Why Frugal Living Doesn’t Work (And Might Be Making You Poorer)
You need to know where to draw the line
⚡You can find this article in video form here.⚡
So, let me guess… You’ve stopped going to Starbucks. I know I did.
You cut your own hair with kitchen scissors. I do that too, and they’re not even kitchen scissors, I think they’re paper scissors. You wash Ziploc bags to reuse them. I haven’t done that yet. You’ve spent three days comparing toothpaste prices. And you’re very proud of that spreadsheet tracking your $0.75 savings at Aldi.
Frugal living, right? The holy grail of responsible adulthood.
Congratulations. You’ve successfully optimized your life for cheapness. But let me ask you something. Are you rich yet?
Has skipping the $5 latte bought you financial freedom? Did downgrading to generic toilet paper help you retire early? Is living like a Victorian peasant finally paying off? No?
Well, surprise — because I’m about to tell you the truth nobody wants to say out loud: Frugal living doesn’t work. At least not the way people think it does.
Sure, it feels productive. You get little dopamine hits every time you save. You think you’re being financially smart by agonizing over coupon codes like you’re deciphering the Da Vinci Code.
But at the end of the day, clipping coupons while ignoring income is like rearranging deck chairs on the Titanic. You’re saving pennies while ignoring the dollars.
Frugality Focuses on the Wrong Side of the Equation
You can only cut expenses so far. Let’s say you’re making $3,000/month. You budget like a monk. You eat beans. You don’t see daylight. Maybe — maybe — you save $200.
But if instead, you negotiated a raise, freelanced on the side, or launched something even remotely profitable? Boom — $1,000+ a month.
You just out-saved every frugal guru in a week. Income is unlimited. Penny-pinching is not. Frugality focuses on saving more instead of earning better. It’s like trying to win a race by walking backwards slower than the guy next to you.
Frugal Living Burns Time Like It’s Free
You know what’s funny? People will spend 20 minutes researching how to save one $1.50 on detergent, but won’t spend 20 minutes learning how to increase their income. You spend hours looking for coupons, driving across town to save twelve cents per gallon on gas, or hacking your way into three layers of cashback just to get $1.19 on a $20 purchase.
Meanwhile, that same time could’ve been spent building a freelance skill, starting a micro-business, or studying an investment strategy. Or even resting so you can have energy to work smarter later.
Being frugal isn’t free — it just shifts the cost to your time and energy.
Frugality Doesn’t Lead to Wealth — Just Less Poverty
Yes, living below your means is a solid step one. But if your entire plan is to never want anything, never spend, and never invest , then you’ve just building a very bland, very limited life.
Frugal people don’t always become wealthy. They just become excellent at tolerating scarcity.
You can be the best budgeter on the planet and still live paycheck to paycheck — you’ll just be doing it in secondhand clothes while proudly tracking every nickel like it’s a rare Pokémon card.
I have nothing against second hands clothes, I wear them all the time, but they’re not the secret to wealth.
Frugality Creates a Scarcity Mindset That Blocks Abundance
Frugality tells you to think smaller. To shrink. To settle.
You start believing there’s never enough — and then you make choices out of fear. You avoid investing in yourself. You pass on opportunities because they “cost money.”
You undercharge for your work. You refuse to outsource. You think buying a course is a scam but have no problem buying off-brand Pop-Tarts. Don’t worry, I don’t have a course to sell you. I’m just saying.
You cannot shrink your way to wealth. You grow into it.
Frugality Doesn’t Scale
Let’s say you save $300/month by being ultra-frugal. That’s $3,600 a year. Impressive? Sure. Respectable? Kinda. Life-changing? Not even close.
Now let’s say you learn a high-income skill and increase your earnings by $1,000/month. That’s $12,000 a year — and it keeps growing.
Frugality hits a ceiling. Income does not. Wealthy people aren’t obsessively frugal — they’re obsessively strategic. They don’t ask “how do I save money?” They ask, “how do I make money work for me?”
Being Cheap Can Actually Cost You More
Buying low-quality stuff, skipping maintenance, avoiding professional help — all these “frugal” moves end up costing you more later.
