Here are some common misconceptions about frugality and frugal folk.
What is frugality?
Wikipedia makes a wonderful reference to a behavioural science research paper titled, “Lifestyle of the Tight and Frugal: Theory and Measurement”
The authors state,
“Frugality is conceptualised as a lifestyle trait reflecting disciplined acquisition and resourcefulness in product and service use. Frugality is sacrifice in denying a series of short-term purchasing whims and industriousness by resourcefully using what is already owned or available for use; all of this is in service of achieving longer term goals.”
Boy, those words stuck a chord with me!
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At an earlier time in my learning curve, I had referred to Frugality as the Cornerstone of Personal Finance
I still attribute it to my transformation from saver to MDBSC investor to someone who has learnt to think in terms of net worth. Along the way, I have learnt a thing or two about how people think about frugality.
Misconception (1): Frugality = Deprivation!
That is just plain stupid. Many think frugal people forget to ‘live now’ and ‘enjoy the present’.
The definition of frugality in the above paper describes me to a tee.
I have never owned a car, do not have a smartphone, do not remember the last time I got myself clothes* etc.
(*) I am an academic and could go to class dressed as an urchin, I will still not be able to top the way the kids look!
That does not mean I have deprived myself of anything.
Frugality is a test, a way by which we need to justify a purchase to ourselves with zero peer pressure.
All of the above-mentioned items could not pass this test in my case.
Does not mean, I do not travel in cars or do not appear well groomed (hopefully!). I have never denied myself any comfort, any luxury or yearning.
There is a common misconception that frugal people deprive themselves of pleasure. Hey, you don’t need to own a car to travel in one.
Perhaps if I loved driving and choose not to buy a car, that is deprivation. It is however, not frugality (if I love driving or if daily car travel is necessary, the purchase would pass the test).
Misconception (2): Frugality = Simplicity!
Many (probably most of them frugal folk) tend to associate simplicity with frugality.
If a person appears to use only public transport, wears clothes that do not attraction etc., they are thought of as ‘simple’.
In my opinion, simplicity has nothing to do with lifestyle or appearance. It is an attitude.
A simple person
- has a clear understanding of what he knows and does not know,
- is quick to acknowledge intelligence/talent in others,
- does not hesitate to give credit or apologize when necessary.
If we must write down an equation, then
simplicity = generosity
might work better. Frugality has nothing to do with it.
I can be frugal and still misuse my intrinsic ego, preventing me to be generous.
Perhaps it is not a bad idea to write, Frugality = Minimalism
Joshua Fields Millburn & Ryan Nicodemus state,
Minimalism is a tool used to rid yourself of life’s excess in favour of focusing on what’s important so you can find happiness, fulfillment, and freedom.
That does not sound too different from frugality to me.
Misconception (3): Everyone can or should be frugal!
The frugal gang is guilty of this. This is as bad as saying, ‘enjoying life’ means spending money or “financial literacy should be thought in schools!”

Frugality is not for everyone. It cannot be taught. Like financial literacy, frugality is an acquired taste which can be triggered by personal events (as in my case) or by a recession (2008 for instance!)
For many frugality is seasonal, like when cash is tight. Only a few can effectively use frugality to enrich their lives.
We can benefit from a frugal existence and/or financial literacy only if the people around us splurge, do not take informed decisions, buy bad products, pay minimum balance in their credit cards etc.
Only then can we earn a real return!
Misconception (4): I can be frugal
This is a common problem with fans of Money Mustache, Simple Dollar and Early Retirement Extreme. They believe that a ‘large corpus’ is not necessary for retirement because they are frugal!
We are frugal because life lets us be frugal. One recurring expenditure which is beyond our control is all that it takes to screw up a well laid plan.
Like I always say, if you want to make God laugh, tell him your plans.
Is frugality necessary?
Not if you earning enough and/or investing enough, that you do not care how you spend your money.
I am obviously biased, so let me ask you.
Do you consider financial freedom in later life at least important as the freedom to use the money you earn today as you like?
If yes, you will recognise the importance of investing productively and evaluating your big ticket purchases before you make them.
If not, thank you for contributing to my real return. I value your continued support.
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