Would You Consider Me To Be Frugal?

The term “frugal” is a funny thing in that it means different things to different people.  For example, many who know me would consider me to be a “frugal” person because I save and invest a large portion of my income every month; however, I personally don’t consider myself to be frugal at all.  In fact, in my estimation I’m a bit of a spend-thrift in a lot of ways.

What Does It Mean To Be Frugal?

Merriam-Webster defines frugality as

“characterized by or reflecting economy in the use of resource.“

From a practical standpoint, I find that definition to be pretty worthless.  A more useful definition is found in the term’s wikipedia entry,

“…acquiring goods and services in a restrained manner, and resourcefully using already owned economic goods and services to achieve a longer term goal…“

That is, frugality is simply the act focusing your financial resources on meeting your personal economic goals, which is a much more all-encompassing definition than merely defining “frugal” as “being cheap.”  I think I come far closer to this definition than the traditional one.

Ways I Am Not Frugal

• I don’t clip coupons
• I don’t avoid eating out
• I don’t limit nights out with friends
• I can be an impulse buyer at times, but only for small-ticket items
• I generally don’t bother shopping around for the best deal for purchases under, say, $50 i.e. I don’t fret about paying an extra $3 on a book from the bookstore as opposed to Amazon.
• When it comes to groceries, I value quality and nutritive value over price
• I love to travel

Ways I Am Frugal

• I save and invest a large portion of my income each month
• I simply do without many big-ticket items most other people can’t seem to live without.  I don’t have a large TV, nice car, or live in a trendy neighborhood.  I simply don’t have the desire to own any of these big-ticket items, which alone accounts for probably 80% of my monthly savings.
• I comparison shop for recurring expenses (such as auto insurance) and other big-ticket items costing over $50 or so.  This accounts for most of the remaining 20% of my monthly savings.
• I typically travel cheaply (I actually prefer cheap accommodations)
• I work out at home utilizing an inexpensive home gym (mostly with my new kettlebell these days)rather than waste money on a gym membership

You Don’t Have To Be Frugal To Save Money

As I said above, I regularly dine out at moderately-expensive restaurants and splurge on nights out with friends.  I have no qualms with spending money on things I believe will improve my quality of life, even if they cost a lot of money.  To me, frugality is less about the amount of money you spend than the value you get out of your purchases.

Sure, I could probably save an extra $200 per month by cutting coupons, eating out less, and entertaining friends at home instead of going out, but that would be boring to me.  I am not willing to compromise what I view to be the ideal lifestyle just to save a buck;  however, I am willing to do without big-ticket items I feel won’t contribute to my happiness over the long term (big-screen TV, luxury automobile, etc).  Simply deciding what is and is not important to me has allowed me to save an impressive sum of money at a relatively young age.  Had I bought a Lexus rather than a Toyota and a $1000 plasma TV rather than a $300 CRT (and the killer surround sound system that goes with it), I wouldn’t be nearly as well-capitalized as I am now.

Would You Consider Yourself To Be Frugal?

How do you define “frugal?”  Are there a few little luxuries you absolutely refuse to do without or are you willing to sacrifice it all in order to achieve financial freedom at a young age?  There are no right or wrong answers, but you are unlikely to ever reach your goals unless you first define what they are.