What is frugality?
Frugality is one of those words that seems to have different meanings depending on how well the economy is doing. Consider for a moment economic good times where everyone is spending, the stock market is rising and things overall are looking to be on the up and up. In times like these frugality conjures up images of the penny pinching miser who never has any fun or treats himself or herself to anything nice. Now consider a recession like our current one. All of a sudden frugal people are paragons of wise spending who will be able to easily coast through economic hardship and emerge unscathed on the other end. Frugal activities like coupon cutting are all of a sudden in vogue in a recession.
But once the recession comes to an end frugal people and activities will go back to being considered something to look down upon.
To be honest, I don’t really like being called frugal. I don’t like being looked down upon because I occasionally figure out some way to save a buck. I don’t like people associating coupon clipping or any other cost saving activity with never having fun in life. So I thought it would be wise to take this opportunity to educate people as to what being frugal is really about.
First of all, frugality is not about never having fun in life, nor is it about obsessively saving for retirement.
People who are obsessed with saving money by any and every means possible are cheap. Cheap is often confused with frugality because cheap people and frugal people use similar tactics to save money. But cheap people take it to the extreme. They are obsessed about it. So obsessed that they often miss out on a lot of what life has to offer them. Cheap people are the ones who never buy something nice or go out to a fancy restaurant. They don’t do these things because they can’t afford them, they do these things because spending money is anathema to them. Cheap people feel bad when they spend money.
On the other end of the spectrum we have people who are obsessed with buying things, often to the point that they neglect long-term financial goals such as retirement savings and even run up considerable debt. These people are spendthrift. You might think that there is no similarity between frugal and spendthrift, but you would be wrong. Spendthrift individuals buy lots of nice things. They also buy lots of things on a whim and then forget about them. Spendthrift people essentially validate themselves by way of their possessions; the more they have the better a person they are.
Frugality is the happy median between cheap and spendthrift. Frugality is all about leveraging every dollar to its fullest in order to get the most out of life while saving for the future. Frugal people borrow from both ends of the spectrum to produce something greater. Like the cheap people, frugal individuals are always on the lookout for ways to save money. But they aren’t going to have a conniption if they waste a little here and there. That’s part of life. Like the spendthrifts, frugal people are willing to (and actually want to) buy nice things, but only if they can afford them. Unlike the spendthrift people, frugal individuals skip buying all those things that they are probably never going to use and that just wind up in a closet somewhere. Frugal people have both long-term savings goals and short term spending goals. They strive to make every dollar they bring in work towards those goals. And frugal people are willing and able make compromises between those saving and spending goals, so that they can get the most value for their money.
