There is a fine line between Thriftiness and Deprivation. Being thrifty is not about feeling deprived. It’s actually the opposite of deprivation.

Thriftiness is finding ways to get the SAME VALUE out of something at a much lower price. A thrifty person knows and still manages to enjoy life while spending less than what he has spent before.

But there will come a time that you will cross that line and enter the Deprivation Mode. This is where your “thrifty strategy” is no longer enjoyable because you barely noticed that you’ve withdrawn too much of the things you love – leaving you feeling miserable.

I know that feeling. I’ve been there. And it felt awful.

This is why I am impelled to write this post because I want you, my dear readers, to still carry on with your financial goals without ever feeling deprived from the things you love.

So, here are 5 Effective ways (from my personal experience) to live below your means without ever feeling deprived.

5 Effective Ways to Live Below your Means without Feeling Deprived

1.Set up a Play Fund

Yahoo! A play fund! Just reading it is already satisfying, ain’t it? I’ve had a play fund ever since I was Budgeting using the Cash Envelope System.

Well, let me tell you how important your play fund is by sharing a horrible experience.

Years ago, I aimed at making my first P100K. I already had P20k stuffed somewhere so I only had to save P80k more. I was just a fresh graduate who was earning a little above the minimum salary, which meant in order to save P80k for the next 1 year, I had to do some serious sacrifices and paghihigpit ng sinturon to achieve my goal.

I forced myself into a Deprivation Diet – financially speaking.

I quit shopping, didn’t eat outside, tried my hardest to walk to work and back home to reduce commute fares, resisted party nights and my social life just to avoid unnecessary expenses. This happened for a few weeks and then suddenly,boom! I EXPLODED!

Life became boring, frustrating and unfulfilling. I so pitied myself and couldn’t take being restrictive anymore. I’ve had enough.

So what was my coping mechanism? To stop myself from wallowing in misery, I went to the mall, became a one-day millionaire and spent more than half of what I’ve earned from the start.

Not spending money on yourself can do more damage to your finances.

It may sound ironic but not spending on yourself will keep you broke.You see, depriving myself took a toll on me. After months of living an extremely frugal lifestyle, the effect was my inability to stop myself from splurging, which in the end, defeated the purpose of my deprivarion diet in the first place.

That’s why it’s so important to have your Play fund. Every payday, allot a portion of your salary to your play fund and YES, it is a must to spend it. But of course, don’t go overboard and spend more than what’s in your fund.

Now as a wife and being the “budgeter” of the family, I have established a play fund for my husband and I, for the simple reason of avoiding the feeling of being deprived.

2.Set SMART Financial Goals

I’ve mentioned this in my post MONEY MANAGEMENT for Beginners : 6 EASY TIPS TO MANAGE YOUR MONEY WISELY.

The problem with most people nowadays is that they establish only “simple” goals.

” But Ameena. How big of a difference is it to make just a simple goal versus a clear and SMART goal?”

Here’s the difference:

A clearer goal can give you more of the drive and momentum that is required for saving.

❌The goal, “ I want to save more money starting today,” is too vague (malabo) and meaningless because you haven’t planned out a specific way to accomplish your goal, nor have you created a benchmark to use so you will know if you are attaining your goal or not.

✔️The best way to make a goal is to make it SMART. They should be Specific, Measurable, Attainable, Relevant and Time-bound. By making sure your financial goals have all these characteristics, you can make them more achievable.

Here’s a proper way to set that kind of goal:

  • Specific– Be Specific with your goals. Let’s use this as an example: “ I will save up P200,000 in my savings account.”
  • Measurable-  Set a benchmark so you know how far you’ve come along in achieving your goal. If you reach P50,000 it means you’re 25% done with your goal of reaching P200,000. If you see P100,000 in your balance, you already know you’re halfway through.
  • Attainable- If you plan to save P200,000 within 6 months and  you very well know from the start  that the amount you can only save per month is  more or less P10,000, then that goal might be a little too grand for now. Be realistic and make it attainable. Why not make it your goal to save at the very least P60,000 within 6 months? It is more manageable and less overwhelming.
  • Relevant-  Do your goals inspire you? Why do you want to save P200,000? Is your goal demonstrable too?  If you have this goal for no particular reason or you just thought of it out of the blue, then you are bound for failure. 
  • Time-bound  – I will save P200,000 before Christmas this year.  Making your goals time-bound is having a target date. It keeps you committed and gives you a push or motivation to make progress every day as you near your target date.

If you want to start living below your means, you must first acknowledgw what your clear SMART goal is. 

