Saving More and Spending Less: Frugality is Not a Dirty Word

Saving money is a New Year’s resolution that ranks right up there with exercising more and eating healthier. But uh-oh! Whether it’s a lack of discipline or a busy schedule, 80% of people lose their resolve by mid-February and fail to follow through with it.

Many people observe Presidents’ Day in February by scoring savings on big-ticket items instead of savoring their savings. But what if instead of spending on holiday sales, we practiced frugality? In all honesty, frugality could be considered the linchpin of financial freedom.

While being frugal has gotten a bad rap, frugality is not a dirty word. On the contrary, it’s a valuable skill for building wealth. Frugality is the attitude and mindset of saving more and spending less. According to Merriam-Webster, it means “careful about spending money or using things when you don’t need to; using money or supplies in a prudent way.”

What’s so bad about that? It sounds like the path to achieving our financial goals is paved with frugality. To make the most of your money, focus on how and what you’re spending money on every day, and recognize that small amounts matter. They lay the groundwork for sound financial habits that will keep you focused on your goals.

Saving money and being frugal doesn’t mean living like a pauper or having an existence devoid of pleasure. It’s about making intelligent, conscious choices to attain your goals. But how do you overcome our culture of consumerism? By looking at saving more and spending less as a two-sided coin of personal finance.

Spending less requires acquiring less stuff and keeping the larger goal in mind. It’s a mindset of working toward a greater purpose. By adopting a frugal lifestyle, you change your value system to focus on the big picture.

When it comes to saving more, the truth is, most people are pretty bad at it. Why is saving so hard? People think of saving as this huge tightening of a budget, but in reality, you can make a significant dent with small increments of automated savings. In fact, the ability to save automatically is the most powerful tool in our personal finance toolbelt.

Why is it so strong? You don’t have to consciously save anything because it’s already being done for you. If you’re manually transferring money into a savings account, you might find new reasons to skip the transfer each month. By reducing the amount of self-discipline involved, automating your savings makes saving easier.

Automating your savings is also a game-changer because, as humans, we have a need for immediate gratification. So, when faced with a decision, we tend to make the choice we think will bring us the most excitement in the moment. Saving typically just doesn’t feel as exhilarating.

You can simplify saving by setting up a fixed, recurring, automatic transfer from your checking account into your savings account. Or, if your employer allows it, you can have part of your paycheck put into a savings account each pay period. These are easy ways to bypass the decision to save by not giving yourself the chance to use the money for something else.

By saving automatically, you adopt a “set it and forget it” approach to saving more that increases your chances for success.