It’s a word many of us associate with being cheap, mean with money or stingy – just like Scrooge McDuck. Although wealthy, Disney’s Scrooge is a particularly greedy, cruel and selfish miser who keeps his cash in a giant money bin and is reluctant to even pay Donald a mere 5 cents an hour to polish his coins.
But Scrooge gives the word ‘frugal’ a very bad name. Taken out of the Disney world, some might think a frugal duck is one who is paranoid about money, stealing everything not nailed down from a hotel room and stashing 25 cafe satchels of sugar in their pockets after a coffee.
But frugal just means fiscally conservative – or smart with money. And who doesn’t want to be smart?
Here are the real benefits of being a bit more frugal:
You’ll have more money
Just like getting into the world of investment early on, adopting a frugal mindset over many years means a lot of pennies that would otherwise fall through the cracks are actually put to work or saved.
When you are frugal, you keep track of how you are spending your money and consciously deciding where it goes. Maybe you don’t really need two cars and perhaps you decide that you might try being vegetarian for a month. Or, maybe you decide that you will spend more to support your local greengrocer.
You’re more creative
Unlike Scrooge, frugality can actually make you a better person. Instead of just spending your way out of a problem, adopting a ‘Can I solve this less expensively or creatively?’ attitude makes us smarter.
It’s also good for the planet, as an attitude of using sparingly, recycling and re-using means we’re being efficient, disciplined and balanced, reducing waste and excess in every area and feeling good about it in the process.
Take yourself off autopilot.
You see the world differently
Whether you have a lot of money or not, it’s easy to act rich.
We live in an overly materialistic, capitalistic and consumerist world, bombarded every minute of the day with offers of things we want but don’t necessarily need.
Frugality challenges the notion that ‘more is better’. Instead of always wanting the next big thing, being frugal means you learn to really enjoy what you already have. Instead of impatience, indulgence and substituting joy for overspending, frugality steers you towards being grateful, mindful and learning how to be truly happy with less.
Here are some easy and practical ways to start being more frugal straight away:
It’s not just about reducing excessive spending in the supermarket and shopping malls. The general principle to apply here is to only use what you need. Ask yourself the following:
- Do I use this item regularly? (e.g. how often do you use that bicycle?)
- Could I live without it? (e.g. would you notice if you didn’t have a bicycle?)
- Instead of replacing it, can I fix it? (e.g. getting your shoes resoled)
- How much impact does this item have in my life? (e.g. having working internet at home is crucial to my job)
Reduce costly habits
Let no one tell you that your dishwasher is not your best friend. But have you thought about lightly rinsing or soaking the dinner plates from last night so you can use a less intense setting?
Indeed, look for efficiency in the less obvious places – like your car tyres. Have you checked the pressures lately? Under-inflation just means you’re wasting petrol and wearing out the tread.
Buck the trend
So, all your mates have dashed out to buy the iPhone 8 – and you really want it, too. But is ‘being cool’ in this instance really important enough to fork out a $400 contract break fee and an extra $20 a month on top of that?
Don’t drink the Kool-Aid and don’t be a victim of great marketing. Decide for yourself if something is worth your time and money.
Have non-spending fun
These days, it’s way too easy to equate spending with fun, but don’t fall into this trap. As they say, the best things in life are free. Whether it’s reading a book in the park, attending the local street festival or visiting a museum with free entry, there are several ways to have fun without spending a fortune.
Buying shiny things will always feel nice, but true financial freedom feels better – and being more frugal is definitely a proven strategy on the road to getting there.
Answer 5 simple questions in our free financial health check to find out how much you should save, spend and whether you’re ready to invest.
Also published on Medium.