The Wisdom of Frugality: Why Simple Living Is Thought to Make Us Happier

wisdom of frugality

For most people in the Western world today, seeking out some degree of happiness in life is a major life goal. For those seeking happiness, simple living is often promoted as a way to achieve happiness, or at least to achieve a level of contentment from which happiness and joy can bubble up.

Why is that leap made, though? Why is simple living considered to be a path to happiness? That’s what Westacott addresses in the third chapter of the book, which is broken down to nine reasons for that connection.

Simple Living Promotes Virtue, Which Promotes Happiness

If frugality makes us virtuous, it goes, and virtue makes us happy, then frugality makes us happy.

This perspective is best described by Plato, who held to the idea that virtue creates inner harmony and thus creates fertile soil for inner happiness. I tend to describe this idea of a “fertile soil for inner happiness” as a sense of “contentment” – if I am content with my life, my stress level is low and I find that happiness bubbles up naturally all the time. If I am not feeling content with my life and feeling stressed out, that happiness rarely bubbles up and when it does it disappears rapidly.

Westacott makes a few interesting observations about virtuous people in this section.

First, virtuous people tend to build better and stronger relationships, which is a source of probable happiness. Virtues often encourage us to act in an altruistic way toward others, nudging us to listen and help and be friendly, and those are the tools with which we build strong human relationships. If good friendships are a source of happiness (I’d definitely argue that this is true) and being virtuous helps build those friendships, then there’s definitely a connection between virtue and happiness.

People who lack virtues and values tend to be unhappy with their situation and their lives as a whole, which, to parallel Plato’s idea, provides a very fallow soil for happiness to grow. If you treat others poorly and have a negative and stressful view of the world, your inner garden isn’t a great place for happiness to thrive. This also connects to the friendship point: very few people want to be good friends with a backstabber or someone who repeatedly doesn’t live up to their word or someone who acts in a cruel way towards others.

Finally, virtuous people feel less conflict between their actual feelings and what they think they should feel. If you live by the virtues and values that you hold true, then your innermost feelings that you actually have should largely match the feelings you think you should have. If you think that behaving in a certain good way should make you happy and then you behave in that good way and it does make you happy, that’s an alignment between your values and who you actually are, and that feels good. If you think of yourself as a frugal person and then actually behaving frugally makes you feel good (or at least not bad), then you’re going to have an alignment of action and virtue that at the very least brings contentment. In other words, if you want to be truly happy, live what you believe; if that doesn’t work, carefully reconsider what you believe.

Simple Living Allows One to Work Less and Thus Enjoy More Leisure

This one’s simple: If you’re frugal, you have less need for money. If you have less need for money, you have less need for work (particularly stressful work). The less you have to work, the more time you have for leisure. This, of course, assumes that leisure brings more happiness than work, but obviously a person can choose to work if they don’t need money. If you’re financially set, you can choose to work if that’s what you enjoy doing the most.

The reason this idea is so satisfying is that almost everyone inherently understands and agrees that, at the very least, leisure in moderation is enjoyable and brings happiness, while the connection between work and joy is much more debatable. A compulsion to work is seen as a bad thing by many, though hard work itself is usually seen as a virtue because someone is doing something that they might not enjoy in order to reap rewards of some kind (like taking care of their family).

I tend to think of leisure as a “recharging of my batteries” or, sometimes, a way to reflect. Good leisure (for me) involves some sort of mental or physical challenge of my own choosing, like solving a puzzle of some kind or doing something that requires energy. To me, this is a vital component of life, one that I make time for, and one that I wish I could make more time for, though I would not want it to be all of my life.

Bertrand Russell (among other philosophers) is very critical of overwork, as expressed through essays like In Praise of Idleness. It’s worth noting here that Russell is mostly defining “overwork” as being connected to forced labor in which the person involved really doesn’t have a choice, whereas a person who chooses to work hard in terms of a personally valuable goal isn’t doing anything wrong. This goes down an interesting rabbit hole about work ethic and capitalism and other ideas.

Most people and philosophers tend to aim for meaningful self-chosen work as the best kind of work. When you have the freedom to choose what tasks you wish to work on, and the fruits of that labor can provide for your life, that’s the best outcome for someone who has to work in some way to cover their financial needs.

