According to Google, the definition of frugal is: “sparing or economical with regard to money or food.”
Here lately, thanks in large part to TV shows like Extreme Couponing and Extreme Cheapskates, frugal living has become a fad. You can’t go into a grocery store without seeing at least a few shoppers wheeling around their carts with huge coupon binders in hand. Drug store shelves are immediately cleared of good deals by competitive “frugal” shoppers and hundreds, or maybe even thousands, of new coupon blogs are popping up every month.
Stockpiles are being built. Thrift stores and yard sales are the new “it” places to shop and a lot of emphasis is being placed on “pinching pennies.”
So, with so much hype on being frugal, is it really here to stay? And, more importantly, how frugal do we need to be in order to find financial success? Let’s take a look.
Frugality in Your Life
Frugality is a personal decision based on values, not on hype. While I definitely agree that you need to be frugal in some areas, how far you take it is really up to you.
The level of frugality you maintain also depends upon what stage you are in in your life. For example, a young recent college grad will need to be more frugal than a successful middle-aged person who has had the time to build a solid financial foundation.
For those of you who are young, in debt, or starting a new life, you need to be especially frugal in the following areas:
Housing and transportation are necessities that can take up a significant portion of your pay. These are two of the areas in which you can make some temporary sacrifices now, opting for more frugal choices, so that you can enjoy living more comfortably later.
Instead of taking out a loan for a $20,000 car, you can buy a $5,000 car. Or, you could walk to work or take the bus. Instead of taking on a big mortgage, you can rent a home for a little while. You could also get a roommate and share the cost. There are several frugal choices you can make in regards to housing and transportation.
How Far Should You Take Frugality?
There is a definite need for some people to take their levels of frugality far past those of others. Likewise, there are people who don’t necessarily need to be frugal but recognize frugal traits are what brought them financial success in the first place and carry on.
Here are some small wins you can focus on:
- Daily luxuries (coffee, eating out, candy, etc.)
When first starting your life and paying off debt, focusing on the small wins might be as necessary as focusing on the big wins. But, how far should you take it?
Do you need to use coupons every time you shop? Should you only buy clothes from yard sales and thrift stores? Should you cancel your cable TV service and drop your cell phone contract?
Frugality is about making smart decisions with your money. It is not about allowing yourself to have no fun or perks in life, and it definitely does not have to mean watching every single penny.
While you should strive to make smart, money-conscious choices, you shouldn’t ban yourself from any fun or entertainment whatsoever.
If you try to be frugal for the sake of being frugal, it’s not going to last. If you try to cut everything out of your budget at once, it’s not going to last.
Focus on the big things first. If you still don’t have money left in your budget to aggressively pay down debt, save, or invest, then slowly start cutting those smaller costs. Small intentional steps will be much more effective in the long run.
Some people are born with what appears to be frugal genes, and some are not. If you are in the latter of the two groups then you need to slowly build your frugal skills so that they stick.
You can definitely associate some level of frugality to financial success. But it doesn’t have to be taken to the point of extreme couponing, constant bargain hunting, and deal snatching. Make smart decisions, be aware of where your money is going, and do what is best for you.
What do you think? How frugal do you really need to be in order to succeed financially?