Let’s face it, saving money is not easy. All of us have temptations, and it is extremely difficult to refrain from purchasing things that make us happy. Additionally, everyone on some level likes to “keep up with the Joneses,” and it is difficult to see others purchase items and be without these possessions ourselves. Frugality just isn’t appealing in our materialistic society, and many would rather not be called cheap.
In order to successfully live a frugal lifestyle, one needs to have the correct mentality. If you are going to live frugally for months and even years, you need to have a mindset that will see you through all of the materialistic temptations and desires that may come your way. I used a few different mentalities when resisting the urge to spend money during my student debt repayment saga, and I hope that some of these tactics will be helpful to anyone who is trying to save money in their own lives.
One of the biggest strategies I used when living frugally was imagining not just the price of an item I wanted to buy, but the amount of interest off my student loans I would save if I used this money instead on paying down debt. I calculated that even if I paid off my student loans on the 10-year repayment plan, the total amount of money I spent would be 50 percent higher than the starting balance due to the effect of capitalizing interest. If you are on an extended repayment plan, it is likely that you would have to pay even more interest on your student debt, and this percentage would be even higher.
Since any money I had could be applied to my student debt and eliminate future interest I would have to pay, I would add this 50 percent in my mind to the cost of any item I wanted to purchase. I reasoned that this was the true price to me of purchasing something because of the opportunity cost of not devoting this cash to debt.
This strategy worked extremely well for me. I remember one time, I really needed a new pair of black shoes. The shoes I wanted to buy were about $130, which is not bad considering I need size 16 shoes and the larger sizes typically come with a higher price. However, I imagined in my head that the cost of the shoes was actually closer to $200 because of the interest I would avoid if I paid this money to my student debt. I reasoned to myself that $200 was way too high a price for shoes, and I soldiered on with my decrepit old shoes until they literally had holes in them, and I had to buy a new pair. By that time, I had paid down my student loans significantly, and the interest was not accruing at such a high rate. In any case, this thought exercise helped me resist the desire to spend money, and I urge everyone to try this out in your daily lives when living a frugal lifestyle.
Another mindset I used was classifying my student loans as a financial emergency that needed to be dealt with like a burning house. I made myself believe that if I did not take care of my student loans immediately, I would suffer financial consequences for the rest of my life. I internalized the notion that my student debt was a millstone around my neck, and that I needed to cast off this unbelievable fetter or financial catastrophe would result. People who surrounded me during the time I paid off my student loans will probably recount how I discussed student debt with a great sense of urgency and how I conveyed that student loan repayment was a high-stakes proposition.
Ultimately, I was probably being over-dramatic. Although student debt can have many consequences in someone’s financial life, paying off student loans is not a life or death proposition. However, if you assume the mindset that student loans must be dealt with like any other emergency, you will have a much easier time saving money. This mindset provides a mental justification for frugality and can positively impact anyone’s financial decisions.
Another method that I read about on the internet and employed to a lesser extent during my student debt repayment saga was to view saving money just like someone might view dieting. Saving money is equivalent to eating less when assuming this mindset, and earning more money through side-hustles is equivalent to exercising. According to this mindset, you could also have “cheat days” just like you would while dieting, but otherwise, the mentality teaches one to be disciplined about spending money and earning extra cash.
To be honest, this strategy did not work for me as effectively as the other two tactics I noted above. I have never really been a big dieter, and I never saw the equivalency of dieting and being frugal. However, there are people out there who might benefit from this mindset, and this mentality can make someone more disciplined when working toward financial goals.
In the end, it is important to find the mindset that is right for you, and will empower you to stay the course as you embark on your student loans repayment journey. Student debt repayment is a marathon and not a sprint, and the correct mentality will ensure that you can “go the distance” when living a frugal lifestyle.