You bought cheap shoes? Congrats. Now your back hurts. You skipped the dentist? Amazing — now you need a root canal.
You didn’t get insurance because “it’s expensive”? Enjoy that $4,000 emergency bill. Being cheap today is a great way to become broke tomorrow.
Frugality Can Damage Your Mental Health
There’s a fine line between living intentionally and living in constant deprivation. Constantly saying no to yourself? Always feeling guilty for spending a dime on joy? That’s not “discipline.” That’s financial trauma with a minimalist filter.
Burnout is real. And financial anxiety isn’t solved by going without — it’s solved by building capacity. Want a healthier mindset? Try spending on things that bring you real returns — mentally, emotionally, and financially.
The Wealthy Don’t Obsess Over Pennies — They Optimize for Leverage
You think the guy managing a ten million dollars $10M portfolio is clipping coupons? Wealthy people don’t care about saving $0.50 on granola bars.
They care about leverage — time leverage, capital leverage, team leverage. They pay for speed. They invest in scale. They buy back time. That’s the secret. If you want to get rich, stop acting like someone who’s broke with a coupon addiction. Start thinking like a strategist.
Frugality Might Be Holding You Back from Building Wealth
Let’s talk opportunity cost. Every minute you spend hunting for pennies is a minute you’re not using to build a business, learn a money-making skill, network with people who can open doors, improve your health, energy, or focus.
If frugality is your full-time job, it’s time to fire yourself. You’re not saving money — you’re wasting your potential.
Being Financially Smart Is Not About Avoiding Spending — It’s About Spending Well
There’s a huge difference between being frugal and being financially intelligent. Frugal says: “How do I avoid this cost?” Smart says: “If I spend here, what’s the ROI?” Frugal avoids hiring help.
This is me, this is definitely me, avoiding to hire help, although I should.
Smart people build teams. Frugal skips the course. Smart people upskill and 10x their income. Smart spending leads to wealth. Frugality just leads to fewer receipts.
What Actually Works Instead of Frugality
Here’s what moves the needle:
— Increase your income through better skills, a better job, or a business.
— Automate your saving and investing.
— Learn how to use money to build assets, not just avoid expenses.
— Optimize time, not just cost.
— Spend with intention, not guilt.
— Focus on scale, not sacrifice.
You don’t need to live in a cave and wash your socks with rainwater. You need a plan that allows you to live better, not just cheaper. So if you’ve been trying to coupon your way to financial freedom — it’s time to stop.
Frugal living might feel like discipline, but what it really does is distract you from the bigger picture. Don’t focus on shrinking your expenses. Focus on expanding your capacity. Don’t live small — live smart.
These concepts should be taught in high school.
It's about control. It's a mind-boggling psychology. I have true sympathy for those in dire financial straits and am pretty strict about my own spending but not to the point of rewashing ziplock bags or skipping dental cleanings. I did invest in good hair trimming scissors and high-quality shampoo and cut my own hair because I've been shamed and then over-charged one too many times by awful hairdressers.
I know well-off relatives who sit in chairs with springs in them, sleep on wooden boards instead of replacing the mattress, won't cut the grass (lawnmowers are too expensive!), spend $30 a week on groceries from save-a-lot, literally let staph grow in their house instead of clean or replace stuff (cleaning supplies cost money!), all to save a buck. For what? They don't give presents, donate to charity, or travel. It all sits in a bank?? Then if they need to sell their house it's probably depreciated in value since it's in such an unlivable condition??
I saw this post on reddit today about some dad complaining because their kids were complaining that he set the AC to 80 F and he like timed their showers and made them turn off every light when leaving a room (which actually decreases light bulb life FYI). The takedowns were great. Those who impose their frugality on others for no legitimate reason are nitpicking, nagging, bossy. They are fine letting others sit in discomfort to save a few bucks. That's it a few bucks that don't result in any magical pot of gold at the end either, as you pointed out.
Again, spending money on things like good quality shoes, mattress, health care, education, your home, food, are good investments that yield both tangible and intangible benefits over time.