Frugality is a necessary aspect of getting on track, financially speaking. Even for people with strong income, there is always the temptation to buy too much, to live too well. Instead, if we are to build wealth in the long term we have to learn to live beneath our means. This frees money to be saved and invested in various ways, and it’s the basis upon which our future financial well-being is built.
But frugality can be taken too far. In some cases, people spend less than they should on important things, leaving themselves vulnerable or even in danger. We’ll cover some of these below and encourage you to spend money where you need to so as to build wealth without living like a pauper.
- Life Insurance – Life insurance is a necessity for people who live frugal lives. Frugality is an indication that finances are tight, or at least that your financial situation is on a journey to something better for everyone in your household. Life insurance companies provide coverage to individuals and families who have tight budgets, because if one of these individuals were to die, this would put the other people in their household in a vulnerable position. If you make the finances work in your household, or if anyone at all depends on you for support, then you need life insurance. Affordable term life insurance costs much less than you likely think, and the payoff is great if something unfortunate ever happens.
- Food and Exercise. Unfortunately, it’s easy to neglect your health when living a frugal life. Food is foundational for your health, current and future. Good food doesn’t have to be expensive, but you do have to prioritize eating healthy food if you want it to be part of your life. Greens and grains are a great place to start. Exercise is another important factor. Without exercise, an adult is likely to become unhealthy, especially in the long term. So don’t look at that monthly gym membership as money thrown down the drain. Look at it as an investment in a healthy future.
- Things That Break. There’s nothing worse than having a perennially broken down car, appliances that kick the bucket at inopportune times, and shoes that have to be replaced every 6 months. When you don’t buy quality, you stand to pay more than you would for replacement and repair. You don’t have to spend extravagantly in order to get nice things. Look on Craigslist and eBay for affordable, high quality things. Find brands that are cheap, but still have an emphasis on functionality and quality, like IKEA. There are options for having sturdy things that don’t cost too much, and this will save you time and money in the future.
There are plenty of examples to show that sometimes spending the least amount of money is not the best way to build a secure and happy future. Focus on essentials like life insurance, and make wise decisions about purchases you require for living, and you’ll be frugal without living in destitution.