Ebenezer Scrooge was a stingy miser and not frugal. I worked for 18 years for Ebenezer Scrooge. Ebenezer has a reputation for being the most miserly person in town. He never gave to charity, his clothes were tattered, and his home was a dilapidated cottage because he refused to spend a single coin on repairs. Ebenezer loved to day trade and would lose thousands of dollars a day on trading, but did not want to share the wealth.

Ebenezer lost his wife and he came to work after the funeral. Ebenezer’s heart remained unchanged. He continued to hoard his wealth, living in the same shabby cottage and wearing the same tattered clothes. He had gained notoriety, but he had not gained any real happiness.

Ebenezer worked till he was in his late 80’s. He never traveled.  Ebenezer grew old and frail. No family or children. No legacy.

I wish Ebenezer smelled the roses. The roses represent the joy that can be found in embracing life’s challenges, stepping out of your comfort zone, and in sharing your experiences with others. Ebenezer never realized the true cost of his stinginess and the richness of the experiences he had missed out on.

The difference between being stingy and being frugal

There are different undertones, implications, and connotations to being stingy and being frugal. They both relate to the people manage their resources and money and how they react to it. The main difference between being frugal and being stingy lies in the attitude and motivation behind one’s financial decisions.

Frugal

Being frugal means being mindful and careful about spending money and resources. Frugal individuals are intentional and make deliberate choices to save money by avoiding unnecessary expenses, finding deals, and making the most of what they have.  Frugal individuals prioritize value and are often focused on long-term financial goals. Frugality is about living within your means, being inventive, and making cautious decisions about where and how to spend your money.

Stingy

Stinginess, on the other hand, has a more negative connotation.

A stingy person is typically someone who is overly cautious or reluctant to spend money or resources, even when it might be appropriate or necessary. This behavior is often driven by a desire to save and accumulate wealth, sometimes at the expense of relationships, experiences, or personal well-being. They are often unwilling to spend money on even basic necessities and may go to great lengths to avoid parting with their funds. Stingy people might be hesitant to share their possessions, whether it’s lending items to friends or family, contributing to group expenses, or giving to charity. They may delay or avoid making purchases, even for items that would significantly improve their quality of life. Stingy individuals often engage in intense negotiations or haggling to get the lowest possible price. Stingy people might find reasons to avoid social gatherings that involve spending money, such as going out to eat, attending parties, or participating in activities that require a financial contribution. This hoarding behavior can extend to money, material goods, or even knowledge. Stingy people often prioritize saving money over enjoying life experiences.

qualities often associated with a frugal person

Resourcefulness

Frugal individuals are adept at finding creative solutions to problems. They can repurpose items, find alternative ways to achieve their goals and make the most of what they have.

Budget-Conscious

Frugal people are mindful of their spending and typically create and stick to budgets. They prioritize their expenses, focusing on necessities while limiting spending on non-essential items.

Prioritization

They understand the difference between needs and wants. Frugal individuals prioritize spending on essentials like housing, food, healthcare, and education while being cautious with discretionary spending.

Savings Mindset

Frugality often goes hand-in-hand with a strong savings habit. Frugal people are diligent about saving a portion of their income for future goals, emergencies, and investments.

Minimalism

Frugal individuals tend to value experiences and relationships over material possessions. They may embrace a minimalist lifestyle, owning only what they truly need and avoiding excessive consumerism.

Comparison Shopping

Frugal people are known for researching prices and comparing options before making purchases. They seek the best value for their money and are willing to invest time in finding deals.

DIY Attitude

Frugality often involves a willingness to do things yourself. This could range from cooking at home instead of dining out to tackling basic home repairs without immediately calling a professional.

Avoiding Debt

Frugal individuals are cautious about accumulating unnecessary debt. They aim to live within their means and avoid high-interest loans or credit card debt.

Long-Term Thinking

Frugal people are often future-oriented. They consider the long-term consequences of their financial decisions and are willing to make short-term sacrifices for greater financial security down the road.

Environmental Awareness

Many frugal individuals are environmentally conscious. They reduce waste, recycle, and minimize their carbon footprint by adopting practices like reusing items and reducing energy consumption.

