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Being frugal should not be confused with being unable to spend. In fact the opposite is true. Carefully monitoring your spending, following a disciplined budget, and saving in as many ways as possible allows you to spend more in the areas that are important to you.

Since budgeting reduces unnecessary and wasteful spending it leaves more money available for discretionary purposes. Choosing the areas where you will spend that extra money is part of the fun of being frugal.

Looking at this topic another way, by being frugal most of the time, you create a situation where you can spend a little extra some of the time. For me, the place that I spend extra money is in travel. When it comes time to book a trip, I still shop for the best deal and try to save, but I pretty much travel when I want to without worrying too much about the price. This same reason is why it’s ok for some people to spend their $5 a day at Starbucks, or in a similar manner. Staying in strict control of your finances gives you the right to reward yourself with a minor indulgence as a result. Whether you take that reward in small pieces very often or large pieces a few times a year, rewarding yourself can inspire even more frugal behavior.

If being frugal could save you $2000 a year and you decided to reward such behavior with the aforementioned $5 coffee each day, you’d still come out about $700 ahead. Plus, that coffee indulgence might be the reward you need to keep up your good habits and keep going. Sure, you could save even more by not having that coffee, but doing so might make you give up on being frugal before you see the benefits. Giving up might lead to getting depressed and ultimately deciding to buy the coffee anyway to cheer yourself up.

Being frugal is a method to save more. It doesn’t permit you to spend more, it just allows you to shift your spending from hidden and wasteful ways to ways that you choose. Having consistently good money habits gives you the right to occasionally spend some of that savings. If that spending inspires you to save more, or not give up on what you’re currently saving, then it is really beneficial.