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Without Budget - 7 Frugal Habits that ACTUALLY work

 I save over 53% of my income,  and today I'm going to tell you how.

 I'm going to share with you seven personal frugal habits that I have, and if you stay till the end, I will give you a bonus rich habit that I also have inculcated over the years, and that has made me more money. But first things first, let's talk about the frugal habits.

Habit number one is knowing my inflows and outflows.

 I don't mean budgeting, but I mean, having an overall picture of how much money comes into my bank account and how much money goes out in each of the several buckets of spending every month. And I believe that this is critical for us to be able to manage our money because what you can't measure, you can't manage.

 Habit number two is automatically saving and investing.

 I have talked before about this book called I Will Teach You To Be Rich by one of my mentors, Ramit Sethi.  And Ramit outlines a system of how you can automate your finances from your bank account.

So, whenever I have my salary and other sources of income coming to my bank account, I have a cutoff date by which all of the money goes off into my various savings and investment accounts, and then whatever I'm left with, I spend that guilt-free.

Step number three is I typically don't take on any credit card debt.

 I use a credit card and I pay it off every month.  I have a rule that says if I can't pay for it with all the cash that is sitting in my current account, I can't afford it yet. So that will be the case with most of my high value purchases.

If I can't afford it yet, I will wait for some time to buy it. I'll make a plan of how I can buy it, but I will not typically take money out of my savings accounts or use my credit card to buy.

Habit four is optimizing your tax bill legally.

 The key word here is legally, I don't mean to say evade your taxes. In fact, I also will go one step further and say, don't moan about paying higher taxes. It's a privilege to pay a higher tax.

What I mean is actually legally saving your tax. This means that investing your money in tax benefitted accounts like. ISAs and pension accounts in the UK or Roth IRAs and 401Ks in the US. Every country has this take advantage of these tax benefited savings accounts.

Number five I sleep over my high value purchases.

 I typically tend to take quite a while to make a decision for a purchase, so I will sleep over my instinct of wanting something. For most things, it just goes away with one night of sleep. And when I see that it has stayed with me constantly for some time only then I put together a plan of how to buy that thing.

Number six is I spend on quality rather than quantity.  

That It is because I have grown out of using things for five times and then throwing it away because it was so badly made. I would rather put my money in high value items that stand the test of time. So I typically wear a jacket that has been with me for five years. I will wear shoes that have been with me for seven years.

I will use a laptop that's been with me for eight years. You get the drift. I tend to buy the best and then not worry about it till it falls apart.

That brings me to the seventh habit, which is this allows me to buy my time back.

 So, I have to make less decisions. I also buy back my time using outsourcing, so I will outsource some jobs that I either am not particularly good at or I don't have enough time to do, but someone else could do it very well for a cost that is affordable to me.

Now if you have stayed on till this long. Thank you so much. I appreciate you so much.

Here's the bonus rich habit that I was talking. I do not consider money as an evil thing .

 There are a lot of people who have this inherent belief that money is the cause of all evil in the world. Well, if you despise money, you'll not have enough of it for sure. That is an emotion that comes out typically of jealousy.

And I'm not a jealous person. I'm not a competitive person at all. Money is a tool for good in the world. And that's how I use it and that's how I get to have more of it.

And, if you are curious about more money habits that might make you rich, I will link another episode here. See you the next time. Bye.

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