them — and possible, financially!
4. They journal daily to spot their own negative patterns
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Another thing frugal people do to get out of debt is to journal daily to spot their own negative emotional patterns. Sure, journaling might sound like a load of bull, however, in the eyes of Han, journaling is the one thing that helped her out of her debt by giving her perspective.
She recalled that she was on a flight back from her first Burning Man festival when she began journaling. She had so many new insights, and as she began writing it out, she slowly began to recall the time she cried to her dad because she was terrified of taking on so much debt.
Han continued, "And I'm hoping for some comfort, some comforting words from my dad. And all he had to tell me was, 'I'm sorry, I'll just cosign your loans for you.""
"It's unfortunate," she continued, "but just like so many others, debt was also part of his story, an obvious next step that most people don't think twice about.:
This discovery was key to healing her issues with money, and it wasn't until she began to journal that she slowly began to realize where her mentality came from. Most importantly, she fully came to terms with how bad her debt had gotten.
5. They don't let mistakes or debt define them
Sure, there might be some lucky people out there who have never had student loans or credit card debt. However, for the average American, the total balance of debt is often around $104,215, according to a study from the credit bureau Experian.
Americans in such high debt, you'd think there would be less shame associated with financial mistakes. While it's good to be realistic and hold yourself to higher standards than accumulating debt, it might feel nearly impossible to avoid the shame. But one thing frugal people who used to have a lot of debt do differently is not allowing themselves to get mired in their shame.
Yes, debt sucks, however, it doesn't need to end in despair. Financial freedom does exist, so long as people are willing to change their mentality and individual actions. In Han's experience, many people who become overly attached to what debt means to them. However, she argues that it's best to approach it from a numbers and logical point of view, rather than from an emotional point of view. This switch is key to being frugal enough to get out of debt.
She explained that often her clients might say, "If I look at my bank account and I see that it's not as much, or I spent more than I would have liked, it means that I suck and that I'm behind everyone [else]."
But, as Han pointed out, "Something that's really helped me is just to look at numbers from a more rational point of view. Like, numbers are just numbers ... there is a reason why, and I can figure out why [things are going wrong], and then I can improve."
6. They celebrate small wins
Last, but possibly most importantly, frugal people celebrate the small wins. They smile and maybe even brag about the deal they got on strawberries at the store, the great price they got on the clothes they sold that they no longer wear and the credit card they finally paid all the way off.
All too often do people go through life completely ignoring the accomplishments they made along the way. In their eyes, it isn't a big deal to pay off the card they had the smallest amount of debt on. It's nothing compared to the people with zero debt, so it doesn't matter, they might think.
As practitioner and professor Lindsey Godwin, Ph.D., explains, "When we acknowledge small wins, we trigger a release of dopamine, the brain's “feel-good” chemical. This chemical boost reinforces positive behavior, making us more likely to keep going."
So, while it doesn't need to be big, don't be afraid to go do something fun! You can even order some delivery... just don't go wild!
Marielisa Reyes is a writer with a bachelor's degree in psychology who covers self-help, relationships, career, family, and astrology topics.
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