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In order to be frugal, you do have to cut down on your expenses; however, it doesn’t mean you have to be cheap.
When people hear about being frugal, they typically think about penny-pinching misers.
That roommate that won’t turn on the A/C despite it being 90 degrees Fahrenheit and humid.
Or maybe that guy that won’t spot you $3 because that $3 will make such a HUGE difference on their ability to pay rent (</sarcasm>).
Those people will put themselves through terrible conditions to spend a few less dollars here and there.
That is NOT Frugality.
A better term for the people in the above situation would be cheap.
It is impossible to be cheap (like above) and still enjoy your life, because being cheap would mean sacrificing your quality of life.
So how can you possibly live comfortably and still be frugal? Well, we should define frugality so that we can differentiate it from being cheap.
What is Frugality?
In my opinion, frugality is identifying the things you value in life and directing your resources towards those things. This is in opposition to being cheap, which would simply be refusing to spend money at all due to an irrational fear of spending money.
Cheapness and frugality come from two fundamentally different mindsets. These mindsets are short-term and long-term mindsets.
Short-Term Vs. Long-Term Mindset
Cheap people are stuck in the short-term mindset. They are willing to give up basic comforts and necessities to save a couple of extra dollars.
This doesn’t make sense because if you refuse to spend money on ANYTHING, then what is the point of saving the money in the first place?
There is none.
Cheap people will save that little bit of money, put it away, save more money, put it away, etc. Unfortunately for them, that money is effectively useless because it will never be used for any sort of benefit since they are not thinking LONG-TERM.
Consider this example: Suppose someone wants to purchase a car. A cheap person would spend hours trying to find the cheapest car without considering how the car runs.
Sure, $500 for a car is nice, but if that car only works for 3 weeks, then it’s a waste of money.
Frugal people have a long-term mindset. Rather than trying to save a couple bucks now no matter the cost, they redirect money to things that they find important. For example, a frugal person may cut down on bar trips 3 times a week and put the booze money towards building a small business.
Perhaps they value freedom; or maybe they value providing financial security for their family.
Either way, they aren’t being cheap by refusing to go to the bar; they are being frugal since they are using the money for a long-term goal that they is more aligned with their values than getting drinks multiple times throughout the week.
Your Values and Mindset
Chances are, you’re spending money (or time!) on something that you don’t truly value. If you were cheap, you wouldn’t be spending money on it in the first place. But if you were to adopt a frugal mindset, you’d take a hard look at what is occupying your resources and redirect those resources towards things that you truly appreciate.
So don’t make life hard just to save a few pennies.
To read about how to determine what you value so that you can work towards a frugal mindset, check out my post about how to determine your values.
“The bitterness of poor quality remains long after the sweetness of low price is forgotten.” -Benjamin Franklin