Buying pricey products to maintain frugality

Being a true frugal means you should think about saving in the long run. People try to buy cheap products to save money instantly and regret later that they have wasted their savings on something that was poorly built. Generally cheap products have poor quality. You may buy something cheap and may have to replace it in the next few months. Then you are wasting your time and money. If you spend on something a bit pricey but solidly built, then obviously it will last longer and you will be able to use it for years without any hassle.

Don't Get Fooled by Coupons

There are plenty of coupons that are supposed to save you some money on your shopping. I personally haven't used many of these coupons but I've still managed to save a significant amount of money on my shopping even without using coupons. I've noticed coupons do not always give you the best deal. The only effective way to get a cheaper deal is to know the market well. Coupons are just like advertisements. The shops and companies distribute coupons through their advertisement brochures, newspapers, websites and magazines solely to promote their businesses. They certainly sell products on a reduced price during the promotion period but theirs aren't necessarily the cheapest available products in the market. Here are some of the things I've noticed that I'd like to share with you:

New gadgets: nothing but a rip-off?

Most people are so fond of gadgets, they queue up to buy the latest released gadgets. They don't seem to have patience to wait even for a day. I found it weird when I saw people queuing up for hours to grab the new iPhone. Well people are different, everyone doesn't have to be like you and me... so if that makes them happy, good for them.

What I am trying to write today is about the gadgets and cute little innovations that have taken the world by storm but in fact, from a frugal perspective, you can easily live without them. In other words, you just don't need them. I will be giving examples of popular devices in this article. I am not trying to promote the products. I wish I could live without some of the gadgets.

Take iPhone for instance (it's fun to grill the popular stuff :). You can either buy it at once and spend 500 bucks or more, or you lock yourself in for a 24-month (that's 2 years right?) contract and pay a ridiculous amount of money every month on phone usage. All they've done is crammed up a collection of redundant applications in one tiny un-ergonomical device and made the world follow them. I'd rather add some more money and buy a decent desktop or a laptop which is more useful than those cute-looking devices with touch-screens and midget buttons.

Knowing your needs and wants

In order to live a frugal life, it is necessary to draw a line between your needs and wants. Lets start with what they really are.

Needs are the basic necessities of life without which we cannot live. Food, shelter and clothes are the most basic needs of human beings. Apart from that, health care, transportation and education  have also become an integral part of our lives. Needs are pretty much standard for every human being. We all have the same needs.

Wants are those extra things that "may" improve the quality of life but without which life does not come to a halt. They are the tools of indulgence. Going on a vacation, wearing expensive clothes, eating out, collecting new gadgets, etc are things that are beyond the needs. They vary from person to person. I may like to buy new gadgets but to you, it may seem totally wasteful. You may like to go on expensive vacations while your friends may think you are crazy.

Beware of the Marketing Schemes

I was watching TV the other day and I saw an ad for automatic liquid soap dispenser. It comes with a built-in infra-red sensor and when you put your hands underneath the nozzle, it dispenses the soap for you. Doesn't that seem luxurious? The ad was making a point that their touch-free product prevents harmful germs from transmitting. If you want to prevent germs from transmitting, you shouldn't even enter the toilet! LOL

I find it funny people inventing these stupid things and find it even more funny people falling for these things. You seriously don't need an auto soap dispenser in your home. I would rather spend $2 for a soap dispenser with a simple spring mechanism than buying this cute little machine. My simple manual soap dispenser has lasted me over 2 years already and it is still doing it's job. Every time I run out of soap, I just buy a large container of liquid refill soap and fill up my dispenser.

This is just one of the examples. There are plenty of these marketing schemes we see everyday that entice us to use their products and services. Some schemes are fairly straightforward while others come with hidden conditions. I especially hate those mobile phone deals. I find it absolutely hard to figure out their deals. Since I don't use my mobile phone much, I don't have to worry about them.

Ditch that Credit Card

I had my first credit card in my early 20s. It started out with a credit limit of A$1000. I was pretty excited to have a credit card. In fact I didn't need a credit card then. I have always been a wise spender. My bank just offered me one and I simply thought, "Wow! They offered me a credit card". I felt like I was specially treated. Yeah I was perhaps a bit naive.

The credit came with rewards points. So I started using it to accumulate the reward points. The credit card had an annual fee and the rewards points feature also charged a small amount of annual fee. I was enticed by the rewards points and kept using the credit card even though I didn't need it. The reward points would expire if not claimed within a certain period and the points I had accumulated over a period would be so little that they would just expire before I could claim anything. In 10 years I only successfully claimed reward points once. I could manage to get a kid's watch for my niece.

Do you really need to drive?

I don't drive but I live near a big city. I usually commute by train or bus- mostly by train. I find most places easily accessible by public transport. They are fairly punctual and I don't have to worry about busy traffic and road accidents. I can just enjoy the ride, read a book or do a bit of thinking while I commute. That's one of the advantages.

I haven't really done a serious cost comparison between owning a car and using public transport. I've always thought using a public transport comes out to be cheaper than owning a car and is a lot safer and you get to do other things while you commute. Paying the insurance and regular maintenance costs add to your overall expenditure.

If you live closer to work, friends and family, maybe you don't really need a car. However if you have to travel longer distance regularly, then this may not be a right option for you. Personally, I can still go on without a car. Any thoughts?

Debt Is Your Mortal Enemy

Having to pay off debt, no matter how small the amount, is something you would want to avoid at all costs but there are instances where we simply can't avoid debt. For buying a house, most of us can't afford to pay the entire amount at once. We take out mortgage and we start paying that off for the next 20 - 30 years. Buying a brand new car could be another example where debt seems inevitable.

However, there are times when we may be able to avoid debt if we plan ahead and start saving for a purpose. It's also advisable not to incur debt unless you really have to and pay off your debts as soon as you can. The longer you hold on to it, the harder it gets to pay off. On the money you've borrowed, you may need to pay heavy interest on top of the principle.

Pick Up FREE Items from the footpath

Our local council conducts clean up collections every year for removing bulky household items. I can't remember how many times a year they conduct these collections. I think it's about 3-4 times a year. Every household leaves their unwanted goods on the footpath for the council to pick up. Check your local council website or ring them to find out the clean up dates.

People also leave goods for pick-up when they move houses. So keep an eye on your neighbourhood.

The items may include:

• furniture e.g. chairs/computer chairs, tables, beds, mattresses, sofas, etc
• carpets
• cloths
• books
• toys
• kitchen utensils
• fitness/sporting equipment such as exercise bikes, trampolines, bicycles, etc
• white goods such as fridges, stoves, washing machines, etc
• electronic goods such as TV’s, DVD players, video recorders, printers, computers etc.
  

Becoming Frugal and Learning to Save Money: A Lifestyle Planning

When talking about becoming frugal and saving money, you have to start by looking at your current lifestyle. You may need to plan things differently to make the most out of what you currently have. Saving money and becoming frugal is not only about how much you earn and how much you have in your bank account. I look at it from a much broader perspective. It's the lifestyle you choose that either makes it easier or harder in becoming frugal.