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When To Be Frugal

I am not an extremely frugal person, but I am not a spendthrift either. I love squirreling away my money just as much as I love my home [3], health, and hobbies. In short, my husband and I save more than a third of our income on a regular basis, but we do not cheap out on certain things. Specifically, I will spend whatever is necessary to live healthily and sleep well. Frugality has its place in the world of personal finance, but there are some things that you just cannot afford to be cheap about and things you can.

Homeowner’s insurance

The natural disasters that have occurred over the past few years have shown the importance of having good homeowner’s insurance. You never know when a hurricane, earthquake, tornado, or flood will ravage your area and damage or destroy your home. This leads me to make sure that I have a homeowner’s insurance policy with enough coverage to be able to rebuild. I also make sure to use reputable companies with a history of paying up when the time comes. In my opinion, it is worth paying a couple extra dollars a month to protect my biggest financial investment.

Health Insurance

The number one thing that drives most people to bankruptcy is not having health insurance [4]. Medical bills are astronomical and are too much for the average person to pay alone. That is why it makes sense to pay for a health insurance plan no matter what budget you are living on. Even high deductible policies protect you more than no policy at all.

Automobile Insurance

There are way too many uninsured drivers on the road today. Even though it is against the law not to have at least liability insurance when driving in Texas, I know there are a ton of drivers on the road around me without it. I think that an automobile insurance policy should at least cover the damage you cause to others and whatever amount you need in order to ensure your own ability to get around.


I personally think that everyone should budget for some fun in their lives, but feel free to be cheap about it. There are so many affordable options out there for entertainment [5]. Would you enjoy board gaming with friends or bird watching in the mornings? You may also want to look into hiking or hosting movie marathons in your home. I believe there is a fun yet cheap option for entertainment for absolutely anyone willing to try something new. I personally love hosting monthly potlucks and we can keep the cost below $25. My husband enjoys computer games and spends $10-$50 for 20-100 hours of fun.

What do you spend on and where do you cheap out? Do you agree with my examples above?