Frugalism? live sparingly and happily
What does frugalism mean?
Live sparingly, spend little money and still? or rather: that's why - be happy: this idea is behind frugalism. Those who live frugally turn their back on consumption and He only spends his money on the really important things.
The movement comes from America and became famous here through bloggers like "Mr. Money Mustache". The frugalism movement is closely related to the FIRE concept (Financial Independence, Retirement early), whose followers financially free as soon as possible and do not want to work for money anymore.
In Germany, especially the blogger Oliver Nölting is known as a frugalist. He plans to retire at the age of 40 and has therefore been thrifty for many years with lots of zest for life.
Frugalism: Why should renunciation be happy?
Spend money only for what is necessary, but not for what is fun? That sounds like a boring, gloomy life, right? Well, that's how you might think at first, though Frugalists are not a malicious miserwho sit by candlelight at home every day and look holes in the air.
Who follows the frugal way of life, wonders what makes him really happy and brings progress in life. Author Michael Robert ("100 Tips for Frugalists") compares life as a frugalist to the life of a student: "A simple life in a shared room, with many parties and cheap holidays. Maybe a bit of studying and a little side job. That has been enough for a simple and happy life. "
After the student time, however, we usually increase our standards and our standard of living and work as a result only for our high cost of living. Michael Robert sums up very succinctly, how to live frugally:
Do not waste, consume little, buy only what you need, do not buy scrap, burden and pollute our beautiful planet as little as possible. Finished.
You will already suspect it: Frugalism is connected with a lack of consumption and of course with a form of minimalism. But frugalists go even further, because they consciously choose their way of life in order to avoid having to rely on a job as a livelihood as early as possible.
Frugalism: What will I do with the money saved?
So frugalists save a lot of money by consuming very cautiously? and then? How do they do that they are so good at building their wealth that theypartially retire at the age of 40?
All the magic behind it: Frugalists try to make a lot of money spend very little and save and invest the rest, With a savings rate of 50 percent (which is not unrealistic for passionate savers!) You can do so already financially free after almost 20 years be that one live off his savings can.
However, the saved money does not just end up in the savings account because it would hardly generate any return there. Rather, most invest their money on the stock market to increase it in the long term. In particular, so-called ETF savings plans enjoy great popularity, where the money flows into many different stocks every month (more info: Funds and ETFs: investing money made easy).
Frugalism: Three concrete tips for starting a thrifty life
(from: "100 Tips for Frugalists" by Michael Robert)
- A first exercise
Grab pen and paper and a calculator. Now you calculate how much money you have earned in your life net. This does not have to be accurate to the euro, a rough rollover should be enough. And now you add up the current inventory of your accounts, do not forget any retirement products. It could be that you get a bit dizzy.
Your lifetime earnings could have been quite high, but surprisingly little has been left on your account. Where is the money going? You probably spent a lot on consumption. You should be clear about where the money is, because you want to make a difference. - Create financial reserves
This is a very important point. You need reserves, i. not all money should be invested. You should get around barely a year, without getting nervous. Why? Because you preserve freedom and independence with it! You do not have to accept the first new job, you can spend more time thinking about what you want to do and work for. Reserves are the first small step to financial freedom. - Reduce expenses and reckon
There is an interesting rule of thumb circulating in the financial community. Let's say you buy coffee four times a week on the way to work for 3.50 euros. This makes 14 euros a week. You now multiply a weekly spend by 752 and you'll get the costs that will be incurred in 10 years.It is assumed that you would otherwise invest the money on a monthly basis and receive interest on average over the last few decades. The result: 10,528 euros for coffee in 10 years!
Reading tips on the topic of frugalism:
- "More money for more life" by Vicki Robin and Joe Dominguez
- "100 Tips for Frugalists" by Michael Robert
- frugalisten.de (blog) by Oliver Nölting
Videotipp: This couple travels the world at just eight euros per day
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