50 Folks Who Have Mastered The Art Of Frugal Living Share Their Top Tips (New Pics)

How much someone should cut back on their expenses or look for additional income streams will depend a lot on their situation at home, their lifestyle and current career, their job prospects, as well as where in the world they live. For example, in the United States, consumers have been spending a lot this holiday season. The job market remains strong and inflation continues to ease, though interest rates are still extremely high.

CNN reports that retail sales rose 0.3% in November compared to October, though economists expected a decline. Retail sales rose even more (0.6%) if you don’t count gasoline sales. In short, Americans are, on average, eating out more at restaurants, as well as buying more things in stores and online.

As Allison Morrow recently wrote on CNN, many Americans might complain about how 'bad' the economy is and how high many prices are when asked. However, their actions "tell a different story" when you look at their behavior.

"Despite higher prices and all-around sour mood, American consumers have been exceptionally willing to spend money on dining out, travel, concert tickets, and all manner of goods."

However, across the Atlantic Ocean, the United Kingdom is ringing alarm bells about the deepening state of financial inequality in the country. The Center for Social Justice think tank recently warned about the growing gap between the haves and the have-nots.

The BBC states that, according to the report, stagnant wages, poor housing family breakdown, crime, and mental health issues have widened the gap during the Covid-19 pandemic. The disadvantaged are “no better off than they were 15 years ago.”

The danger, according to the Center for Social Justice report, is that the UK might slip back into a level of deep social divide the likes of which have not been seen since the Victorian era.

The think tank explains that for many poor Brits, “work is not worth it” because it is poor quality, offers little to no security, and gives little chance of progression. That’s why people turn to welfare.

We asked personal finance expert Orford about the biggest barriers that people tend to have when it comes to saving money. He was kind enough to share some insights with us and stressed the importance of budgeting and even seemingly minuscule savings.

“In the media, it's common to hear ‘cut back on the little expenses’ to save money. Having been in a situation myself where I was spending far more than I earned, I recall asking myself, ‘How could saving $4 on this or that make any meaningful change?’ The fact is, every little bit helps,” the author of ‘The Financially Independent Millennial’ told Bored Panda via email.

“In my case, to be successful in spending less than I earn started with ‘paying myself first.’ This meant keeping three separate bank accounts: one for needs, one for wants, and another for savings/investment.”

Orford explained that his ‘needs’ included necessities like rent, insurance, and groceries. Meanwhile, his ‘wants’ included going out to eat at restaurants, going shopping, and holidays—things that usually meant he was spending more than he was earning. His solution to the problem was to create a budget.

“My needs money stayed in the needs account, and I moved a portion of the remainder to my ‘wants.’ The key was sticking within the ‘wants’ budget, and not going over. I recall my in my first month with this exercise, I ran out of all my ‘wants money’ after the first weekend! That meant staying at home for the remainder of the month—and that got me thinking, ‘How can I go out more, have a life, while not over-spending.’ The answer? I found a balance. I didn't go out as much, didn't shop as much, and before I knew it, I had money left over in the ‘wants’ account at the end of the month. This is the monthly surplus.”