Why Being Thrifty Isn’t the Best Strategy

Why being thrifty isn't the best strategyThe following is a guest post contribution from Jeremy at Modest Money.

Of course, I’m not going to come out and say Don’t Be Frugal. After all, frugality is essential to good saving and investment. In a way, by deciding not to spend a dollar, you’ve made a decision with a 100% return. In a way …

Anyway, I’m also a big advocate of enjoying your life. Money = possibilities. By putting off most of your spending until the distant future, you are drastically reducing your possibilities in life right now. Some are fine with this and really enjoy the simple pleasures of an inexpensive life. But others feel trapped.

Frugality becomes like any other chore and, like the New Years Resolutionist who stops going to the gym the second week in January, spending reduction often ends in failure. Thrift is great, but I suggest that you simply find a way to make more money. Here are 3 ways to do that.

Invest in Your Education

If you are past the age of the typical undergrad, don’t think that your education has passed you by. As an adult, you have more personal direction than many younger people.

Find a job that you want, but for which you are presently under-qualified. If a two year degree or certification can give you a salary upgrade of several thousand dollars or more, further education is an investment well worth making.

You can even learn for free, with many universities posting classes online and web schools offering better situations all the time. Find a way to gain the skill set for your betterment investing in your future.

Get a Side Hustle

For those unfamiliar with the phrase, a side hustle is something you do to make extra money, apart from your day job. Maybe you can get some freelance work for weekends. Perhaps you have a unique perspective to be communicated, like all the popular finance blogs that have turned into careers for their creators.

One of my good friends turned her leather handbags into a full time job. There is something you can do that can earn you a little extra money. Expand that side hustle until you’ve increased your income noticeably.

 Earn the Same, Spend the Same, Lower Your Overhead

If you can find a way to lower your overhead costs of living, you can keep every other part of your lifestyle the same, all the while spending much less money. Here, I’m talking about things like your house and your car.

Can you reduce your rent payments by $250 a month by moving in with a roommate or moving to another part of town? Can you get around to the places you need to go, using only a bicycle and/or public transportation? With either of these changes, you can save thousands a year.

Most of us have a lot of waste in our lives, but instead of focusing on the small stuff, like cutting out your monthly trip to the movies, focus on the big things, like your property tax. There are many ways to find discounts and cut out spending entirely. If a big change can save you big money, you don’t have to worry so much about your lifestyle spending.

 

Sometimes pinching pennies is the wrong approach. By making more money and being willing to make “big” changes to eliminate your need to spend, you are free to live how you want within the remaining parameters. I hope this has been helpful and that you save a lot by giving yourself more money to work with.

Photo Credit: Tax Credits

No Responses