Frugal Living: Why Now Is The Best Time To Start

By Ray Arya •  Updated: 05/02/20 •  11 min read


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Becoming a minimalist and living frugally seems daunting to many. Some are too attached to their material possessions that letting go of them appears impossible. Others just can’t stop buying unnecessary stuff. But I can’t emphasize enough how liberating life can be once you realize that it is more than your stuff.

You are not your house, your car, your latest iPhone, or any other status symbol. You are your values, experiences, memories, and relationships. You can live frugally and still be happy simultaneously. Happiness and contentment are the highest priorities of minimalism and frugality.

The circumstances in which we live in today are clear indicators that a consumer-driven lifestyle is neither healthy nor sustainable. The stock market has crashed rapidly, people lost their jobs, and many are facing the worst time since the Great Depression in the 1930s. Hence, let’s take a closer look at why the time has never been better to start living frugally.

What is Frugal Living?

Living frugally means taking charge of your life and making smarter decisions on how to live it.

The typical routine looks like this: after school, you start to work, get your paycheck and spend most or all of it. Maybe you choose to buy your own home and go into debt. Or maybe you’re still paying back your student loan or consumer debt. By the end of the month, nothing’s left. You start complaining about money, your job, and not having enough time for things you’d like to do. Sounds familiar?

The majority of us are trapped in that rat-race. And we are supposed to stay in it until our mid-60s? Sadly this is the reality for most of us but nobody should live like that!

Frugal living is a choice to be better with material possessions, time, and money management and not spend lavishly on things you don’t need. Instead, you save and invest money to grow wealth and strive for financial independence. The long term goal is to be independent of wage income. Living mindfully, minimalistic, and frugally are the easiest ways to escape the rat race and to create a life of your choice.

How to reach Financial Independence: The Basics

1. Spend less than you earn

Live below your means, increase your savings, and put your money towards overall wealth accumulation.

2. Track your income and your spending

Understand where your money is coming from and where exactly it is going to.

3. Find ways to increase your income

Ask your boss for a pay raise or start a side-hustle. Focus on increasing your income and growing your wealth faster.

4. Increase your skill-set

Invest in yourself by learning new helpful skills and developing financial literacy.

5. Build and grow your assets

Invest very diligently in a disciplined manner in low-cost and high-quality index-funds or in other assets that appreciate over time like real estate or businesses.

6. Create multiple income streams

Build financial stability by adding more income streams to your current work. By increasing your skill-set you will find useful side-hustles that will help boost your wealth.

When are you financially independent?

You can call yourself financially independent when your assets generate enough passive income to cover your basic expenses. Passive income could come from the interests in your stock portfolio, properties that pay you rent, or from businesses that regularly pay you for holding shares.

The amount of money needed to be financially free is different for everybody. Some need millions and others a few hundred thousand dollars. This depends on your cost of living and of course on your spending habits. So if your expenses are 30.000 dollars a year, then your assets need to accumulate enough passive money to cover that amount. Frugal people try to reach financial independence faster by aggressively increasing their savings rate.

Why you should strive for financial independence

It seems much more comfortable to go the conventional way. Find a secure job and work until you’re allowed to retire. I see no problem in that as long as you’re enjoying what you do. After all, it’s your choice. But let’s face the truth. The majority are discontented and see no way out. Here’s when the easy way becomes a lifelong struggle.

Luckily there are other ways too. Living frugally helps to live a more meaningful life while growing wealth at the same time. It is a brilliant way to reach financial independence and more freedom.

Imagine what you could do when you are not dependent on a job that doesn’t fulfill you. What if you could retire 10, 20, or even 30 years earlier than the majority? Sounds like a worthy alternative, right?

Many frugal people are followers of FIRE (Financial Independence Retire Early), a movement that became very popular through Mr. Money Moustache, who retired with his wife at the age of 31. After calculating the amount they would need to retire, thy focused on saving as much as they could from their high-earning jobs.

People think that frugal people are extreme cheapskates. In reality, frugality is different for everybody. And it should always align with your values. For me, I love spending money on things that enrich my life. But I avoid emotional spending. For frugal people optimizing life quality and striving for freedom is much more important than short term pleasure.

Others take the Retire Early from its acronym too literally. But Retire Early simply means having the option to stop working. You could also reduce your hours, change your job, volunteer, take a long break, start a new project, travel the world, or do whatever fits you. That’s what this is all about. Nothing less, nothing more.

As with minimalism and counting your stuff, nobody is going to judge you for not being truly financially independent if you decide to continue working. And if yes, why care? It’s enough that you understand and make use of this concept.

Why should you start frugal living now?

