You might wonder what the point of having money is, if you don't spend it. But acting broke might just be the smartest move you make. We're not talking about convincing yourself you don't earn enough compared to others. We mean living well within your means – in fact, below your means – even when you earn enough to spend more. By spending less, you free up money for long-term investments that build real wealth.

Don't see frugal living as deprivation or missing out – it's a way to secure your future financial freedom: the freedom to choose your work, live where you want, and retire comfortably – without a mountain of debt.

The concept of acting broke

Acting broke doesn't mean you need to survive on instant noodles, rely on others to pay your way, or that you should never have fun. It's about being intentional and choosing long-term wealth over short-term shopping sprees.

It means:

• Saving and investing before you spend on non-essentials every month.
• Not upgrading to the latest tech if your current devices still work fine.
• Skipping flex-for-socials buys and saving for things that truly matter to you.
• Living as though your bank balance were smaller – not because you're stingy, but because you're smart.
   

Here's how to tighten your purse strings now for more freedom later:

1. The first step to wealth: Don't stress to impress

Comparing your life to others and trying to 'keep up with the Joneses' makes you spend money you don't have, to impress people you don't even know. Yes, of course, posts on social media make it look like everyone's living large – because no one posts about their debt repayments or bounced debit orders.

Focus on your own financial goals instead of your friend's TikTok haul or soft-life posts. If you feel tempted to compete, pause and ask yourself: 'What am I really chasing?'

2. Don't upgrade your lifestyle with every income boost

A raise, tax refund, or side-hustle income can feel like an amazing windfall. But before you celebrate by upgrading your life, take a breath. Lifestyle inflation is sneaky – you earn more, so you spend more. Before long, you're back to living month-to-month, with only a few newer, nicer possessions to show for it.

To make saving easier, increase your monthly debit orders to savings or investments whenever your income grows. Then you can splash out with what's left over – not the other way around.

3. Practical budgeting and strategic fun spending

You're allowed to enjoy your money. But enjoying it wisely means setting limits and sticking to them. Entertainment, shopping, travel – you can enjoy it all, as long as it fits into your budget.

• Set aside a guilt-free 'fun fund' every month, and stop any fun spending once it's used up.
• Get more value from your social spending. That could mean drinks at home with friends, where you can control the vibe, rather than a night on the town.
• Save up for big splurges instead of relying on credit.

4. Know your numbers

If you don't know what you owe, what you earn after deductions, or what your interest rates are, it's time to get a clear picture of your finances. Wealth isn't built on vibes – you need to pay attention to the details.

• Check your bank account before spending, not afterwards.
• Monitor your credit score regularly – drops can affect your borrowing power.
• Take action to repair your credit score as soon as you notice any change.

5. Make your money work for you

You don't need to be rich to start investing – you just need to be consistent, patient, and informed. A financial adviser can help you understand your options. For long-term goals like retirement, savings tools that benefit from compound interest will grow your money more.

6. Spend with intention, not on impulse

Takeaways, delivery fees, pick-me-up coffees, streaming services you sign up for to watch one series and then forgot about – it's amazing how small expenses add up if you don’t pay attention to them. Track where your money actually goes each month, and ask yourself whether you really need each expense in your budget.

Here’s how to take more control:

• Track your spending with MoneyTracker on the Money app.
• Create a monthly budget and review it weekly, to spot areas where you could exercise more self-control.
• Ask yourself: ‘Do I need this right now?’ before you buy anything.

Balancing frugality and enjoyment

Acting broke doesn't mean giving up nice things or turning into a miser. It means making smart decisions that protect your future, while still enjoying your present. It's about investing first, buying less on impulse, and spending with more intention. No matter what age you are, a frugal mindset can help you build the most valuable possession of all – a brighter future.

Let Nedbank help you make smart money moves

Chat to a Nedbank financial adviser to help you map out a realistic plan based on your goals.