I thought I would kick my money posts off by dispelling a common misconception. Many people think that being economical with money, or buying cheaper brands is being cheap. Actually by defination it’s being frugal (Wikipedia):
Frugality (also known as thrift or thriftiness), often confused with cheapness or miserliness, is a traditional value, life style, or belief system, in which individuals practice both restraint in the acquiring of and resourceful use of economic goods and services in order to achieve lasting and more fulfilling goals. In a money-based economy, frugality emphasizes economical use of money in meeting long term personal, familial, and communal desires. Let me put this in real terms, baked beans! You have your top of the range beans at say 99p, a can of your supermarket own quality label at 75p. Intermediate label at 50p and the basic range at 12p a can. I can tell you now the cheapskate would have gone for the 12p can without battering an eyelid. A frugal person on the other hand would way up the best taste/price balance. They may think the 50p can is as good as the top brand at 99p therefore making a saving of 49p with little difference to the quality of their life whilst the cheapskate would have saved 87p but probably lost a lot of quality in the process.
This principle stretches across all walks of consumerism. The cheapskate will by the cheapest flat screen TV that will probably only last a couple of years (if they are lucky) whereas a frugal person would do their research and purchase a set of good build quality and reputation even if it means spending more for it to ultimately last longer. They may even purchase an extremely expensive set if it would a good investment to do so.
Thats smart spending and it sets the scene for the way I have constructed my budget for 2008 that I will share with you here starting on the 1st Feb, as well as tips on saving money and being more frugal. If you have credit card or other debts, just want to get your money act together subscribe to my RSS Feed and over the coming weeks and months I how to bring you a lot of good ideas and tips to get your financial life back on track.If you have any comments on frugality, or would care to share some of your favourite frugal moments or tips please feel free to comment.