The Frugal Beagle Steps to Start Saving

(This post originally published on 27 November 2007)

Saving money is a good habit to cultivate, but it can be so difficult for some of us. There’s just so many things we have to pay for.

We tell ourselves that we will save money when we receive that increment, or if only we had extra money. But that day never comes because there’s more we have to pay for.

Some of us may even be in debt, and saving money may be the last thing on our minds. Keep reading because this article has something for you too.

What we need is a concrete savings plan, and the motivation to get started today.

I have prepared a list of ten steps that will help you to start saving money:

1. Find Motivation

One of the most important criteria to be successful in achieving anything is to find the correct motivation. For example, you would be motivated to lose weight if you wanted to look good in your wedding dress.

You need to find a motivation to get yourself to start saving. Do you want to get and stay out of debt? Do you want to save up to buy something like a car? Do you want to have a sense of financial security?

There is no right or wrong motive. Your motivation is personal. It’s even better if you can find more than one motivation for saving.

To set your motivation, complete this sentence: “I want to start saving because… ”

2. Set a Goal

Once you have the motivation to start saving, you need to set a goal to achieve. You might ask me why motivation is not enough. Before you skip to the next step, allow me to clarify.

Setting a goal means setting a measurable objective. For example, your goal could be to save RM1000 within six months, or your goal could be to save RM10,000 from January to December. Your goal could be as simple as saving RM50 per month.

When you set a goal, you start to have a concrete idea of what you want to achieve. You won’t forget or lose focus halfway.

3. Plan Your Budget

The next step to start saving is to take a look at your budget to see how much you can realistically save.

Take a look at your expenses and see if any items are not necessary and can be converted into savings.

If you do not have a budget for your income and expenses, I strongly suggest that you start to prepare one. You do not need to track every single cent you spend (though that would be ideal), but you can start off just tracking your major expenses. The main idea is to see if you are spending more than your income.

After studying your budget you will have a general idea of where you stand financially.

Update: Read the 7 Step Frugal Beagle Budget

4. Set a savings amount

This should be easy. Look at your goals and your budget to see how much you can save.

Some would prefer to be ambitious, because they want to feel the satisfaction of saving by being creative in their spending and cutting expenses.

Some would prefer to start off with a small amount, and that’s perfectly fine too.

The point is to set an amount that you can realistically set aside for savings. Don’t save too much and then find yourself having to take out money from your savings later.

Remember the Frugal Beagle Black Hole Savings principle: “Once money goes in, it never comes out”. You should try your very best not to use your savings until you have reached your goal.

5. Plan a Schedule

This should also be easy if you have already set a measurable goal.

This is where you ask yourself how often you want to put money into your savings account.

Most people with a fixed income will do this when they receive their salary, so a monthly schedule will be natural. Children getting allowance or pocket money may want to save weekly or even daily.

Another important thing to consider is to discipline yourself to allocate money to savings first. This means setting aside this money before you pay your bills and use the money for expenses.

If you allocate money to savings at the end, you may find that there is very little left because the money has been used for other purposes.

6. Plan where to get savings from

You need to know where the money is going to come from. For most people, their savings are going to come from their salary.

This step is especially applicable for those of you who don’t have enough money to save. You may even be living beyond your means.

Well, the good news is that savings are still possible! The bad news is you really need to start making some tough decisions and sacrifices.

What you have to do is to start looking at your budget and start eliminating non-essential expenses. If that doesn’t work, you may even have to consider getting additional income.

Once you know where your savings money is coming from, make it a point to allocate income for saving from that source.

7. Identify a savings account

The next step is to identify where you are going to keep your savings. Keeping your money in a Milo tin under your bed is not wise.

An ideal situation is for you to start a separate savings account with a bank of your choice. I would advise you to refuse an ATM card for this account to stop itchy fingers from withdrawing the money.

This will help you to identify that this money is set aside from savings, and it also helps you to track your savings.

If you accumulate enough money, you could even put your savings into some low risk investments such as Fixed Deposit accounts or bonds.

Those of you frugal beagles who are more adventurous may have the desire to place your savings into medium to high risk investments such as unit trusts, stocks and Genting.

I don’t encourage this because saving and investing should be treated separately. This is a controversial topic so I leave this choice to your own judgment and experience.

8. Pay off debt

What do you do if you are currently in debt? Can you still save? The answer is yes!

What you have to do is to apply the same principles for saving, but instead of putting your savings into an account, you use that to knock off your debt.

The common advice from the experts is to save up an emergency fund of 3 to 6 months of expenses. After you have built up your emergency fund, apply the rest to paying off debt.

The idea is to develop a habit that you can continue to practice even after you have eliminated your debt.

9. Do it now!

Don’t wait, don’t procrastinate. Do something about it right now, even if it means taking a scrap of paper and starting on step one to jot down your motivations for saving.

Someone once said that the best time to start saving is yesterday.

