Being frugal

Frugality is a term which when heard brings nightmares to most people. They see in their minds people with zero clothes, no enjoyment and no worldly possessions.. their entire being driven by miserly tendencies.

That is an incorrect definition.

Frugality is a mindset which clearly understands the difference between needs and wants. Frugal people ensure that they carefully and knowingly spend on their wants but ensure that they spend on things that they need.

Frugal people differentiate between buying a luxury sedan which may not be used often vs buying a smaller car which does the job it is required for it to do.. especially when it is required to be used sparingly.

There are a few rules which one can utilize to develop a frugal mindset. A few of them are below.

1. Defining if the brand value gives you the benefit vs the additional cost

Many people ignore lower cost products because they dont have the brand value. When others comment, they find themselves squirming because their own worth is defined by what other people think. Frugal people are more self confident in their own self worth... which then enables them to make the right choice depending on their needs vs their wants

2. New vs second hand

Any large capex.. like that of buying a car immediately depreciates 25% the day after buying. So deciding if it is really worth it to buy a new car vs an second hand..especially if it is something for your children or for yourself as a second car.. again depends on clarity of needs vs wants.

It doesnt mean that if the decision is to buy a new car it is wrong.. one has to define the need and then take the right call.

3. Identifying costs which are investments

Studies, new tech are all good investments since they can in certain circumstances build for the future.

4. Not being too stingy

Not spending on vacations or basics are miserly traits... stopping over spending now that is being frugal.

One should spend the right money by doing the right things of booking your tickets before hand and also in the right location.

One must remember , money not spent is money saved and when that money earns itself .. then that is simplefinancialsense