In modern Western society we are driven heavily by consumption which is largely driven by ideology. The West was purported to be a land of discovery, vastly unexplored. Yet, over time, America became known as the "land of possibility". By the early 1900's, a major shift began to occur when American society became aware of the limitless possibilities of a free-market society. By the 1920's, Ford had introduced the assembly line and by the 40's General Motors began spearheading innovation of big business and production standards. 

The argument could be made that automobile production was the spark that ignited our modern consumerist culture. With innovations in production and rapid technological development over the following decades, Americans became increasingly expectant in the ability to participate in the free-market. Fast forward another 80 years and the average American presumes that everything should be instant access. Two day shipping is the new norm and instant downloads have overtaken our previous dial-up connections. Our ability to purchase and consume has reached a point the world has never seen. So where do we go from here?

Don't get me wrong, the ability to have access to a free-market is a great gift given to us in the West. Our access to fresh food, clothes, and other necessities is a luxury that many other societies may never know. However, this superpower is to be used with caution. Greed is not a word familiar to the people in resource-constrained societies such as Uganda or Haiti. Same day delivery and online shopping are completely foreign concepts to many in underdeveloped nations. Yet, in America, greed drives every socioeconomic class from the poorest of the poor to the richest of the rich. Greed is defined as an "excessive or rapacious desire, especially for wealth or possessions" (source). We all ​are subject to feelings of greed throughout our lives by wanting and desiring more than is absolutely necessary and required. 

The Diderot effect is named after French philosopher Denis Diderot and highlights a profound pattern of consumption that emerges across individuals related to the purchase of consumer goods. The term Diderot effect was first coined by anthropologist Grant McCracken in 1988 but actually originally referenced by Diderot himself a personal essay titled Regrets on Parting with My Old Dressing Gown.

Diderot was in financial need which became known to the Russian Empress Catherine the Great. Upon learning about Diderot's need for money, she agreed to purchase his library for a large sum of money and appoint him lifetime caretaker. What he did shortly after that windfall is what led to the realization of the "Diderot effect".

Diderot highlights how the purchase of a beautiful red dressing gown led to a spiral of consumption that ultimately landed him back in debt. Upon the initial purchase of his new red gown (and hence the parting ways with his old dressing gown), Diderot began to examine all of his other possessions in comparison to his bright new red robe. He quickly realized how lousy they were in comparison. His solution at the time was to begin purchasing new items that were more in line with the luxury of the beautiful red gown, all leading back to the same level of financial constraint that he was originally plagued with.

The purchase of a new phone is accompanied by a fancy new case, a protection plan, insurance, and a higher monthly bill to boot. Refinishing your deck or patio area comes with the purchase of a new gas grill, patio furniture, outdoor plants, and some trendy decorative lighting. A new outfit needs new shoes and jewelry to match. We are eternally damned by these types of purchases.

The goal is not to stop this urge from happening, but rather change the way you respond to it. Replacing a worn out or broken couch does not have to lead to new lamps, end tables, coffee tables, and an impressive new area rug. You can replace or fix the couch but be cautious of the temptation to enter a proceeding spiral of consumption. Consider painting the tables or simply changing the lamp shades as an alternative to complete replacements- a substitution of undesired behavior. 

Instead of substituting the undesired behavior, you could also aim for complete elimination of Diderot-like behavior. This might involve saving up an exact amount for the purchase of a new item- a couch in our example above. Any purchases made within the next 90 days would then need to be examined against whether the original purchase influenced that behavior. If you can hold off beyond 90 days, then the item you were considering purchasing is likely a desire, not a necessity.

I will admit, it is definitely nice to have nice things. Although frugality is an important trait that I hope to share with everyone, frugality does not have to be synonymous with deprivation. By recognizing that we are all subject to the same pressures as Denis Diderot, we can recognize that a spiral of consumption is never more than one purchase away. In particular, if you are already in financial trouble, one single spiral can derail a significant amount of positive progress. 