Knowing what you will be gaining by living below your means will make it easier for you to start it and stick with it.

sticky notes on board

3.Make an Expense Diary

This is one of the very first steps I made. 

Tracking your finances effectively helps create better financial awareness. This gives you the opportunity to know where every centavo goes and how you’re spending your money. 

Doing this actually gave me a clearer view of the habits I had to change and what I was overspending on.

Your expense diary doesn’t have to be all fancy. Just a simple notebook will do where you can scan your expenses of the previous days.

Also, if you have a habit of just mindlessly spending your money, an expense diary will help you prevent that. 

Related post: How to Have a No Spend Day/Week/Month

 
 
 

4. Practice “Delaying Gratification”

Delaying Gratification (DG), simply stated, is giving up something you badly want right now for something better in the future.

  • A college student practices DG by avoiding a saturday night with the gang to study for final exams because he knows he has a brighter future if he studies well and graduates.
  • An entrepreneur practices DG by choosing to work on his business for an extra 2 hours every night instead of sleeping because he knows that the extra effort he will put in will help his business thrive faster. And when his business materializes, he will earn more income and be able to retrieve his loss of sleep.
  • An investor practices DG by patiently studying and doing some deep research first before putting his money in an investment vehicle he barely knows. Because he knows that setting up a strategy first before investing gives him a greater chance of earning more.

I can give you a hundred more scenarios of incorporating DG but I know you get my drift.

Practicing DG comes with knowing the “end result” of what you want to accomplish. Once you know the “end-result” and supposing you badly want it, practing DG and the feeling of not being deprived will follow.

5. Discover your Fulfillment Curve

“Anu nanaman ba itong term na Fulfillment Curve, Ameena?”

It took me a whole blog post to explain what Fulfillment Curve (FC) is along with the tips on how to incorporate it in one’s life. Here it is:

How do you avoid deprivation through discovering the FC in your life? Let me just explain it through 2 scenarios:

Scenario 1: You live in Metro Manila and you decided to take a Vacation Leave from work just so you can relax. You’ve set your mind to go to Boracay with your family but upon checking your travel fund, the amount won’t cover all the expenses for your Bora trip.

What do you do? Remember, we are talking about living below your means while avoiding deprivation.

Lower your standards. A little bit of paradigm shifting will do the trick.

Why don’t you just go to a beach that’s just outside the metro instead? It’s nearer, entails cheaper transport expense, you still get to enjoy the sand and the sea – and the best part is, you still get to have the same amount of fun and laughter with your family.

So ask yourself: If you can’t afford your first option, are there alternatives that are as equally as beneficial as the first one?

Scenario 2: I was invited to four different beach trips which would all take place within the next one and a half months. It was summer time. Yes, I could have gotten to all four escapades, but I chose to decline some invitations.

Out of all the four beach trips, I only attended two.

If you would ask me how many times a year would I like to travel for beach trips, my answer would be around three times a year only. Maybe in some cases, twice may be enough.

Three beach trips a year for me is equivalent to the peak of my FC which is the “Enough” point of the curve

You see, I’ve discovered that my FC is just three beach trips a year meaning any beach trip exceeding three times may make the experience aggravating plus, it would make me feel guilty for spending too much money on travel.

If you do the math, three beach trips a year is equivalent to one beach trip every four months. Now imagine how exhausting it would be for me and my wallet if I had accepted the invites of all four beach trips in a span of one and a half months – a far cry from the peak of my FC.

Ask yourself: How many times are you willing to go for something before you feel that it’s enough?

Discover what your Fulfillment Curve is. Assess yourself, write it down somewhere as a reminder and stick to it. I know it sounds cliche but you should know thyself.

Final Thoughts

We are all wired differently- different upbringings, beliefs, principles – so not all 5 strategies I’ve shared can work out for you. And it’s okay.

The important thing is you that you still have your mind focused on achieving your financial goals. And in case you find yourself in a Deprivation Mode, follow these 5 Effective ways and see yourself bounce back with a more burning desire.

By Ameena Rey-Franc

Recognized as one of the Top Finance Blogs in the PH. Ameena Rey-Franc (founder of TTP) is a former Banker and BS Accountancy graduate turned Blogger, Keynote Speaker, and entrepreneur. Currently an RFP delegate, she is also the Author of a book about Financial Resilience and has held seminars for reputable companies like GrabFoodPH, Pru Life UK, VISA, JPMorgan Chase& Co., Paypal, Fundline, Moneymax, and many more. The Thrifty Pinay's mission is to empower women to LEARN, EARN, and be FINANCIALLY-INDEPENDENT no matter what life stage they are in.

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