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Every single day of my life I have at least one conversation with someone who has a preconceived notion about what frugal living means. It seems there are an endless number of frugal living myths that are keeping folks from even attempting to learn how to save money. Believing the money myths that are floating around can be extremely dangerous to your finances if you allow them to take over how you spend. If you’re currently trying to find out how to stop living paycheck to paycheck, you’ll want to take a look at these frugal myths to be certain you aren’t getting caught up in any of them.
The danger of believing a myth about frugal living happens when you allow that myth to change your spending habits, your saving habits or worse, your entire financial outlook. When those things happen, you must realize that you’re putting your family straight in line for a financial crisis with the potential to destroy everything you’ve built. What most people don’t realize is that how you think about money can affect the money you have. It’s this reason that knowing and understanding money myths is so important.
18 Frugal Living Myths and Money Myths
Before we get into my list of frugal and money myths, I want to clarify exactly what it means to be frugal. As I wrote in my book, Six Dollar Family: From Six Dollars to Six Figures; the word frugal means economical. Knowing that, you can make the leap that a frugal person is someone who both lives and spends economically. No matter what level of frugal you are, these frugal myths will probably cross your mind at least once in your life. The more frugal you are, the more you will have to beat them back in your mind.
1. You Don’t Need a Budget
While it is true that a very small portion of people can manage their finances successfully without a budget; the majority of families need one. Having a budget allows you to direct exactly where your money is going each month. Not having one let’s your money simply be spent wherever and whenever without thought.
2. Making a budget is hard
If you’ve never made a budget before, you may be hung up on the budgeting myth that creating a budget is hard. The truth is; it’s quite easy to learn how to create a simple budget. It is only when you dig deeper into different types of budgets that it becomes hard.
If you currently have a budget that isn’t working, taking the time to learn why your budget is failing is all you need to help get your family back on track.
3. Living on a budget is hard
Another common myth about money is that living on a budget – or rather sticking to a budget – is hard. It is no harder to stick to your budget than it is to do anything else in your life. The difference between those who successfully stay within their budget and those that don’t is desire. One group wants to live financially better and one really doesn’t. You may not even realize which group you are in since both desires tend to be subconscious.
4. You should be embarrassed to live frugally
You know what? Steve and I work very hard for the money we have which means I am not at all embarrassed to do what I need to in order to save some of that money. Can that be embarrassing at times? Of course! When I’m running to the post office to pick up my 20th package of Prime Pantry coupon deals that month and the women who work there simply don’t understand; you’re right to say it could be embarrassing.
There is not a single reason to be embarrassed about saving money and in fact; I personally feel it is those who spend without thought and harm their finances doing so who should be embarrassed.
Instead of allowing that embarrassment to stop me from being as frugal as I can, I embrace it. With those women – and others – who may not understand, I simply smile and tell them I have teenagers who eat me out of house and home. Learning to embrace the embarrassment and you’ll beat this particular frugal living myth.
5. Being Frugal Will Make You Rich
Let’s get one thing straight because this budgeting myth is a huge one; while you absolutely should live as frugal as possible, doing so will not make you rich. Living a frugal lifestyle is about saving money, but the harsh truth is that saving money alone will not help you build wealth.
In order to get “rich,” you will need to learn to diversify your income. Doing things such as using a micro-investor such as Acorns, using sitessuch as Personal Capital to track your net worth and taking on side hustles to earn more money are what will help you build the wealth you are looking for.
6. You don’t need an emergency fund
We’ve talked about what some of the biggest myths about money are, but this one is one of the most damaging. The myth that you do not need an emergency fund leaves your family open for total financial destruction should the unthinkable happen. Emergencies happen everyday and if your family is not financially ready to deal with those emergencies, you will not be able to keep your head above water.
Instead of allowing this myth to control your budget, save an emergency fund that covers 3-6 months worth of expenses. Once you have done that, take the time to learn how to create a crisis budget. Having both in place will ensure you are ready for whatever life and Murphy’s Law can throw at you.
7. You will be miserable when you’re living frugally
Frugal living does not have to make you miserable. It’s quite the opposite usually. Saving money and having more in your pocket is usually quite freeing for most people. When you don’t have to worry about where the bills are coming from, you are free to enjoy your life the way it was meant to be enjoyed.
8. Frugal people never have fun
This myth about thrifty (Six Dollar Family) people is close to #7, but is not the same. While one says you will be miserable, this one states you will never have fun at all. As I said a second ago, living a thrifty life, frees you to live the way you were meant to. This means having run too! When you’re saving money, your bills are paid and you have a full bank account, you’re able to do those fun things your family loves to do!
