One of the key goals of this blog will be to help you save money by spending wisely. Spending wisely starts with the basic rule, “Avoid paying full price.” Following this rule makes nearly any other financial situation easier. The more money you save when spending, the more you have for other purposes whether saving, spending, giving, or investing. It is both a mindset and an endeavor. Whenever you think about spending, this should be one of the first things that comes to mind and then guides you towards your goal. Yes, there are plenty of times when we have to pay full price, but that should be a last resort – not routine. To follow this rule, we need three things: a frugal mind-set, spending strategies, and practical tips for everyday things.
We will spend plenty of time discussing tips on how to save money, but today, let’s start with a frugal mind set. To some degree, I tend to gloss over the constant struggle about mind over matter and the psychological aspects of managing your money in favor of practical how to tips. But I think developing a frugal mind-set makes other financial issues easier. Before you take a financial action, you should think “frugally”. The two notions should go together. Save frugally. Invest frugally. Spend frugally. Even live frugally. Frugal should become a habit, a way of life. This doesn’t mean no shopping, fun, or indulgences. Just do it economically, avoid paying full price, live within your means, and save for your goals. Thinking and acting frugally is the foundation for your other financial goals and security.
Frugal, thrifty, penny-pinching, cheapskate – different views of minding your pennies, but a 2009 American Express study found that 84% of millionaires hunt for bargains. I know I’m never going to convince most people to live frugally like using both sides of a sheet of paper, so let’s concentrate on a frugal rule that anyone can follow. When you think about spending, think first about our basic rule, “Avoid paying full price”.
After savings successes, you should be rewarded with more than just extra money in your budget; you should feel the thrill of victory. After that comes the joy of the hunt itself. Change your mind-set from, “I don’t have time to hunt for bargains” to “I like saving money, the joy of the hunt, and the thrill of victory.” Perhaps guys can concentrate on the thrill of victory, ladies on the joy of the shopping hunt, and everyone on a penny saved is a penny earned.