Be mindful of your purchases. Truly consider how much you will value your purchase in the long-term. Certainly do not agonize over every single purchase, but rather try to emphasize mindfulness and frugality more consistently over time. With enough practice, you will easily be able to identify what purchases are in line with your values, and which ones aren't. Overconsumption is not an impressive or attractive quality. Take the time to analyze whether something, or someone, is influencing you to engage in spending behaviors that are not consistent with your ideals. 

Earning more money can either turn your life around or turn it inside out. There is a difference between earning to spend and earning to save. The mindset is completely different between the two.

Poor accumulators of wealth spend more as their income increases. Good accumulators of wealth learn to save some, or all, of their increased earnings. This is the difference between displaying and accumulating wealth. Those who "display" wealth, are interested in spending on things that show to others some resemblance of wealth. Savers are frugal with their habits and are more interested in their net worth increasing over what friends think of what they have. 

Increasing your net worth is simple and it necessitates that you become a good wealth accumulator. It does not mean that you earn a high income and spend everything you make because despite your façade of high social status, you are essentially poor from a net worth perspective.

A word of caution: more income is not always better. You can actually be a good wealth accumulator if you practice mindfulness and frugality with your money.

Here are some questions to ask yourself before chasing a higher salary at all costs:

• Will a higher salary bring me higher amounts of stress?
• Will I get to spend as much time with my family if I chase a higher salary? What about friends?
• What am I giving up now by trying to earn more for the future?
• Do I actually need more money (surprisingly many people answer "no")?
• In trying to be more productive and resourceful, am I missing out on some things that actually  contribute to improving my mind and body? (Exercising, sleeping, proper nutrition, meditation, reading, etc.)

If we are always focused on productivity and output, we may miss the very things that are right in front of us. Further, many activities listed above (exercise, sleep, nutrition, meditation, cognitive challenges) are actually scientifically proven to improve BDNF and neuroplasticity thus making our brains even more productive. 

Not always. We highlighted above that earning more money can potentially lead to increased psychological, and occasionally physical, stress.

Another axiom worth mentioning is about "working smarter, not harder". At baseline, most people work relatively "hard", they just tend to be inefficient. Efficiency would be working aggressively for a short period of time and then taking a break. For example, the Pomodoro technique is surrounded around taking 25 minutes for a task and then given yourself a break at the end of 25 minutes. This technique is centered around the concept that we have very limited attention spans. Instead of trying to work for 8 hours straight, try instead to break your work down to short intervals interspersed with stretching, standing, or walking breaks. Doing this throughout the day will likely increase your productivity quite a bit.

Our work inefficiency and arbitrary 40-hour work weeks actually reduce our freedom greatly. If you work remote, this might be easier to pull off. If you work at the office, you will look like anybody else who is frequently taking breaks throughout the day, they are just doing it at random. You are going to pre-define your time periods and rest intervals. Set the clock for 25 minutes and do not stop and take a stretch break until you get their. Once you reach the 25 minute mark, try taking a true 5 minute rest by breathing, stretching, walking around, or anything else that can allow you to practice mindfulness.

The typical belief is that we need to have "nice things" and buy more stuff to display a high social status to prove to others how wealthy we are. In spending more, you fail to realize that you are inherently saving less and therein drastically slowing down the accumulation of your net worth. In the long term, spending more will effectively create more financial strain and stress, not less. This is not likely to result in long-term happiness.
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If your six-figure job requires ruthless hours then you are not in control of your own freedom. There are certainly ways to make more money with less stress, but those opportunities are few and far between. More stress traded for more money is almost always the deal.

Think of the promotion to management. Now you have more employees to manage, scheduling to do, deals to close, handling poor performance and lack of motivation. Management is somewhat akin to "adult babysitting". Consider if this is truly something that you want and go into a promotion like that fully aware of how increasing your earnings might impact your job satisfaction. 

