The idea of living frugally is not just about not spending money. It’s more about spending money wisely. Sometimes saving money now by buying something cheap can end up costing you more later. And there are times when spending more now will end up saving you money later. There are definitely times when it makes more sense to spend more now in order to save later.
What does it mean to live frugally?
Living frugally isn’t just about spending as little as possible and saving lots of money. It doesn’t mean that you can never enjoy those free spins. Living frugally is more about spending your money in a wise way on the correct things and therefore leaving you with more money to spend on things that matter to you. It is important that you are able to save your money for the things that you want or that you have funds saved for times of emergency and this can happen if you make good purchasing decisions now. It means you have to consider the future.
This is not as easy as you might imagine. It is difficult to turn your back on that cheap item as you genuinely believe you are saving money. However, buying that cheap item can often cost you a lot in the long run as it may well need replacing quickly. Saving money can often be about spending wisely, and that means buying quality items that will last longer and not need replacing.
There are times when spending more today means you will save tomorrow.
There are two elements to consider when you are deciding on whether to make a purchase or not – the price and the quality. On items that we don’t see as very important, like household supplies or basic clothing it’s likely you just look at the price. If it’s a big item like a car or even a house that you don’t buy every day, you may well focus on the quality and blow the budget.
The likelihood is that you fall between these two positions. Spending little on things that are not important to you and spending more on things that are obviously better quality. The truth is that even though you may think that paying cheaply for household supplies is okay, it could be that you end up paying far more because the cheap product doesn’t do the job properly and you need to buy more.
It may be worth spending more on a better product in order to save yourself money in the long run. Below are a few examples where this is the case.
Purchasing a car or bike.
When buying a car or a bike it is not a good idea to go cheap in order to save money. You do have to think about the other costs of having a car. For instance, insurance, maintenance, parking. All these things need to be considered and be part of your overall budget. Buying a cheap car could cost you dearly in terms of maintenance. It may need costly repairs that a better model would not. And this is not just about luxury models. Some more expensive models have fuel economy features which will save you money in the long term.
Purchasing a home.
When choosing a home to purchase, it is definitely not the time to cut corners. Skimping on the little things in order to buy could impact how much you will need to spend later in order to maintain or repair the property. Also, important to remember when purchasing a home is that location, neighborhood and the size of the property are things that can’t always be changed. Think ahead, will this property fit your needs in the future or will you need to upgrade and find a bigger and more expensive home. You may think that a particular property is a steal because of the price but you may live to regret the purchase.
Wallets, bags, laptop cases, luggage.
Things that you use and rely on daily is worth spending a little more on and buying a quality item. Because you use it daily, the chances of a cheap version falling apart quickly is quite high and you will need to replace it. Buying cheaply may be very appealing but quality and craftsmanship will likely last you for years, sometimes a lifetime. For items that you are using every day, it is best to purchase a well- made quality item and this will cost more but, in the long run, save you money.
Appliances for the home.
Today there are many energy- efficient products on the market. They may well be more expensive to buy than other models but they will save you money in the long run.
It is important to consider how much you are spending at the outset, your budget and how much it will cost you to run the appliance. If you plan to keep the item for a long time it may be worth buying the more expensive but energy efficient model because this will keep money in your pocket in the long run and therefore is the sensible thing to do.
Of course, you do need to factor in maintenance and how much warranties will cost. Energy efficient bulbs are another matter. They are definitely worth the extra money as you will make the money back on the energy savings. A LED light bulb will last for around 5-10 years without needing to be replaced and is obviously more cost efficient than buying a regular CFL bulb which lasts roughly 2-5 years.
Cheap furniture is likely to fall apart quite quickly. It is important to consider how often the item will be used and how long you will need it for. If it is a bed and mattress buying cheaply is not sensible choice. When it comes to other items, unless you only plan to use it for a relatively short period and plan to move on, investing in better quality pieces makes more financial sense.
It is, of course, easy to expand the above list of items, depending on your lifestyle. In summary, buying cheaply is not always the sensible or financially clever thing to do. It is important to consider all factors involved when making a purchase and not simply because it is cheap.