Four Frugal Life Lessons

Four Frugal Life Lessons

Four Frugal Life Lessons

Hello all.  A big part of my personal finance world is the general theme of being frugal.  The four frugal life lessons outlined below help explain the genesis behind this, my evolution toward frugality, and the path toward saving over one million dollars in ten years (as outlined in last week’s post on my Net Worth Explosion).

I’d start by saying that I grew up in a cost conscious household.  I wouldn’t say my parents were super frugal, but I was one of four boys and quite simply got my fair share of hand-me-downs.  I didn’t get everything I wanted growing up, but I felt I had a great childhood, I had what I needed and wouldn’t change a thing.  Fortunately, my wife had a similar upbringing, so when we started dating in college (and married shortly after college) it was fairly easy to mesh our views toward personal finance.

Lesson 1: Recognize Needs vs Wants

I remember when I was growing up, I would go with the store with my parents and ask for this or that and quite often the answer was “no”.  If I didn’t need that new shirt, another pair of shoes, or new jeans, I usually wasn’t getting it.  And by no means am I complaining, that is the way it should be.  It helped me recognize and evaluate needs versus wants.  This was the beginning of many financial related lessons I learned growing up.

These lessons stuck with me as I grew older.  In high school I began working part time jobs to make extra cash.  Of course my parents continued to provide for me and buy me things I needed.  I elected to work and the money I made was for my own discretionary purposes.  I thought I was rolling it in, making a few thousand dollars in the summer.

As these paychecks started coming in, I reverted back to the old lessons I learned to help me decide what to spend my new-found riches on.  I could buy the latest video game or cool new clothes, but do I need these things?  Were they worth the hard work and time I put in to earn that money?  Would these purchases meaningfully add to my level of happiness?  Are they necessary or are there cheaper or free alternatives that provide the same utility?  I recognized everything I could spend my money on were “wants”, so I ultimately deferred my consumption, and that led to Lesson 2.

Four Frugal Life LessonsLesson 2: Defer Consumption

My parents taught me the lessons of investing early and the benefit of compounding interest.  They were smart with their money.  They worked hard for it, they valued it, and they wisely invested for the future.  Watching them manage their money sunk in for me.  When you make money, you have choices.  The most basic of which is to spend it now or defer consumption and spend it later.

Quite frankly, this is the problem with materialism and consumerism which permeates throughout American culture.  Just because you have some extra money in your pocket or checking account, does not give you a license to spend it any way you want.  Rather, defer consumption, invest that extra money and have more to spend later.

This was another valuable lesson I learned growing up and I saved practically all the extra money I made in the summers.  What did I save it for?  Upcoming college expenses of course.  I didn’t know how expensive living the college life would be for me or how long the money I was making would last, but I knew college was coming and that I would need every bit of it.  This eventually led to the next lesson I learned.

Lesson 3: Track Expenses

After college, there was a general anxiety and unease that I felt about not fully understanding how much money I would have coming and going out.  I just did not know what to expect exactly.  I got a job out of college and obviously knew what my salary was, but my paycheck was a lot less after taking out tax, health insurance, etc.  And my cost of living changed as I moved and got my own apartment and was responsible for my own utilities, etc.  From this I began to understand the importance of tracking my expenses.

This was another lesson I learned growing up, but now began to realize its importance.  I saw my Dad balancing the checkbook every weekend.  This was his way of tracking the ins and outs of our family’s cash flow.  I took it a step further by tracking each expense individually, categorizing it, and tracking total expenses month by month and year by year in an easy to use spreadsheet.  This allowed me to not only track the ins and outs, but also compare my expenses over time to see how they changed and evolved.  This eventually evolved into the fourth lesson.

Lesson 4: Reduce Expenses

After tracking my expenses on a monthly and annual basis, I was better able to budget for the upcoming year which led to more closely examining my expenses and cutting out unnecessary costs without sacrificing quality of life.  This was relatively easy at first, but each year I focused on cutting more costs and used the savings to spend more meaningfully elsewhere or invest for future consumption.

Where was I able to cut expenses?  Early on it was things like a gym membership.  Alternatively, I bought a stationary bike (which quickly paid for itself) and ran outdoors.  I hardly ate out at restaurants, and when I did I looked for coupons or deals.  Alternatively, I focused on grocery shopping, packing lunches for work and making great meals at home.  For date night, my wife and I would prefer having dinner and drinks at home and renting a movie which was much cheaper than dinner and drinks out and catching a flick at the theater.

More recently we’ve cut our cable subscription, consolidated our phones (opting to use business provided cell phones for personal as well), my wife cuts my hair, we bought solar panels to reduce our utilities and many others that we’ll discuss in more detail in future posts.  These were easy lifestyle choices and ways to reduce expenses without sacrificing lifestyle.


The culmination of these four frugal life lessons led to greater and greater wealth accumulation.  I was investing the money I saved and since I started early and often, this led to our net worth explosion.  I eventually realized at my pace, I was not only saving enough to pad my retirement, but also enough to retire early.  Really early!  I hope to reach financial independence by age 35 (about 5 years from now) and retire by age 40.

The four frugal life lessons are part of The Green Swan lifestyle.  Have you led a similar path toward financial independence?  What lessons did you learn along the way?  Let me know in the comments below.