What about the successful business owner who sits in his backyard while earning $10k a month from his business? Where were you the first 35 years he was rolling around on the floor like one of the employees? All you see now is the snapshot of what he has become due to all his time spent, holidays missed, birthdays not attended. All so that he can enjoy the "twilight years" of his life just to have you assume he always did it that way.

My ultimate proposal is that we improve and optimize our efficiency. Researchers indicates that happiness plateaus at an annual income around $70k per year. After that, the return is insignificant. This might mean that if you are already above this income level, earning less by taking a role more aligned with your values is more valuable than the increased earnings. 

I am not averse to hard work and discipline, far from it. However, you need to enjoy life and enjoy what you do. Be careful about becoming beholden to your job. Buying more than you can afford is the number one way to feel stuck in a job you hate. If you are going to participate in periods of life with higher income and higher stress, please do so wisely by accumulating, saving, and investing your increased earnings, not spending it all away!

 If you are frugal, disciplined, and value-oriented, focus on the following:

•  Attaining a household income of at least $50k-$75k per year. This will allow the typical debt-free individual to all expenses (expected and unexpected) and still save at least 10% of their income. You can certainly earn more if you love your job but be careful about chasing a higher salary if you hate the job you are presently in. 
• When receiving a raise or promotion, only realize a maximum of 50% of that actual raise meaning: only spend up to half of the difference and save/invest the other half. 
• Attain a position with an ideal schedule. Imagine what your dream schedule would look like. Weekends off? Summers Off? No nights? Short commute? Want more than just 1 week per year of vacation? Map out your ideal schedule. Now, what positions are you able to attain that would get you close? Start there. This is essentially reverse engineering yourself a successful job search.
• Saving and investing as early in life as possible. The reason for this is that you won't need to earn more money later in life which means increased options when choosing the source of income you generate. Think of it this way: a 30 year old who has accumulated $100,000 in a 401(k) or other retirement account, could stop investing altogether at age 30 and still wind up with $1 million by the time they reach 60 (assuming 8% return per year for 30 years on the initial amount of $100,000. A 40 year old would need to have accumulated a total of $220,000 by this age in order to reach $ 1 million by the age of 60. Only 10 years difference in age but a difference of $120,000 in starting balance to attain the same goal by the age of 60, $1 million dollars.

I encourage you to see if there is more to life than determining success based on earnings. Money can only buy certain things, most of which derive very little happiness.

There are plenty of things that move the needle on happiness that are free:

• Socializing - spending time with family and friends
• Going for a walk
• Forest bathing
• Meditation
• Yoga at home - or even light stretching
• Visiting the library - taking out books/videos as well
• Going to a park

Perhaps your best life is about separating "what you do" from "who you are". Do not think about work after hours or on days off. Be mindful and figure out "who you are" when you are away from work. Spending too much of your precious time at work and thinking about work will make your job define you. From my experience, MOST people do not want to be defined by their jobs.

Let us know your thoughts below in the comments section. Are there any other free activities that you really enjoy to share with the frugal community?

• ​How to Increase Your Net Worth: 3 Simple Steps
• The Single Most Reliable Method to Increase Wealth

Extreme deprivation isn't really that much fun. To most folks, the idea of putting on 4 layers in the winter instead of turning on the heat is not that appealing. Standing in the grocery store comparing the cost per ounce of beans is, for many, not a recipe for a good time. The cost savings of single-ply toilet paper is just too abrasive for most (literally).

Don't get me wrong, frugality tends to come with some weird savings hacks that are the centerpiece of your friend's jokes. I have even heard of someone using industrial CO2 containers to make their own seltzer water. Frugal folks tend to be a pretty strange flock. 

If you are motivated by cost cutting and frugality on small ticket items, go right ahead, I won't stop you. 
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But if the idea of penny pinching on the little things drives you crazy then perhaps you need a much needed re-frame on your concept of frugality. 

1. Housing
2. Transportation
​3. Food.

For those of us who cannot tolerate the idea of skipping our latte factor items, there may be bigger fish to fry for you yet.