Contentment

Frugal people often find contentment in simple pleasures and experiences rather than constantly seeking material possessions. This mindset contributes to their overall well-being and happiness.

Mindful Spending

They make intentional choices about where they allocate their resources. Frugal individuals are less likely to engage in impulse buying and more likely to think through purchases before making them.

Embracing frugality can empower you as a person

Frugality helps you build financial independence and stability by saving money, reducing debt, and increasing your overall financial security. This independence can free you from financial stress and the need to rely on others for support.

Being frugal enables you to allocate resources toward your goals and dreams, such as buying a home, starting a business, or traveling the world. You have the financial means to pursue your passions and aspirations.

Living within your means and having a financial safety net can significantly reduce stress and anxiety related to money. You’re less likely to worry about unexpected expenses or financial emergencies.

Practicing frugality requires self-discipline and mindful spending. This discipline can spill over into other areas of your life, helping you make better choices and maintain a healthy work-life balance.

By spending less on non-essential items, you have more freedom and flexibility in how you allocate your resources. This can mean more time for family, hobbies, or pursuing opportunities that align with your values.

Frugality often encourages sustainable and eco-friendly practices, such as reducing waste, conserving resources, and choosing products with a longer lifespan. This can contribute to a healthier planet and a sense of empowerment in making environmentally conscious choices.

Frugality can be closely associated with minimalism, which focuses on decluttering your life, simplifying possessions, and prioritizing experiences over material possessions. This minimalist approach can lead to a greater sense of contentment and focus on what truly matters to you.

Being frugal encourages resourcefulness and creativity in finding cost-effective solutions to everyday challenges. This problem-solving mindset can extend to other areas of your life and enhance your problem-solving skills.

Frugality helps you develop resilience in the face of economic downturns or unexpected financial setbacks. Having a frugal mindset means you’re better prepared to weather financial storms and adapt to changing circumstances.

When you have financial stability through frugality, you may be in a better position to help others in need. Whether through charitable donations or lending a helping hand to friends and family, you can make a positive impact on your community and society as a whole.

Frugality empowers you as a person by providing financial security, reducing stress, promoting self-discipline, and allowing you to allocate resources toward your goals and values. It can lead to a more intentional and fulfilling life, emphasizing what truly matters to you while also fostering financial responsibility and resilience.

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Introduction

The surge and rise in prices of goods and services in an economy are called inflation. The increment in price results in your currency buying fewer goods and services resulting in the decreasing purchasing power of your money.

As I am revising this article, the inflation rate in Canada and the U.S. is around 8% the highest in four decades.

I am going to write about what I have been doing to save money during this inflationary period.

I have spent more than 25 years in the financial services industry. I have lent money, managed money, traded money, and seen two recessions, the tech crash in 2000, 9/11, 2008, and now 2022. The COVID-19 crisis was an outlier or a Black Swan. The challenge with the COVID-19 crisis is that we had to quarantine ourselves, as countries around the world had been hit by a pandemic that was merciless, carcinogenic, and catholic. The knife was in the stomach, turned around and salt is being rubbed in the form of a shortage of many goods, disruption in supply chains, hoarding, and inflation.

I would strongly recommend that you create a budget and stick with it. Inflation kills your budget.

The future is uncertain and the times are scary. However, we will overcome it.

One question on your mind is whether you will come out ahead financially at the end of this. Here is what I am doing to deal with inflation and save money.

Save on Car Insurance

It is easy to save if you own two cars. Debbie has a short drive to work. I am working from home. We will be driving the car once a week to get groceries. This month, I called the insurance agent and took one car off the insurance. Total savings is $125.

Save on Cell phone, cable, internet

As a loyal customer with a provider, you have to negotiate and it can save you money. I called my provider and negotiated better rates for the cell and internet. I switched to IPTV where I get 5,000 channels and only pay $15 a month. Total savings is $50.

Hair color for Debbie

Debbie used to go to a salon for coloring her hair. I learned how to color her hair. Total savings  $125.

Cutting grass

I have a huge lot and for the last couple of years had a professional company cut my grass three times a month. I am going to cut the grass this year. Total savings $100.

