Seven Hidden Benefits of Frugal Living

In a world where rampant consumerism is the norm, choosing a frugal lifestyle can sometimes mean living as an outcast. Your friends may shake their heads when you opt out of expensive restaurant dinners, and your neighbors might get a good laugh out of your penchant for amazing garage sale finds. Maybe your family members just don’t “get it,” and assume you’re being overly cheap, or worse, completely unreasonable.

But if you’ve been frugal long enough, you have probably realized that there are more benefits to your frugality than meet the eye. People may say you’re cheap. They might call you tight. They might even think you’re strange, but it’s only because they just don’t know what they’re missing out on.

Seven Hidden Benefits of Frugality

But just because people don’t understand it, that doesn’t mean frugality isn’t as amazing as we think it is. Here are seven hidden benefits of frugality that are hard for outsiders to appreciate:

Benefit #1: Frugality Can Be Good for the Environment

Even if you don’t care a lick about saving money, frugality comes with benefits that extend beyond your pocketbook and personal life. The truth is, frugality doesn’t just benefit “us;” it can benefit the planet we live on too. By making fewer purchases and consuming less, we can positively impact the environment in a number of ways.

According to the Environmental Protection Agency, Americans generated about 251 million tons of trash in 2012, with only about 87 million tons of that material making its way to the recycling bin. That means that, on average, each American created approximately 4.38 pounds of waste or trash per day — which is, quite frankly, rather alarming.

Although frugality can’t solve every environmental problem that modern society has created, it’s a start. The little things add up.

For starters, reusing and repurposing old items instead of throwing them away means less trash in landfills, dumps, and waterways. Meanwhile, families who buy used items instead of new will inevitably throw away a lot less product packaging over the course of a lifetime. Trading used items around also means less energy used for production, packaging, and shipping for every item you don’t buy. And buying a cheap, fuel-efficient used car (or ditching it altogether in favor of a bike or public transportation) helps reduce air pollution and greenhouse gases.

The bottom line: Being frugal means consuming fewer of the planet’s resources, and that’s always a good thing.

Benefit #2: Being Frugal Can Mean Less Stress

Imagine what it would be like to never worry about money again. What would it feel like to have a healthy nest egg in the bank, no debts, and a rock-solid plan for an early retirement?

A lot of people have achieved that exact feeling — and without working as CEOs, day traders, or plastic surgeons first. And many of those people will tell you that the key to their lifestyle is, and always has been, living below their means and investing the rest. Sounds easy, doesn’t it?

But there are other benefits to frugality beyond the financial security that will surely come with it. And one of those benefits just happens to be less stress in general.

Need proof? An annual study on stress and health from the American Psychological Association has revealed money issues as the top stressor for Americans every year since the study’s inception in 2007. This year’s survey, which polled 3,068 adults in August 2014, found that 72% of Americans felt stressed about money during the last 12 months. Meanwhile, the majority of Americans polled, 64%, reported that money is a somewhat or very significant source of stress on an ongoing basis.

Being frugal doesn’t necessarily mean never stressing out about money, but it can certainly help, especially if you can stick to a budget on last month’s income. Living below your means, saving a large percentage of your income, and not trying to keep up with the Joneses can help you sleep better at night as you cope with life’s inevitable ups and downs.

Benefit #3: Not Caring Can Be Good for the Soul

Speaking of “keeping up with the Joneses,” is there anything more exhausting? Maybe your neighbor’s new car has brought out your green-eyed monster, or perhaps it was your sister’s constant vacationing. Whatever it was, it was a huge waste of time, and could have had a detrimental effect on your finances. We all know that “keeping up” with others is a lost cause, and one that only stands between us and our own financial goals.

Frugal people already know this and quit caring about that stuff a long time ago. Why? Because they have learned that other people choose to spend their money differently, and that’s okay. Meanwhile, they have laser-like focus on the things that really matter in their life and don’t let themselves get bogged down by what other people are doing with their money.

Most importantly, most frugal people realize that their frugality serves a purpose. Like Dave Ramsey famously said years ago, “If you will live like no one else, later you can live like no one else.”

Frugal people know that their frugality isn’t a sacrifice; it’s a means to an end. And not caring what others think frees them to follow their dreams without worrying how it looks to everyone else.

Benefit #4: You Have More Time for Things That Matter

Let’s face it- being fashionable and hip is time-consuming. When you’re intent on always having the best, you have to spend time figuring out what that really means. You have to shop around. You have to read product reviews. You have to flip through consumer magazines to see what other people are wearing, doing, and using in order to get up-to-date on all of the hottest trends.

All of that takes time, and it’s time that frugal people would almost always spend doing something – anything – else. Because when you’re frugal, you generally only shop out of necessity or when something is important. When you’re watching your pennies, shopping is no longer a fun way to spend a Saturday.

Non-frugal people might balk at the idea that throwing money around at the mall isn’t fun, but the truth is, losing that burden is actually quite freeing. Since frugal people are trying to make the things they do have last longer, they don’t have to spend time shopping around for something new and can spend that time doing things that are more important – like spending quality time with family, cultivating a new hobby, or simply relaxing. Anything that feeds your passion, really.

