The ‘Hermit’ Savings Rules: 8 Frugal Tips for Today’s Economy
Thanks to a worldwide pandemic, consumer habits across the world have been forever altered in what economists have dubbed “the age of the hermit consumer.”
How To Survive on $500 a Month: A Frugal Living Guide
Also: Pocket an Extra $400 a Month With This Simple Hack
“For ‘hermit’ consumers, it can be really easy to make impulse purchases and overspend because of how easy and convenient shopping online is,” said Carter Seuthe, CEO of Credit Summit Consolidation. “Something that can be helpful to maintain a more frugal budget is just to define your expectations and priorities when it comes to the amenities you have.”
Below are some expert rules for living more frugally in today’s economy.
Embrace a DIY Mentality
“DIY is my new favorite hobby,” said Andrei Vasilescu, co-founder and CEO of DontPayFull. “It’s cost effective, and YouTube is a great teacher. About 50% more people are getting into DIY now.”
Syed Lateef, business coach and CEO of SyedBNB, agrees.
“We can all see it,” Lateef said. “The focus has shifted towards a more home-oriented lifestyle, and I can personally say that more people are embracing do-it-yourself (DIY) activities.”
He said this is a good thing because mastering basic skills for home and car repairs can lead to considerable savings.
“Nowadays, the hundreds of online tutorials and resources makes it easier than ever to learn and perform these tasks ourselves,” he said, “reducing the need to hire professionals.”
Check Out: 10 Frugal Habits To Adopt Right Away in 2024
Save Money by Cooking at Home
“The driving force behind the hermit economy isn’t entirely clear,” Lateef said.
He said it could be due to the lingering hesitation for close-contact services, the increase in remote work or a shift in social values.
“What’s obvious, though,” he said, “is that consumers are now more inclined to spend on home-centric activities.”
As a result, he said, many followers of the FIRE (financial independence, retire early) movement have come to realize that frequent dining out can be quite costly. So, frugal individuals are embracing the art of cooking at home, experimenting with budget-friendly and nutritious meals.
He added, “Hermit consumers save money but also encourage healthier eating habits.”
Focus on Secondhand Finds
In the current economic climate, looking at secondhand alternatives before buying new is a wise strategy, Lateef suggested.
“I believe that the ‘hermit’ consumers are now placing more emphasis on sustainability because of the pandemic, so shops like thrift stores and online marketplaces are trending because of the treasure troves of affordable, yet quality items.”
In terms of frugality, he said, this not only helps save money but also aligns with sustainable practices by repurposing and recycling items.
Adopt Minimalism
“Since the pandemic, when the ‘hermit economy’ essentially started, adopting a minimalist approach is increasingly seen as a smart way to economize,” Lateef said.
A minimalist way of living, he said, reduces expenses and cultivates a sense of contentment and simplicity.
“In this hermit economy, frugals and the general consumer now prefer a higher quality of life over the accumulation of material possessions, leading to financial savings and a more uncluttered, focused lifestyle.”
Be Smarter With Money
According to Vasilescu, embracing a frugal lifestyle — or the hermit economy — is all about being smart with money, not about missing out on fun.
He said, “I’ve learned to save by living in smaller spaces and negotiating rent, which is something 35% of people have successfully done.”
He suggested taking advantage of free activities such as visiting parks and libraries.
He added, “Sharing things with others in the community, like tools or clothes, also helps save about 25% in general costs.”
Overall, Vasilescu said being mindful about spending is key.
“I ask myself if I really need something before buying it,” he said. “Tracking expenses has helped me save 20% more. This way, I enjoy life without spending too much, proving that being frugal can be both fun and rewarding.”
Experts say we always should reserve some room in our budgets for some fun.
Save but Also Splurge Where You Can
Seuthe said some people are comfortable meal prepping and switching to far simpler diets they can purchase in bulk to save money, while other people might be more comfortable with simplifying their laundry or skincare routines to save money there. The point is to do what feels right for you and your needs.
“For me,” Seuthe said, “living frugally is all about saving money where I can while still splurging every so often on the things I care about with the money I have saved.”
Try the 50/30/20 Rule
In today’s “hermit economy,” where individuals are more inclined to save and spend cautiously, adopting frugal financial strategies is crucial, experts say.
One effective approach they recommend is to try out the 50/30/20 rule — allocating 50% of your income to necessities, 30% to wants and 20% to savings. This helps in balancing essential expenses with saving goals.
Be Savvy When Using the Service Industry
“The hermit economy came out of the COVID-19 pandemic when we all became more accustomed to staying home than venturing out to restaurants, hotels and other pillars of the service industry,” said Jake Hill, CEO of DebtHammer.
While maintaining this type of lifestyle is a great way to be more frugal since you’ll automatically be saving money by not partaking in these activities, he said we should be equally smart when we do decide we want to dine out or spend on other forms of entertainment.
“When you do want to experience all that the service industry has to offer,” Hill said, “take the time to look for discounts, Groupon offers or other ways to spend less on your favorite outings.”
More From GOBankingRates
How to Get $340/Year in Cash Back -- for Things You Already Buy
4 Reasons You Should Be Getting Your Paycheck Early, According to An Expert
10 Ways to Turn Your Six-Figure Salary Into Generational Wealth
This article originally appeared on GOBankingRates.com: The ‘Hermit’ Savings Rules: 8 Frugal Tips for Today’s Economy
