5 Myths About Living a Frugal Life

Frugality is the single most important characteristic in an individual who seeks to attain financial independence.

By being frugal, you work BOTH sides of this equation. Your expenses are reduced, while your savings rate increases, allowing you to invest in assets that provide PASSIVE INCOME we all love.

Frugality may seem like a bad word to some and this is mainly due to the five myths described below.

Myth #1: Frugality makes you “cheap.”

Some key differences between being frugal and cheap are:

Someone who is frugal saves money. Someone who is cheap saves money at the expense of others.

A frugal person focuses their spending on things of value. A cheap person saves in any possible scenario, at all costs.

A frugal person values time. A cheap person values money.

A frugal person looks for value. A cheap person looks for the least expensive.

Essentially, a frugal person does not value material items. They do not try to keep up with Joneses. They are perfectly OK driving their used car or truck, finding deals at Goodwill and other thrift stores, and packing a lunch. However, they do spend money on the parts of life that matter most to them.

Myth #2: Frugality doesn’t allow you to truly live.

This is the funniest one. I get it all the time. “Craig, you need to live a little.” These people clearly don’t know much about me.

As the song “Live Like You’re Dying” goes, I have been sky diving (in the Swiss Alps), Rocky Mountain climbing (in Colorado), and even rode a bull (maybe he was named Fu Manchu?). I’ve climbed volcanoes in Guatemala, scuba dived in the Galapagos, and have been all over the United States.

That’s what “living” is for me. Those adventures and the people I meet doing those things are what I live for. You know what I don’t live for? Crappy restaurant food. “Nice” cars. Superficial clothing. Going to the same bar with the same friends every weekend. You get the idea.

It’s not just me. Talk to anyone who values frugality. Compare them to those who spend more lavishly, and I can almost guarantee the frugal person, the one who needs less to appreciate life, is infinitely happier than the lavish spender. They are more fulfilled, have more things that matter, and acquire less clutter.

“The richest man is not who has the most, but who needs the least.” I don’t know who said it, but I love it!

Myth #3: Frugality is too hard.

This may not be a myth. Frugality is hard, especially in the beginning and especially if you’re used to a life with few financial limits. But it gets easier. Over time, frugality becomes second-nature and it’s the unreasonable spending and excess that become difficult. As the sugary-sweet high of consumerism begins to fade, it’ll be replaced by the joy of living debt-free, living more simply, and with less stress.

Rather than think of ways to save 50 percent or more of your income—which, if done correctly, will likely allow you to “retire” in five to 10 years—you would rather come up with the “it’s too much work” excuse and work 40 to 50 years.

I’m no mathematician. But it seems awfully clear that you are going to be putting in a LOT more work if these excuses persist.

Related: 
Thirty Tips for a More Frugal Lifestyle

Myth #4: Increasing your income is better than being frugal.

This is a half-fair statement. You can absolutely make more money by increasing your income. However, the trap that most Americans fall into is that immediately as they increase their income, they increase their lifestyles. They reward themselves with a new car or live in a more expensive apartment, etc.

Increasing your income is a great way to go about achieving financial freedom. While there is unlimited scalability, however, it is far less efficient.

Back to the financial independence expression:

Increasing your income only allows you to work one side of the equation. Frugality works both! By decreasing your expenses (right side), you are able to invest in more passive assets (left side).

Not only that, but when you cut expenses, you are saving after-tax dollars. Ben Franklin’s quote of a “penny saved is a penny earned” is actually outdated with our current tax system. A penny saved is now 1.33 pennies earned (depending on your tax bracket).

Myth #5: Nobody else is doing it

It can be hard to scroll through Facebook or see your friends and family appear to live “high on the hog” while you’re sitting back trying to find ways to save money just to make ends meet. When you feel that way,  know that one of two things is happening; either your friends are living above their means or they’re making life seem better than it is for social media. Both happen on a daily basis and both have their own dangers associated with them.

Trying to keep up with the Joneses is a great way to kill your finances. Don’t fall victim to the myth that you’re the only frugal person you know, but keep an eye out as well so you don’t attempt to keep up with the people around you.

Mr. Money Mustache (MMM) is the original frugality badass. MMM worked as an engineer for a few years and quickly realized he was among the few that were saving large portions of their income. After “retiring” at 31, he realized he was on to something. This freedom has allowed him to start one of the most successful personal finance blogs in the space, spend unlimited time with his son, and do things he loves to do.

Conclusion

There you have it—five common frugality myths, busted! Now, quit your whining, and take action! Here’s a challenge/action item for you.

Look at your finances, whether you use Mint or Personal Capital, or you just look over your most recent bank statement. Then, determine ONE THING you can cut from your life. This is preferably something with a meaningful impact. Perhaps you can cut your restaurant spending in half? Or maybe you can ditch that silly cable bill.

We can all help fight misconceptions about frugality since we’re all examples of stereotypes that don’t fit in some way or another. Maybe the larger social trend of moderation is here to stay. If so, let’s help shed the thinking that has marginalized thrift and popularized excess. We just may be better for it.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s