Thanks for taking a look.

The Green Swan

Work Harder, Work Smarter, Retire Earlier and Find Your Beach


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Four really good lessons Green Swan and it’s how we’re trying to live our lives. Deferring consumption is definitely what we’re trying to do at the moment – money is an exchange and we do want to exchange our money for things at some point in our life. We see it as financial independence when we can do what we want when we want 🙂 Or make an IVF baby.


Apathy Ends

I like how you use previous tracking/trends over time to slowly shape future behavior. Great technique.

Cut the cable bill…….. I don’t have it in me to do that yet

Financial Slacker

It’s great that you were able to learn these concepts from your parents. It seems like so many people don’t have much in the way of financial literacy getting passed down to them. It’s one of the things we are working on with our own children. It took me many years to start really focusing in this area, and I am hoping they start much sooner.


Yeah I agree, it’s good to start young with kids. It’s on my wife’s and my list to look more into with regards to our little one and how best to approach it. Just want to make sure we do everything we can!

amber tree

Lesson #1is the most applicable for us right now. Finding out is something is a need or a want is not always easy…The problem is that we actually have very very little needs and that a lot of times it is more a want. I find myself disguising the want as a need… A clear attention point. Especially with eating out on holiday, I have a lot of needs for a restaurant… What is wrong with using the kitchen in the holiday house?


Yeah I agree, there is some grey area in there. Need to try to be as honest as possible with yourself, and if it is truly a need can you find a cheaper alternative? Thanks Amber Tree!

Stefan - The Millennial Budget

These are four great seasons you have posted! I think #1 is definitely the hardest. Sometimes we feel like our wants are needs! We are all guilty of that and controlling our impulses can be very hard. Once habits are established everything becomes easier though.

I also do not plan on getting cable for two reasons: you can get anything online for free these days and I have a friends cable password which means free cable :p Looking forward to your TWO post a week.


Developing positive habits is a just and definitely helps get you on the right path.

There are some round about ways of using friends password etc which the networks really haven’t shown much of an interest to dissuade. You’d have to think they could tell by the different geography of your friends and your use of the password yet they don’t do anything… Not going to publicly endorse but it’s out there and easy to do.


It sounds like cutting lifestyle has been a big factor in your success, and ironically, it has increased your happiness. It is too bad more people do not grasp this principle.

I am looking forward to your article on Thursday. I am attempting to build up the courage to cut the cord myself!


I have to admit a bit of jealousy when it comes to the positive financial role models that you had growing up. Yes, I made my own choices, but often wonder if they would have been better if someone had shown me the power of applying these lessons at an early age.

At least I’ve learned the error of my ways and have started fixing our finances. Besides, everything happens for a reason, right?


It is interesting to ponder “what if” but I agree with what you said that everything happens for a reason. I tend to believe that is the case. Live and learn and be better as a result. Good for you for getting back on the right path. Optimism can go a long way!


Ah the difference between wants and needs. My sister teachers financial literacy to little kids and they sometimes have trouble with that…TV is a need right?? Unfortunately, many adults still haven’t learned the difference. I was fortunate to have frugal parents and their frugality has been ingrained into me…and my dad also encouraged me to invest at a young age.


Yeah, adults do struggle with that still. I wonder though how much of it is a struggle with determining a need vs want and how much also is self-discipline. It can be a little bit of a gray area I suppose.

Rob @ Money Nomad

Fantastic tips! I agree that one of the biggest challenges people face is the needs vs wants. Once you understand that you’re well on your way. And the crazy thing is, it really doesn’t have a whole lot to do with the financial status you had as a kid (as discussed in Millionaire Next Door). However, I do think the degree in which money was talked about at home plays a big role in it.

Thanks for sharing your 4 tips and hopefully in a few more years I can be at your million dollar mark as well! 🙂


Yeah, that ties into what Andrew from Living Rich Cheaply said as well…mentioning how beneficial it was growing up in a frugal family and his Dad teaching him investing. Those lessons at a young age are very valuable. And now a Dad myself, I’ll have to do my best in that regard and also be a good role model.

Good for you, I will look forward to hearing when that day comes. Keep at it!

Thias @It Pays Dividends

Great list! If someone is able to get the idea of needs vs wants ingrained in them early, they are so much more prepared for the life ahead. While I didn’t have the best money mentors growing up, my parents did teach me that if I wanted something that I needed to save up for it and that is something that has stayed with me through today.


Absolutely. I remember my parents having me save up for stuff all the time. Most often by the time I actually had enough saved, I didn’t really care to have that item anymore and rather keep watching my savings get bigger and bigger.

Kalie @ Pretend to Be Poor

Your financial story sounds a lot like mine. I was fortunate to learn the difference between wants and needs and how to delay gratification from my mother. I think there is a lot of power in frugality and being able to limit expenses to what is actually worth it to you. That’ll be a large part of what fuels our FI.

Mrs. PIE

It’s fantastic that you learned so much from your parents. While my parents are not investors in any shape or form, they taught me the value of budgeting and planning. They both were kids during WW2 and lived through rationing and lack of resources. A lot of that rubbed off on me


Yeah wow, I can’t imagine that, but definitely valuable lessons to learn in formative years. Have you ever written a post about that? I’d be interested in hearing more.

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