Being frugal as part of the successful road to retirement, especially early retirement is a popular topic on HumbleDollar and on various retirement Facebook groups, even more so on FIRE blogs. One blogger brags she buys her children’s clothes, shoes and toys at garage sales and thrift shops.
I don’t buy it.
Being frugal alone is not going to generate sufficient excess funds for saving and investing 50% of income for example. The real secret may be family status and avoiding the opposites of frugality.
Let’s be sure we are on the same page.
Being frugal includes:
• Prioritizing value over price: don’t just go for the cheapest option; they consider the overall value they get for their money.
• Avoiding waste: includes everything from not buying things you don’t need to finding ways to use things you already have for multiple purposes.
• Being mindful of spending: planning purchases and avoiding debt are important aspects of frugality.
• Focusing on what truly matters: spending money for genuine value and happiness, while cutting back on unnecessary expenses.
In don’t see frugality alone as allowing for extraordinary savings.
What is the opposite of being frugal?
• Wasteful: describes someone who spends money carelessly and without regard for its value.
• Extravagant: implies spending money excessively, often on luxuries or unnecessary items.
• Spendthrift: refers to someone who spends money recklessly and irresponsibly, often exceeding their means.
• Prodigal: emphasizes the squandering of resources, often associated with a disregard for future consequences.
• Lavish: is spending money freely and generously, often on elaborate or luxurious things.
Avoiding any of these faults gets you back to normal in my opinion and clearly make it possible to be a good – not extraordinary- saver.
There are other factors that contribute to super savers which I previously described.
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I have known some folks who were frugal to the extreme and some who were free spenders to the extreme and I think they both have issues not necessarily related to money itself. There is a broad medium between the two where i think normal people live.
if someone is frugal because they don’t have enough to be normal, then they need to improve their ability to generate income. The frugal people I’ve known just assumed what they had was all they would ever have so they treated every nickle like it was the last one they would ever get. The result was they wound up with a few nickels and no dollars.
The free spenders I’ve known never seemed to realize the effect extravagance would have on their future life. I worked with a guy like that and one day he asked if I were having money withheld to get the employer match and I said of course I am and I’m adding up to the max. I told him how much it had earned in the month before and he said “If I could just get that much together, I would have it made.” He went on spending of course and as far as I know never got it together.
This is why I think frugal and extravagance are character flaws.
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good explanation–never thought of why people did what they did other than parents went through Depression and were very careful with money–the other extreme were folks who just wanted to have what they considered the things in life.
per usual moderation might be the best answer to what most of us have gone through.
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