One of the sure-fire ways to control your budget is to consider frugal spending. This could come off as a financial oxymoron as they seem to contradict each other. Spending basically means using your money to purchase items that you may or may not need. On the other hand, being frugal is trying to hold off spending and making do with as little as possible.
There are effective ways to approach frugal living which can greatly help you as you manage your finances. It can give you the ability to live below your means and provide you that extra wiggle room to move around in your budget. A frugal mindset can even give you the chance to meet your long-term financial goals a lot faster with extra funds on hand.
On the other side of the frugal spending conversation, spending money is one of the easiest things you can do. Though Forbes.com came out with an article that seems to paint a great picture with the way consumers spend money. It basically said that post-2008 financial crisis, consumers are more conscious with the money they spend. Shopping for most people now is a practice of looking at value rather than hype.
Frugal spending gone bad
However, there are people who seem to go overboard with their desire to save. Some to the point that frugal spending takes on a different turn. Rather than enjoying the benefits of living below their means, their enthusiasm to penny pinch leads to some expensive financial lessons. Here are a few of the things that can go wrong when you become a little overzealous with your efforts to save.
Saving on equipment you need
At this day and age, telecommuting is a possibility due to advances in technology. There are a number of companies that allows their employees to work from home a few days a week to save on cost. There are also some people who have found a career in working from home. Whether they are freelance writers or even reporters based at home.
With this career, there are a few things you would need such as a computer and some equipment such as a printer and even a scanner. There are times where you might think that heading off to a shop to get cheap printouts saves you money rather than buying a printer of your own. However, you need to understand that as you drive to and from that shop, you are using up gas that costs money. You might also be tempted to buy other things if that shop is inside a mall. You end up spending more than just money for the printouts you needed.
Free things come at a cost
One of the things you need to understand is the concept of opportunity cost. Investopedia.com explains this means you lose opportunity in pursuing another course of action. Take your internet connection for example. If you work from home, this is a necessity you cannot live without. Even if a nearby establishment such as a coffee shop offers free internet connection, you better think twice about it.
It is probably a good backup option when you are having problems with your connection at home or when you want a change in scenery. However, if you plan on relying on that free internet connection for your work then you are on the losing side. Opportunity cost would show you that this will be costlier than getting an internet connection at home. Consider the time and effort you put in preparing to go out and commuting or driving to and from that establishment. Factor in as well the food and drinks you have to buy as you stay in and work most of the day.
This is one of the best ways to help you save money when you do your grocery shopping making it less expensive. You do have to spend time looking for and clipping or printing the coupons so you can use them when you go out. This is one of the frugal spending tips you need to look into but you still have to be conscious when checking items out. There could be times that human error plays a part and you can end up paying more than you should. Just because you are using coupons doesn’t mean you have to let your guard down.
Buying in bulk
This is another money saving tip that a lot of consumers seem to practice religiously. As much as it can help you save money, it can also cost you money and at times, more than what you saved. If you buy more orange juice than what your family consumes because it was on sale, there is a big chance that some of them would go bad because you would not consume them. That is money down the drain for you. When considering frugal spending, be sure to factor in what you can only consume and actually use and not be swayed by the discounts you will receive if you get more.
Statisticbrain.com shares that there is an average of almost 165,000 garage sales all over the country in any given week. This means that if you spend enough time looking through them, you are bound to get a good deal on something you need. The downside on this is that you never really know the background and history of the things you are purchasing.
The savings you get would mean nothing if that bed you bought had bedbugs and mites in them. You would have to spend for cleaning or totally replacing the bed. That would come out more expensive than you originally planned. When you are going through garage sales, be sure to inspect an item thoroughly before buying them. The same goes with online deals where it so easy to pick up a second-hand item. It is a good idea to know as much as you can about the item you are planning to purchase. This is so you can make an informed decision of whether to buy it second hand or invest in a brand new one.
DIY could lead to costlier repairs
If you are one of those people who likes to tinker with broken stuff around the house then this is for you. You might have started off successfully fixing your children’s broken toys or patching up some tiles in the kitchen. However, there are some things that are best left to professionals when it comes to repairs.
If you are already talking about big and complicated home appliances then better think twice. It might be best to call in for a service. You might be tempted to just try and see what the problem is. It might just be a loose screw which you can easily put back in. You end up taking everything apart and trying your best to put them back together. The problem is you can’t do it anymore. You end up paying more than you originally had to for the repair service.
Taking on a frugal spending approach when it comes to your finances is a great idea. You just need to know when to draw the line. Understand the difference between being sensible with money and already being cheap with your finances.