Don’t Be Ashamed of Your Frugal Living

The simple maxim of spending less than you earn stands at the heart of personal finance success. If you can consistently do that one thing, you’re going to succeed when it comes to personal finance. I repeat that idea all the time because it’s so true – it’s the core of everything.

People get into financial trouble when they don’t follow that maxim. If you consistently spend more than you earn, you’re going to dip into financial trouble.

The result of this is that the first financial move people have to make when they’re beginning to turn their finances around is to get a grip on their spending.

For some, that’s a really hard pill to swallow, not because they don’t know how to do it, but because they view a reduction in spending as something to be personally ashamed of. They don’t want to feel “poor.” They don’t want to put forth an appearance of being “poor.”

That idea of “poor” means a lot of different things to a lot of different people. I’ve witnessed people respond with revulsion at the idea of clipping coupons or taking public transportation. I’ve received emails from readers who are completely convinced everyone in the world will think of them as a cheapskate if they take their own lunch to work.

I’ve been about as open as humanly possible about my choice to spend less money. The Simple Dollar’s website is visited by almost a million people per month and is shipped out by email daily to tens of thousands of people. Many of my friends and family read it. Many members of my local community read it. I’ve had people I don’t know at all walk up to me at community events and shout out my name as if I’m an old friend because they’ve read the site. They know that I’m pretty careful with my money.

The truth is that any “shame” you feel about being frugal is just due to a few simple tricks our mind plays on us. If you can break through on each of these points, the idea of being frugal will have a lot less downside.

Recognize the Spotlight Effect

Ask yourself honestly: unless you’re specifically looking for it, how often do you really notice the choices of others? Even when you notice, how often do you really care?

I’ll be honest: the only time I notice things about most people is when they’re doing something completely over the top in such a way that they’re obviously grabbing attention or doing something that’s potentially destructive to me. I rarely pay much attention at all to the day-to-day lifestyle choices of my friends and family, though I do notice what my immediately family members do most of the time. I barely notice any details about community members that I’m not interacting with.

Yet, when I’m doing things in the presence of other people, I feel like they’re all noticing every little thing.

Those two things don’t add up. How can I not notice lots of things about other people, yet expect that they are constantly noticing lots of things about me?

Here’s the truth: most people drastically overestimate how much other people notice what they do and how much they care. It’s called the spotlight effect. As Wikipedia states it:

The spotlight effect is the phenomenon in which people tend to believe they are noticed more than they really are. Being that one is constantly in the center of one’s own world, an accurate evaluation of how much one is noticed by others has shown to be uncommon.

People just don’t notice you very much unless you absolutely force them to notice. If someone sees you using coupons at the grocery store, it’s likely their mind is on something else and the thought doesn’t even register. Even if they do notice, their mind will mostly reflect back to themselves, wondering if they should use coupons, too.

It is extremely, extremely rare for people to think negatively of you if you’re being frugal in a way that doesn’t impact their life at all. If you’re worrying about this at all, you’re wasting your energy.

Know the Difference Between “Frugal” and “Cheap”

What about situations where your financial choices do impact others? For example, let’s say you have a dinner party. You don’t want to be a “cheap” host!

Of course you don’t, but that spotlight effect still holds. People are more focused on themselves than on details of your life and your possessions that have no impact on them.

If someone is going to come into your home and judge you negatively because of your possessions, they’ll find some way to judge you negatively no matter what possessions you have. You’re never going to be able to have possessions nice enough to deflect the judgment of a truly negative person.

Other people are going to be drawn in by the spotlight effect. They’re going to be far more interested in how you interact with them and the items they directly have to interact with than with anything else in your home. If your home is clean and they feel fine sitting down, they’re not going to care about much else. If you serve them edible food that meets their dietary needs, they’re not going to care too much about the details.

A frugal person understands this. They take care of their guests. They’ll go the extra mile to put a nice meal on the table, but they don’t feel the need to have thousands of dollars in home decor because, frankly, guests don’t really care. Being cheap, on the other hand, means that you don’t bother with these things because they’re expensive. If you don’t take care of the things your guests directly interact with, they probably will think you’re cheap.

Take your car, for example. Very few people will care whether you’re driving the latest model (if they do, they’re probably judging you for other things outside of your control). They do care that it’s clean and welcoming to them if you give them a ride. They also care whether or not you have a great conversation with them on the ride.

Notice that the things that actually impact other people are pretty minor details. You don’t need thousands in home decor to please house guests. You just need a clean home and a good meal. You don’t need an expensive car to please a rider. It just needs to be clean and dependable. In both cases, good conversation and friendship help.

The difference between “frugal” and “cheap” is how your financial choices affect others. The “spotlight effect” often misguides us here, too, as we convince ourselves that more of our choices have impact on others than is actually true.

Treat Yourself Well Without Spending Money

Another avenue which can lead people to feeling bad about their “cheapness” is how they treat themselves. It can be really easy to view frugality as self-denial and a path to a life that doesn’t involve personal enjoyment.

That’s not true in the least. All frugality means is that you recognize that when something has a financial cost, it’s hurting the other options in your life. It doesn’t mean you can’t enjoy things that cost money. It just means that it needs to be worth that cost.

If you take that to heart, it really makes free and low-cost things seem awfully appealing.

Before I made that switch in mindset, I used to enjoy expensive things a lot because of the investment. I knew that they had to be really good things because I invested money in them.

Now? I usually enjoy free and low-cost things more. There are many, many, many things I enjoy doing that cost me nothing or only cost a few cents, like curling up with a great book from the library or singing along to a song that I love or going for a long walk in the woods (or elsewhere). Those are the things I strive to fill my hours with – things that I enjoy that happen to have very low financial costs.

I don’t mistreat myself out of some need to be ultra-frugal. When I want to do something that costs money, I do it, particularly with social things. I just put a premium on things that don’t involve spending money.

Cut the Things You Don’t Care About

One of the best ways to be frugal without dragging down your lifestyle is to look for ways to cut back hard on the things you don’t really care about.

I like to bring up laundry detergent as an example here. As long as my clothes get clean and the substances don’t trigger allergies or cause any other problems, I basically don’t care what I use to clean my clothes. I don’t feel like a better person because I choose to use Tide instead of a store brand or even my homemade laundry soap. I just don’t care. It doesn’t affect my life. I don’t judge whether I’m a good or a bad person based on the substance I use to clean my clothes.

I don’t care about the electricity that comes into my house. I don’t feel like a better person if I burn more electricity. Instead, I strive to use as little as possible, particularly when those methods don’t have a lifestyle impact on me. I’ll use LED lightbulbs to minimize energy use, for example, and I’ll flip a switch to turn off all of our entertainment devices while we travel.

This philosophy applies to every expense in my life. If it’s not important to me, I’ll cut it to the absolute bare minimum. That way, I have resources for the more important things in my life.

Be Frugal, Not Cheap

Most of the things people think of as “cheap” aren’t actually frugal things, they’re just socially offensive things or things that cut into something that is personally valued. Frugal people avoid those things, too.

In fact, you likely barely even notice the truly frugal people in your life. They drive the well-cared-for and clean used cars. They show up at a lot of community activities. They’re cleanly dressed. If they stand out, it’s not because of their spending, it’s because of their other choices.

Frugality is about the things other people don’t notice. It’s about finding personal fulfillment without spending money. It’s about cutting back on the things even you don’t care about.

That’s something to be proud of.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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