Handling Money Well – Frugality

Frugal – dictionary definition

- economical in use or expenditure; prudently saving or sparing; not wasteful: a frugal manager.

- entailing little expense; requiring few resources; meager; scanty: a frugal meal.

My own practical definition of frugality is “consistently spending less than you earn”.

I have not found a good way to become rich quick, or how to spend money freely. But I can tell you some slow, reliable ways to ensure your future financial success.

Frugality is crucial to success with money. The richest people I know (which include multi-millionaires and even one billionaire) are careful and frugal with their money, or else they would soon lose it all.

Many people with much lower incomes are also frugal. They save, avoid debt, and live very happy lives, free from financial stress.

Frugality should apply to all expenditures, both large and small. I grew up relatively poor and have gradually become successful financially, but my spending habits have not changed much.

I try to avoid spending money wherever I can. I always search for lower cost alternatives, even for lunch or coffee. I try to buy good-quality and long-lasting products, if they are not too expensive.

Take cars for an example. When my wife met me in 1974, she was surprised that a young banker would travel by bus or bicycle, and not even own a car, though I could easily have afforded one. Later on, I bought older cars which I could buy for cash in the bank, and thus avoid any debt.

Now, I usually buy demonstrator cars or else last year’s model, which saves me anywhere from 10 – 40% off of new car prices. Then I keep the car for 10 years which also saves money. I could afford to drive a very expensive car, but I live modestly, as do most millionaires. People may laugh at my cars or clothes, but they would envy my resulting wealth.

Kathy (my wife) buys most of her food and clothes at discounts. She loves to shop at thrift stores. Maybe someone might say it is a shame to buy second-hand things when you can afford new luxury products, but fortunes can change quickly, particularly if you become loose with your money.

Virtually anyone who works energetically (every day and every year) and who is constantly frugal will soon reach some basic level of financial success. But if they ever change these important habits, success may just get up and walk away!

There are other important aspects of handling money well, but they all start out with frugality.