Frugal use to have a bad reputation until modern entrepreneurs like Warren Buffett and Mark Zuckerberg made it cool again.
People have a hard time understanding why billionaires go out dressed with the same plain T-shirt day after day. Or why one of the richest men in the world chooses a $10 watch instead of a Rolex.
For people who grew up with parents struggling to make ends meet every month, stretching the dollar was a requirement. We lived hooked on the hope “that one day…” we’ll make it big. We were drooling at Radio Shack thinking about all the cool gadgets we’ll buy with our allowance.
That’s why most of us can’t wrap our heads around penny-pinching CEOs.
Wealthy people understand that it isn’t what you earn, it is what you keep
Most of them come from a “rags to riches story” and know the value of every hard earned dollar. These are a different breed than the “rich kids of Instagram” aka teenagers who flaunt their families’ inherited wealth on social media.
Rachel Sherman, an associate professor of sociology at the New School for Social Research who studies consumption habits among the wealthy, says “Being frugal is one of the ways in which we evaluate whether a wealthy person is morally good or morally bad.”
Frugal means: Saving money in smart ways wherever possible and never paying more than the value you’re receiving in return. Living within your means by buying quality items or services that you need, at bargain prices.
Lifestyle choices depend on circumstances, personality, the mindset of who is holding the money, as well as the type of relationship one has with his finances. A lot of rich people admit to carrying the “poor man’s” mentality when it comes to money due to their upbringing.
Ever heard of “decision fatigue”?
According to Wikipedia, decision fatigue refers to the deteriorating quality of decisions made by an individual after a long session of decision making. All highly successful people know that they are affected by this.
That might explain why they make some choices that might seem cheap or even shallow at times, like the “daily uniform”. They don’t want to spend brain matter on “what to wear today”. They just throw on a T-shirt and jeans and direct their energy and time to make a difference in the world.
They’re focused on the more important things.
💡 Cutting down or cleaning up your schedule, closet and even bills might give you the peace of mind needed to concentrate on the bigger aspects of life. It’s not frugal, it’s smart! The successful are super-focused and obsessively organized – learn from the best!
Small frugal habits to consider
- If you can’t finish a restaurant meal, take it home
- Bring lunch to work
- Use GasBuddy to search for the cheapest gas within 2 miles
- Use coupons and stacking different deals (e.g., Groupon + eBates + credit card points)
- Small changes go a long way – Switch to an affordable wireless carrier that lets you build your own plan instead of locking you in a 2-year contract, forcing you to pay for more than what you use
- Read the fine print whether it’s a loan document or cell phone contract
- Add structure to this chaotic world – use apps, lists, reminders to keep your spendings in place & make the best decisions
- Create a savings’ habbit – if possible, put aside 5% of your income and teach your family to do the same
💡 Remember that splurging and showing off are for people who have a lot of free time and need to constantly reassure their value by means of the things they own. At the risck of sounding like a fortune cookie: life is not about that.