Saving on housing, transportation, and food is a hell of a good place to start. In fact, it may be the only strategy you will ever need.

Housing. Buy less house than you can afford, nothing more. Married with one kid and no plans for more? Why the hell do you need a 5 bedroom, 3 bathroom house? You don't. Be smart. Warren Buffet still lives in the home he bought for $31,500 in 1958.

Transportation. Don't buy a new car. Ever. It's really that simple. Buffet, one of the wealthiest men alive drives a midsize sedan, a 2014 Cadillac.

Food. Don't eat out. Split meals when you do go out. Cook at home a great majority of the time. 

1. Housing
Show these guidelines to your mortgage or real estate professional if you have trouble computing a price range off of these numbers. 

Rule 1: Always buy less than you can afford

• Do not buy a house that you cannot put at least 20% down on immediately
• With a 20% down payment your mortgage payment- including property taxes- should be less than 30% of your after-tax take home pay on a 15-year mortgage
  • You can still choose a longer mortgage duration but you will use this for assisting with finding your price range.
• Avoid PMI at all costs by making, at minimum, a 20% down payment

Rule 2: Purchase all necessary insurances - don't skimp on these! 

• ​Homeowners insurance
• Additional Disaster insurance (if applicable based on your area) - flood, hurricane, earthquake

Rule 3: Buy a house with at least 2 bathrooms - the more bathrooms in a home the better the resale value

• Consider avoiding a mortgage broker if you expect to take the full 30 years to pay off your home since their fees are often over the life of the entire loan. Instead use a brick and mortar lender such as your bank.
  • Mortgage brokers actually tend to save you a ton of time compared to dealing directly with brick and mortars.
  • My personal strategy: I likely will always use a mortgage broker for two reasons:
    1. The time savings
    2. I plan to pay my house off very quickly so the lifetime loan fees that a broker charges will be minimized

​Rule 4: Always get a termite inspection and order a plan that covers treatment.

• ​Nothing ruins a quaint home like these guys.

2. Transportation
Rule 1: When it comes to cars, buy used. Never buy new due to massive depreciation as soon as you drive it off the lot.

• I prefer the $5-7k range with less than 100,000 miles. This appears to be the "sweet spot" for durability and cost savings. These vehicles have already taken a majority of there depreciation and you can often resell them, for cash, and recover most of your money when you are finished with it.

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Rule 2: Bike or walk more often. If you cannot bike or walk, combine your trips to save gas and mileage on your vehicle.

• Not only does it save on gas but it makes your car last longer because you are keeping the mileage down. Those little daily trips down the road to the gas station can add up to thousands of extra miles on your car every year.
• If you cannot bike or walk, consider combining trips instead of making several different small runs. Again, the miles can add up significantly over the course of a year. 

​Rule 3: Shop around for more affordable car insurance.

• ​I am amazed how simple it is to save money by calling around, yet nobody ever does it. Make the call.​ Don't push it off any longer.
• If you like the plan you have, consider raising your deductible as this will lower your premium. Plus, if you buy a vehicle based on my guidelines above, parts are very affordable for vehicles in that price range and you can do a lot of the labor yourself.

3. Food.
Rule 1: Drastically reduce, or eliminate, dining out and take out orders.

• I am still a big advocate for date nights and going out with friends, but consider the choices you make. Here are some easy ways to cut back you expenses while still enjoying a night out:
  • Limit alcohol consumption - this can lower your bill by 20-50% depending on your drinking habits
  • Consider splitting an entree - my wife and I do this all the time
  • Order a salad instead of always getting the filet

Rule 2: Cook at home.

• This obviously lends to my first point, dining out less.

Rule 3: Buy in bulk. Especially buying and storing the following:

• Spices and Salt - I buy these on Amazon
• Frozen foods
• Canned goods
• Snacks such as:
  • Walnuts, almonds, pecans, cashews, etc. Buy these in bulk for cheap on Amazon.