Save by Working from home

I requested to work from home. It saves me two hours a day stuck in traffic. I am saving $160 in gas and $50 in parking. Total savings $210.

Cooking at home

I am cooking all my meals at home. I used to eat out pretty often. No need for Uber Eats or Door Dash. Total savings $150.

Cut the non-essentials

Inflation could last for a while. No one knows if another wave of COVID-10 will come. So, the more money you save, it can sustain you.

Refinance, consolidate and lower your rates

If you have many loans, lines of credit, and credit cards, I recommend you refinance your mortgage and consolidate. This way you will have only one payment. Call your banker and lower your interest rate. I recommend Ashish Lala. He is the best in the business.  Continue to invest in conservative stocks that will give you a dividend and ask for a raise.

I hope some of these tips will help you to save money during these inflationary times.

Photo Credits: Tonik  Richard Burlton Andraz Lazic Andre Gaulin Diogo Brandao Max Ilienerwise Becca Tapert Anastase Maragos Sharon McCutcheon

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Do you want to save money? Here are my favorite quotes on saving money.

Never spend your money before you have it. – Thomas Jefferson

Do not save what is left after spending; instead, spend what is left after saving. – Warren Buffett

He who buys what he does not need is stealing from himself. – Swedish Proverb

The price of anything is the amount of life you exchange for it. – Henry David Thoreau

Therefore, it is not how much you make, but how much you save that matters.

It was 2001. I was a young, aggressive, investment advisor on Bay Street. A call came in and being the broker of the day I answered.

Meeting potential clients

The caller was in his late 30’s, an executive in the hydro business and his wife was a marketing executive. They had two kids. He wanted to meet with me as he needed help to save money and start saving for retirement.

Are you kidding me? Sure…. It was an opportunity of a lifetime.

I called the wife and told her I would be late for dinner.

I am dressed to kill. The car is washed. I am ready to make an impression. I am ready to open an account and help this couple save money.

I drive around and check the hood. I see a Mercedes and BMW parked outside their home.

I am excited. My heart is beating fast. I have my pitch perfected.

I ring the doorbell and they welcome me.

Zero Savings

After the basic get to know chat, we sit down to have a more serious conversation. The numbers are impressive. They have a total family income of 250,000 plus bonuses. I can work with that. I can give them tips on how to save money.

After that, I ask how much do you save at the end of the month?

Their face completely changed. They had zero savings.

The monthly payment for the mortgage was $ 3,000, each car was leased for $ 500, private school per child was $ 2,000, trips, vacation and eating out took the rest.

I made some recommendations that included some lifestyle changes to be made in order to reach their goals and how to save money.

As a result, I left empty-handed and never heard from them.

As a VP with a US discretionary manager, I covered Ontario and Manitoba. I would only go to see a potential client who had a minimum of $ 750,000 to invest.

I flew to Sudbury to see a surgeon, an executive in the construction business and a retired janitor.

How to save money

As a result, I googled the home of the janitor and it was not impressive. To be honest it was in a derelict state. I thought to myself he probably wants free information on our stock picks and is not interested in our services.

I went to see him at 5 pm and he preferred that we sit out in the balcony. After the usual small talk, I explained a little about our services and asked him the usual getting to know your client questions. I asked him about his net worth and he did not have a clue. He brought out two statements from different banks and the total was about $2.5 million.

As I am looking at all his holdings, he tells me he also has some share certificates and bonds. He brings about 30 share certificates and bonds and they consist of all blue-chip stocks listed in Toronto and New York.  His liquid net worth came to approximately $5 million.

I recommended that he convert them to electronic shares.

Above all, I was fascinated. I wanted to know his story.

He shared that he started off as an 18-year-old janitor and saved a lot of his money and invested in shares. He retired at 55. He was not interested in impressing anyone. He lived within his means and took vacations. Overall, he lived a simple life. He did want to leave a legacy with a few charities. He was good at saving money.

Conclusion

In conclusion, if there is something, I have learned from being two decades in wealth management is that it is not how much you make but how much you save.

It is important to go out, travel, spend time with family, and do other fun stuff but it has to be within your means.

Photo Credits: Michael Longmire Vanessa Lee Javier Reyes Zan Allef Vinicius Benedikt Geyer

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