This is a question which I have been asking myself a lot over the last few years without coming up with a definitive or even satisfactory answer.
I know that there are people who manage to account for every dollar that they earn and for every cent that they spend. Unfortunately, I am not one of them. I operate a lazy man's budget (separate post to follow) and do not track expenditure closely. So long as my expenditure is roughly within the budget, I pay relatively little attention to my spending on day to day items. Larger items do get closely scrutinised. Some examples:
1.We shopped around for mortgages to get the best terms available each time we borrowed;
2.We do not own a car, prefering to rely on public transport.
I do save a respectable portion of my income each year - but I do not know off the top of my head exactly how much or what percentage of my income is saved each year. I suspect it would be possible to do better.
I can only give myself a C or, at best, a B grade for frugality. In future posts I will examine my budgeting system and selected items of expenditure to see where improvements can be made.