9. You will go without what you need if you live frugally
I really don’t understand where this money myth comes from, but it is so far off the mark it isn’t funny. Going without what you need is the exact opposite of the reason you’re living frugally. Yes, you may have to wait to buy something you want, but the very foundation of a frugal life is taking care of your needs.
10. You can’t spend money if you’re frugal
It is true that the goal of living frugal is to spend as little as possible, but just because you’re frugal does not mean you can’t spend money. In fact, you’ll often find yourself spending money on higher quality items as you learn the difference between quality and quantity. It also gives you the freedom to take vacations as you can, buy higher quality clothing and more.
11. You are the only one trying to be frugal
It can be hard to scroll through Facebook or see your friends and family appear to live “high on the hog” while you’re sitting back trying to find ways to save money just to make ends meet. When you feel that way, know that one of two things is happening; either your friends are living above their means or they’re making life seem better than it is for social media. Both happen on a daily basis and both have their own dangers associated with them.
Trying to keep up with the Joneses is a great way to kill your finances. Don’t fall victim to the myth that you’re the only frugal person you know, but keep an eye out as well so you don’t attempt to keep up with the people around you.
12. You won’t struggle if you live frugally
Ya’ll there is nothing more damaging than believing a financial myth that says you won’t struggle. It may sound harsh, but the simple truth is that unless you’re a multi-millionaire, you will struggle financially at some point in your life. Believing that you can put your entire financial future on auto-pilot and that you’ll never have to worry about things again is – simply put – ignorant. Falling victim to this myth almost always leads to major financial issues in your life.
13. Frugal Living is Always Easy
If you think making the frugal choice will always be easy, you are very sadly mistaken. Sometimes, it is downright hard to make the frugal decision. When you get in the habit of thinking it will always be easy, you allow yourself to become open to financial surprises and emergencies you’re unprepared for.
14. Frugal people are always cheapskates
These days it seems as if the terms frugal, cheap and miserly are interchangeable for most people. They should not be though. As I mentioned in the beginning of this post, being frugal simply means economical. Being cheap means exactly that; refusing to spend money no matter what even to the point of harming yourself or family’s finances. Miserly could be described easiest as “Scrooge McDuck.”
It’s pretty simple to keep yourself away from titles such as cheapskate or Scrooge. How? Know when to spend money, when to buy the better product and when to save cash. Knowing how to best spend your money will keep you from becoming what you don’t want to become.
15. It is impossible to be truly frugal if you have kids
Here is another frugal myth that I just can’t understand. We all know that kids are expensive, but I’m not sure why anyone would believe a myth that says you can’t be frugal simply because you have them. Does saving money with a large family mean you will have to work harder? Of course. Does having children mean you’ll spend more money than if you didn’t have kids? Of course.
Neither means you can’t be frugal and neither means it will be impossible for you to do.
16. Being Frugal Takes Skills I Do Not Have
Having skills that you otherwise might not is a hallmark of being frugal so this is one frugal myth that is more of a half-truth than one that is plain wrong. It is true that there are certain skills you should have to save money and it is true that the more of those skills you have, the more you’ll save.
The catch is though that anyone can save money whether they have those money saving skills or not. No matter what your particular skill-set is, you can always turn your lights off when you’re not in the room, create a budget and so on. Money saving skills are great to have, but they aren’t going to keep you from saving any money at all if you are missing one or five.
17. All Frugal People are Penny Pinchers
This myth about saving money goes a long with the one that frugal people are always cheap. While most frugal folks do watch their pennies closely, not all do. For some, living a frugal life is more about not spending as much as the would if they were not watching things. For others, it’s about saving money in only one or two areas of their life. For some, they pinch and squeeze every dime they can out of every area of their budget. My point is this; just because you’re trying to live frugal does not mean you must become miserly.
My Favorite Side Hustles
Having multiple streams of income is sometimes the only way to have a fully funded budget each month. It can seem complicated to do though; especially if you’re already stretched to the limit on time.
But having multiple streams of income doesn’t have to be hard. In fact, it can be as simple as working for a few minutes a day online. Two of my favorite side hustles are just like this.
18. Most Families are Frugal Because they Must Be
Finally, the last money myth I want to address is the one that says anyone living frugally has no choice. This isn’t just wrong, it’s so wrong it’s not even in the same ball field you’re standing in right now. Most frugal people are the way they are because they want to be. They live a thrifty life because they want to keep the money they have. In fact, I am that way. My family lives comfortably enough that we would not necessarily need to be as frugal as we tend to be. We are because we recognize that when we are not frugal, we waste money. It makes no sense to us to waste money so we choose to live frugally.
Are there some who are forced to be frugal? Yes, but don’t assume that all are.