I’m sure by now all of us reading this will know that the true key to saving money and expanding your investments is to become frugal with your spending habits. There was an excellent program on BBC1 last night; Britain’s Spending Secrets which examined the spending habits of families right across the wealth spectrum and tried to give an insight into how they prioritised their spending. As you might expect, it began with the single mother on benefits who refused to buy anything other than big brand named items.. then went through a few ‘middle income’ families who prioritised private school or children’s activities before finishing on a multi millionaire who claimed to be extremely frugal yet had a fridge full of caviare.

The key takeaway from this program seemed to be that (aside from the brand-snob single mother) all the other families clearly demonstrated an awareness and need to save money yet still splashed out on a few specific things they felt important to them. What might seem like an odd or extravagant purchase to an outsider was actually deemed an essential item by the family themselves. And so it got me thinking: What items do I purchase or things that I do which aren’t particularly frugal? Things which I know I could cut out to reduce expenses, yet still continue purchasing for my for various reasons.

Insurance

My parents were particularly infamous with their frugality (you had to be with 6 children between you) and yet I distinctly remember my mother teaching us the importance of having decent insurance.  To me, purchasing insurance is not only about balancing the risks and costs of something happening, but also about purchasing the piece of mind that comes with having a level of protection. Some forms of insurance are just a given; You’d be mad (and arrested) to drive anywhere in the UK without car insurance, but also taking an extreme life changing risk to not have some form of Buildings insurance on a purchased house. However we also have several other forms of insurance; All the pets are insured, our home contents are insured and we both have life/critical-illness cover. I know that many in the financial community instead choose to ‘self-insure’ by putting what they would have paid in premiums aside to pay for any uncovered losses, however that’s not been a risk we’re willing to take and so remain firmly unfrugal with our Insurance expenses.

Travel

The best travel deal I ever purchased was back in my uni days; scrolling through the MegaBus website looking for a return ticket down to London for the weekend.. I spotted a £1 Sheffield – London fare coupled with a Free London – Sheffield trip the next day. Add on the 50p booking charge and my return ticket cost £1.50, Awesome! The coach was due to leave at about 7am (it was over an hour late), took 6 hours to do a 2.5 trip (multiple detours to other stops) and was literally falling apart (the roof above my seat had a hole in it, I kid you not) and yet I was happy and prepared to put up with all of this due to the low cost. Not anymore. When we travel to France next week, we paid £10 more for flights that left at a reasonable time and didn’t involve a trek across London to get to Stansted. Similarly when a group of friends suggested we all went skiing a few years ago; I put my foot down at spending 16 hours on a crammed coach to get there despite the £50 saving on flights.

Perhaps its just coaches I dislike, or the early mornings they frequently require? Either way; I’m distinctly unfrugal when it comes to making travel plans.

The Lottery

I get a lot of stick from certain members of the FI Community around playing the lottery, and yet my ticket remains purchased every week on an automated direct debit. Aside from the fact that if I were to quit now I know my numbers would come up next week, the lottery is the only real form of gambling I do for entertainment. With my averaged returns throughout the year; the cost is about £1.50 a week for the enjoyment and trill of thinking that I might one day hit that jackpot. It will probably never happen and unlike most gamblers.. I know that, however there’s still a chance and so its a small price to pay in my opinion. Plus; when I hit that jackpot I’ll be sure to buy you all a chunk of Vanguard LS 80 Acc ;)

Technology

I hate wasting money on pointless technology gadgets. The number of times I’ve been over people’s houses and seen piles of discarded tablets or electronic games which were used once and then thrown aside is astounding. Instead, I purchase very few new technology items but when I do.. I want them to be good. My laptop was almost double the cost of my uni housemate’s when we both got ours back in 2006, and yet mine is still going strong with only a larger hard-drive added. Similarly my desktop and monitors were over £1000 when purchased new back in 2010, yet had ample space for me to add additional components as time went on and still capable of running the latest games. Working in IT and frequently from home; having a fast computer with multiple screens is a luxury I afford myself despite being unfrugal.

What do you spend money on despite knowing that others would not consider it frugal? Let us know in the comments below, or join in the discussion on the forums!