This Would Make Ben Franklin Cry: 5 Frugality Myths Americans Believe

Now, more than ever, understanding how to handle your money and actively practicing frugality is vital.

In fact, I am going to make a bold statement. Ready!?

Frugality is the single most important trait in an individual who seeks to attain financial independence. 

Take a look at this popular FI expression:

Passive Income > Expenses

The best way to work both sides of this equation? By actively practicing frugality in as many aspects of your life as possible. When expenses are reduced, your savings rate increases, which in turn allows you to invest in assets that can provide you with a passive income.

Have people succeeded without being frugal? Absolutely! Look at Grant Cardone and Donald Trump. Both successful men have a history of focusing solely on increasing income as opposed to reducing expenses— yet both remain financially independent and live extravagant lifestyles. 

Politics are not my area of interest or expertise, so we will not talk about it here, but look at Trump and Cardone’s infamous reputations. Their followers are split amongst those who worship them and those who detest them.

Famous ‘Frugalists’

Moving on, let’s take a look at some of the most famous figures who have shown how to value frugality. There have been many throughout history, but I am going to focus on two: Ben Franklin and Warren Buffett.

Ben Franklin was essentially the founder of the FI movement. Franklin created a printing business in 1728 that went on to become the first franchise recognized in history. He eventually sold half of his business and amassed enough passive income through the other half that he was able to retire at the age of 38. In his prime Franklin was very wealthy — yet, he still spent money as if he were poor. The financial freedom Franklin achieved from his business allowed him to pursue other passions and follow his drive to experiment and learn, resulting in the invention of a few little things you may have heard of: electricity, bifocal glasses, and the lightning rod. 

Related: A Case Against Frugality: Why Pinching Pennies is NOT the Best Path to Wealth

Warren Buffett, one of the world’s richest men, has amassed a net worth of over $113.2 billion (2022) by serving as the stock market’s best investor for the past 50+ years. How has the stock market enables Buffet to amass such incredible wealth? The Snowball is an awesome book that illustrates just so, and the title says it all. By keeping spending significantly lower than expenses and investing the difference, Buffet rose to riches. With compound interest and above-market returns, Buffett’s investments amassed over time into the incredible wealth he has today. 

S you tell me : Who would you rather be associated with? Grant Cardone or Warren Buffett? Donald Trump or Ben Franklin?

With this article, my goal remains to create more Ben Franklins and Warren Buffetts in the world. The first and most important step is frugality.

Frugality might seem like a sacrifice, or an inconvenience. The negative connotation is largely due to the five myths we’ll discuss below. So let’s get to debunking th allem.

Let’s go!

Myth #1: Frugality makes you “cheap”

I previously wrote an entire article on this topic, called “The 4 Stark Differences Between Being Frugal and Cheap.In the article, I debunk the relationship between frugality and “cheapness”. Rather than repeat myself, I’ll leave a summary of the three main differences here:

  1. Cheapness is saving money at the expense of others, while frugality is saving at your own expense.
  2. A frugal person recognizes the necessity of spending more on things of value, while a cheap person tries to  save at all costs. 
  3. A frugal person values time, while a cheap person values money.
  4. A frugal person seeks value. A cheap person looks for the least expensive.

In other words, a frugal person does not value accumulating material things without purpose. A frugal person doesn’t try to keep up with the Joneses, and show off their wealth. Those who live frugally are perfectly OK with driving their used Honda Civic, finding deals at Goodwill, and packing a lunch. However, they do spend money on the parts of life that matter most to them.

Myth #2: Frugality doesn’t allow you to fully enjoy life

This myth is the one I find the funniest, and I hear it all the time. “Craig, you need to live a little.” These people clearly don’t know much about me. 

There’s a great song called “Live Like You’re Dying” and as it goes: I have been skydiving (in the Swiss Alps), Rocky Mountain climbing (in Colorado), and even rode a bull (maybe he was named Fu Manchu?). I’ve climbed volcanoes in Guatemala, scuba dived in the Galapagos, and have been all over the US.

Having great experiences, traveling, and learning about new ways of life is what “living” is to me. These adventures and the people I meet along the way are what I live for. You know what I don’t live for? Sub par restaurant food. Fancy cars. Designer clothing. Going to the same bar, with the same friends, and drinking the same drinks, every weekend. You get the idea.