From here, Westacott looks at the idea of a “life of leisure” i.e. freedom from necessary labor. There are a number of ways to get there: be born into it, marry into it, get lucky, or accumulate it through work and investment, and frugality (which has the double benefit of reducing the needed amount while also helping to accumulate). The best strategy is a mix of frugality (spending less) and industriousness (earning more); industriousness alone tends to lead to spending more and jumping onto lifestyle inflation. Frugality balances out industriousness, in other words.

What’s the best solution? Westacott summarizes a lot of philosophy that points at finding work that pays the bills and is inherently rewarding. For many, this can seem like wishful thinking, but most jobs have some inherently rewarding aspects and some aspect that aren’t rewarding. You might like some parts of your job but you still can’t wait for the weekend. However, that phenomenon is true in most self-chosen tasks – there are probably parts you like and parts you don’t like in almost everything you do. The question is whether you focus on the parts you like or focus on the parts you don’t like. One of those two paths leads to a strong sense of happiness.

This section ends with two caveats. First, individuals often have little choice in how hard they work, as it is dictated by other needs and goals and circumstances. While this is undoubtedly true, a lot of our sense as to whether work is enjoyable or miserable comes down to what we choose to feel about it and what we choose to look for, which is one of the most valuable lessons of stoicism. Second, work is much less of a curse than it once was, especially in industrial societies. Many of us are able to work in information economy jobs, which do not involve back-breaking labor in the least. Even those who do physical labor often have a great working environment compared to the past, with worker safety regulations, limitations on working hours and conditions, and abundant learning and training opportunities. The modern worker in the Western world has a pretty good life compared to 150 to 200 years ago.

Merely Satisfying Basic Needs Suffices for Happiness

Another principle behind the connection between simple living and happiness is the idea that merely satisfying one’s basic needs is all that’s needed for happiness. As long as your true basic needs are met – food, water, basic clothing, basic shelter – you have all you need to be happy.

This is an argument often used by Stoics that argues core necessary elements for a satisfactory life, one that can offer significant happiness, are quite minimal.

How minimal, though? What is the minimal satisfaction of one’s needs that can provide for personal happiness? It’s a question debated throughout history and one that’s of particular interest today, as most of modern society seems to be based on the idea that one needs quite a lot of things in order to be happy. Can one achieve happiness without a cell phone? Without electricity? Without a car? Without running water? People did these things less than a century ago and were certainly happy. Westacott offers up a lot of interesting arguments on this issue.

Epicurus, for example, argues that our default human condition is pleasurable and that pain is merely a disturbance of this condition. In other words, the discomfort we feel at not having something that we think we need usually isn’t due to that thing lacking, but due to having altered our natural state to the point where we feel like this thing is a requirement. Our sense of discomfort at not having something is due to our reliance, not due to the necessity of that item. Modern society seems to constantly nudge us toward fulfilling unnecessary desires and often nudges them to the point of insatiability, both of which are recipes for unhappiness. When there’s always something new to want, happiness is pretty hard to find.

Modern society seems to constantly encourage us to desire more, even when our basic needs are well met. As time goes on, we begin to view more and more things as being essential needs and that also causes a much larger number of things to be considered completely reasonable wants. As the world changes, so do we; the world presents a mirror in which we view ourselves. A simple example: if everyone around us has a smartphone, we thus assume that we need one, too. However, that’s just not true: happiness doesn’t come from merely imitating what other people have. Happiness comes from having an internal definition of what we need to live and what we need to be happy, and having insatiable desires is guaranteed to detract from that.

So, how does one curb insatiable desires? The best solution is summed up in one word: gratitude. This is a viewpoint that I strongly agree with. If you’re struggling to curb desires in your life that seem insatiable, adopting a daily practice where you reflect on the things you already have that you’re grateful for helps tremendously. It channels your viewpoint toward what you have rather than chasing ever-higher levels of whatever it is that you feel brings you happiness. (It is worth noting that insatiable desire isn’t necessarily a bad thing if it’s channeled toward something virtuous, but simple acquisition and luxury aren’t virtuous by most standards of virtue.)

In the end, everyone reading this likely has everything external that they need to have happiness in their life. It’s when we fail to realize this that we hop on the hedonic treadmill of buying more and more to try to fulfill an insatiable desire that never really brings happiness. That doesn’t ever lead to a happier life, but it does lead to financial trouble.

Simple Living Promotes Serenity Through Detachment

The choice to intentionally live your life in a simpler fashion with fewer possessions means that you have fewer things to worry about, and happiness is found in your peace of mind and low stress.

