In everyday English, which word most accurately describes a person, habit, or method that saves money by avoiding waste?

Introduction / Context:
This question tests your ability to choose the most accurate vocabulary item for the idea of saving money. While more than one option may seem close, the correct choice must best match the idea of using money carefully and avoiding waste, in line with the wording of the stem. Understanding the difference between economical and cost effective is important here.

Given Data / Assumptions:

• The stem asks for something that saves your money, focusing on careful use and avoidance of waste.
• Option A: Cost-effective.
• Option B: Economical.
• Option C: Both A & B.
• Option D: None of the above.
• We interpret saves your money as using less money than usual or avoiding unnecessary spending.

Concept / Approach:
Economical is the adjective most directly used to mean using money, resources, or fuel carefully, without waste. For example, an economical car uses less fuel, and an economical lifestyle avoids unnecessary spending. Cost effective, on the other hand, means providing good results for the cost involved, giving good value for money. Something may be cost effective without strictly saving money in an absolute sense; it simply gives good return for what you spend. Because the question stresses saving your money, economical is the more accurate and focused choice.

Step-by-Step Solution:
Step 1: Identify the core idea in the stem: saving your money by not wasting it.Step 2: Recall that economical means not spending more money than is necessary and avoiding waste.Step 3: Compare this with cost-effective, which emphasises efficiency and value for money, but may involve high cost if the results justify it.Step 4: Recognise that option C Both A & B would only be correct if both words had exactly the same meaning, which they do not.Step 5: Reject None of the above because economical clearly fits the definition in standard dictionaries. Therefore, economical is the best and most precise choice.

Verification / Alternative check:
Consider two examples. Example 1: She lives an economical life, cooking at home and avoiding unnecessary luxuries. Here economical clearly means saving money and avoiding waste. Example 2: The treatment is expensive but cost effective; it cures the disease quickly. In the second example, cost effective does not necessarily save money; it might be expensive but still worth the cost because of the result. This contrast shows that economical is closer to the idea in the question, while cost effective is related but not identical.

Why Other Options Are Wrong:
Cost-effective is not wrong in all contexts, but it describes value for money rather than simple saving. The option Both A & B is incorrect because the question asks you to select the single word that best fits the idea of saving money, and the two words are not perfectly interchangeable. None of the above is wrong because economical is a standard word for saving money.

Common Pitfalls:
Many students see cost in cost-effective and quickly assume it is the correct answer. However, good exam technique requires you to choose the option that is closest in meaning to the exact wording of the stem. When a question mentions saving money or using little money, economical is the safest and most accurate choice. Keeping such fine distinctions in mind will help you handle many subtle vocabulary questions.

Final Answer:
The word that most accurately describes something that saves money by avoiding waste is Economical, so option B is correct.