Any pound that I don’t spend is a pound that I don’t have to earn. Or, equally, a pound that I can invest for the future. And so it makes sense to me to spend money consciously and deliberately. To be intentional in what I buy and what I do not. To live frugally, but well.
Frugality is the quality of being economical with money and other resources. It’s not about being a cheapskate, but about avoiding waste, lavishness and extravagance. And, if you’re into behavioural science, it’s about focusing your spending on the achievement of a longer-term goal.
For me, living frugally is about simplicity and growth. It’s about making the best use of the money I have. It’s about aligning my spending and my other resource usage with the way in which I wish to live my life. It’s about refusing to get drawn into a consumerist culture that doesn’t value the same things that I do.
Frugality, then, is a way of thinking about money and spending.
In terms of what this looks like in practice, I’ve developed a set of tactics that help me to remain intentional in my purchasing decisions and to resist the siren call of shiny new stuff. I’m not saying I’m perfect at it, of course, but I’m trying. And I’m making progress, albeit slowly.
1. Recognise the difference between needs and wants. Needs are things that I… well… need. Like food, clothes and car insurance. Wants are thing that I don’t really need, but that I’d kinda like to have. Wants aren’t necessarily off the table, but there’s a higher bar to be overcome before I’ll buy them. Or they go onto my birthday present wish list.
2. Decide what I need before I start looking. Going into a shop without knowing what I’m hoping to purchase is a recipe for financial disaster. Thankfully, I don’t much like shopping anyway, so the notion of ‘just browsing’ really doesn’t appeal to me. Being clear about what I need before I start shopping keeps things simple, short and frugal.
3. Focus on the minimum viable product. Even when I need something, I don’t necessarily need it to have all the bells and whistles. Take my recent purchase of three new smoke alarms, for example. I need them to alert me to a fire. I don’t need them to talk to each other (the house isn’t that big) or to link to an app on my phone. So rather than shelling out £200 on top-of-the-range gizmos, I spent £45 on what I actually need.
4. Decide whether actually buying something is necessary. There are, after all, other ways to obtain things I need. I might be able re-purpose something I already own, for example. Or borrow one from someone, if I don’t need it permanently. Or there may be someone near me who is looking to get rid of the thing I need. This won’t work for things like car insurance, of course, but it works well for lots of other stuff.
5. Check I can actually afford it. This is obviously a bit of a deal-breaker. Smaller routine stuff comes from the normal household budget. Larger one-off things, like unexpected repairs to the car, can come from savings. But barring some kind of massive exceptional circumstance, going into debt – and paying interest – to support regular expenditure just isn’t going to happen. If I can’t afford it, I can’t have it.
6. Make it a family purchase. My money isn’t just my money. It’s my family’s money. My wife and I have shared finances, so every penny we earn goes into our shared bank account. And we have an agreement that if we’re going to spend more than £30 on something – other than clothes and groceries and ‘standard’ things like that – we’ll discuss it with each other first. Not to get approval, but just so we each know where our finances are at. Also, it’s actually nice to talk things through with someone else.
(Furthermore, my wife’s much more sensible than me, so this approach usually stops me making any rash or unwise purchases.)
7. Get points and discounts. I get more value from my purchases when I take advantage of retailer discounts, such as those that I receive through the ‘blue light card’ that I have from one of my volunteer roles or from discount schemes offered by the retailers I use most frequently. I also use my American Express card whenever possible*, so that I receive points that I can use to pay for airline flights and such like. Ditto my Tesco clubcard, etc.
None of this is rocket science. Frugality, for me, is really just about being intentional with my spending. It’s not about denying myself things, but about recognising what I really need if I’m to lead a meaningful and fulfilling life. It’s more than a habit. It’s a way of thinking about money. It’s a state of mind.
* Don’t worry, I always pay off my credit card in full at the end of each month, so that I don’t incur any interest charges.
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Disclaimer: I’m not a financial advisor. The information on my blog doesn’t constitute financial advice or recommendation and shouldn’t be considered as such.