(A cute aside: this concept came up at the dinner table about a month ago and as I was talking a bit about it, my daughter understood it so well that she began singing the song Hakuna Matata from The Lion King: Hakuna Matata! / What a wonderful phrase! / Hakuna Matata! / Ain’t no passing craze! / It means no worries / For the rest of your days! / It’s our problem-free philosophy! /
Hakuna Matata!
I think she got the idea quite well, actually.)

The thing is, serenity actually isn’t a common life goal in the modern world. There’s undoubtedly a good connection between simple living and serenity, but serenity isn’t something that people commonly aim for in their life.

That isn’t to say that it doesn’t exist. Many groups and philosophies and religious traditions view a quiet mind as part of the path to enlightenment and happiness. I’m particularly reminded here of buddhism’s four noble truths and the eightfold path, a concept I discussed and applied to personal finance and modern life a while back. It centers around the idea that things in life are impermanent, particularly distressing and painful things, and that one can find clarity on the journey and on the other side. (This is an extremely simple interpretation of buddhism, something that has been written about in countless books of wisdom.)

Benjamin Franklin offered up a different perspective on frugality and serenity: frugality enables people to avoid debt and put aside money for the future, which eliminates a lot of money worries and leads to a more serene life.

One could take that a step further and simply “live for today” and completely ignore all future implications of one’s behavior because worrying about the future is often stressful and unproductive, but that type of attitude ignores the problem of negative future events which will happen. Your “future self” is unreliable – you can’t expect your future self to bail you out of whatever may come.

A better approach is to cultivate habits of mind that make us less attached to what we may lose. For example, the higher our standard of living, the more we feel attached to the things that we might lose – our expensive home, our expensive habits, and so on. Living simply counters that sense of attachment – we have less to lose. You can’t take away a person’s cultivated mind, their deep enjoyment of nature, or things like that. Another example: living too much in the present at the expense of the future is almost always going to end disastrously, so consciously cultivating our long term thinking habits until they become second nature is quite useful.

In the end, simple living is a practice that one can use today to make one simultaneously realize that they need less to be happy while also making their future less financially fragile. Together, those two factors lead to a less stressful and more serene life.

Living Frugally Prepares One for Tough Times

Another reason that frugality and simple living can make us happier is that it helps us handle tough times much easier, for several reasons. For starters, it requires much less to maintain a simple life – you don’t need the resources of an high-salary stressful job to keep the ball rolling. At the same time, living simply and frugally often goes hand in hand with building a financial safety net – if you’re spending less than you earn, you’ve got to be doing something with that excess, and almost anything you might do secures whatever may come in your life. Also, if you already have a simple life, there’s far less that can be taken away from you, so tough times don’t come as a shock to you.

The stoic philosopher and speaker Seneca advocated strongly for having periods of intense frugality in one’s life as a method of understanding and appreciating financial hardship and learning from it in terms of what you don’t actually need in your daily life as well as how to live if things become difficult. I actually view this approach as a philosophical precursor to the thirty day challenge, in which a person devotes 30 days to making some significant change in their life to see if it’s something they want to permanently change or just to learn what that change is like.

The catch, of course, is that how well people adapt to some level of lifestyle deelation is highly connected to their temperament. Some people will relish the challenge and the change and find peace and joy in it. Others will dwell on what they’re leaving behind and resent the change. A person that voluntarily adopts a simpler life is much more likely to enjoy the challenge and find peace and joy in simple living, which can help with tough times. It’s better to voluntarily adopt it than to be forced into it, in other words.

Boethius, a Roman philosopher, argued that happiness depends almost entirely on one’s inner state not their external circumstances. A happy person can find happiness with almost nothing. An unhappy person can be unhappy with everything they might ever desire. In other words, it’s about what’s inside of you rather than what’s outside of you.

Still, it remains a good idea to prepare for adversity, and living a simpler life is just one route to that. Other tactics that work include having a 401(k)/Roth IRA, having insurance, having an emergency fund, and having a strong social network.

Of course, when adversity strikes, dealing with it cheerfully is almost always a good approach, one that can be practiced by handling minor setbacks with good cheer rather than anger and resentment.

