Frugal Living: How It Helps (But Not In The Way You Think It Would)

By Anonymous (not verified), 6 July, 2024

Growing up, my father would always tell us how living frugally is beneficial. He would constantly remind us how individual drops make up the ocean and that the only way to become financially well-off in life is to live frugally and well below your means. His advice, rooted in a blend of wisdom and experience, laid the foundation for our family's financial ethos.

Early Lessons in Frugality

When I grew up and got a job, I spent the first few years spending frugally, mostly out of habit. I meticulously tracked my expenses, prioritized savings, and avoided unnecessary expenditures. This approach naturally resulted in a certain amount of savings in my bank account. Seeing that money accumulate provided a sense of security and accomplishment, a tangible reward for my disciplined approach.

However, there was a flip side. The sacrifices associated with frugal living sometimes felt overwhelming. I found myself questioning whether I was taking the concept of frugality too far. Was it necessary to avoid every small expense? Could I allow myself a bit of financial freedom without jeopardizing my overall budget?

The Turning Point

Out of curiosity, I built an Excel sheet to calculate how much I really saved by avoiding minor expenses in a month. The results were surprising. It turned out that the bulk of my cash outflow was due to one or two major expenses like insurance renewals and car maintenance. Even if I had indulged in a few minor expenses, it wouldn't have significantly affected my monthly budget.

From that day onward, I stopped avoiding small, minor expenses, assuming that whether I avoided them or not, my monthly budget wouldn’t be significantly impacted. I began to enjoy little luxuries—a cup of coffee from a café, a book from my favorite store, or a meal at a nice restaurant.

The False Sense of Security

A few days later, I even lectured my father on how he had gone too far with the whole idea of frugal living and that he could have at least allowed for minor expenses. I argued that the "drops" really don’t matter in an ocean; maybe a "bucket of water" would, but he could definitely stop worrying about the drops. My newfound perspective felt liberating, and I believed I had found a balance between frugality and enjoying life.

And oh boy, how wrong I was.

The Gradual Shift

A few months (almost close to a year) down the line, I realized that my expenses were running almost close to my income. I was living paycheck to paycheck, a clichéd but apt description of my financial state. The realization was a wake-up call. How did I, someone who prided themselves on financial discipline, end up in such a situation?

I returned to my Excel sheets. It took some time, but I eventually realized that the drops do matter, just not in the way I had initially expected. As I reviewed my past expenses, I noticed a troubling trend. Along with the small expenses, I had also started picking up “not-so-small” expenses gradually. My idea of a “drop” had expanded over time. Comparing my current expenses with an earlier expense sheet revealed a clear pattern: I had begun making larger expenditures without even being aware of it. Moreover, the number of my monthly transactions had bloated to two or three times the number of my earlier monthly transactions.

The Mental Muscle

What I realized, finally, was that living frugally allows you to exercise a certain mental muscle frequently—a mental muscle that aids us in our journey towards financial well-being. Just like every other muscle in your body, the more frequently you exercise it, the stronger it grows. This mental muscle, which I now call "financial discipline," is crucial for maintaining long-term financial health.

When you exercise this muscle only to avoid large purchases, you might deprive yourself of the opportunity to exercise it frequently, as there are only so many large purchases an individual can make in a certain period. However, small purchases provide plenty of opportunities to exercise this muscle regularly.

In the longer run, if you do not exercise this muscle enough, you might find yourself lacking the willpower to avoid larger expenses, which will eventually cause your expenses to balloon up. This is a classic example of the "slippery slope" phenomenon. Once you start allowing small expenses to slip through, it's easier to justify bigger ones, leading to a gradual but steady increase in your overall spending.

The By-Product of Habits

Becoming wealthy is the by-product of retaining certain habits throughout your life. Like every other habit, these habits can get reinforced by regular practice or fade away if not practiced enough. Avoiding minor expenses every now and then provides us an opportunity to exercise self-control regularly. This regular practice of self-control in small matters builds up our capacity to handle larger financial decisions wisely.

Lifestyle Inflation

There is a certain term that I had come across multiple times while reading online articles: “lifestyle inflation.” I had a theoretical understanding of this term, but this experience taught me its practical meaning. Lifestyle inflation refers to the tendency to increase spending as one’s income rises. It’s a subtle and gradual process where today’s luxuries become tomorrow’s necessities.

In my case, the small indulgences I allowed myself gradually led to larger ones. What started as a few extra coffees and books snowballed into more significant expenses like dining out frequently, upgrading gadgets, and indulging in spontaneous travel. Each expense, in isolation, seemed justifiable. But together, they contributed to a significant drain on my finances.

The Psychological Aspect

Frugal living is not just about saving money; it’s also about cultivating a mindset. It’s about being mindful of your spending, making intentional choices, and understanding the value of money. This mindset helps you differentiate between wants and needs, prioritize your financial goals, and build a secure future.

When you practice frugality, you develop a sense of control over your finances. This control is empowering and can reduce financial stress. It allows you to make decisions based on your values and long-term goals rather than impulsive desires. In contrast, when you lose sight of frugality, it’s easy to fall into the trap of mindless spending, which can lead to financial instability and stress.

Rebuilding Financial Discipline

After my wake-up call, I knew I had to rebuild my financial discipline. I went back to basics, re-evaluating my budget, and cutting down on unnecessary expenses. I reintroduced the habit of questioning every purchase, no matter how small, and considering its impact on my overall financial health.

I also set specific financial goals, such as building an emergency fund, saving for retirement, and investing in my future. These goals provided a clear direction and motivation to stick to my budget. I tracked my progress regularly, celebrating small milestones and adjusting my strategies as needed.

The Rewards of Frugality

Living frugally doesn’t mean depriving yourself of all pleasures. It means making conscious choices that align with your values and long-term goals. It’s about finding joy in simple things, valuing experiences over material possessions, and prioritizing what truly matters to you.

Frugality has allowed me to achieve financial stability, reduce stress, and build a secure future. It has taught me valuable lessons about the importance of discipline, mindfulness, and intentionality in managing my finances. Most importantly, it has given me the freedom to make choices that align with my values and goals.

Practical Tips for Frugal Living

Based on my experience, here are some practical tips for living frugally without feeling deprived:

  1. Create a Budget: Track your income and expenses to understand where your money is going. Set limits for different categories and stick to them.
  2. Prioritize Needs Over Wants: Differentiate between essential and non-essential expenses. Focus on fulfilling your needs first and limit spending on wants.
  3. Practice Mindful Spending: Before making a purchase, ask yourself if it’s necessary and if it aligns with your financial goals. Avoid impulse buying.
  4. Find Joy in Simple Pleasures: Enjoy activities that don’t require spending money, such as hiking, reading, or spending time with loved ones.
  5. Set Financial Goals: Having clear goals can motivate you to stick to your budget and make mindful financial choices.
  6. Track Your Progress: Regularly review your budget and track your progress toward your financial goals. Adjust your strategies as needed.
  7. Build an Emergency Fund: Save a portion of your income for unexpected expenses to avoid financial stress.
  8. Invest in Your Future: Save for retirement and invest in opportunities that can grow your wealth over time.


Frugal living is more than just a financial strategy; it’s a way of life that promotes mindfulness, intentionality, and long-term financial well-being. By practicing frugality, you can build financial discipline, avoid lifestyle inflation, and achieve your financial goals. Remember, it’s not about depriving yourself but about making conscious choices that align with your values and priorities. So, embrace frugality, exercise that mental muscle, and pave the way for a secure and fulfilling future.


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