Cheap living for this purpose is minimizing your expenses while maximizing your income and free time. We included this section because it is important to have enough time and money to develop a business. You have a chance to get this extra time by securing low living expenses and no overtime or a second job. Then hopefully you will have free time, and extra money, that can be dedicated to starting a home business.
Does your frugal living have to go on forever? The short answer is “no”. We hope you are successful at your home business and that you don’t have to limit your expenditures and lifestyle forever. You can always continue to be thrifty and not wasteful.
Living expenses can be grouped into several traditional categories. These categories are listed below with the average annual percent of your income.
These categories are:
Food (food in home and out, drink) at 14%
Housing (dwelling, utilities, housekeeping, maintenance, furniture, taxes & insurance) 34%
Clothing (apparel, accessories, cleaning) 4%
Transportation (vehicles, fuel, maintenance, insurance, fares) 19%
Entertainment (movies, AV equipment & services, pets, toys, hobbies, playground equipment, reading, education, miscellaneous) 9%
Health (fitness, personal care, doctors, medicine, medical supplies, insurance) 8%
Savings & giving (including pension & social security payments) 12%
The information above is adapted from US government statistics. The percentages are not “cast in stone”. They may vary several percentage points or more for your particular circumstances. (Adapted from US Bureau of Labor Statistics 2011 Consumer Expenditure Survey)
An overall rule of simple frugal living is to live below your means. Spend less than you earn. Try to spend a lot less. This involves working on each category above to minimize your expenses in each. It can be an interesting challenge.
The trick in frugal living is to minimize each expense category without degrading your quality of life. Strategies to increase your income without working more hours should also be a part of your cheap living plan. We suggest how to do this in our Guide to Living Cheap.
Frugal living ideas are an easy way to start living more cheaply, or frugally.
One way of living cheap is to dwell in a recreational vehicle or RV. An RV is usually much less expensive than a house or apartment to buy (or rent) and maintain. You can move to new locations as desired, so there is a built-in entertainment factor. RV parks can be of higher quality than trailer parks. There is more info at Frugal RV Living.
Retirement can be an opportunity to change your lifestyle to one of cheap living. Retirement has evolved and has become active retirement for many retirees. This means that a retired person may be able to use their free time to start a home business. See Cheap Retirement Living.
Some special suggestions are contained in our frugal living pages for singles and students at Frugal Living for Singles and cheap student living.
When the above living frugal methods are employed you should have more time and money available for starting a home business.