But it t’s not just me who values this way of life. Talk to anyone who values frugality and compare them to someone who spends luxuriously. I can almost guarantee you that the frugal person, the one who needs less to appreciate life, is infinitely happier than the lavish spender. Having the ability to look beyond the perceived importance of material things makes those who live frugally more fulfilled. They live far less cluttered lives and value what they have far more. 

“The richest man is not who has the most, but who needs the least.” I don’t know who said it, but I love it!

Myth #3: Frugality is “too hard”

If this is something you’ve said to yourself before, then congrates! You and 98% of Americans. It’s true consumer culture foceses on the quicker and the easier the better. I hear it far too often: “it’s too hard, I can’t, it’s too much work” and it totally baffles me. 

The problem is short term thinking. Rather than figure out ways to save half or more of your income now — which, if done correctly, will likely allow you to “retire” in 5 to 10 years — you would rather invoke the “it’s too much work” excuse, then proceed to work your entire life away.

I’m no mathematician, but seems to me it’s far more work when these excuses persist.

Related: Living Frugally vs. Spending on What Matters: How I Achieve a Happy Medium

Myth #4: Increasing your income is better than being frugal

This is a half-fair statement. Obviously by making more money, you’re increasing your income. However, the trap that many Americans fall into is lifestyle creep: as their incomes incrases, so does their expenses. Many people reward themselves with a new car or live in a more expensive apartment, etc.

Increasing your income is of course a great strategy to achieving financial freedom. While it is unlimited in scalability, it is however far less efficient.

Back to this foundational financial independence princile:

Passive Income > Expenses

Increasing your income only works one side of the equation. Frugality works both! By decreasing your expenses on the right side, you are able to invest in more passive assets on the left side.

Even better, when you cut expenses you are saving after-tax dollars. This classic quote attributed to our buddy Ben Franklin: “a penny saved is a penny earnedk” is actually pretty outdated in our current tax system. A penny saved is now 1.33 pennies earned (depending on your tax bracket).

Myth #5: If you have a family, frugality is impossible

Having a family definitely adds another layer to practicing frugality that isn’t an issue when you are single. However, practicing frugality is still absolutely possible. I am still the last node on my family’s tree (no kids) so I can’t relate, but we can look at some examples of how it works.

Let’s look at a few examples. Meet Mr. & Mrs. 1500, Mr. Money Mustache, and then there’s Mr. Mrs. Frugalwoods, etc. etc. Ok  I promise you do not have to have a “Mr. and Mrs.” in front of your name to be frugal, but let me break it down for our first two cases:

Mr. and Mrs. 1500 started their journey of financial independence while already having two kiddos! Once they realized the freedom that financial independence could offer them, they set themselves a goal of 1,500 days to be financially free by practicing frugality. They now live in a wonderful town outside of Boulder, Colorado, they travel regularly, and Mrs. 1500 just scored the car of her dreams. You may recognize the story of Carl and Mindy Jensen here.

Meanwhile, Mr. Money Mustache (MMM) is the original frugality badass. MMM worked as an engineer for a few years and quickly realized he was one of very few successfully saving large portions of their income. After “retiring” by the age of 31, MMM realized he was on to something life changing. The financial freedom allowed him to start one of the most successful personal finance blogs, spend unlimited time with his growing son, and do more of all the things he loves to do.


There you have it:five common frugality myths, completely busted! Now put down the phone or laptop, and make your plan of action! Here’s a good place to start:

Take some time to look at your finances, whether you use Mint or Personal Capital, or simply browse your most recent bank statement. From there, rule out ONE expense you can eliminate from your life. This is preferably something that will have a meaningful impact, but anything is a start. Perhaps you can cut your take out spending in half? Or maybe you can ditch the cable bill (I know you’re streaming anyways).

Whatever you decide,  commit to 60 days without it. After those 60 days, if you really feel like you are missing out, then bring it back in and cut something else out instead. Run this experiment every single month.

Over the course of the next 12 to 24 months, the effects of eliminating excess spending will have compounded, and you will have changed 12 to 24 things that you were wasting money on. Your life will be a little more optimized. If you’re an average or median income earner, your savings rate will likely be at or above 50 percent. You will be on the fast track toward financial independence!

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