Have you ever been considered living a frugal lifestyle? I’ve noticed that many people are adopting it out of necessity due to the economy.
Some are wondering if this is something that they want to do even as things are improving. Others are curious about what it takes to do it.
I want to clarify what I consider frugal. The word has so many connotations associated with it.
Wikipedia (yep, I’m using that) defines frugality as:
the practice of acquiring goods and services in a restrained manner, and resourcefully using already owned economic goods and services, to achieve a longer term goal.
There are definitely some benefits and some pitfalls with having a frugal lifestyle that I’ve seen.
Benefits of a Frugal Lifestyle
I believe frugality is a component of a two prong attack plan. Decreasing your nonessential expenses can be a great use of your time.
Increasing your income or creating an additional income stream can help you accomplish some of your goals. It can have a wonderful balancing effect on you.
For those looking to improving their current financial situation, having a frugal lifestyle is a great starting point.
It’s sustainable. With some tweaks and adjustments you can alleviate some of your recurring expenses.
It can change your mindset. You can start to see that many times, it’s not your income that’s keeping you in debt, it’s your lifestyle.
Frugality can help others. Not all, but many frugal people discover they have more resources to help others. Some have cut back their hours at work and volunteered. Others can contribute more money to their favorite charities.
While I’m a supporter of living a relatively frugal lifestyle, I have read and seen some problems some people have had adopting a frugal life.
The main problem stems from the fact that some people are die-hard frugalists.
They beat themselves for not being frugal with everything. Take it easy on yourself! No one is going to make the most financially optimized choice, so just learn what works and what doesn’t work.
The trap can become when the money saved does not equal the time spent doing it. If you’re spending hours working on a project that will save you a few dollars, then you’re not being frugal.
Ignoring earning extra income is a viable strategy as well. Let’s face it, you’ll probably get to your financial goals (pay down debt, save for retirement, and invest) quicker if you had more money to put towards it.
Some people go from being frugal to being cheap. There’s a big difference between the two.
I’ve read people who have incorporated frugality into their lifestyles without getting swallowed up by it.
They seem content to do what they can and look for ways to cut spend on things that don’t really matter to them.
The money gets reallocated into financial goals and to people, experiences, and things that they love.
Resources for Frugal Living
If you’re curious or you want to optimize your frugal lifestyle, there are several sites and books that can help you.
While there are way too many places to point you to, I will mention some of my favorites.
Personal Finance Blogs
I find blogs and websites to be a wonderful source of information because it’s like reviewing dozens of case study on how a frugal lifestyle affects people’s lives.