Lots of folks think they’re frugal because they clip coupons, use customer reward cards and frequently buy items on sale. We all should be proud when we do these things. But—isn’t frugal living a lifestyle?
Take the quiz below to see how thrifty you really are. Answer Yes or No.
- I frequently buy toys for my kids during routine shopping trips.
- I save money in the long run, by stockpiling staples I find on sale.
- Buying in bulk is always cheaper. After all, “The more you buy the more you save.”
- Driving a newer car is important to me. I typically buy a new vehicle every four to five years.
- I’m much happier when I have more money to spend.
- I pay my credit cards off each month.
- It’s no big deal to spend more money during the holidays.
- If I lost my job today, I’d have enough money to pay my living expenses for six months or more.
- I spend a couple of bucks playing the lottery each week.
- I save money by purchasing items because they’re on sale.
Hopefully you only agreed to statements 6 and 8. If so—Congratulations! You seem to be in control of your spending.
- No. Overspending on your kids isn’t good for them or you. It’s important to teach your children the value of money. And, let them know you don’t buy items on a whim. Put your dollars to better use—deposit them in your 401K.
- No. Staples like toothpaste, bathroom tissue, and laundry detergents are always on sale. Stick to the items on your shopping list. After all, do you really have room to store, or need a year’s supply of paper towels? A better place to “spend” that money is on your emergency fund.
- No. You may think that a family size bundle of facial tissue costs less than four or five individual boxes. This is not always true. Compare the per unit price of the bundle pack to the individual boxes.
- No. Most vehicles are engineered to last well-over 200,000 miles. Buying a new car is a huge waste of money, unless you’re the type that drives a vehicle until it crumbles into dust. The Federal Reserve reports that, in 2009, the average car loan was over $30,000. And 91% of that amount was financed!
- No. Having more money to spend shouldn’t be your objective. Having more money to save is a better goal.
- Yes. Credit card debt is a major problem. And most folks that have them carry a monthly balance. With interest rates hovering around 14.5%, you may find it difficult to bring your balance to zero—especially if you pay the minimum amount due. Here’s a nifty calculator, courtesy of the Federal Reserve, to help estimate how long it takes to pay off your credit card debt.
- No. Ideally, you should spend the same amount each month. Splurging for holidays and other special occasions only leads to more debt.
- Yes. You need an emergency fund. What is debatable is the amount. And whether you’re loaded down with debt or not. Come up with a savings plan that makes sense for you. Wouldn’t you feel more secure knowing that your family could survive for many months without your income because you planned ahead?
- No. Even if you’re spending a few dollars once a week in the company pool, you’re still throwing hard-earned money away. At five-dollars a pop, that’s $125.00 a year. Think how much better off you’d be with that money tuck away in your child’s college fund.
- No. The only way to save money is to not spend it in the first place! Stores have sales so you will spend money. Don’t waste yours buying items you don’t need.
We all should take note of the frugal habits of some of the world’s billionaires. Did you know that the late Sam Walton (founder of Wal-Mart) drove around in an old pickup truck? And Warren Buffet, (the world’s richest man in 2008) well… he still lives in the house he bought for $31,000 in 1958!
You can find ways to cut frivolous expenses—especially in these rocky times. A good place to start is with a budget. Mint.com and Money Strands are two good money management tools that make budgeting almost fun. And the best part about them is the price—FREE!