If you happen to know you need a budget, but cannot see yourself trading in your 2-ply toilet paper for 1-ply to save a few Shekels, then focus your efforts in these three areas.

Comment below on how you have saved in these areas. 

Disclosure: This post may contain affiliate links wherein I get a commission if you decide to make a purchase through these links, at no additional cost to you.

I read and hear about too many cost-saving methods that are impractical and simply do not produce quite the return they promise.

First, figure out why you want to save money. 

Are you saving for a house? Saving for college education? Saving for an investment? Saving for anticipated expenses such as repairs or maintenance? 

Second, please realize that saving money does not have to be difficult. It also does not need to lead to massive deprivation where you use candles instead of lights (plus candles are a fire hazard).

To prove my point, here are 3 stupid items that I save real money on every single year. Results may vary.

Almonds, my number one snack food item.

I buy a ton of them. Not literally a ton, but damn close. I buy a 40 oz. bag of whole raw almonds online for less than $13.

​A typical 16 oz. bag of almonds at the store is $8. The bag I buy online is 2.5x larger but costs less than twice as much. 40 ounces of almonds would cost me over $20 at the store therefore I save about $7 per 40 ounces. I go through a full 40 ounce bag every week which means I save $7 every single week. This adds up to over $350 of savings every single year.

Actually there are two paper products to be aware of here: single-ply toilet paper and half-sheet paper towels are two game changers.

I can buy a 1000 sheet single ply toilet paper that lasts for 6 months for less than $7 at the store. Supposedly the average American uses $10 worth of toilet paper per month. By switching to single-ply TP I have been able to spend only $14 per year, per person in our household. This comes out to a little over $1 per month of TP usage. This equates to a savings of over $100 per year compared to the average American 2-ply user!

• Normally I buy this toilet paper (keep in mind I buy mine in-store so the price may differ)

Half-sheet paper towels allows me to be significantly more mindful of how much paper towel I was using. Full sheets are bullshit. Rarely do you ever need a full sheet. I cut my paper towel usage in half my first year using half-sheets. How much could this switch realistically save? I use two less rolls per week at which saves me over $150 per year. 

Using a water filter could potentially save you big money every year. If the typical household purchases a case of water every week, and bottled water is approximately $5 per case of 24 (depending on where you live), you could save $250 in bottled water every year. If you buy two cases per week, you might be able to ​save over $500 per year.

Some of these companies even claim you can save up to $1000/yr, but that's a pipe-dream in my opinion. 

There are two popular options depending on how often you want to change the filter and how easy you want your experience to be:

• Pur water filter - simplest method; fits right on your faucet; the downside is the filter needs to be changed more often
• Gravity-fed Berkey Water Filtration System - longest lasting option; stand alone water system; you put water in the top and it filters into a basin with a spigot on the bottom, it's pretty cool
  
  • I actually own an Alexapure but they are nowhere to be found right now and Berkey is one of the best brands on the market

Here is proof that even these 3 ridiculous ideas can save you serious money every year without effecting your quality of life via deprivation. 

These don't involve turning the thermostat to 45 in the winter or 90 in the summer. They don't involve biking 30 miles to work. They sure as hell don't include eating noodles everyday (just almonds).

What are 3 things that save you real money every year that might surprise fellow readers? Comment below with your answer. 

The financial independence community often demonizes the use of credit cards. The words of advice that are commonplace in the personal finance realm suggests you pay for everything in cash. Guys like Dave Ramsey even go so far as to encourage that you cut up your credit card. 

But wait, this cannot be the only way. We should not have to carry pockets full of cash around just to fit in with the financial freedom crowd. Why do I have such a problem with this "cutting up the card" advice? I will tell you why. Cutting up your credit card to avoid spending does not correct the actual behavior of overspending.

I agree, it adds friction to the process which many psychologists believe will interfere with the participation in an undesired behavior. In this illusion of self-control, you would add friction to your undesired habit as a means to decreasing the likelihood you will participate in said habit. A smoker would lock their cigarettes in a cabinet and hide the key down the block as a method for increasing friction between them and their undesired behavior.  Cutting up the card is like hiding the cigarettes. It fails to address the poor habit head on. 

