Have you ever heard been nagged by your parents to spend money wisely? Or perhaps you have nagged your family members to manage their money more efficiently and not be wasteful? Well, this is known as being frugal!
Now many people have taken it to the wrong context. Sometimes, they tend to become miserly when it comes to expenses which is needed. Such as things involved with their safety. Take for example a man who buys second hand car parts for his car despite being able to afford new parts, is putting his own and other passengers of his car's safety at risk. Another example would be a person who buys a can of soup and is unwilling to open it up to consume it until the very last day before the expiry date. That is sadly the case of mistaking being miserly as being frugal.
Now frugality doesn't have to mean that you scrimp and save every penny like how Ebenezer Scrooge would approve of. It also isn't entirely represented by just spending below your means. It simply means that you learn how to differentiate what you want vs what you need. That is how to be frugal the right way.
The best way to be frugal and being comfortable about it is first to allocate a budget. Let's say you make USD100,000 per month. Now it would be wise to put a cap on your spending below that USD100,000. In fact, it is advisable for you to save 10% of it in the bank and 20% of it in various investments catered to your personal risk appetite. Then, the rest should be broken down to cover your expenses, and whatever is left shall be used for indulging in pampering yourself.
That could be hard believe it or not! You know why? That's because with the availability of credit cards and personal loans, one can be tempted to spend beyond his or her own means. These financial products are usually a double edged sword. It can be used for your benefit or it could lead to more financial burden.
My take on this is that you understand why do you want to be frugal in the first place? Is it because you are saving up to buy your wife a present? Are you saving up for a dream vacation or that special sleek automobile you see beckoning you at the showroom window each time you drive past it? It could be anything. As long as it drives you to be frugal. But you need to know having that reason alone is only the beginning. With that reason, it will keep you to your plan thus you won't give up on your financial plan easily.
To my honest opinion, being frugal is just only one aspect in life. If you overdo it, it will take away the fun from your life. If your plan is to get rich by being frugal, then you only got a small portion right. Being frugal helps but it's not the definite method to get rich. It is only only the beginning of getting rich as in the first gear. There are other gears you will need to take on before you become rich. There are two ways to train your mind towards going beyond frugality towards financial freedom and they are in fact fun to use.
Author Resource:
Guy Alejandro loves to help you with any questions you may have. He doesn't claim to know it all but what he knows, he shares in his blog http://www.authoritytips.com . To know more about the two ways to train yourself in Being Frugal The Right Way and How To Be Come Frugal , login to his website to find out more!
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