Tuesday, December 9, 2008

Economic Challenges: The Frugal Lifestyle

Tightwad, cheap, thrifty and frugal seem to be interchangeable words. Before we get into it though, let's take a closer look at a few definitions. Being tight or cheap often pertains to having the money and simply not wanting to part with it. This is akin to the joke, 'Every time you take a quarter out of your pocket, George Washington squints from the light.' You get the point.

On the other hand, a quick look in Webster's dictionary defines frugal as: economical in use or expenditure; prudently saving or sparing; not wasteful. So, don't be confused... there is a BIG difference in the two.

Being frugal can be a good thing. It's become a lifestyle for many and seems to have origins rooted in the Great Depression. Parents pass down traits to their children and several generations later, we have frugal living as a lifestyle choice and no longer a necessity. Many books have been written on the topic which tout increasing your quality of life by simply not being wasteful. Two of the more popular titles are "The Ultimate Cheapskate's Road map To True Riches" by Jeff Yeager and "America's Cheapest Family Gets You Right On The Money" by Steve & Annette Economides.

We're all creatures of habit and changing our routines is more mental than physical. Change doesn't have to come all at once though. Start small. Simple items such as using your banks ATM machine as opposed to mall kiosks will save you $2-3 per transaction. Clipping coupons and mailing in rebate forms is pretty straight forward. It will require a little of your time. But, the rewards add up.

Unfortunately, it is during difficult economic times that we become more expense conscious. This is something we should be doing everyday - not just in good & bad times. Have a rainy day fund (i.e. emergency fund), don't spend money if you don't have it, save for an upcoming purchase and know where each paycheck is spent.

Good financial planning starts with smart money decisions.

1 comment:

Rob Simpson said...

Hello Mark,

I have a great member of staff who I consider frugal. For instance, if I did the stationary order, I would probably be lulled in to buying the over marketed and over priced pens.

Fortunately, Frugal Natasha does the order and we are delivered a pack of bic biros at about 8 pence each. They write just as well.

Incidentally, we have a good personal finance magazine for download on our website and its free.


Save the $1 you might spend on the New York Times tommorrow and have a frugal read on me.