THE IMPORTANCE OF SAVING MONEY

The frugal possess a valuable asset, foresight. Foresight is the idea of thinking ahead prior to taking an action. This means that the frugal have an understanding of economics. The frugal begin knowing that we live in a world of scarcity. The goods that we see in the market did not magically appear. They were produced through work. The most important phase of economic activity is production. If nothing is produced, nothing can be consumed.

Goods in the market have prices. These prices are there so that we can make rational decisions in our purchases. Prices are informational. What a frugal shopper will do is to make himself aware of what the price is for things that he buys. The frugal have developed price awareness. The frugal knows where he can get the best deal and that is where he will buy his goods. Grocery stores put out weekly flyers with their sale items listed.

When purchasing a large ticket item, it pays to shop around for the best deal. It may take going to all the stores that sell a particular item. If you can save $100 on a purchase, it will be worth the effort and gas expended. The frugal understand that their funds are a scarce resource. He cannot print off more money, like the government, without being thrown in jail. He must budget his money. He does not want to spend more for an item than he has to.

When you save money on your purchases, you will have money left over to spend on other items. This means that your money will go farther. This is called stretching your budget. An item that we all use is toilet paper. Some people will buy the Cadillac of toilet paper. I have found a 12 Double Roll pack of toilet paper at Kroger for $3.95. Last time I bought toilet paper at Wal-Mart it cost $5.84. I saved $2.07 plus tax. I can take this $2.07 savings and spend it on something else that I want. To me toilet paper is toilet paper.

When you save money on a multiplicity of goods that you normally purchase, then you will have money left over to spend on some luxury item that you may have been saving for. All of this takes pre-planning. Once you understand the importance of saving money, you can make a game out of it. You can demonstrate your deftness when it comes to your shopping. It is an acquired skill to save money and an important one at that. First, though you must understand mentally the concept of saving money and its importance in the long run. Don’t be shortsighted.