Exchanging Frivolity for Frugality: A Beginner's Guide to Handling Money

I'm going to attempt to make this as unpretentious and smug-free as possible but there are definitely some issues that need to be addressed. I'm going to go through some basics when it comes to making purchases and saving money and I hope that they are helpful to anyone who is struggling to make ends meet or those who want to simplify their lives. Most of the main points I am making I, myself, have fallen victim to, or I know someone else who has. Money is a major cause for fights, separations, divorces, etc. and in the current state of the economy, it is important to know how to make simple cut-backs in your own spending and realize what really matters. Handling and saving money is a crucial skill for any homemaker looking to improve their life and the world around them. The reality is that we need money to live and without it there is no home.

Before I get in to the main body of this, I want to explain what money really is. Money is a physical representation of your personal efforts. Most of us have a job of some sort and in exchange for our skills and time, we get money, which is easier to exchange than directly bartering or trading your own skills or goods. My grandfather once told me that before you buy anything, think about what it costs. How many hours did it take you at work to earn the cost of the product or service? Is your time really worth it? Minimum wage is currently $7.25 per hour. Assuming it is an 8 hour day, 58 dollars is made (before taxes). Therefore, if you are looking to purchase an item costing $58, that is an entire day's work. I know this seems like a no-brainer, but how often do we really think about it before handing over the debit card?

After thinking about what your time is worth, there are a series of questions that I personally like to ask myself before making a purchase.

1. Do I really want it? - If you don't want it then obviously don't buy it. If you aren't sure, go home, wait 24 hours, then decide. A lot of times you'll realize that it wasn't something you really wanted but rather, an impulse. It is also a good idea to research what it is you want. Consumer Reports is a great site to check products and see what others who have already purchased them have to say. If it has a low rating, you may want to either find another product with a better rating, or not purchase at all. In addition to the initial question, is this something that you are going to use or consume or will it sit and collect dust or rot? Is it something you will get bored with after a small amount of time? Is it useful? Will it help you or bring you happiness (although true happiness cannot be bought but sometimes things can make us happy)? If all else fails, just watch an episode of Hoarders, that always manages to scare the crap out of me.

2. Do I need it? - Do you have something else that could easily be used as a substitute? Do you already own one? If you answered 'yes' to either of these then no, you don't need it. Food is a necessity, brand-name or prepackaged food is not. Although I will argue for some brands which the generic simply won't suffice and that is fine, it all goes back to what your time is worth to you.

3. Can I afford it? - It is important to know the current state of your bank account at all times. It's a lot easier today with online banking and most banks now have websites where you can check your balance regularly. If not, you can always do it the old-fashioned way by writing down all purchases and deposits in your checkbook. It is good practice to not buy anything that you couldn't pay for in cash. Credit is something that can easily take control of our lives and has the potential to cause many problems. I know there are some things that are needed that must be bought through a loan such as a car or a house. Just make sure that you will be able to keep up with the payments before your purchase. A financial advisor can help you decide your price range.

4. Can I make it myself? - This is a more nontraditional question to ask yourself before buying something, but in the world of DIY, it is worth asking. If you are a plumber, you wouldn't pay someone else to come in and fix a leaky pipe. Likewise, if you can bake a pie from scratch with fresh ingredients, why would you buy a frozen Sara Lee pie? Not to mention, most prepackaged food is full of preservatives, sodium, and unnecessary sugar. If you can sew a new shirt or bag, why buy one that would otherwise support sweatshop and child labor? By cutting out the 'middle man', you can save money, too. Why pay for something when you can do it yourself and gain a sense of accomplishment, too? I will admit that sometimes it is not cost-efficient to buy supplies to make something versus the pre-made product, but the decision is ultimately up to you.

While working in retail at a bargain store, I swore that if someone put a 99 cent sticker on a dead rat and left it on a shelf, someone would buy it. This is something that I have fallen for and continue to see others caught in the trap. It isn't necessary to purchase something simply because it is cheap. Nor is it wise to buy something because it is on sale or clearance. You are not saving money if you buy something that you weren't intending to buy in the first place. In saying this, remember the first two questions to ask yourself before purchases.

Frugality is defined as “sparing or economical with regard to money or food.” It is spending your money in a way that makes sense and that is not wasteful. It doesn't mean always buying what is cheap, either. Frugality encompasses buying items of better quality so they will last longer. In doing that, you will be saving money in the long run. Buying a $10 pair of shoes that will wear out in months isn't as smart as buying a pair that cost more but will last for years. Similarly, foods that are bad for us such as fast foods are cheap. But like the shoes, it quickly wears out our bodies.

When it comes to saving, I personally prefer to keep my money in a credit union. Here are a few reasons why.

Open a savings account in addition to your checking. Even if you can only spare to save $20 a week, do it. Make sure your savings account is the kind where you would have to physically go to the bank to get that money out. Out of sight, out of mind holds true. I used to do this and it proved extremely useful. It was also very easy for me to transfer the funds online when I really needed them. In doing this, you can be prepared for the unexpected.

If any of this resonates with you or fits within your values I encourage you to give it a try. It is our duty as responsible homemakers and householders to not be mindless consumers, but rather, frugal educated ones. Happy shopping and enjoy the benefits of your new found cash stash, wisely of course!