100 Words On: Why Frugality Has Its Limits

The main benefit of frugality and saving is they’re good habits that lay a strong personal finance foundation. That being said, the frugal lifestyle definitely has its limits.  Although scrimping and cutting corners can result in significant savings, at some point, it simply becomes impractical to cut anymore. Meanwhile, those trying to save their way to prosperity will sadly discover that it’s a painfully slow process.

The bottom line: Frugality has its merits to be sure, but for those looking to build wealth or get out of debt as fast as possible, increasing income is a much better strategy.

Photo Credit: coneslayer


  1. 1


    I find a good way of living financially better is to spend less than you earn. Your saving will increase slowly but surely. And just enjoy life with what you spend on the necessities.

    • 2


      I agree. When it comes to cutting costs, I’m careful not to do anything that will reduce my overall quality of life significantly. You can take frugality too far. There is a fine line between holding on to your cash and living a miserable life.

  2. 3


    I’m right there with you on this Len, I’ve written a post or two on the topic as well. Frugality can be the equivalent of being on a permanent diet.

    And there’s a complication with it that might be missed by many. Back when you could count on not only employment for life, in a job that paid a living wage WITH full benefits AND predictable increases in pay, it was possible to cut corners and save your way to prosperity.

    Here in 2011, jobs and long term employment are no longer certain, benefits are being cut, and raises–if you get them–are paltry. Against that backdrop, frugality has become more of a survival strategy than a wealth building one.

    In this environment, the only way to improve your lot in life is by increasing income, and that’s an entirely different strategy, requiring a very different mindset. The mindset of increasing income is offense, the mindset of frugality is defense. It’s hard to increase income when your financial mindset is set on defense.

    Live within your means certainly, but thinking that frugality is the answer can be counter productive.

    • 4

      Len Penzo says

      “The mindset of increasing income is offense, the mindset of frugality is defense.”

      I love that, Kevin! I may have to borrow that one day (I’ll be sure to attribute it to you, of course!)

  3. 8


    Frugality can be very similar to a diet. If it is a fast or very difficult, you will find ways to stray. If you embrace it as a way of life, you will continue the habit. Increasing income is just part of the equation. If you increase income and still spend more than you earn, you have a problem. Some of each is the answer.

  4. 10


    So many people try to cut expenses to the bone when in reality they have an income problem. It’s difficult to watch people struggle with their budget and money management skills when an extra few bucks in their paycheck would solve everything (and isn’t as hard to find as people imagine).

    • 11

      Len Penzo says

      Joe, could you guess that I posted this in honor of yesterday’s Stacking Benjamin’s podcast roundtable? 😉

  5. 13


    I was lucky to have a money mentor in the shadows my whole life. However, because she was frugal to the extreme, I had a hard time listening to her wise advice because I knew that I could never be as extreme as she was in her money-related behaviors.

    I stuck my head in the sand for a long time, but when I realized that I could take some of her advice and apply it in a way that worked for me, things started happening.

    It has taken me far longer to achieve any measure of wealth, but it has happened and I’ve enjoyed my life at the same time. It’s possible :)

    • 14

      Len Penzo says

      I hear ya, Ree. I know some people who can be frugal to a fault. Still, it’s better than spending more than we earn!!

  6. 15


    Big difference between being careful and a scrooge, I always try to buy the best i can afford because it will last much longer. Quality instead of quantity(having to buy it again and again whatever “it” is) sin going cheap will probably mean you need to buy it again and again, some things cannot be avoided but if it lasts 10 years good for me!!

    • 16

      Len Penzo says

      Great point, Daryl. Most people are so conditioned these days toward finding the best price that they forget that paying more for quality can be the smarter strategy. Not always, but often.

  7. 17


    I try to do both…sort of. As a member of a 2-career couple I am limited because I am not particularly willing to move out of the area. So I still look for better paying opportunities, but right now, flexibility is more important. Then again, I don’t have an income problem.

    I do, however, counsel the young engineers in my company. One: don’t spend it if you don’t have it – this means bringing lunch, being careful of the kind of car you buy, etc. Two: more income. I have been pretty successful at getting the younger guys raises over the years. Occasionally one will complain about his salary (which, for the area and the job, is fair.) I will suggest that “yes, you can get more somewhere else, but you will have to leave Santa Barbara to get it. I recommend that if you want to further your career, that you do that eventually. Remember, a $10k raise when you are 26 can translate to a LOT more money over your lifetime.”

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