Simple Living Enhances One’s Capacity for Pleasure

People tend to appreciate luxuries more when they are fairly rare, an idea I pointed out in yesterday’s article about keeping trips to the ice cream shop as a “treat” rather than as the norm. This doesn’t have to mean expensive luxuries – think about how good your ordinary bed feels after a long, hard day. You appreciate your bed more after a long hard day than after an ordinary day, right? That’s because the exceptionally hard days are rare, and those are the ones that create more appreciation for a comfortable bed.

Of course, there are times when “rough living” is enjoyable. I enjoy camping – it’s a wonderful experience, but it unquestionably takes away a lot of the conveniences of being at home. Why? To an extent, this is because camping makes “rough living” into a novelty, one that I know I can leave when I want.

Most of the time, however, “novelty” means going from a low quality experience to a high quality one, like the novelty of eating at a high-end restaurant. Much of the time, when we seek out novelty, we’re usually seeking out a higher-quality version of a regular experience in our life.

The problem here, of course, is that if we seek out that higher-quality version over and over again, it becomes our new normal. That new normal is usually more expensive than the old normal, and reverting back to our old normal is usually unpleasant. Once you’ve become used to good coffee, going back to old coffee isn’t fun.

Another interesting aspect of this is the “connoisseur problem:” the best experiences are usually only appreciated by people who enjoy those types of experiences regularly. I don’t drink wine often enough to really appreciate a glass of a $500 bottle of wine. It’s wasted on me. I like a glass of inexpensive table wine along with my pasta dinner and that’s about it, so buying expensive wine really isn’t worth it for me.

Of course, one might argue that it’s silly to think that one would intentionally choose bad things, and I would agree. However, rather than intentionally choosing bad things, I often just choose the best low-cost option. Rather than choosing an awful book that’s getting dumped on the cheap book rack at the bookstore, I’ll just go to the library and borrow a good book for free. Rather than watch a bad movie, I’ll just seek out a well regarded one on Netflix or from the library. I don’t need to seek the best (usually because I won’t appreciate it unless I’m very passionate about that niche). Instead, I seek the “bang for the buck” – the best of the highly inexpensive options – and I stick with that. On the rare occasion when I do enjoy something that’s high quality and high price tag, I appreciate it to an extent, but I recognize and savor it as a rare thing, then I go right back to my “bang for the buck” option.

The thing is, such an attitude naturally encourages appreciation of the infinite wonders of everyday life. If you’re not constantly chasing the “ultimate” experience in some narrow niche and throwing a lot of money at it, you leave yourself a lot of mental room to appreciate simple things like a cold glass of water with lemon in it or soft grass under your feet or sunshine on your shoulders or a well-timed joke from your wife or a good book from the library.

This is a perspective advocated strongly by Thoreau and Emerson (noted earlier) as well as a common theme in literature and art. The argument basically boils down to the idea that it’s easier to appreciate something if you have fewer distractions. If you’re constantly distracted by your chase of some super-expensive peak experience in some niche, you miss out on the wonders that everyday life constantly shows you.

Frugality Fosters Self-Sufficiency and Independence

A frugal person is often less dependent on others, both in terms of interpersonal relationships and in terms of needing goods and services.

For example, a frugal person doesn’t need to rely on another person’s favor to maintain their way of life. If you’re frugal, you don’t have to suck up to your boss or to a particular client. You don’t have to bend your values to make those people happy, and you don’t have to worry about how you’re viewed by that person. Money can incentivize you to live by someone else’s values (your parents, your patrons, your clients) and not your own, which can be a miserable experience.

Self-sufficiency in general is seen as a virtue, personally and socially and professionally. A capable person is seen as a valuable friend and as a valuable asset in the workplace, and that sense of being capable is also very valuable for one’s self worth.

Furthermore, there’s incredible value in being immersed in a task that really presses your skills. I’ve argued before that achieving “flow state” is one of the most profoundly enjoyable things a person can do, and all it requires is some degree of skill at something and a problem before you that truly challenges and pushes those skills (and sufficient time and energy to sink into the problem). We’ve all lost track of time and even track of where we are when engaged in an interesting challenge – that’s what flow state is. (This concept really deserves a full article on its own, as I believe that working for and achieving flow state regularly in your life is a great tool for frugal people.)

On the other hand, not being self-sufficient and capable means that you’re reliant on others to do tasks for you. This reliance usually comes with a cost – often a financial one, but sometimes a social one, too. If you’re dependent on a particular device or a particular service, you’re going to be shelling out money to maintain that device or continue to buy that service. If you’re dependent on a friend or a family member, you’re going to have to expend energy to ensure that relationship remains strong.

