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Tuesday, December 20, 2011

Principles of Frugality

      The only way to gain financial independence (other than an inheritance or lotto or something) is to build up a substantial amount of money. The only way to do this is to A) Make some money, and B) SAVE it instead of spending it.

Now focusing on making more money is a legit strategy for reaching financial independence but, as our own government has shown, it doesn’t matter how much you are bringing in if you are spending even more.
Americans have become masters at making money, and all but the poorest of us have enough to build up some savings but for one thing: The spending is out of control.

If you want seriously cut your spending you have to redefine wants and needs. Nothing can be off-limits. To this end, frugality is a legitimate tool, and necessary for most people. And as such will be a major focus of this blog.
Most other books and blogs seem to teach frugality for its own sake. As if saving money is meaningful in and of itself. I disagree. I am naturally a spendthrift. I don’t LIKE having to be frugal. However, I am very good at it. One reason is because I am doing so for a specific reason: to more quickly reach financial independence. If you are have to be frugal forever and still stay poor, what’s the point? By focusing on Frugality AND increasing income, I will much more quickly reach that goal then just doing one or the other.Then I will get to a point where I don’t necessarily HAVE to be frugal. At least not nearly as stringently.

Being frugal for your entire life and doing nothing to change your income or reach financial independence is crappy, and no way to live. Do it for a reason, and it becomes much easier to justify those sacrifices.


Even the most expedited plans to reach financial independence take at least several years. Most take much longer. That is a long time to go being super frugal and never spending money on ANYTHING, even the things you care about a lot. Most people can’t even do it. The easiest way to survive is to save on stuff that you really don’t care that much about, so you can spend a little on the stuff that really matters to you.
If you just really really can’t stand eating super cheap food all the time, that’s fine, as long as you are saving in all the other areas. If you want to go to the movies once a week, that’s ok if you never eat out and are only spending 80 bucks a month on food, for example. So I would pick one or two small things to spend money on that really make your life more enjoyable.


You don’t necessarily have to give up certain things if you can find cheaper ways to do them. If you love watching movies, try getting Netflix instead of going to the theater once a week. Or go to the library instead of Redbox. Or even buy the $10 or $15 DVD that you can even sell for a couple bucks later, instead of paying $20+ for 2 people to go to a theater.

Just remember That your frugality has a purpose: to eventually put you in a position so you don’t HAVE to be (as)frugal.  As Dave Ramsey says, “live like no one else so you can live like no one else.”

- The Money Monk

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