The advantages of starting as soon as possible include:

  • Cultivating good financial habits
  • Take advantage of compound interest
  • Being able to pay off your debt faster

10. Review

After you have started to save, review your savings plan and goals at constant intervals. For example, you could review your plan every three months.

If you are falling behind, think of ways to catch up. If you realized that the goals you set are beyond reach, re-set your target. There’s no point being too rigid with yourself and then giving up altogether.

Think you can save more? There’s nothing wrong with saving more money and achieving your goal ahead of time.


I hope that these 10 steps will give you an idea on how to start saving. Remember that it’s not how much you save, but it’s developing the saving habit.

If you are married it would be a good idea to develop this saving plan with your spouse. In fact, it would also be a good idea to teach your kids to save.

With the proper motivation and planning, you will find that it isn’t that difficult to save money after all.

What do you do to start saving money? Please share in the comments.

The 7 Step Frugal Beagle Budget

(This post originally published on December 6 2007)

Every one of you frugal beagles will have a different reaction and idea in your head when I mention the word budget. Some of you may find it an unnecessary restriction in their lives. The only people I can think of who don?EUR(TM)t need a budget are those who:

  • are rich enough to get others to manage their money
  • have the ability to store it all in their head
  • don?EUR(TM)t have many expenses

I think this is really necessary for anybody who is serious about spending frugally and building wealth.

Some of you have had experience with a budget, but you gave up at one point or the other. You could have found it difficult to stick to a budget or got discouraged after a while. I suspect that some of you even stay away from a budget because you know that your spending is beyond your income.

In this article, I will share with you a 7 Step Frugal Beagle plan for creating a budget and sticking with it.

Why is a Budget Important?

A budget is very important because it serves two purposes:

  1. A guide to let you know how much money you can afford to spend
  2. A measure to let you know if you are overspending

A budget gives you the power of awareness over your finances. You will be able to know where your money is going, and where you stand financially.

What Should Be In a Budget?

What do you include in your budget? Your budget should include all your major income sources and expenses. This means that you should be budgeting for your expenses such as rentals, loan payments, utility bills and food.

Most people would follow a monthly budget, but it is equally all right if you want to follow a weekly budget instead. I wouldn?EUR(TM)t advice any period longer than a month.

Frugal beagle puppies (rookies) who are doing this for the first time should aim to keep things simple. Round all expenses to the nearest ringgit. Don?EUR(TM)t be too pressured to track every sen you spend.

The 7 Steps

1. Where?EUR(TM)s Your Money Coming From?

First of all you need to know where your money is coming from.

For most people this will be their monthly salary. For others it could be income from commissions, business or allowance from parents.

You should not include uncertain income to your budget such as dividends, bonuses or gifts. Your budget will be in trouble if you don’t get the money you expected, and you end up overspending for the month.

2. How Have You Been Spending?

After you have determined where your money comes from each month, it is time to analyze where you have been spending money.

Gather your bills, credit card statements and receipts to see what your expenses are. It would be best if you can find one month of expenses.

The purpose for doing this is to get an idea of how you have actually been spending.

If you don?EUR(TM)t have anything to document how you spent your money, then you will have to think and remember.

Don’t do any calculations at this stage.

3. Assign Expenses into Categories

After you know the kinds of things you?EUR(TM)re spending money on, you can group related expenses together into categories.

If you?EUR(TM)re doing this for the first time, resist the temptation of creating too many categories. Keep things simple.

At this stage you might be wondering how you are going to keep all this information. I suggest you find some free software for your computer or Pocket PC. You can also use web based software. I like Expensr Money Strands. An alternative is to keep a simple spreadsheet.

4. Set Limits and Goals

The next step is to set a limit for each spending category. Use the information from steps 1 and 2 to write down how much you are currently spending for each category.

After you have done this, you should have a total income and total expenses figure. You can immediately see if you are over spending.

The next step (and this is important) is to set a budget goal for your spending categories. For each category, set a goal that is

  • Realistic enough so you won?EUR(TM)t discourage yourself. You may want to start small and set more challenging goals later.
  • Challenging enough so you make some progress and force yourself to spend carefully and creatively.

For example, if you have been spending RM500 on food, set a goal of spending RM450 on food next month.

Don’t forget to create a category for savings.

5. The Cushion Category

You may want to add a category to your budget to cater for emergencies and unexpected expenses.

I call this my cushion category and I use this money to handle unexpected car repairs or buying last minute gifts.

The amount allocated to this category should be minimal, and should not be used if possible. If you find yourself using up your cushion category every month then you need to re-analyze your budget.

I put unused funds from my cushion category into savings.

6. Track Your Expenses

After you have finalized your budget, it?EUR(TM)s time to start using it!

Make it a point to update your expenses at regular intervals. You will find it easier if you save receipts. Don?EUR(TM)t wait too long or you will forget about the transaction. Make it a habit!