The bottom line: Opting out of the consumer culture has a way of freeing up your calendar in a hurry. Once that happens, you can start spending your time how you want to spend it.

Benefit #5: Frugal Living Is Good for Humanity

Living in a rich country can give you a seriously distorted world view. When you look around and see nothing but excess, it’s easy to forget that a large percentage of the Earth’s population goes without basic necessities like food and water.

When you begin to see things from that perspective, it fails to make sense why we should buy so much “stuff,” only to throw it away. And it’s not just about the “stuff” we buy and waste; let’s talk about food waste too. Recent research from the U.S. Department of Agriculture and Environmental Protection Agency shows that Americans throw away around 40% of the food that is meant to be consumed annually.

In a world where people are truly starving, that is a sad statistic. However, food wasted isn’t the only tragedy; think of how much energy it took to grow and produce that food, along with the plastic and other materials it took to package it, and the energy it took to transport it.

Being frugal can’t solve pollution or hunger, but it does mean being less wasteful with our already scarce resources. And when you make a commitment to wasting less in general, you’re reducing your carbon footprint and freeing up resources for others who might desperately need them. It may not be much, but at least it’s something.

Benefit #6: Having the Ability to Give Generously

It’s been proven that frugality can make a positive impact on any family’s budget, but that benefit doesn’t have to be limited only to personal gain. Obviously, the more money you have and the less you spend overall, the more money you can set aside to give generously to charities or social service organizations you trust.

There is no hard data on how much frugal people give to charity vs. non-frugal folks, but a recent study shows that middle-class Americans are beginning to dig deeper when it comes to charitable giving. According to the Chronicle of Philanthropy, Americans give around 3% of their income to charity on average. However, Americans who earned less than $100,000 per year began giving slightly more from 2006 to 2012, even as their “real incomes” grew little due to inflation, rising health care costs, and other factors.

For those who want to give generously but have never been able to afford to, adopting a frugal lifestyle is one way to free up some money to give. And, as we all know, giving generously has a way of coming back to you.

Benefit #7: Retiring Early

As if all of the other benefits of frugality weren’t enough, the huge financial advantage that comes with a frugal lifestyle is enough to get many people on board.

Obviously, the more you save (and the earlier you start), the more money you’ll be able to stash away for retirement. And once that money starts growing, you might find that retirement could happen much sooner than you expected.

The way this works is simple. Compare two modern families whose parents both enter the workforce around the same time. Although incomes fluctuate over the years, let’s say that each couple brings in $60,000 annually over the next 20 years.

Couple A: If Couple A saves the standard 10% of their income in pre-tax retirement accounts and earns an average of 8% on their investments over those 20 years, they’ll wind up with around $274,571 after 20 years (not accounting for inflation).

Couple B: Let’s say Couple B saves 20% of their income in pre-tax retirement accounts and earns the same 8% over 20 years – they’ll have $549,143. And if they stash away 30%, they’ll have $823,715.

What’s more, Couple B has gotten used to living off just 80% of their income, so they’ll only need to withdraw $48,000 a year to meet their frugal living expenses. Meanwhile, Couple A has been living off 90% of their income, and will need $54,000 a year to maintain their lifestyle. So Couple B will actually need less money to retire comfortably.

Lots of other factors come into play here, but you get the point. Those who can start early and save more of their income will likely reach the “magic retirement number” earlier than everyone else.

But the benefits don’t stop there; frugal families who always say “no” to debt will be even further ahead than the rest. Imagine being debt-free and having a boatload of money saved for retirement. That’s the reality for a lot of frugal people who have lived their entire lives by the principles espoused by this website and others like it.

Frugal Living: It Isn’t One-Size-Fits-All

The truth is, frugality has something for everyone. If you’re passionate about the environment, being frugal can help you feel like you’re doing your part. If you’re a humanist, a frugal lifestyle is an acceptable response to many of the problems we face. And if you’re simply in it for the money, that’s okay too. There are honestly dozens of reasons to live a frugal lifestyle, and all of them are valid.

So the next time someone balks at your frugal lifestyle, you can just ignore it. They may not “get it” now, but that doesn’t mean they won’t get it eventually. In the meantime, use your frugal lifestyle to set a positive example for those around you. And you never know- when the people you love see all of the positive benefits that come with living on less, they might finally come around.

What is your favorite “hidden benefit” that comes with your frugal lifestyle? Do you find that people don’t understand why you live the way you do?

Holly Johnson

Contributing Writer

Holly Johnson is a frugality expert and award-winning writer who is obsessed with personal finance and getting the most out of life. A lifelong resident of Indiana, she enjoys gardening, reading, and traveling the world with her husband and two children. In addition to The Simple Dollar, Holly writes for well-known publications such as U.S. News & World Report Travel, PolicyGenius, Travel Pulse, and Frugal Travel Guy. Holly also owns Club Thrifty.