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I could never just cook off of the written recipes I inherited from my Great Grandma. That’s because important ingredients always seemed to be missing. Vanishing ingredients weren’t a product of forgetfulness, but because grandma had lived during the Great Depression and over the years, learned to make more with less. The economic times during which she raised her children necessitated a more frugal family.
It seems as though today’s American families could benefit from my grandmother’s frugal wisdom. The US poverty rate rose last year and falling family income was the main culprit. With inflation outpacing family wages, many households are feeling the pinch when it comes to spending.
As the recession drags on, the impetus for families to learn frugality is only increasing. That’s why today’s blog interview is with Paul Vachon. Paul Vachon is founder of The Frugal Toad where he writes about Personal Finance with a frugal twist.
(Me) Why is it a good idea for families to introduce frugality into their family budgets?
(Paul) What a great question Shaun and thanks for asking that. I think everyone can benefit by being a little bit smarter in how they spend their money, Families typically spend more so the opportunity to save is greatest.
(Me) Step by step: how can families progressively introduce more frugal finance decisions into their spending habits? Does it matter if frugal changes are gradual or instantaneous?
(Paul) Making small changes at first is always preferable since your family will be more likely to stick with it.
Step 1: Write down both short-term and long-term personal and financial goals. Prioritize goals like college for children, retirement, summer vacation, or a new car.
Step 2: Create a budget that your Family can live with. I include Family because it is not realistic to think that you can cut out cable TV entirely and expect the Family to be ok with that.
Step 3: Identify where can you reduce spending in order to fund your goals? This is where you need the support of everyone if you are to reach your goals outlined in Step 1.
Step 4: Implement your plan to reduce spending. Start with small savings and build gradually. Share your successes with Family members to build support for frugality.
Step 5: Revisit the Plan! For any plan to work you need to monitor your budget and make changes if necessary. Start with weekly budget meetings at first and then monthly as needed.
(Me) What are some good budget categories that families should focus their efforts to be more frugal?
(Paul) I would have to say that food and entertainment are going to be right at the top for most families. Those two areas are also where some of the easiest savings can be found with a little effort. There are some great sites out there that can save you money on food and entertainment such as Groupon, Living Social, and Restaurant.com. Create an account and start saving, it’s that easy. Groceries are another big ticket item for Families. The easiest way to save on groceries is to create a weekly menu and use it to generate a shopping list. Leave the kids at home with a babysitter and purchase only what is on the list. The next step to save even more would be to check the weekly store ads for sales and the Sunday paper for coupons.
(Me) What causes families to fail in the efforts to be more frugal? What can they do to get back on track and prevent it from happening again?
(Paul) I always say that frugality should fit your lifestyle not the other way around. If your Family values the summer trip to the beach find a way to honor that and work to cut spending in other areas so that you can continue to do the things that make you happy. If you are miserable cutting coupons for items that you don’t use then find other ways to save money. Don’t give-up your favorite ice-cream to save a few dollars a month when you can spend a few minutes locating a coupon or sale that will allow you to save some money and still enjoy your favorite things. It all comes down to what you place value on and then taking action.
(Me) How can the whole family get involved with frugality?
(Paul) I would try to encourage children to be frugal by being a good role model first of all. By showing your children that being wasteful costs money they are more likely to embrace frugality as a lifestyle choice. Show your children that taking care of their possessions helps the Family to use money for other things that are important to your child like family fun night, vacations, or helping others in need. If you spend money frivolously your child will learn to spend money as you do.
(Me) What resources are available for families looking to be more frugal?
(Paul) Beside the resources mentioned above I recommend Get Rich Slowly and The Simple Dollar as two sites that have lots of tips on saving money. I would also recommend Mint.com, a free site that makes keeping track of your spending and bills easy.
Read More About Frugality at The Frugal Toad
- Ready to go Travel? – Try a Vacation Rental for Big Savings
- Finance for Dummies – Credit Reports
- Gap Insurance – What is it? And do I need it?
Read More from Past Interviewees
- So Over Debt: 10 Ways to Make Sure No One Reads Your Blog
- Money Talks: One Big Savings Account or Lots of Little Ones?
- Money for College Project: 3 Ways to Cope with Unwanted Christmas Presents
- My Personal Finance Journey: Buying the Right Foreclosed House in Today’s Market
- The Penny Hoarder: How to Place a Bet on the Oscars
- One Cent at a Time: How use of Alternate Energy can Save Money