Monday, January 19, 2009

Frugal Principle #1: Purpose

I believe that the first principle that has to be behind any attempt to live a more frugal lifestyle is a sense of purpose. The frugal person has to know why and for what he is saving money. Otherwise, he risks becoming like Ebeneezer Scrooge, a "tightfisted old hand at the grindstone," who nevertheless lived in a shabby apartment and ate gruel. One might say he was "frugal," yet he never used his savings for the good of himself or anyone else.

With a sense of purpose, however, the frugal person is not simply a miser hoarding money. Rather, he is someone who has knows what is truly important to him and is willing to sacrifice other less important goods toward achieving his goal. So I believe that the very first step for anyone who plans to start living more frugally is to ask himself, "Why do I want to
save money? What are my goals?"

These goals could be anything and will be different for everyone. They could be as small as saving up for a new coat or a night out or as large as saving for a house. They could include paying off debt, building a family emergency fund, saving for a vacation, amassing a college fund, or even giving more to charity. The important thing is that the goals be compelling enough that the person is willing to give up other things to achieve them. (I wrote a little more about spending your money on what satisfies here.)

It's important also to be able to clearly state and visualize one's goals, or else they will not have the ability to motivate one. For instance, right now my family's financial focus is on amassing an emergency fund. Our purchase of our first home last spring really drained our savings, and we're trying to build them back up. While this may not seem like the most exciting goal ever, when I think about the peace of mind it will afford when we have three months of living expenses in the bank, it does motivate me. Or when I reflect that the days of our ten year old car are probably numbered and dream of a minivan in our future, it's not so hard to drive past Starbucks.

As I said in my previous post, frugality is all about choices. With a true sense of purpose in your life, saving money becomes not so much a burden as a set of exciting steps toward realizing your dreams.

1 comment:

  1. Have you read the Tightwad Gazette? Because if you haven't, it is a MUST READ that will change your life!!!


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