What about the DIY movement? The financial benefits (in terms of money earned per hour) is often pretty low for DIY projects; however, they’re often an enjoyable project for the person doing it and can often encourage a “flow state.” I get this way when I’m in the garden doing something like weeding.

To put it simply, if you’re interested in spending less money, there’s going to be a push for you to do more things for yourself, and that in itself comes with benefits. You begin to feel like a more capable person (improving self worth), you begin to appear more capable (increasing social and professional capital), and you achieve a flow state more often (which is an incredibly enjoyable state to be in).

Simple Living Keeps One Close to Nature and the Natural

There is an extremely long tradition in philosophy and in most cultures of people desiring to live closer to nature. Almost every generation has a significant “back to nature” movement, and you hear constantly about people leaving the city for long vacations or even to move to a simpler setting.

For starters, there’s significant scientific evidence that more time in nature in terms of exposure to lots of living plants and animals has psychological and medical benefits. There’s a reason that doctors will often encourage patients to spend time outdoors, and there’s even broad cultural practices that center around the health benefits of time in nature. It is good for one’s health to spend at least some time in nature.

Spending time in nature has an enormous philosophical tradition as well. The Stoics viewed spending time in nature as one of the greatest aspirations and uses of time available to people. Epicurus argued that a deeper understanding of nature freed us from fears and superstitions, and spending time in nature and learning about the world encourages pride in our own efforts (i.e., it feels good to walk a long trail, both because of the accomplishment and the time in nature and the things you observed).

How does that connect to simple living? Well, spending time in nature is extremely inexpensive and often free. Almost every major city has extensive parks that one can spend time in, and if you get a chance to get out of the city, there’s an abundance of state and national parks, forests, and grasslands in the United States that one can visit, many for free. They offer trails, hiking, nature walks, wonderful vistas, wildlife… all of the nature you could want, and it’s basically free. It’s something that the rich and the poor and the middle class can all appreciate and take advantage of in their lives. A simple frugal life can enjoy time in nature just as much as the wealthiest person. It’s a great equalizer.

Simple Living Promotes Good Health

Westacott’s final argument that simple living makes us happier comes from the connection between simple living and good health. Many of the elements defined as “simple living” in the West correlate well with elements of health: fresh clean air, fresh fruits and vegetables, lots of outdoor exercise, and so on. At the same time, many of the elements of modern life that are far from simple living tend to be emblematic of poor health: pollution, excessive noise, fast food, extreme stress, tight schedules, and so on.

It’s worth noting that until very recent history, living in a rural setting away from communities was fairly dangerous. Humans had to be very careful around the natural world because we didn’t have remedies or easy medical treatment for things like snake bites and couldn’t rescue people from falling into a ravine, for example. Clean water was fairly difficult to find in many settings until surprisingly recently. We’re also rarely at risk from other people; the sense of stable law and order in Western nations extends to the wildest of areas within their borders. The risks of living simple and rural are far less than before.

Today, healthy options for living are available to both the rich and the poor. Virtually everyone in the West has access to clean water and healthy food options and access to nature and so on. The biggest difference is in education and whether people choose to access the options available to them or take an easier road, such as the choice between convenient food or inexpensive and healthy options.

Final Thoughts

What you’ve probably noticed is that many of these reasons are interconnected with one another and, because of that, there are likely a set of these reasons that really click with you (because they have similarities) and a set that doesn’t really click but at least makes sense.

Westacott makes the astute point that these reasons are similar to a family. They’re all interconnected in some way (some more strongly than others), but there are also tensions between them, too. While there are some underlying connections between all of them, there are groups of these reasons that tend to congregate together and provide happiness in a person’s life.

For example, I find that simple living really clicks home with me because it allows me to work less and enjoy more leisure and it also enhances my capacity for pleasure, which seem deeply connected. I also enjoy the connection to nature and the promotion of good health that frugality seems to inspire in my life, which also seem connected to each other. The other reasons make sense and are meaningful for me, but they don’t necessarily push me and reveal happiness for me in the way that those four reasons do. I suspect that there are groupings for each frugal person, and they’re not always the same – you’ll appreciate all of the reasons that frugality and happiness are connected, but a few of them really click home with the way you think and the way you live.

Next time, we’ll look at why the philosophy of frugality is a hard sell in the modern world.

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Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.