I find that I become very conscious about each ringgit I am spending when I track my expenses. This has helped me to avoid impulse spending.

As you update your expenses, take a glance at your budget to see how things are going. If you are over spending, cut down on another category to make up for it.

You don?EUR(TM)t have to balance every single cent, so don?EUR(TM)t get too stressed if you lose track of a few ringgit. It?EUR(TM)s also okay if you go over your budget. Just try again next month.

7. Review

Periodically spend some time to look at your budget and review your goals. As time goes on your needs will change and so will your budget. Keep it updated with your latest expense categories.

Tweak your goals to make them more challenging or to give yourself more ?EUR~breathing room?EUR(TM) to spend.


These 7 steps should be enough to get you started with your budget. It is simple enough that you could even use it when you teach your kids about budgeting.

My final word of advice is to get started right now. Don’t wait until the end of this month or the start of next month.

Have fun with your Frugal Beagle Budget!

9 Reasons to Be a Frugal Beagle

(This post originally published on 19 Nov 2007)

Here are nine reasons to start living a Frugal Beagle lifestyle today:

1. Increased Cost of Living

Things are getting more expensive, and our income is not increasing at the same rate.

Take a look at a few examples of how the cost of living is increasing in Malaysia:

  • Petrol used to cost RM1.62 per litre. It costs RM1.92 now, and rumours are going around saying that there will be an increase of 70 sen to 1 ringgit after the 2008 General Elections.
  • The price of enriched wheat flour has increased due to a global shortage of supply. As a result, most food stall operators have increased prices by up to 30 sen.
  • TNB has submitted a proposal to increase electricity tariffs.
  • Toll prices have increased, and is due to increase again has increased in 2008.
  • Inflation of the Malaysian Ringgit is getting worse. An obvious indicator is how the sen coin is going to be phased out of production starting from April 2008.

2. Saving Money is Easier Than Making Extra Money

Many people (including myself) are looking for ways to earn extra income. The main objective for making extra money because our income is not sufficient to sustain our lifestyle.

If we think about it, it is actually easier not to spend money than to earn money. Businesses are always thinking of cutting down on costs because they know that it is easier to profit a dollar by saving costs, than to make two dollars in revenue for one dollar profit.

3. Live a Simple Lifestyle

I don’t know if you notice, but our lives get more complicated when we buy more things.

  • There’s more to maintain because each gadget or appliance comes with its own requirements for cleaning, recharging or parts that need to be replaced or refilled.
  • There’s more to keep track of because there’s one more warranty or service schedule to remember.
  • There’s more things that need to be repaired
  • There’s more bills to pay for items that need subscription to services.

4. Avoid Craving for More

It costs a lot to have the latest and the coolest. If we are not careful, we find that we fall into the trap of always wanting something new. There’s always something we want… something we’ve got to have now.

Have we ever found ourselves unsatisfied after purchasing something we want? Sometimes there’s only a temporary satisfaction before we have our eyes on the next latest thing.

5. Staying Out of Debt

Living a frugal lifestyle means we are careful how we spend our money. It means that we think twice before taking any credit from a bank. We avoid living beyond our means.

The end result is we end up being debt-free.

6. Freedom and Peace of Mind

If we recap the previous five points, we find that they lead to us having a sense of freedom. What I mean by freedom is:

  • Freedom from debt, because we won’t overspend our money.
  • Freedom from clutter because we won’t have too many things to take care of.

With freedom, comes peace of mind. Imagine living a life where we do not have to stress about how we are going to repay our credit card debt. Imagine a life where we live focusing on the things that really matter.

7. Eliminating Waste

Have you taken a look at the things you’re throwing away recently? I have noticed that I have thrown a lot of stuff away because:

  • I bought more food than I could eat, and it has gone bad
  • I bought something that I didn’t need
  • I bought something newer

Living the Frugal Beagle lifestyle means that we don’t generate as much waste, and that’s good for the environment and our wallets.

8. Building Wealth

Living frugally means that we are building our wealth, because we control our expenses. We try to maximize the use of the resources we already have.

  • Spending less money than we earn, equals
  • A positive cash flow, equals,
  • Us becoming wealthy, equals
  • Increasing our bank accounts, equals
  • Being rich!

If you don’t believe that being frugal can lead to wealth, go to your favourite search engine and look up frugal billionaires.

9. Satisfaction

There is this strange feeling of satisfaction after doing something for yourself. For example, the food that you cooked yourself always tastes wonderful, and the bookshelf you built yourself always looks better than anything you can find in a store.

I can still remember how wonderful my first home baked loaf of bread tasted, even if it turned out a little salty according to Mrs Beagle.


I hope that the nine reasons I mentioned have helped to convince you to live a frugal lifestyle.

Do you have any suggestions to add? Leave a comment to let me know what you think.

Photo: Paige Foster

[tags]Frugal Living, Motivation, Living[/tags]