Embrace Frugality & See Through the Illusion of Wealth

We are on a mission to be more frugal in order to have extra money to invest. If you read the The Millionaire Next Door Books then you realize that a main hallmark of wealthy folks is: frugality. The concept is simple, you need something left over to invest after all the bills are paid. This is not easy with so many demands on the resources we have. Extreme frugality or frugality in general can be attainable if we take a practical approach. But, frugality in our culture can be hard too, there are so many demand signals to buy, buy, buy that it becomes very hard to resist. Many of us fall into self destructive thinking when it comes to purchasing things in the moment. What we call the “It only costs_X” virus. I am trying to banish the phrase from my vocabulary. Instead replace with the thought that X product for Y price is either a “good value” or a “bad value.” This becomes more of a calculation based on my hourly salary, the convenience, the need and a comparison of prices in the marketplace. The opposite of frugality is the illusion of wealth that is all around us. Who really owns the shiny cars rolling down the street, the McMansion, the clothes on credit cards? I can tell you, usually not the people using those items, they are on loan from very wealthy people that lent the money and harness the power of interest. There is obviously a time and a place to use credit, but be careful or it becomes the dragon that destroys your own wealth. Plus, does all this stuff really make people “happy”? Is this the “American Dream”? When I see over the top opulence I always think back to reading The Great Gatsby. Jay had it all and he had nothing at the same time. The on and on empty pursuit of pleasure may not lead where we think it will.

What is hard about extreme frugality?

A. Denying oneself consumption and pleasure in the moment is hard. We are hardwired to be present moment biased. For some it may be painful for them to deny themselves something they want. B. Denying ourselves convenience is hard. I find this especially hard being a busy working professional with a family. We need a certain level of convenience to make it through the week.

Downsides of frugality:

A. Could mean less free time for you or your family. You will be busy doing things that others contract out for. A classic is making meals at home. It takes time and effort out of one’s day to cook. B. Could be socially awkward at times. If the work crew normally goes for a Starbucks run, you may decide to refrain at times. You will have to not care as much about other people’s opinions.

Benefits of frugality:

A. You will build wealth more quickly by delaying consumption today for more consumption tomorrow. Potential for financial freedom at a younger age, down shifting to part time work, travel, etc. B. Better prepared for emergencies of the unexpected. C. More appreciative of what you have and the value of things, time and money. Frugal people really value their time because they know how hard it is to earn a buck.


So, is there a way for people like me in the middle of the spectrum to adopt more practical frugal habits? How do we make frugal the new sexy? Yes, we can pick frugal habits off a menu and find the right balance in our lives. We all have dynamic outlooks and personalities that demand a different take on building true wealth. So, here are a few things we are trying to implement at the Money Vikings to increase our frugality skills and strength. Because like any habit, it is a muscle that can be strengthened with practice and time.
  1. Clothes. Only buy used at Thrift Stores. Retail prices are outrageous.
  2. Try and buy used everything. It automatically saves money on almost any item.
  3. Put a strict cap on lunch expenses, say no more than $10. Better yet, bring your own.
  4. Never order alcohol at a restaurants. Drink at home.
  5. Only buy basic used cars. Go with practical brands.
  6. Garage sales and estate sales, do not miss them!
  7. Library, use it for free entertainment.
  8. Make gifts for people or hand make a card or letter to someone for an occasion.
  9. Avoid late fees!
  10. Insulate your house and set the temperature to a reasonable level, not extreme either way.
  11. Grow some of your own vegetables and use your own compost.
  12. Cut the cord on cable and all the other unused subscriptions. My Money Viking brother Jerry is currently doing an audit in this department to cut some of his unused subscriptions that are piling up. And if you read my early post, I recently shut down the hot tub in the back.
  13. Destroy high interest debt! Jerry just paid off his car loan, way to go man!
  14. Shop on Craigslist.
  15. We use Vinegar as our main cleaner in the house. It’s cheap and healthier for us.
  16. Watch the driving. I am trying to reassess some of the driving I do, wasting gas needlessly.
  17. Use everything as long possible and take good care of it.
  18. Try drying some clothes outside if possible.
  19. Hand washing dishes saves electricity.
  20. Instead of going out with the family and spending a bunch of money, have a game night, make a pizza and start a fire in the fireplace!
So, do not be like the NOT SO GREAT GATSBY. Live the good life of true wealth in a frugal manner. All those fancy clothes are uncomfortable!

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