Here at Be The Budget, we spend a lot of time talking about thirty living. Whether we’re discussing how to trim your fixed expenses, avoid impulse purchases, or just find creative ways to spend less money, thrifty living is one of our favorite topics.
That said, for many people, the term ‘thrifty’ is misconstrued, and carries a slightly negative connotation. So, before we go much further, I’d like to address an important question: is being thrifty a good thing?
Yes, being thrifty is a good thing. In fact, there are a number of benefits to living a thrifty lifestyle. For example, thriftiness can help you save more money, improve your financial stability and get out of debt, all of which, in turn, may lead to a lower level of financial stress.
So, with all that in mind, whenever somebody describes you as ‘a thrifty person’, you should take it as a compliment, not an insult.
But, what exactly does thrifty mean, and what are all the benefits?
Well, keep reading, because that is exactly what we’re about to discuss.
Let’s jump in!
What Does Thrifty Mean?
Ok, so we’ve discussed the fact that being a thrifty person is a good thing, but before we take another step, I want to make sure you have a clear understanding of what it actually means to be thrifty.
Does it mean you like to shop at thrift stores? Believe it or not, you can be a thrifty person without ever stepping foot into a thrift shop.
Is thrifty the same thing as cheap? No, cheap and thrifty mean two different things. The term ‘cheap’ refers to somebody that is unwilling to spend money, even at the expense of others. The term ‘thrifty’, on the other hand, refers to somebody that is careful to avoid waste in their financial life, without sacrificing generosity.
So, if it doesn’t just mean you shop at thrift stores, and it isn’t the same thing as cheap, what does thrifty actually mean?
In the proper context, the word ‘thrifty’ is used to describe a person that manages their resources — in particular, their money — carefully, and without waste. Moreover, thrifty people tend to avoid spending money in favor of achieving their long term financial goals faster.
7 Reasons Why Being Thrifty Is A Good Thing:
Seeing how this article is written by a thrifty (or frugal as I’m more likely to call it) person, I can tell you that there are quite a few benefits to living a thrifty lifestyle.
Now, to be clear, it might not be a super luxurious way to live (unless, of course, you consider driving a 2005 Toyota Camry to work luxurious). It might not even be the life that you always dreamed you would have as an adult.
But, when it comes down to it, thrifty living has a lot of awesome benefits. And despite any of your preconceived notions, I have found it to be one of the most rewarding ways to live.
On that note, here are 7 of the top reasons why being thrifty is an incredibly good thing.
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1. Increases Your Financial Margin
If you’re unfamiliar with the term, ‘financial margin’, it refers to the gap between your expenses and your income. And when it comes to your financial life, the more margin you create, the easier everything becomes.
For example, if you have a ton of financial margin, and you are hit with an unexpected expense, it is much easier to pay for it. On the other hand, if you have very little financial margin (i.e. you spend almost all the money you make), and you run into an unexpected expense, it can become extremely difficult to make ends meet.
A lack of financial margin is why so many people live paycheck-to-paycheck.
And here’s the thing, if you want to create financial margin, there are only two ways to go about it:
- You can earn more money
- You can reduce your expenses by living a more thrifty, frugal lifestyle
Now, if you follow this blog, you know that I am a fan of attacking your financial margin from both ends. In other words, I highly recommend you work on building your income, as well as reducing your expenses. I mean, if you really want to widen that gap between your expenses and your income, why wouldn’t you do both?
All that said, earning extra money is something that tends to take a little bit of time. Therefore, the quickest way to increase your financial margin is to get thrifty, and cut those expenses.
2. Helps You Save And Invest More Money
One of the biggest reasons why being thrifty is a good thing, is that it can help you save a lot more money.
In simpler terms, you know that financial margin we just talked about?
Well, whenever you have a gap between your expenses and your income, it also allows you the opportunity to save and invest more money. And the best part is that the more you save and invest, the wider your financial margin becomes.
It is a fantastic financial cycle that will help you escape any kind of financial struggle in your life, stop living paycheck-to-paycheck, and finally put your money to work for you. And it all starts with a little bit of thrifty living.
