On Thursday, Peter and I discussed the concept of Intelligent Frugality, or as he called it, Smogul (smart + frugal).
Learning to become more frugal is prudent and does differ from being cheap, especially with oneself. My thoughts are, to become more respectful with money thus saving more for what matters in your life and paying attention to wasted dollars which add up quickly over time.
I cited one of my favourite financial books, Why Smart People Make Big Money Mistakes by Belsky & Gilovich. I highly recommend this book; it's a fun read and will open your eyes to all sorts of "mental accounting" mistakes we all make without realizing it.
Have you ever cheaped out on good ice cream or chocolates thinking you save big time by buying the $4 stuff instead of the premium $8 treat? After all, that's a 50% savings, but with each bite, you'll be reminded of your inferior purchase. Keeping in mind there's only one real reason to eat ice cream or chocolate and that's for the sheer pleasure of it. Why not go for the good stuff?
And when we're off to purchase a new car for say $35,000 and an extra like a premium sound system costs "only" $3,500 more, we say, throw it in! Why that's only 10% of the purchase price.
A dollar is a dollar wasted or saved. It doesn't matter if it makes up 1% or 80% of the purchase, it's still the same dollar. Consider this when testing your own future frugality.
If you missed the segment, it's up on the CBC site at http://www.cbc.ca/radioactive/kelley-keehn.html. Happy smoguling!