8 Key Signs Your Frugal Habits Are Paying Off

Happy young couple husband and wife using a laptop computer looking at a screen paying bills online, planning budget discussing finances sit at the home table

Living frugally isn’t always easy, but the results can literally pay off. If you’ve been following a thrifty spending plan for awhile, you’re probably eager to know how much progress you’ve made.

Try This: Frugal People Love the 6 to 1 Grocery Shopping Method: Here’s Why It Works

Learn More: How To Get $340 Per Year in Cash Back on Gas and Other Things You Already Buy

In some cases, this can be easy — i.e., your savings account balance has grown — but sometimes the results are more ambiguous. Regardless, feeling like your financial sacrifices aren’t in vain is important, because it motivates you to keep up the good work.

Chances are, your frugal habits are improving your situation in a variety of ways. Here’s a look at eight key signs you’re moving in the right direction.

Sponsored: Owe the IRS $10K or more? Schedule a FREE consultation to see if you qualify for tax relief.

You’ve Built an Emergency Fund

“When you’ve been cutting costs across the board, it may feel like it takes a while to add up,” said Mark Henry, CEO and founder of Alloy Wealth Management. “Eventually though, one place you will see the results is your savings.”

Specifically, if your emergency fund is large enough to cover 3-6 months of living expenses, he said this is a sign your frugal habits are paying off.

“When your emergency fund reaches the ideal amount, be sure it stays an emergency fund, and you replenish it as soon as possible when you have to dip into it,” he said.

It might be tempting, but he said you also shouldn’t treat yourself with the money in your emergency fund.

“While that money is an accomplishment to be proud of, it should only be touched when you truly have no other option to cover an unexpected expense,” he said.

Check Out: 5 Unnecessary Bills You Should Stop Paying in 2024

You’re Consistently Ending the Month With Cash To Spare

“The goal of a budget, or ‘spending plan’ as I like to call it, is a zero-sum,” Henry said. “This doesn’t mean that you spend all of your income, but that every dollar is assigned a job, whether that is saving, paying off loans or going out to eat.”

If your frugal habits have been successful, he said you’ll consistently have money left at the end of the month, meaning you’ve spent less than the amount allotted for each category.

“It’s important to make smart money moves with the extra money, whether you save it, invest in retirement funds or pay off any debt,” he said. “If you were being frugal to save for something specific, like a new car or vacation, see if you can maintain your frugal habits to continue to save more, even if you have a more wiggle room now.”

You’re Maxing Out Your 401(k) and Contributing to Other Investment Accounts

If you’re contributing the maximum amount to your 401(k) each year and putting money aside in other investment accounts, Henry said this is a notable accomplishment. “This should be a financial goal throughout your career,” he said.

Investing in your future with money-conscious habits now will allow you to avoid having to be frugal in retirement, he added.

You’re Paying Your Credit Card Bill in Full Each Month

“If you’ve cut back on spending, your credit card bill will be lower and you will be able to pay it off every month on time,” Henry said. “Make it a habit not to buy anything on your credit card that you aren’t positive you will be able to pay off by your billing date.”

Spending within your means is a key sign you’re learning to be frugal.

You’re Paying Down Debt

Living in a frugal manner should leave you with more money to contribute to any debt payments you’ve acquired.

“Effective frugality often leads to a reduction in debt levels, whether it’s paying off credit card balances, loans or other liabilities,” said Tyler Meyer, CFP, founder of Retire to Abundance. “By prioritizing debt repayment and minimizing unnecessary expenses, you’ll gradually eliminate debt, improve your credit score and free up more income for saving and investing.”

You’re Achieving Financial Goals

“As you practice frugality, you’ll find it easier to achieve your financial goals, whether it’s building an emergency fund, buying a home or saving for retirement,” Meyer said. “Meeting these milestones demonstrates that your frugal efforts are yielding tangible results and moving you closer to financial independence.”

Being frugal won’t always be easy, but when you’re tempted to overspend, take a look at the progress made toward these goals to stay motivated.

You Have Improved Financial Discipline

If you’ve recently been feeling less inclined to make unnecessary purchases, take this as a sign of growth in the right direction.

“Over time, frugality fosters greater financial discipline and mindfulness in your spending habits,” Meyer said. “You’ll become more selective about your purchases, distinguishing between wants and needs, and making informed decisions that align with your long-term financial objectives.”

You Have Less Financial Stress

“Frugality often leads to reduced financial stress and anxiety as you gain control over your finances and build a solid financial foundation,” Meyer said. “By living within your means and prioritizing savings, you’ll experience greater peace of mind knowing that you’re prepared for unexpected expenses and future financial obligations.”

Not having to constantly worry about money will definitely feel like a weight lifted off your shoulders, especially if this was once a major issue.

More From GOBankingRates

This article originally appeared on GOBankingRates.com: 8 Key Signs Your Frugal Habits Are Paying Off