Wednesday, August 20, 2008

Classic frugal moment

A small anecdote that I realized sums up a lot about being frugal.

Using my $100 gift card I won in a sweepstakes from my alma mater's alumni association I bought a highly-regarded book in the aptly-named bargain section for $7.50. (Retail price: $30, Amazon price: $20)

That may not jump out as you as particularly frugal, so let's dissect a bit further:

1) Always try to enter a sweepstakes when it's free, takes little time or effort, the prize is somewhat desirable and is from a legit source. You won't always win, but when you do this is fantastic essentially "passive income," no?

2) Frugal people look for the sweet spot of value and price -- even when they're spending free money. This means they may sometimes need to flexible to accommodate considerations. Case in point, I didn't go into the store with this book in mind at all.

3) Moderation is key. After some looking, nothing other than the book I eventually purchased caught my eye as much. So, rather than spend the whole card on a bunch of things that kind of interested me (even if they were also on sale) or blow nearly one-third of it on a new hard cover version of book I've been meaning to read for a while (but could also check out from the library), I bought the one book.

For me, the decision-making process was mostly second-nature, but for anyone trying to take a closer look at their finances, it's maybe helpful to slow down and consider your impluses when making a purchase.