What Does It Mean to Be Frugal?

What Does It Mean to Be Frugal?

Does being frugal mean you’re cheap?

What Does It Mean to Be Frugal?

…maybe.

In case you were wondering, here’s the actual definition:

Frugal [froo-guh l]

Adjective. Economical in use or expenditure; prudently saving or sparing; not wasteful.

Dictionary.com

Seems like a sensible way to spend or spare your money but according to statistics, most Americans have not come to their economical senses.

Americans’ collective debt surpasses $4 trillion for the first time.

CNBC

As an American (and as someone who is financial aware) this scares the shit out of me.

A couple years ago I made the conscious decision to notice people around me, their spending habits, and their financial status. I also sought information from a book called The Millionaire Next Door. This is one of those books that I think should be taught in school.

After reading that book and observing the realities of those around me, I then had a confident perspective that to be frugal also meant growing wealth.

Being Frugal = Growing Wealth

Being frugal is one of those concepts that is so simple yet not implemented because it isn’t glamorous like driving a Rolls Royce.I mean, just check out this picture of Bill Gates and Warren Buffett.

Bill Gates and Warren Buffett in non-flashy attire
Bill Gates and Warren Buffett in non-flashy attire

Gates net worth: $101.7 billion USD
Buffett net worth: $89.2 billion USD

Instead of a Rolls, it’s more like a four year old Toyota Corolla or a 2008 Toyota Prius (actual cars I’ve owned). Growing up we took notice of flashy things and spent money on trying to make ourselves look flashy. Some of us achieved this, and a whole lot of us went broke.

Now, it’s not to say that flashy or expensive things aren’t nice, but if you are not financially fit enough to pay your rent/mortgage, pay your utilities, cloth and feed yourself without going into debt, then by the frugal definition, it is not economical for you to be flashy.

Knowing Your Why

The idea of being frugal in itself is a rather dry lifestyle, but if you are frugal with financial goals in mind then it starts to get exciting.

Much like doing any activity without a purpose, saving just money just to save is meaningless. To me, the key to sustaining and prospering while living a frugal lifestyle is to stay focused on your why.

It is in that focus where you see the value of a dollar.

When dialed into that focus, you’ll begin to see each dollar that you earn as an opportunity to have a Rolls Royce, or start a business or give back to a community you are passionate about and want to support, or whatever it is that is your why.

The Adjustment Period

If this concept is new to you, it will be tough and there will be an adjustment period. But if you remember to stay focused on your ‘why’, the sacrifices (spending money on things that don’t serve your why) will seem less like sacrifices and more like dream killers.

It will become easier and easier to say to no eating out, to say no to going to the movies, etc. So, the best advice I can give is to stay focused on your why.

The majority of Americans are in debt and have lost sight of their why. Some may have never even thought of having a why because credit cards are so readily available to take your money while monetizing on it! (i.e. student loans, car loans, etc).

Why bother to save money if I have access to a credit card?

Credit cards are not the answer.

Because as long as you’re in debt to the banks, the fight to fund your why is often a losing battle. If you are out of debt and invest your money into saving or retirement (funds that monetize your money for you), doesn’t that sound more economical?

So, what does it mean to be frugal?

The short answer is, it varies depending on the frugal person’s why. For me, it means being able to fund things like living independently, giving myself an in-case-of-emergency fund, and having the means to test different business ventures.

I also just want to see my net worth go up. There are other whys behind why I choose to live frugally but these are the top three I felt were worth stating.

If you’re reading this you’re probably wondering if you should live a frugal lifestyle. My answer to you is: with a strong enough why (and everybody has one), I don’t see why you shouldn’t.

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