1. Pay the balance, in full, every month. Do not carry a balance. According to Chris Hogan in Everyday Millionaires, the average millionaire pays there revolving credit balance in full, every month, and never carries a balance.
2. Check your balance on all lines of credit every single month.
3. Take advantage of your free annual credit report. Check this every year for errors. Trust me, you will be amazed how inaccurate your credit history can be and how it can negatively effect your score. You will be able to dispute any errors and improve your overall credit score.
4. Pay attention to any rewards calendars and be aware of any bonus periods for certain categories of spending.  For example, if you have two credit cards and one of them has extra cash back on groceries this month, then use that card for typical grocery spending (this does NOT mean spend extra just because there is a reward).

First up is credit card rewards. The fellas over at ChooseFI have a great section on their site about travel rewards and credit card rewards. Cash back, bonus points, airline miles, travel rewards and hotel credits are some of the many perks that certain cardholders can participate in with disciplined use. Without a credit card you cannot participate in these rewards. Remember however, these credit card rewards are not actually for your benefit (at least they are not supposed to be). These rewards exist to encourage spending behavior. Period. You are lying to yourself if you say that rewards will not encourage you to spend more. It will, unless you are hardcore about recognizing your spending habits and budgeting. This is why you have to "game-out" rewards and turn the tides in your favor so that you can benefit from something that was originally intended to cause you harm (in the form of overspending). 


Next up, cards can help build your credit score. To do this, you need to pay particular attention to some important factors in order to build your score:

• Payment history - Be on time and consistent.
• Credit utilization - Keep it to less than 25% utilization rate.
• New Credit/Credit mix - Different types of credit including, but not limited to: mortgage, installment loans, credit cards, etc. will improve your score.
• Credit history and length - Keep your oldest card open as long as the full balance is paid every month. 

The final credit card benefit worth mentioning is the added safeguards of carrying a credit card vs. carrying cash all the time. If you think this doesn't apply to you, think again. Lost your wallet? Just immediately call and freeze your credit card. If there was cash in your wallet, likely forget you ever had it.

Pulling out your wallet or money clip and revealing some serious paper is asking for trouble. Remember, criminals are looking for targets. If they see you at the checkout shuffling through your $100 bills to pay for a light bulb you might have an expected encounter on your way out to your car in the parking lot.

Yes, you can be both frugal and have a credit card. Just manage it responsibly and it can be an asset instead of a hindrance. Spend wisely and continue to find ways to improve your saving habits and spending behavior.

​Let me know your thoughts in the comments below. 

Some folks need more incentive than simply a lower price tag to practice frugality. Thrifty habits often come with additional benefits, aside from lower cost.

Below you will find some of the dual benefits of common cost cutting techniques. Use this as a means to continue to motivate yourself on why you chose the financial independence lifestyle.

The cost implications of this are obvious. Paying $160 per month just to watch a few games or occasionally flip on the hunting channel? Why not see if you can reduce how much TV you watch by eliminating the channels you barely watch, or even cutting cable altogether.

Some will make an argument that they get great benefit from watching a certain sports team or having access to a certain movie channel. That is entirely your business, not mine. 

What I am suggesting is seeing if truly assessing this habit from more than just a monetary cost perspective really yields a positive return on your happiness.

Remember, time is life's most precious commodity. As far as we can tell, it is a fixed commodity for all of us. Consider that, according to the BLS,  the average full-time employed American still finds enough time to watch approximately 2 hours of TV per day! Unemployed Americans watch nearly twice that at 3.8 hours per day. This is alarming! Think of all you could be doing if you reduced, or even eliminated, the TV watching habit.