Now that you are familiar with frugal living, I can finally explain why now is the best time to start. To be correct, starting in your early age would be best. Why? Simply because your money has much more time to grow in the stock market through compound interest. Additionally, you have a larger cushion to make mistakes along the way. But it’s never too late to start saving and improving your life. Here are the reasons why.

1. Financial Literacy

You might be surprised why this comes first. But considering that money is our life-long companion, the least of us gives a sh** educating ourselves about it. We complain about money, but never really talk about it. We work long hours for it but spend it carelessly. Plus, most of us are terrible at managing it. Money is energy and a powerful tool that can be used for greatness but also for useless waste. And regarding the amount of time we put into earning it, it deserves to be learned and managed wisely.

It’s time to understand how it works, and how to use it for building wealth. At least everybody should build an emergency fund for difficult times. Let’s learn to organize our finances by keeping a budget and start reading books about it. I can’t stress enough how important it is to be in peace with this topic. I hear a lot “Money isn’t everything!” but if so, why worry about it daily, why work 40, 60, or 80 hours a week for it until you’re 65? Think about it that way!

2. Financial Stability

The second most important reason would be this: stormy days can come from nowhere and hit us anytime. Having a lack of financial security during a crisis can end up in a disaster. You might have to downsize your house, find a new job, or even change your hometown.

It’s crucial to have an emergency fund to bridge a difficult period. A financial cushion for at least 6 months will give you time to figure out a plan. The first step would be cutting down unnecessary expenses and building that cushion. It’s easier than finding a way to earn more money.

3. Less Stress

Your stuff consumes you, your money, and your precious time. Time to realize that you have enough of it. You can observe that even when the country is locked down and the shops are closed, life continues.

Yes, there might be a constant itch to fill your shopping cart on Amazon with more things. But wait! Unless the stuff in your cart is essential, you don’t need to hit the order button and make Jeff Bezos even richer. Owning less reduces stress. So stop looking for more and enjoy what you already have.

4. Flexibility

As the time is always changing, throwing off non-essential stuff and living below your means provides you with more flexibility. By owning fewer possessions, saving for rainy days, and investing simultaneously, you will become more flexible for the future.

You are better prepared and can quickly adapt to new circumstances. You don’t have to panic or get under the pressure of making rushed decisions.

5. Great Opportunities in the Stock Market

Frugal people who are invested in low-cost index-funds such as ETFs are aware of the volatility in the market. History has shown that the world stock market has consistently grown by 7% annually on average over time. Thanks to the power of compound interest, investing makes financial independence achievable for anybody. It just takes consistency and patience. And it’s easier than you think.

Therefore, it is smart to invest or reinvest when stock values are down, provided that you have saved for your emergency fund of course. Consider investing during a recession as shopping at a discount. But it’s crucial to do your research and educate yourself first.

6. Self-Development

It’s always worth saving money for your big goals such as financial independence, your own home, a new business, or even a world travel.

But it’s even more important to invest in yourself, your physical and mental health, your personal growth, and in good habits. It has proven to be the best investment of all. Most frugal people are devoted to do all that.

Making yourself a better version whenever you get the chance will support your path to become financially free in so many great ways. You will develop the right mindset to make your plan work. All you need is to start now!

Closing Thoughts

Money is a powerful tool that we can use to design the life we desire. And living frugally is an excellent way to easily have more of it. Often we don’t have a crystal-clear understanding of what we want in life.

Ask yourself: What life do you want, where do you want to live, how you want to live, how do you want your family to live, what do you want to work, how do you want to spend your time if you are retired to stay productive? You need to be very specific with it. Otherwise you will end up winding in distractions.

So sit down, put the time into it, and start setting goals and figuring it out. Start now! No-one else will do it for you! Don’t worry if on your way it turns out that you want something different. It’s alright if your goals evolve until you feel that you are on the right path. At least you will realize what you don’t want and what doesn’t work for you.

Finally, never forget what are you are doing it for, your so-called “Why of FI”. Your highest priority should always be contentment and happiness. Enjoy living with less and look forward to ending up with more!

Related: Coping with Crisis and Self-Isolation & 6 Types of Minimalists


Your Money or your life: Transforming Your Relationship with Money and Achieving Financial Independence – Vicki Robin

Mehr Geld für mehr Leben: Wie Sie in neun Schritten Ihre Beziehung zum Finanziellen ändern – und früher in Rente gehen können – Vicki Robin

Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence – Jakob L. Fisker

Ray Arya

Ray is a frugal minimalist who loves to travel and live in his self-converted camper van. He writes about the benefits of downsizing, decluttering, saving money, building wealth, and the freedom that results from the power of less. is for everyone who seeks a meaningful life and is committed to contentment.

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