How Living on a Tight Budget Makes You Happier

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If you've been living on a tight budget for a while now, you know it's not all fun and games. Sometimes you don't want to compare prices — you just want to buy the groceries you need. But frugality is worth the effort, not only because it leads to greater financial freedom, but also because, in many ways, it contributes to a fuller, more creative, and more satisfying life. (See also: 10 Things You Can Do Today to Be Happy)

You choose experiences over things

When you're trying to rein in your spending, you know that going for a hike, enjoying the sunset, listening to music, or playing games can provide just as much fun as shopping and spending money. Experiences provide joy and satisfaction through memories, and over time those memories keep boosting our happiness.

Meanwhile, the new wears off on those new possessions, and as objects become familiar, they provide us with less satisfaction. (See also: 4 Reasons You Should Splurge on Experiences, Not Things)

You emphasize quality over quantity

There's frugal, and then there's cheap. Frugality emphasizes not buying stuff you don't need, but also getting the most for each dollar you do spend. Cheap items may cost less, initially, but they wear out and need to be replaced sooner.

Another great aspect of prioritizing quality over quantity on a tight budget is that you prevent more clutter from accumulating. Clutter is stressful, and gets in the way of you having a clean, peaceful home. Who needs that?

You focus on relationships

A limited budget means you won't be able to splurge on expensive hobbies and other pricey forms of entertainment. Instead, you're more likely to invest your time in relationships. You could volunteer at a community garden, make art with your friends, explore your local parks, or host potluck dinners. And in focusing on community rather than cash, you're creating a more full and satisfying life. When we have an extended network of friends in place, they help us manage crisis and change. With friends by your side to help you move, adjust to being a parent, or recover from an illness, you're better off in every possible way.

You increase your creativity

When you have an endless supply of funds, you can just throw money at a problem and not give it a second thought. But when you live on a budget, you need to get strategic and creative about how to make day-to-day life run smoothly. If you've ever had to come up with a weekly meal plan for four on a budget of $100, you know how to get creative. If you've had to DIY the solution to some household problem because you couldn't afford to hire a pro, you've learned to problem-solve. If you've learned to borrow and barter instead of buy, you know how to negotiate and use connections.

It's the restrictiveness of a small budget that induces creativity. Creativity thrives on boundaries. By giving yourself financial boundaries, you've enhanced your own creativity. And the more you use it, the more it grows.

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