How You Should Spend Money

Frugality isn’t about cutting your spending on everything. That approach wouldn’t last two days. Frugality, quite simply, is about choosing the things you love enough to spend extravagantly on—and then cutting costs mercilessly on the things you don’t love.

The mindset of frugal people is key to being rich. Indeed, as the researchers behind the landmark book The Millionaire Next Door discovered, 50 percent of the more than one thousand millionaires surveyed have never paid more than $400 for a suit, $140 for a pair of shoes, and $235 for a wristwatch. Again, frugality is not about simply cutting your spending on various things. It’s about making your own decisions about what’s important enough to spend a lot on, and what’s not, rather than blindly spending on everything.

THE PROBLEM IS THAT HARDLY ANYONE IS DECIDING WHAT’S IMPORTANT AND WHAT’S NOT, DAMMIT! That’s where the idea of conscious spending comes in.