I don't consider myself to be a person in possession of a great deal of willpower.
In fact, generally speaking I'm pretty much a lazy bastard who would just as soon lay on the couch watching football as do something meaningful.
Yet somehow, I've managed to get by on far less money than your average American bear... without feeling any sense of deprivation whatsoever. Looking back on it, I didn't always consider shopping to be the horrible pain in the ass that it is today... there was a time in my life when I actually enjoyed being able to spend money, and thought that "being rich" was the goal of all goals.
So how did I get from there to here?
I don't think of myself as a particularly rule-bound person, but when I really look at it, I had some strategies that ended up working out really well for me in the long run.
Strategy Number 1: Deal with Your Big Rocks First
A dear friend of mine once told me this little parable... It's often credited to Dr. Stephen Covey, the author of the Seven Habits of Highly Successful People (which I own, but alas, have never read.) Anyhow, the basic theory is that in order to have time and energy for a full life, you have to deal with the big important stuff first. Here's a delightful video (I think this is Covey) demonstrating the principle.
While they're generally talking about expenditures of time, the principle totally holds true for financial decisions too. I can't count the number of times that I encounter people on the interwebs (or in real life) who try to be frugal by pinching pennies on every tiny little purchase, all the while making really stupid financial decisions on the big ticket items.
I have a dear friend from high school who is a great example of this. They have a giant house... the ridiculous kind with at least 30% of its space dedicated to high vaulted ceilings. Their little family of 4 (mom, dad and 9 year old twins) has 3 vehicles, plus a camper and a garage full of jet skis & snow mobiles. Their house is only about 10 years old, yet they've had the carpet replaced twice and are constantly replacing their brand new furniture with brander newer furniture.
One day I was visiting, and I happened to notice that their office had a neat modular desk/shelving system. I commented that I liked it, and her husband piped in telling me all about it. And it only cost $12,000! I just about fell on the floor! I mean, I could live for a year on $12,000!
But here's the thing... my friend is always broke. She is forever taking extra jobs to try to make ends meet, and strategizing over how to save a few pennies at the grocery store. She really wanted to come to our 25th high school reunion, but couldn't afford the $50 admission.
I think you're getting the picture. A frugal lifestyle is pretty easy to maintain if you focus on making good decisions on the big ticket items. Do you really need a huge house in an expensive neighborhood? How about cars? Maybe you need one, but do you need two or three? Why not get a used car? Trust me, you simply cannot cut enough coupons, or pinch enough pennies to make up the ground lost by a humongous mortgage or new car loan, or $12,000 shelving unit.
Strategy Number 2: Pretend You Make Less Money than You Actually Do
It seems to me, that they key to keeping your spending under control is to limit the amount of money that you have at your disposal.
In a way I am quite fortunate to have spent my early adulthood being totally and completely broke. It allowed me to develop very good spending habits out of necessity. Nevertheless, as I started to earn more money, my spending went up accordingly... until I read YMOYL, that is.
At that point, I decided that the way to keep my spending from going up with my income was to trick myself into believing that my income was still as paltry and small as it had once been.
And the great thing is, there are easy ways to do this. Once I made the commitment to live on less, I sat down and figured out how much money I really needed each month, and then started looking for ways to keep anything above that amount from ever showing up in my hands to begin with.
The first first thing I did was to up my retirement contributions. The non-profit that I worked for didn't have a real retirement plan, meaning that they didn't contribute anything to my retirement savings, but they did have a 403b (the non-profit equivalent of a 401k) that I could contribute to tax free. Within a year or so I was taking the maximum allowable contribution (which, I think, was around 20%.)
The other thing I did was to set up a retirement savings account, and had my bank make automatic monthly transfers from my checking account into this savings account. Then when I was dealing with all my tax time finances, I already had the money set aside to make my IRA contribution (the max allowable) for the year. I pondered setting up a similar strategy for my regular savings, but by this time I was sitting pretty squarely on the saving bandwagon, so I just made my monthly savings transfers manually.
I did, however set up automatic deposit of my pay checks, and automatic bill pay on everything that I could. This included using my credit card for all day to day purchases, and setting it to automatically pay off the balance in full each month. Let me tell you, it's really wonderful not to have to worry about whether you remembered to pay all the bills or not each month.
Many people shy away from this approach because they're afraid of overdrawing their accounts.
But I found that by keeping a decent cushion in the checking account I never had a problem. I did, however, schedule a monthly "day of reckoning" where I would sit down and look at my account balance and the upcoming bills, and transfer money from savings if necessary. I've gotta say, that whole process really helped to keep me honest.
And the final thing I did was to set up extra monthly principal payments on my mortgage. Actually, I refinanced the loan at a much lower interest rate, but kept the payments the same... which worked out to about $100/month in extra principal payments.
I realize that I am fortunate in that I didn't have any consumer debt to contend with, but if you do, I'm sure you can set up automatic monthly payments for that too (which, if you've got consumer debt, is probably your first priority over retirement, savings and mortgage debt.)
The point to all this is... if you set up all of your financial transactions to happen automatically, you really don't have to think much about money. Seriously, pretty much the only time money enters my brain these days is if I'm contemplating spending above and beyond my monthly allotments.
Strategy Number 3: Leave Room for a Few Luxuries
I'm not generally a big fan of most budgeting systems. The problem is that if you don't leave any room for luxuries, you can tend to end up being rather... well... miserable. I've lived in poverty folks, believe me, it isn't fun.
So when I calculated the amount that I needed to live on each month, I was sure to include about $100 for luxuries. Just knowing that I had given myself an allotment for things I wanted, but didn't really need made the entire process feel empowering, rather than like deprivation. Sometimes I spend my luxury bucks on little things like going out to eat, or buying a new piece of clothing, and other times I save it up for something more substantial.
The key here is to take your luxury dollars from your monthly allotment, and NOT from your savings (which is reserved for emergencies, and investment type purchases - like a new furnace.) This way you actually get to enjoy the money you save from pinching pennies and saving on the small stuff.
OK! So there you have it!
These are pretty much the three basic principles that I have lived by for the past 20 years or so, and they have served me very well. Things are a little bit different now since I don't work anymore, and don't have a steady monthly paycheck, but the basic ideas still apply. And the best part is... there is absolutely no will power required!