The Psychology Behind Frugal Living: Part 2


The Psychology Behind Frugal Living is a mini-series that explores the psychology behind how frugality can help you live the life of your dreams, how to overcome fear of what others think of your frugality, and how to develop frugal habits effectively.

In Part 1 of this series, I explained that most people aren’t living their ideal life because they don’t have the financial means to do so. Their time is consumed by a job they probably aren’t ecstatic about, and they simply don’t have enough savings or another income stream to feel comfortable transitioning to part-time work, starting their own business, or quitting work entirely to pursue their true interests.

For most people, the quickest solution to this problem is to build up savings through living more frugally. By developing frugal habits, it’s possible to start saving a huge chunk of one’s income and build up a significant stash of money in a short amount of time to allow for a transition to a new lifestyle.

But there is one huge barrier that will prevent most people from actually embracing a frugal lifestyle: fear of what others will think. 

Think about it. If you start packing your lunch each day for work instead of blowing obscene amounts of money on eating out, what will your coworkers think of you? If you downsize your house, what will your old neighbors say? If you trade in your new car for an older model, what will your friends think? If you start selling all the crap around your house you never use, how will your parents react when they come to visit?

Living more frugally actually isn’t difficult. But explaining why you’re living differently to your coworkers, friends, and family is hard. It’s uncomfortable. It’s much easier to stick to your normal way of living, not disrupting the flow of everyday life.

But normal doesn’t get you a life of freedom. Normal doesn’t give you the financial means to pursue your ideal life.

So how can you overcome this fear of what others will think and embrace frugal living to the fullest?

I’m glad you asked.

Three Types of People You’ll Deal With When Embracing Frugality

There are three types of people you’ll deal with once you embrace a frugal lifestyle, and here’s how you can overcome the fear of what all three will think of you.

Type 1: The Ones That Matter

The first type is obvious: your family.

Your family (specifically your parents and siblings) is the number one hindrance that will prevent you from living frugally.

There’s a couple quirky phenomenons at play in most families that make it particularly difficult to live in ways that are different from them:

1. Most people want to make their parents proud, or at least have their parent’s approval/support.

Because of this, most of us tend to live a similar lifestyle as our parents. If we grew up in a high-income household surrounded with plenty of material goods, we’ll likely develop this type of lifestyle over time as well because it was our baseline growing up. It was normal for us.

There’s also a popular belief that “kids should do better than their parents” in terms of quality of life. This belief holds good intentions, but unfortunately doing better than our parents often translates to having more, bigger, shinier stuff than our parents. This leads to a life filled with stuff, but often lacking in financial health. 

2. Most siblings subtly compare their lifestyles to each other, whether they’re aware of it or not. 

In addition to seeking our parent’s approval, we have an affinity for comparing our lives to those closest to us: our siblings. In a wonderful TED talk on the philosophy of success, Alain de Botton explains that most of us measure “success” by how we compare with those most similar to us in terms of upbringing, i.e. demographics, socioeconomic status, and opportunities available to us.

It just so happens that the people most similar to us in upbringing are our siblings. For this reason, most of us keep a subtle eye on how well our siblings are doing, what type of income they’re earning, and what type of life they’re leading.

So how on earth can we start living a frugal, not-so-ordinary lifestyle, if our parents and siblings are living radically different from us and we care so deeply about what they think?

The answer is simple: your family cares about you, not about the size of your house, the model of your car, your salary, or the stuff you own. When you make a decision to live frugally and start making decisions that appear abnormal, it’s natural for your family to question you. But this is just a sign that they care. If they didn’t care about you, they wouldn’t bring up your new frugal tendencies. They’d just let you drift off into Frugal Land to live with all the other frugal weirdos without lifting a finger.

The best way to field questions posed by your parents and siblings is to reassure them that you’re on the pursuit of happiness, not the road to crazy town. To take a page from The Minimalists, try this technique when being questioned:

Family member: Are you OK? Why are you (selling your car, downsizing your home, eating out less, selling your crap, moving to southeast Asia) all of a sudden?

You: You care about me, right? And you want what’s best for me, right?

Family member: Yes, of course.

You: Well, I think doing this will improve my life and make me happier. I know it seems weird, but let me just give this a try.

This reassures your family member that you’re just pursuing happiness, not losing your mind. And because your family likely cares about you more than anyone else, odds are they’ll completely understand and support you in your new frugal ways.

Type 2: The Ones That Semi-Matter

The second type of person you’ll have to deal with when you choose to adopt new frugal habits are what I like to call the ones that “semi-matter”. These are the people you would invite over to your house for dinner. They’re close friends. 

Developing new frugal habits will semi-effect these people. Instead of going out to dinner with these people like usual, perhaps you start having potluck dinners to save money. Or instead of going shopping on the weekend, you start inviting them to go on hikes. Or instead of hitting the bars you might suggest camping, having board game nights, or attending free local concerts. 

When you explain to these people that you’re trying new ways of living to free up your time and save more money, the ones that actually matter will completely understand. They’ll support you and even join you on your low-spending  activities.

The ones who are turned off by this newfound sense of frugality and no longer want to hang out are the ones who were more interested in the social event itself, rather than you.

In short, your true friends worth keeping will stick around once you start embracing frugality. They may even join you to some extent. The best way to deal with the ones who don’t want to stick around is to let them go. 

Type 3: The Ones That Don’t Matter

The last group of people you’ll have to deal with are what I call “the ones that don’t matter”. This includes anyone that no longer wants to associate with you once you start embracing frugality.

This is the coworker who makes no effort to talk to you once you stop going out for lunch with her. It’s the neighbor who no longer wants to associate with you once you sell your new car. It’s the friend that stops talking to you once you quit bar-hopping with him every weekend. It’s the buddy from high school who stops hanging out with you once you sell your boat.

These are the people who act differently around you or stop interacting with you entirely once you start living more frugally. If your relationship with these people changes simply because of your spending habits, they’re not worth associating with anyway. 

Once you embrace frugality, these people will seemingly disappear from your life. But this isn’t something to worry about. Do you really want someone in your life who is there solely because of what you spend money on? The best way to deal with these people leaving your life is to simply let it go. You might notice that a certain amount of stress and pressure to spend on certain things also begins to drift away once you no longer associate with this people.

Just Remember…

If some of this advice seems harsh or extreme, just remember: this is literally your one shot at life. It’s better to spend it in ways that make you genuinely happy than attempting to please people around you and live in ways that aren’t true to yourself.

Embracing frugality doesn’t have to be scary. The people who care about you will support you in your frugal ways. The ones who don’t support you or no longer want to hang around with you weren’t worth keeping anyway.

For tips on how to start forming frugal habits, stay tuned for Part 3… 

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2 Replies to “The Psychology Behind Frugal Living: Part 2”

  1. Thanks for sharing your extended thoughts on frugality, Zach. It’s true that siblings silently compare each others success. I try my hardest not to do it, and I really try to put my FI chasing to the side so I can be friends with them as individuals.

    I also like that you said the “In short, your true friends worth keeping will stick around once you start embracing frugality.” – it’s 100% true. Some will understand and some will constantly pressure you or fade away.

    Some great pointers for me because I do sometimes end up buying lunch out with friends. Looking forward to part 3!

    1. Thanks for the kind words, Graham! And you nailed it – “some will understand and some will constantly pressure you or fade away”. The people worth keeping in life don’t care how you spend your money, they associate with you for who you are as a person. If it just so happens that you’re trying to live more frugally to save money, they’ll completely understand.

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