There are some people who scrimp and save all of the time and they might even be accused of being a modern-day Scrooge. Some people may feel that this is not a good way to be and it is much better to spend money. It is something that it is worth thinking about as you should be doing what is best for you.
Advantages of Scrimping and Saving
- If you have a lot of savings behind you it means that if you need money in an emergency then you will be able to use those savings to help you out and it could mean that you will not need to borrow instead. This will normally be the cheaper option as well, which is always attractive.
- When you have money in a savings account it will normally attract interest. This means that the bank or building society will give you some money in exchange for you having the money in there. This means that you can earn some money without actually doing anything. If you find a high interest account then you could get a reasonable rate in return for saving your money.
- If you do not spend much money beyond what you need to it means that you do not get a home full of clutter. You just have items that you need and maybe a few other things and this can make it easier to keep things clean and tidy and also means that you will not need such a big home as you will not have so many items to find room for.
- Getting into the habit of spending less means that you will not have such a high risk of having to borrow money as it will be easier for you to stick to a budget and make sure that you do not spend too much as you will be used to it. If you do decide to buy something expensive, such as a house, you will already have a lot of money to put towards it, you may not need to borrow so much and you will find it easier to repay the loan you took out as you will not be used to spending lots of money.
Disadvantages of Scrimping and Saving
- If you do not spend much money you might get a reputation of being tight. People might think that you are not generous, and they may judge you on that and think that you care about money more than anything else.
- If you are not spending money you will not be helping out the economy. If people spend money the economy can grow – it means that companies can expand and employ more people and this can benefit everyone as there will be more tax payers and then more spenders and things can grow and grow. By not spending this does not happen and it means there are more unemployed people and less money coming in from tax so public services are not so well financed as a result.
- If you spend the very minimum amount then you may not be able to enjoy yourself. It could mean that you are not going out anywhere, not doing any hobbies or having any new things at all. This can mean that life is not much fun for you.
So, it is really god to see if you can find a place in the middle. Where you are spending enough money to enjoy yourself and not be seen as tight but you are still able to save some money and you do not feel like you ate paying out so much you are out of control.