Money, Money, Money! Its so boring…
Lately, I have immersed myself in readings on personal finance and the found a common theme of achieving your dreams through frugal living. I am all for minimalist, waste free and green lifestyle, and truly believe that living in accordance with those values can better ones life. But I doubt that by being a penny pincher you will get very far in fulfilling your dreams.
There is nothing wrong with being money conscious, in fact I encourage it as you will see throughout the personal finance section of my blog. However, I have a problem with saving 50 cents here and 50 cents there strategy. But before I explain my problem with that strategy, watch a comedians take on the 50 cents strategy.
What is wrong with the 50 cents strategy?
Walk into the personal finance section of a bookstore and you will find books ranging from how to retire early by cutting coupons to getting your dream vacation by purchasing no-brand-name products.
These strategies require constant vigilance and take precious time out of your life that could be spent doing something more rewarding. There is something very wrong with putting hours into planning a grocery trip. Typical grocery journey: Buy cheaper milk at Store 1, drive to Store 2 find parking and buy cheaper bread, then drive to Store 3 for laundry detergent.
But small savings add up at the end of the year!
Yes, but the time spent to create savings, could actually be utilized to create more money! For instance, you could increase your income by applying for higher paying jobs. If you have a speciality like filling taxes, than you could put an ad on Craigslist and make money filling out tax returns. You could take a part-time job and earn a few extra dollars and learn something new while you are at it.
On fulfilling dreams…
Saving a few extra cents here and there might help you pay of your debt faster, or take a short trip, but at the end of the day you will find yourself picking and choosing between your dreams. As important as it is to keep savings to a healthy level, it is equally or greatly important to increase income. Because at the end of the day money defines us.
Summary: Effort required = High, Money Saved = Low
The effort it takes to always be “on” to save a few cents at every opportunity is too high. 80-20 rule approach to savings is much better. Reducing spending on the monthly big ticket items once requires way less effort and savings are likely to be bigger. Read quick ways to start saving this week.
What are your thoughts on my take on being penny wise and pound foolish?
