Thursday, June 15, 2017
Embracing Frugality For Easy Savings
The spend money whether you have it or not mentality has caught up with us all. Excessive consumerism is the culprit. According to the Bureau of Economic Analysis, the average American saves little more than 4 percent of their income. That is much better than saving nothing at all, but that will not be enough in retirement; at least not at your current standard of living.
Where is the rest of the money going? On average, we spend more than half our earnings on housing and transportation. Buying a bigger house or a “better” car only leads to buying more of the bigger and “better” things, and so the endless cycle of buying stuff that adds no real value to our lives continues, but does it have to?
People will say the need a bigger house, but they only need one to store all the stuff (junk) they own. They buy a new car not because they need one and make nonsensical statements to justify the expense like “to save gas”, or because it is safer. The real reason is to keep up appearances. The “my car is better than your car mentality” at work.
While it may be easy to say that you want to save money, implementing a plan that actually works may not be. We must break from the mentality that our self-worth is tied to our stuff.
All things being equal, frugality is the easiest way to ramp-up your savings.
Naysayers will argue that there is just so much you can save with frugality because once you cut out an expense you are done; you can't cut it again. While that is true, that is rather shortsighted. Say you used to pay $100 for cable, change providers and now pay $50; you will now have an additional $50 in your pocket from that day forward, and not just once.
Problem with frugality is that many have a negative opinion of frugality. Spending countless hours clipping coupons or some other mind numbing task is what comes to mind. Frugality is all about being economical, maximizing your dollars and finding less expensive ways to have the things you want without being wasteful.
You don’t have to become a cheapskate. This is not the same as being frugal. Eating canned soup for dinner every night because you got a case on clearance and pay pennies on the dollar is just plain cheap, and unhealthy not frugal.
Many people only visualize extreme frugality, not what I am selling. These extreme examples are all real. Some people are actually doing THIS stuff and suggest you do the same. One only takes cold showers because with no hot water, shorter showers are the norm, thus saving on both heating and consumption. OK if you like cold showers, but not so much if you hate them!
Another one I recently read, you do not need a fridge, get rid of it and just scrape the mold off the cheese instead. Use your car as an oven to bake some cookies and not as means of transportation. I am not making these up. Selling your car and walking everywhere sounds economical, but unless you live within walking distance from the places you frequent, like your job and the market.
While extreme frugality may have its place as part of an overall savings plan, there is no room for it at the expense of comfort and more importantly your health. You cannot diminish you quality of life to save a few dollars. Can't take the kids to the park because you have the Sunday paper and are clipping coupons? Time to rethink your strategy. After two or three months, those extreme ideas will destroy your will power and frugality will be gone.
I refuse to give up anything that will make me live like we did back in the 20th century. Giving up my cell phone or other modern conveniences is out of the question.
I like to think of myself as frugal, but if I had to give up things that I enjoyed or cared about, I could not be. Could not do some of the outlandish things many out there actually do.
I don’t clip coupons, use homemade cleaning products or cut open the tube to get to the last bit of toothpaste. There is money to be saved that way, but I prefer one-time actions that will continue to save time and time again above all else. I replaced my regular light bulbs with more cost efficient LEDs. I just lowered my utility bill. The best frugal actions don’t add extra work.
First blog I ever wrote grew from a note to my kids about how easily we could save $25 a week. I used the morning cup of “coffee” their uncle buys as an example and suggested he make his at home. Easy math when one cup equals $5.
Thing is he looks forward to that cup, needs it to get going and is not willing to give it up. If something is that important to you, keep it. I used that cup of coffee just as an example, but a simple adjustment/cut like this can be easily accomplished elsewhere.
Eat a home cooked meal tonight instead of take-out and make enough to brown bag your lunch tomorrow. Save on dinner tonight and tomorrow’s lunch. This action alone can potentially save $25 a week. You can do so much with just $25 a week.
Whenever I shop, I take a look at the store brands. Generic items like trash bags, detergents and foodstuff like sauces and pasta. Just spend a few minutes comparing labels, if I see no problem I will always go with the more economical option. The only real difference, at least most of the time, is the more attractive and therefore more expensive packaging.
Small changes; all achievable and repeatable over time that will lead to a more frugal, happier life. Applying the principles of frugality to your life will help save for both that immediate goal and for the future.
I am not a financial advisor. I hold no fancy degree and as such this is not financial advice. Seek the advice of a professional.
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