Other Posts About Saving Money:
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3. Reduces Stress
For years now, we have been hearing experts talk about the harmful effects of stress in our lives. From worsening physical ailments, to depression, and even the destruction of our relationships, the less stress you have in your life, the better off you’ll be.
And one of the leading causes of stress in America, is money.
Here’s the good news: if you want to reduce your stress, living a more thrifty lifestyle is a great way to do that. By increasing your financial margin, saving more, and putting some distance between you and your reliance on your next paycheck, thrifty living can lead to some serious stress reduction.
I don’t know about you, but just about anything that causes me to stress less about money is alright in my book. Seriously, that’s the entire reason my wife and I stopped using credit cards, got out of debt, and keep our monthly expenses to an absolute minimum.
It might seem a little counterintuitive, but adopting a thrifty lifestyle can have a seriously beneficial impact on your stress level.
4. Changes Your Financial Perspective
One of the major reasons why being thrifty is a good thing, is that it can completely change your perspective on your financial situation.
For instance, when my wife and I first got married, we were deep in the throes of trying to “keep up with the jones’.”
We both had hefty car payments, we were carrying a good amount of credit card debt, we were spending beyond our means, and barely making ends meet. To an outsider, it probably looked as though we were doing just fine. And yet, behind closed doors, we always felt like we were falling behind.
Somebody always had a nicer car than us.
A ton of people we knew were buying homes that we knew we couldn’t afford. And most of those didn’t even come close to the cost of all the expensive homes we were looking at online. We were trying to satisfy our financial desires by spending more money, and in so doing, we were moving in the opposite direction.
It wasn’t until we decided to get thrifty, get out of debt, and cut our expenses to the bone that we realized how misguided our financial perspective really was.
I’m just happy we decided to get thrifty when we did. Had we not decided to do so, I get a little queasy thinking about where we might actually be.
Put simply, living a thrifty lifestyle helps you focus on what really matters in life, and stop focusing so much on the world around you. After all, when you spend your time focusing on your own financial situation, there isn’t much room to compare your life to the world around you. And let me tell you, it is a breath of fresh air.
But you won’t know what I’m talking about until you actually try it.
5. It Keeps You Focused On Your Goals
Along the same lines as changing your financial perspective, when you live a thrifty lifestyle, it is much easier to stay focused on your financial goals. I mean, it’s hard not to think about your financial goals when you’re avoiding any waste in your financial life.
Think about it like this, whenever you do something thrifty, whether you’re shopping at the dollar store, couponing, or just holding yourself back from spending money on something you don’t need, you are effectively reminding yourself to stay focused on your financial goals. And when your thrifty lifestyle actually leads to financial progress toward your goals, it causes you to focus even more.
Thrifty living can have a profound effect on how well you stay focused on your financial hopes and dreams.
6. Can Help You Get Out Of Debt
I eluded to this earlier, but one of the most important things my wife and I have ever done in our financial life, is get completely out of debt. And if it weren’t for thrifty living, there is no way we could have done so as fast as we did.
In fact, if you are in any kind of debt, I can’t encourage you enough to adopt a thrifty lifestyle, and use every spare penny you make to escape from debt. The thriftier you get, the sooner you will become debt-free. And the sooner you become debt-free, the more financial opportunity and freedom you will have to live the life you’ve always dreamed.
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7. Increased Generosity
One of the least talked about reasons why being thrifty is a good thing is that it increases your opportunity to be generous with the money that you make.
After all, in order to be generous with your money, you need to actually have some extra money to give.
Now, this goes back to the whole financial margin thing. The more of a gap you create between your expenses and your income, the more freedom you will have with your money. And with that freedom, comes the ability to give more than you ever thought possible.
I have a very positive view on thrifty living. While some people might consider it restrictive, or even misinterpret it to mean the same thing as cheap, I have found it to be one of the most positive financial behaviors you can adopt.
So, whether you’re trying to get out of debt, save more money, invest, or give generously, I highly recommend living a more thrifty lifestyle, because, honestly, being thrifty is a very good thing.
Are you a thrifty person? If so, be sure to comment below with some of your favorite thrifty-living tips and tricks. I’d love to hear all about them!