Frugality The Do’s and Don’ts
Frugality, funnily enough, is a habit that is often practised by the rich. The practice, however, generally carries a negative connotation and is certainly not perceived as cool. That said, you don’t have to be a sour penny pinching demon to make your dollar go a long way. All you need is a bit of common sense. So what are some of the frugal habits that I would recommend?
- Avoid debt (!) like the plague, I said: AVOID DEBT LIKE THE PLAGUE! Sure, not all debt is bad, in fact if you use debt the right you can actually become filthy rich, yet, I’m talking about the expensive consumer debt you need to avoid. So, say NO to personal loans, car loans, credit card debt… you name it. These debts should be avoided at all costs.
- Drive a safe, practical car. Perhaps boring and painful to the egocentric, but a lot better for your wallet. Value quality and reliability
- Live on less than you earn. Yes you can!
- Spend time shopping around when making big expenses. Looking to buy a car or a house or are you looking to repair your car or renovating your house? This are BIG decisions that is worth shopping around for (get at least 3 quotes). It can literally save you thousands or sometimes years worth of pay cheques.
- Remember what is really important. Don’t worry, I’m not going to tell you it’s all about collecting memories, but just want you to be conscious that you spend your money on the things that you really value.
- Review your insurances and bank expenses from time to time. Also only insure the things you generally ‘can’t afford’ or would make a big dent in your savings. Healthcare, car and travel insurance, YES, but insurance on that new iPhone or extended warranty on that television set? Probably not. Also check what insurances you already have. Simply by paying with a credit card will insure you for theft, loss and damage for 6-12 months.
- Paying for Services You No Longer Use. Still paying comprehensive insurance on your 10 year old car?
- Gasoline. It’s all the same crap so stop buying into the premium bullshit.
- Repair before you replace. Only do this if the repair is an actual repair and things are not hanging together in pieces of course (there is a limit!). Try it, it’s satisfying too!
- Don’t feel the need to upgrade technology/buy the latest gadgets. More often then not you don’t really need the upgrade especially if you bought premium at the outset. The replacement also becomes more satisfying.
- BONUS: Don’t pay late fees.
Frugal habits that don’t work.
- Sweating the small stuff such as penny pinching in the supermarket. Sure keep an eye on prices, yet, don’t obsess about pennies on the dollar for small ticket items.
- Don’t cheap out on gifts and/or treats for friends and family. Giving is, for many people, more rewarding than receiving.
- Buying on the cheap. More often than not you will find you get what you are paying for. Not always and your own experience will tell you what product categories this applies to but keep it in mind. Sometimes it is more frugal to spend a few more dollars on a shirt that will last 5 years than one that will need to be replaced in less than a year.
- Ignoring maintenance. Yep, when it comes to maintenance, a frugal person will not look to save a buck by skipping car maintenance, neglecting upkeep of the house, or even ignoring medical issues. Spending a bit of time and money on maintenance can prevent expensive repairs down the road.
Need more motivation? Take inspiration from the frugal habits from these millionaires and billionaires!