4 Habits That Will Make You Richer on a Modest Budget

Veteran personal finance writer and author of the “Your Playbook For Tough Times” series, Donna Freedman, asserts that a rich life isn’t defined by how much money you have.

“Money is necessary to survive, but it’s not everything in this life,” she says.

The key is to identify what brings you joy, not what you see others enjoying on social media, and then figure out how to obtain those things as affordably as possible.

Once you’ve made a list of the things that enrich your life, such as spending time with loved ones or helping others, you’ll realize that you can have more without spending more.

Step 2: Adjust Your Budget

You may have more room in your budget for the things you love than you think. Start by reviewing your spending to see if there are any expenses you can cut down. Chances are, you’re wasting money without even realizing it.

For instance, you might be spending more than necessary on car insurance because you haven’t shopped around to see if you could get a lower rate from another insurance company. You may also be paying for cable TV but not really using it. Go through all your monthly expenses to see if you can cut them down by switching providers or negotiating a lower rate.

Moreover, analyzing what you’re spending money on can help you identify things you don’t really need. With a few tweaks to your budget, you can open up a richer life on a smaller budget.

Step 3: Find Free and Inexpensive Ways to Live Richer

In reality, there are numerous ways to get the things you need, want, or like at a lower cost or even for free. You can look for groups that give away or clear out what they no longer use. This way, you can find anything from free furniture to musical instruments to toys and children’s clothing. This means you’ll have more money to spend on the things you deem important. If you’re about to attend a big event or even a job interview, you can rent an outfit instead of buying one and using it only a few times.

Step 4: Find Frugal Alternatives

If times are truly tough, Freedman suggests accepting that just because you want something doesn’t mean you can have it right now.

“But you can have something similar,” she says.

For example, if you want a chocolate cake from an upscale bakery but can’t afford it, you can buy a small brownie instead and enjoy it. You may not be able to travel, but you can still explore your own city, visit museums, and immerse yourself in different cultures.

Step 5: Be Grateful for What You Have

Your life can feel richer if you focus on what you have and what’s going right. If you want to upgrade your phone but can’t afford it, focus on the fact that you have a phone and it’s working. Maybe you don’t have the job you really want, but you can be grateful that you have an income.

“There’s nothing wrong with wanting something. But when we focus on wanting the right things for the right reasons, we’re more likely to be satisfied when we get them. If all we ever want is ‘more,’ we’ll never be content,” Freedman says.