What is Frugal?

There are certain personal finance truths the average American should accept to build wealth. A total of five in fact; invest early and often, be frugal, collect rent don’t pay it, be diligent, and finally, knowledge is money. Look at any of my material and you’ll know the real estate financial truth is probably my favorite!

But which of the five is absolutely, positively fundamental to get ahead and build wealth? I’ll give you a hint, it’s the hardest one! Yes, you guessed it, be frugal! Frugality comes very unnatural for most of us, especially nowadays. It just doesn’t feel normal depriving us of wants. In my humble opinion, without frugality, it’s difficult if not impossible for the average joe or jane to get ahead. In other words, and pardon the cliché, frugality is the cornerstone upon which personal finance must be built.

In my upcoming book, Being Frugal, a Truth to Build Wealth, I share not only how frugality enabled my family to build wealth but also everyday techniques to squeeze dimes out of nickels! Before delving into tactics, techniques and procedures, as we used to call it in the military, first let’s examine exactly what it means to be frugal.

While Websters defines frugal, an adjective, as “careful in spending or using resources,” being frugal is so much more. In fact, it’s a way of life. Like any lifestyle, it’s best to think of frugal in terms of those characteristics’ indicative of the frugal person. I believe there are three primary characteristics.

The frugal person inherently distinguishes between needs and wants in every aspect of their lives. If you think about it, at the base level, we really need very little. Good shelter, durable clothing, reliable basic services, transportation, and nutritious sustenance. Yet, it is human nature to confuse what we need in our daily lives with what we want. It is in our nature to seek out the things, people and experiences that are pleasing to us even if it really isn’t a need for our daily life. I believe most people inherently possess an inner conflict between needs and wants. The frugal individual is a master of conditioning themselves to focus their finances more on the needs than the wants! 

The frugal person is a super saver who retains more resources than they spend. Frugal living provides a means to invest; investing and the frugal life are inextricably codependent.  In a nutshell, frugal living sets the conditions for saving (investing) with a promise of financial freedom in later years. Additionally, frugal living and super saving are inversely proportional; the more frugal we are (the less we spend), the more we save!    

A frugal person seeks and recognizes value in all aspects of their life. A frugal person recognizes value in all aspects of their life, not just in goods and services. What degree or certification will be most valuable? How can my partner and I best realize the value of our skills and experience? As it relates to goods and services though, frugal does not equal being cheap. Never has more truer words been spoken than “you get what you pay for”. The frugal person instinctively recognizes good value in materials or services.

The counter to living frugal is simply to live and spend day by day with the mantra that you only live once. I totally get it. While I don’t have regrets, I have certainly “what if” some of my bigger frugal decisions. Regardless, the facts remain clear, frugal living in concert with the other financial truths will enable me to put my kids through college debt free and set the conditions for early retirement. In the next several weeks I’ll explore more on frugal living, be sure to check back next week!

Looking for a good how-to on wealth building? Check out my book, Millionaire on a Worker’s Budget: Five Financial Truth’s to Build Wealth on sale now at Amazon!

Interested in rental property investing? Look for Collect Rent, Don’t Pay It: A Beginner’s Guide to Rental Property Investing on Amazon to learn how our family turned rental property investing into a successful side hustle!

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