Merriam-Webster defines frugality as “careful use of material resources and especially money”. There is much more to it than what is packed into such a simple word, however.
For some, frugality means hope and opportunity. That’s the feeling I get from the word. For others, frugality means missing out on something. Frugality can mean less work for some people and more work for others. How can such a simple word have so many different meanings for so many different people? This is because everyone has different life experiences.
Frugality is efficiency with money
Let us start with the basic definition of frugality: “careful use of material resources and especially money”. Whenever we make careful decisions about how we spend our money, we are thrifty. Every time we decide that spending $ 100 on something slightly tempting isn’t a wise choice, we’re thrifty. Whenever we shop at a lower price, we are thrifty. Whenever we buy something because it will take a long time, we are thrifty. Whenever we buy the bulk package because it’s cheaper per use, we’re thrifty.
In this sense, almost all of us are a little frugal in everyday life. People always make decisions about when it is okay to spend money and when it is not okay.
What is the difference between frugality and normal everyday life? Frugality is a conscious effort to be more efficient with your money than is possible by default. You practice everyday life when you choose not to buy a cool new $ 300 device that you don’t really need – we all do this quite a bit. You are frugal when you spend some time figuring out what the cheapest package of toilet paper is so that you can make the right choice now and in the future. If you’re taking an extra step that you normally wouldn’t have taken before to be a little more efficient with your money, you are thrifty.
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Frugality is efficiency with other resources too
As you are efficient with your money, you may find that many of the same principles apply to the other resources in your life. For example, you can be economical with your food by taking care not to prep over a meal and saving leftovers and extras for future use. You can prepare meals in advance as it is not only money saving but also time efficient as you can use a lazy Sunday afternoon to make busy weekdays far more efficient.
This is especially important when you consider that we often exchange money for other resources such as time. We order takeaway mainly because it’s more efficient on a busy evening, not because we love the food. For example, spending $ 40 on take-away is not frugal when you could cook the same meal at home for $ 20, but it may save you time and energy that can be efficiently applied elsewhere .
Frugal strategies should also be considered in terms of time, energy, and other resources. A frugal strategy that saves you $ 1 but requires 20 minutes of energetic effort is probably not a good frugal strategy because $ 1 is actually costing you 20 minutes of time and energy that could have been applied elsewhere, probably with a much better return on investment.
Isn’t that just minimalism? They overlap a lot, but frugality doesn’t always mean “less”, it just means “more efficient”. Frugality does not mean that you are inefficiently exchanging your time, energy, or other resources just to save money. It also means using these resources efficiently.
Frugality is NOT misery or cheapness
Another important factor to consider with frugality is that it is very easy to overdo frugality.
As mentioned above, in order to be efficient with your money, always exchange something for this efficiency. For example, buying toilet paper in bulk will get you more toilet paper for your dollar, but you need to have enough space to store that toilet paper. If you feel unhappy when your closet is cluttered with unused toilet paper, it is not worth the small amount of money you are saving.
Frugality shouldn’t make you feel worse. It shouldn’t harm your sense of contentment in your life. It shouldn’t damage your relationships. It’s cheap, not economical.
While you have to give up something in order to gain value elsewhere, look for the things that are clear Winsand there is no clear win when you are unhappy or when you damage relationships.
Frugality sees additional benefits
Living frugally often offers additional benefits that you might not otherwise have noticed.
An example of this is frugal hedonism. Adding the constraint of keeping costs down to your decisions does not mean that you are choosing misery. Rather, it means that you are expanding the range of things you may have been considering outside of your original comfort zone, and discovering new benefits and pleasures in the process.
Frugality can mean less stress because you have less to worry about. Frugality can mean better relationships as you host inexpensive and free social events, and trade more with friends and share tasks. Frugality can mean discovering new hobbies as you try new things that you have never thought of before and discover a new interest.
Frugality is a financial tool that anyone can use
A final important aspect of frugality is accessibility. It is a financial instrument that anyone can use.
There are many financial instruments that are not available to everyone. Not everyone can invest. Not everyone can have a credit card. Not everyone can have a savings account.
However, everyone has to eat. Everyone needs protection. Everyone needs clothes. Everyone needs social relationships. All of these things give us the opportunity to be frugal and to use our resources more efficiently.
This is often why frugality is overlooked when talking about finances. Frugal tips feel so common and commonplace that we don’t see frugal techniques as tools for building our financial future, but they are.
When you add frugality to your life and manage to spend $ 100 less per month without feeling miserable, all of a sudden you are putting $ 100 less per month on that credit card. Suddenly, you could be spending $ 100 more a month paying off debt. You can invest $ 100 more per month in your retirement savings. Over time, your life will change as you can buy a car with no credit, or finally have a down payment on your home, or finally get out of debt and that bill no longer hangs over your head.
It starts with frugality, and that is a tool we can all use.
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