Consider the following additional benefits of cutting/reducing cable, aside from cost savings:

• Additional time to finally read 
  • This one should be obvious but think about how much you can learn from all the additional time spent. Pick up a book on money. On health. Happiness. Taxes. Building a business. Pottery. Gardening. The list is seemingly endless. In my opinion, spend a majority of your time reading nonfiction to learn from the most influential individuals who have come before you!
• Find a chance to bond with family and friends
  • Look for activities to engage the family and friends that involve paying attention to one another, not the TV!
• More happiness
  • In modern times, television sells best when it is negative or causing emotional turmoil. Stressful TV series. Action packed TV dramas. Daily negative reports in the news. Think about how much your daily exposure to negative information would reduce.
• Time for exercise
  • Another obvious one. Cut TV even by 15 minutes or even just use part of your TV time to put on yoga, circuit training, bodyweight circuits, etc.
• Adherence to a healthier sleep schedule
  • The proposed benefits of better sleep are endless. My favorite nonfiction book highlighting the benefits of sleep, and how to get better quality sleep, are outlined in "Why We Sleep" by Matthew Walker

Save money on books and movies. This one actually lends back to our first idea, cutting cable. Stacking these habits would be an excellent idea for maximum benefits of the frugal lifestyle. 

There are many free events at the library. Some events at our local library include, but are not limited to:

• Learning another language
• How to travel abroad
• Learning about personal finance and income taxes
• Understanding health care coverage
• Learning how to network
• Resume building workshops
• Health and Wellness workshops
• DIY and craft courses/workshops

For those with a family, most public libraries have dedicated areas for children. This can be a great alternative for children to learn and socialize instead of watching TV or playing games on a device.

You control the costs because control the inputs.

Aside from controlling costs, think about how DIY might further impact you in the following ways:

• Learn how to become a handyman... or handywoman
  • Less dependence on others for tasks. 
  • Learning how to fix something small teaches you how it works and gives you ideas on how to maintain it for longevity.
  • Teaches you how to spend you time more efficiently and effectively (you will also have less time to watch TV if you have to change the doorknob on your front door... a win-win).
• Cutting your own hair or your spouses hair - obvious huge, recurring cost savings compounded over time. Additionally:
  • Allows you to customize your hairstyle and perfect it over time. You will be terrible at first, most likely. However, over time you will learn to perfect it and you will have reliable and consistent results, rather than relying on a stylist to "get it right" every single time you visit them.
• DIY homemade products - huge potential cost savings as you often buy in bulk. Additionally:
  • Potential to improve health as you control the ingredients
  • Customize your recipes for particular aromas
    • You can use whatever you want here. I personally use essential oils to customize the aromas and contents of everyday items such as
      
      • hand soap
        
      • deodorant
        
      • household cleaners 
        
      • air fresheners 
      • skin care

Again, as we highlight in "what is frugality", being thrifty is often of great value to those of us leading a life aimed at financial independence.

These dual benefits are an excellent way to continue to properly value our cost saving efforts beyond dollars and cents. 

The more you understand about why you have chosen frugality, the easier it will be to stay on track over the long term.

If you have anything further to add to this article, please place it in the comments below.

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Frugality is a term often used synonymous with being "cheap". However, is that really a fair comparison? 

1. Frugality arranges itself with value as the central tenet.  
So what should we value? Value your time, because there is no amount of money that buys more of it. Value your life energy, it is not an infinitely renewable resource. Value your freedom, the freedom of choice (yes, you always have a choice). Value your relationships, because this is really all that you have in this world. Value your beliefs, because nobody can take them away from you.

I admit, most of the above is more from a philosophical life perspective. Most of you are looking for the secrets to money and wealth. So what should we value from a financial perspective? From a financial perspective you should value:

• Your savings rate
• Your net worth
• Compound interest

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Saving money is one of the most important values of frugality. Frugal people differ from "cheap people" in that frugal living takes a long term view on spending money rather than a short term perspective. A cheap person has a tendency to assess the cost in a short term horizon and miss the benefits of how extra money can accumulate into significant wealth over time.

