Are you Frugal or Stingy?

April 4, 2017 by wealthx

Frugal or Stingy are the words are seen as characteristic of an individual. Different people perceive it in a different way depending on the situation and context. Frugal in the consumption of consumable resources such as food, time or money, and avoiding waste, lavishness or extravagance. Stingy means reluctant to spare money or any possession.

There’s a clear distinction between being frugal and being stingy. Are You Frugal or Stingy? Being frugal is about being resourceful and creative with what you have. Being stingy, on the other hand, is saving money for the pure sake of it, and making your purchasing decisions based on whatever is the cheapest. Ultimately it’s about knowing the value of a given purchase versus merely looking at the price tag.

Before you make a big purchase, just check your bank account to make sure you have enough saved so you don’t go over your budget. It doesn’t pay to be frugal if it’s negatively impacting your emotional or physical health. Don’t compromise on you and your family’s health. Don’t be frugal on it as it’s a necessity. Without good health what will you do with the wealth you have acquired? Frugality is a mental approach we all take when considering our resource allocation i.e. time, money, convenience etc. Being frugal may be seen as negative but it’s not always bad. It purely depends on the situation you are in. As I mentioned above there is a situation about health where you don’t need to be frugal to save money.

When it comes to managing your finance, it is important to understand where your money goes. And that’s why I am recommending to have a budget and keep a record of your spending. It’s a good habit and essential steps to reach your financial goals. Being frugal is good at times but when you try to be too frugal you become stingy. Which is bad. There is a thin line between being frugal and being stingy.

Now your next question should be how do I identify what is frugal and what is stingy? Well, this depends purely on yourself. First, you need to make a list (budget) of your spending. Then categorize your expenses in a priority 1/2/3 and so on. Necessity items must fall under priority 1, needed but can wait should fall under priority 2. Judge your expenses based on this priority and you will come to know purchase of which items can be avoided. Mostly luxury items which are based purely on emotions can be avoided. People who are cutting down on priority 3 is frugal while people who are cutting down on priority 1 is stingy. Don’t confuse between frugal and stingy. And it is purely person specific.

There is nothing wrong you can buy things you can afford. But make sure you are getting value for money. If you are not getting value for money you shouldn’t buy them. Being frugal is not bad it is actually a good trait. It helps you to save money and eventually achieve your financial goals. If you want to achieve your financial goals you need to identify your financial leakage and plug them. Avoid emotional or impulsive purchase of goods you hardly use. Controlling expense and saving more is the key to achieving financial goals.

Confession time: I am fairly frugal though not always.

It is good to be frugal sometimes.. check out more on personal finance | Savings | Investment on WealthX.in