There was a time not so long ago when the word frugal meant cheapskate, penny-pincher, tight-fisted. It was not altogether flattering, and could easily be taken to extremes. Those extremes would often lead to decision makers refusing to spend money on any food or clothes for the family that wasn’t absolutely critical. Even then, the purchased items were meager and ultimately insufficient. With a definition like that, no one wants to be frugal.
But that is not the only definition of the word. A more meaningful definition is smart with money. That puts frugality in a whole new light. It doesn’t mean not spending what you should, or being cloistered away from life’s pleasures. You can be frugal and still enjoy the steak while wearing a nice suit. Here are some aspects of frugality you will want to incorporate into your modern definition:
Frugality is as much about what you do with your money as what you don’t. Being frugal is not just for people living paycheck to paycheck. It is for people from every walk of life. If you make $65,000, or have $250,000, you might choose to invest a percentage in a fully accredited opportunity like Diversyfund, a crowd-funded, real estate investment service. Harnessing the power of other savvy investors could ensure your money is in a smart place.
Real estate is generally a good place to invest money as you do not have to be wealthy to get a good ROI. It is ultimately something that anyone can do with the right guidance. Other investment opportunities include insurance and stocks. These are all specialized fields that require a great deal of research and expert guidance, and should never be taken lightly. When you have money, one of the most frugal things you can do with it is invest it.
Another very smart thing you can do when you have money is pay off your high-interest credit card debt. You are making the card companies wealthy by making minimum payments. Whatever you buy with your credit cards can cost you two to three times as much as the sticker price by the time you pay them off.
Paying off your debts is always a good goal to have. You can do it with a debt consolidation loan that will allow you to make one monthly payment instead of multiple payments, and likely get a lower overall payment with virtually no fees. Spending your extra money on smart payments is a good way of making sure you have even more extra money down the road.
When it is time to go shopping for a new computer, don’t start by figuring out which one you can afford. Start by figuring out which one is best for you. Additionally, figure out which one is likely to still be serving your needs four to five years down the road. Chances are, the cheapest one you can find will not fit either of those descriptions. The cheapest one is one you will have to buy again, and again. It will never fully meet your needs. And it will last for a year or less before needing to be replaced.
You might have to save for a few extra months to get the one you really want. But that is the one you should get. That is the one that you will still be using several years later, with surprisingly good resale value when the time finally comes for you to upgrade. Frugal shopping is not bargain hunting. It’s quality hunting: quality that lasts, and will save you time and money in the long run.
Being frugal is not about burying your money in the backyard and never spending it. Frugality in the modern age is about smart investing, smart payments, and smart purchases.
This post is brought to you and contributed by Abby Locker.