For example, avoiding the more expensive organic produce at the grocery store solely based on price is a characteristic of the cheap. A frugal individual will consider the long term potential reductions in healthcare spending of eating healthier organic produce with lower pesticide and herbicide contaminants as part of a thorough cost-benefit analysis. 


2. Frugality is also the act of gaining awareness.
Become aware of your daily routines. Assess your spending habits and scrutinize your budget. Do you have a list of things that really make you happy? If not, sit down right now and list the top five things that have the potential to make you smile everyday (do not read another word on this site if you are not willing to sit down and literally write down your five sources of potential happiness).

To become aware you need to become present in life. Become conscious about where you are directing a majority of your time and energy. This is about efficiency, not goal setting. I am not a firm believer on the traditional concepts of goal setting (which you will notice in future posts). Gaining awareness and becoming present, avoiding the torment of merely existing through life, is actually a potent wealth generator throughout life.


3. Frugality is about gaining back your freedom.
We all had it after birth, but lost it shortly thereafter. I am of course referring to our freedom. Freedom to choose and freedom to live your life according to your standards, not others.

Let us be honest, there is very little you can do in life without money. Period. At the end of the day, most people would be much better off in life with more savings and less debt. I suspect quite a bit of mental health issues would be drastically improved if just those two numbers were adjusted, meaning less debt and more savings.

Consider the correlation drawn between mental health status and money problems according to a Money and Mental Health survey:

• 86% of respondents to a Money and Mental Health survey of nearly 5,500 people with experience of mental health problems said that their financial situation had made their mental health problems worse - source
• People experiencing mental health problems are three and a half times more likely to be in problem debt than people without mental health problems - source
• 72% of respondents to Money and Mental Health’s survey said that their mental health problems had made their financial situation worse - source

Remember however, correlation does not equal causation. The survey above could just as easily mean that these folks had mental health problems long before they had money problems. Nevertheless, there is a strong correlation between mental health problems and financial difficulties, regardless of which one happened first.

Using the above findings, I would suggest that most folks who would like to improve there overall well-being take a look at their finances. If you happen to also find yourself in problem debt or financial struggles, perhaps consider if improving your financial health would make life much more tolerable.

Personally, I believe that improving debt to savings ratio- amount of debt relative to your savings- is a forceful method towards gaining back your freedom in life.

Think about what life would be like if you did not have to spend your 40's and 50's sprinting towards retirement savings. Think about how much freedom you would have if, by age 40 (or 50 - if you are older than this my statement likely will not apply), you no longer needed to save another dime for retirement because you were saving aggressively towards retirement when you were younger. You could spend these years traveling with your family, embarking on new experiences, all while likely enjoying some of your best earning years. Your children (if you have any) would like be of the age where they can also benefit from these experiences and memories as well.

So how do I gain back some freedom in my life? By examining your "Margin of Potential" against your income and your expenses. Quite simply, Margin of Potential = Income - Expenses

Everyone has a "Margin of Potential" equation. Whether your are on public assistance, or make over six figures, this equation applies to you.

However, I frequently find that most folks just take the difference between their income and expenses, and turn around and spend it anyway. That is why I call it the margin of potential. The difference between income and expenses is not saving unless you do something with it!

After calculating your margin of potential, write down the top three things that you do with that number. If saving and investing are not in the top three, we have a problem.

If you do not have a positive number when assessing your margin of potential you will likely find yourself amidst significant financial troubles. One might ask, "How could I possibly have a negative number?". Answer: credit. You can borrow your way right into misery and allow your expenses to be greater than your income (the "American Dream").

The truth is, frugality is really about making your margin of potential a positive number. Of course, one way to make this number positive is simply make more money. However, for many, increasing income is quite a bit more difficult than decreasing expenses. Decreasing expenses is where frugality truly shines. By lowering your own cost of living and decreasing the inflation of your lifestyle, you will lower your expenses and give yourself the opportunity to have a positive margin of potential.

So what will you do next after establishing a positive margin of potential? My hopes is that you will begin to investigate what using this margin can truly do for your happiness.