I enjoy reading many blogs that talk about personal finance. But I don’t agree with those who only talk about savings and condemn the costs!
I know what you are thinking
Ok, I also know I have written several articles on the topic of saving, but I don’t think at all that it is necessary to save on everything!
It is not necessary to always find new methods of saving but to optimize expenses without losing the quality of life.
It depends on the stages of life and in some cases, it may be the case to save HARD.
But in general, there are a lot of things that are worth the money for.
After all, if I wanted to live in a spartan way, perhaps I would move to a small house in a remote country, sell the car and live off the fruits of my garden and the few accumulated savings.
Instead, I live in Milan, an expensive city but full of opportunities.
I earn, save and invest and am constantly looking for new sources of income.
I am also always looking for experiences, novelties, cultural stimuli, and experiences.
My goal is to forget about money, not to think at all times if and how I can save it.
So today I would like to explain to you what the subtle difference is between stinginess, frugality, and careful management of personal finances.
I would also like to understand which category you belong to and what your approach to money is.
In this article
The topic of this post is
- What does it mean to be frugal?
- What does it mean to be stingy?
- But how do you manage to achieve financial freedom?
What does it mean to be frugal?
Being frugal means being sober, prudent, careful in managing your finances.
As I see it, it means spending less than what you earn.
But it doesn’t mean eliminating expenses and living to save.
If we see spending as a weakness, for me we are getting it wrong.
Spending on what gives us satisfaction is sacrosanct.
I like to eat in renowned restaurants because cooking gives me pleasure.
I like traveling because it enriches my cultural background.
I like to pamper myself and relax because I work a lot and sometimes I need it.
But I think I am frugal because at the same time I save on a thousand things and I manage not to make myself weigh it.
I’m frugal because I don’t throw money, but I manage it.
What does it mean to be stingy?
If you never spend a penny and give more value to the euro saved, compared to the enjoyment you can get by investing money you are a bit stingy.
Then I mean it is not an absolute problem for you, but it could be for those around you and your children.
I don’t think that not spending gives you freedom and can be a value to teach and practice.
I think deciding what to spend makes you free.
I think spending wisely is a value.
If you have time and want to collect wood in the woods, that’s fine.
If you don’t do it because you want to take your time to do something else, that’s just the same.
On the other hand, if you are constantly thinking about how to save, you have a problem with money.
You have to save on what you don’t value, but you have to spend on what you like.
Being free to spend on what you enjoy is true financial freedom.
But how do you manage to achieve financial freedom?
Well here the donkey falls, someone would say …
You have to plan, analyze, manage your expenses.
You need to identify how much you need to live, allocate part of your money to discretionary expenses, and the rest to savings.
Saving must generate new income, new cash flows, to be able to increase your assets.
If you save and still don’t spend, what is the purpose of saving?
If you don’t spend and you don’t need money why are you saving?
To generate new income that you will not need?
I think you always have to save with a goal, otherwise, it doesn’t make sense.
I think I’ve explained to you why spending makes sense and frugality doesn’t have to become a disease.
Saving as an end in itself is useless. so what will be your reason of saving.
As well as obviously spending on what does not give you satisfaction.
I prefer to spend but do it wisely and save to allow myself some entertainment now and then.
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