the quality of yielding the most outcome using the most effective process.
The main point of being economic is to avoid wasting money. Since money is the main medium of exchange for goods and services, it is important to use it sparingly. Economical people tend to save more since they spend less. It is believed that rich people are economical, which explains why they have a lot of money.
According to economics, the study of how people use available resources to achieve their goals, human beings have many wants and needs. It will therefore be challenging for someone to achieve basic wants without money. Apart from money being a medium of exchange, it is also:
- A means of storing value.
- A standard of deferred payments.
- A unit of account.
It is therefore important to learn how to be economical to achieve the best benefit from your money. Here are some ways to be economical:
- Avoid impulse buying. Impulse buying is when you see something that you like and immediately buy it, even though it was not planned for.
- Budget your money. Budgeting will help you plan how to spend your money and avoid spending on things that are not budgeted for.
- Reduce your spending. You can decide to opt for a cheaper way of doing things to reduce costs such as using public transport in stead of taking a taxi. You can even completely reduce the cost by walking if it is a walking distance.
- Reuse. Use commodities more than once. Instead buying plastic paper bags, you can buy a reusable bag, which is also environment friendly.
- Only spend what you can afford. We tend to admire the things we can't afford and strain ourselves in order to have them. For instance, as a food lover, you might use your two weeks savings to go to a fancy restaurant which would have been the amount of money you would have used for food in two and a half weeks.
- Learn how to do things for yourself. By learning how to cook, clean, do your hair, and take care of other services yourself, you can learn to do it by yourself and reduce on spending.
- Save and invest. Instead of spending all your money, you can set aside some of it for future use or invest it in a successful business to yield more income.
- Be productive. You can increase your income by taking another job that you can do during your free time or free days.
Real World Example of Economical
Under the canons advocated by Adam Smith, a good tax system should be economical. A tax system is considered economical if there is a maximum yield to the government using the minimum possible cost of collection. The collection costing including the cost incurred by the taxing authority and the tax payer.
Adam Smith stated that, "every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state." This applies to the tax system in most countries all over the world, such as Internal Revenue Service in America. The taxing authorities try collecting the maximum they could using the lowest cost.
Significance of Economical
Being economical also comes with other benefits apart from wasting money. As an economical person, you tend to increase your chances of success due to the discipline you have when it comes to spending. Below are some of the benefits of being economical:
- It encourages savings. When you are cautious of how you use your money, it makes it possible for you to save.
- It decreases the buying of unnecessary items. As an economical person, you will use your money in an economical way meaning you rarely spend on unnecessary items.
- It increases the outcome of your income. As an economical person, you only spend what is necessary and try to gain more. Through that, your income is always more than if you were not being economical.
- Being economical reduces pollution. Reusing items is a characteristic of an economical person. You also tend to have less garbage therefore reducing pollution.
- It helps you learn new skills. As an economical person, you prefer doing things yourself rather than for paying for the good or service.
As an economical person, you tend to use your money wisely. This helps to keep you at a place where you can afford your necessary needs and basic wants. It is therefore advisable to be economical with your money.