Friday, June 5, 2015

Can You Be Frugal Without A Goal?

When I first started off this blog on my investing journey, I had a clear objective of what I wanted to achieve at the end of the day. There are several steps that I needed to follow and habits that I needed to change in order to achieve that and frugality is one of those high in priority.

The hard truth is not many of us are born to be frugal in nature and it will be very difficult to mimic what Buffett has achieved throughout these years. For a small percentage of people, frugality is just how they live and who they are. They don't have to think about it and those frugality habits are engraved in what they do on a daily basis, be it spending on food, groceries or accommodation.

In my opinion, adopting a frugal lifestyle is an intelligent thing to do. First, it creates an awareness of difference between cheap and frugal. Being cheap is about focusing on the price where quality can be compromised in order to but what is cheapest. However, being frugal is about focusing on the value where price and quality merge to form a conclusion regarding whether they are worth a buy. Second, since there aren't unlimited resources on the demand and supply, it probably make sense to conserve to be frugal and waste as little as possible. Again, this is focusing more on what you need rather than how much you can afford.

For some people, having a goal is important in order to achieve and motivate the frugal lifestyle effectively. For instance, when you had a goal of losing 100 pounds in 6 months, it probably make sense to start planning on your dietary meals and gym schedules accordingly. Similarly, when you had a goal of achieving early financial independence, frugality had better be part of your plans along the way. The problem is when a person had achieved their ideal status of financial independence, what would be their next motivation to remain frugal.

For many financial bloggers alike, every financial budgeting and decision we make is grounded in our desire to achieve higher savings rate, higher disposable income and therefore higher capital to put to use for investment. And thanks to that goal, frugality isn't exactly a rocket science or struggle for us. But would our desire to remain frugal in the absence of such clearly articulated plan works without a goal? This is something difficult that I haven't exactly had an answer myself.

What do you think? Would you remain frugal without a goal? Are you born to be frugal?


  1. I am not sure what is frugality. I only know "Don't waste food, electricity and water."

    No smoke. No casino. No call chicken. No mistress. Seldom drinks alcohol (with tax)

    1. Hi Uncle CW

      I guess that's frugality to sustain all the limited resources we have in earth. :)

  2. Somehow, frugality becomes a habit even when we've achieved what we wanted to. We become frugal when we change our mindset and it stays with us after awhile.

    1. Hi SGYI

      Yeah, I guess some things have become a habit once we embedded them in our daily activities.

  3. Your post attracted Frugal Daddy to drop a "Hello!". I read your blog daily for the past 6 months. Mine is quite raw:

    Keep up the good financial work and writing!

    1. Hi Frugal Daddy

      Many thanks for the support.

      I've visited your blog and left a comment there. It's a lot of good posts there.

      Hope you keep on writing more often.

  4. B,

    A goal can be a tool (we use it) or crutch (we depend on it).

    Something that we do repeatedly becomes a habit. And if we can do it without consciously thinking about it, it's a lifestyle.

    If we do something because of a goal, what happens when we remove the goal?

    Will that activity stop?

    You decide which is more sustainable ;)

    1. Hi SMOL

      Definitely it's more sustainable if we are unconsciously doing and it becomes embedded in our lifestyle. If one does it with hatred or reluctance, it'll only becomes another bottleneck in the process.

    2. This comment has been removed by the author.

    3. Hi SMOL and B

      I have always been careful with my money because of my family background in the younger days. It is part of me to be frugal and find value for money in every part of my lifestyles. However, setting clear goals still help.

      For example, i have been looking for a 999 gold necklace for my parent as a gift and since the resale value is there too. And I finally found a shop selling 999 gold at $58 (where commonly found was $62 and this is not a pawn shop) but the gold necklace there were beyond my budget. At that same shop, I was actually tempted to look at 912 gold since it is cheaper and prettier. Not wrong, but this is a fine line of finding value for money and being cheap.

      So it does help to focus (weak-willed?) when you have clear goals and a deadline. FYIP - Till now, i still haven't bought it. :P

    4. Some of the things are commonly priced at $X, when we can buy a few % lower from one particular shop. Think harder. How come?

      Same as investment return. How come such good deal when commonly investment return is just X%?

    5. Frugal_Daddy,

      Setting clear goals in buying necklace?

      1) Is the goal of the gift to make your parent happy? So what's with resale value? You subconsciously want it back one day? (Joking hor!)

      2) Is the goal more for you to find joy in finding a good, better, best buy? Would your parent be happier knowing you bought it for $4 cheaper per ounce? Do you know what design your parent prefers? It's to wear one right?

      Goal setting is crystal clear until SMOL comes along to muddy the waters...

      Don't hit the face!

      I bounce back very quick hor? That's what my kindergarten teacher complained to my ah ma, "You grandson no sense of shame at all!"

    6. Hi CW8888

      It is good to ask questions when abnormality appear. However, isn't this is when most investors find good deals? If we don't buy on dip or discover "google" or "apple" before it gained popularity, where our profits come from? The dividends or marginally gain from blue chips at a very high P/E will only help you fight inflation. I am actually not qualified enough to discuss about value investing. Just my humble thoughts. :)

    7. The key is COMMONLY priced. Then it is good deal for most of us. Otherwise, we have to think very hard.

    8. Hi SMOL

      It is kind of funny to associate buying "wants" or luxury item with Frugality, isn't it? haha.

      There is a long background on this. To cut short, I try to give key words background:

      1) My mum about 70. She has spent all her life as a housewife taking care of her children and grandchildren at home. Her activities are all housechores and TV the most. The only luxury item she has was gold necklaces and rings, which she had pawned to help the family tide through financial problems when i was much younger. I don't intend to take it back, but it will help her if one day, she secretly need money. They are the sort who will spend what they have anyway. This is more like a way to help them on emergency fund or diversity, any excuses you can think of. :P

      2) In fact, vanity is a sin, according to a religion (I am a free thinker). My frugal(cheap or stingy?) side has questioned me over and over again whether it is beneficial to buy gold as a gift. It is actually not for show off, but more for a memory and sincerity to her. Some are actually advocating gold as an asset class in permanent portfolio. haha. I think she will be proud if she wear a gold cost, for instance, $1000 but only bought at a price of $500. haha. Proud of you, my son! Shame on you, kindergarten teacher!

  5. Frugality is a way of life. The positive path is wealth. The negative path is cheapness (cheapskate)?

    1. Hi Lizardo

      Frugality doesn't really leads to wealth. And it really depends on circumstances sometimes. I think it's just making expenses sustainable at a low rate. Wealth still requires taking position to make money work harder.

  6. Hi B,

    Definitely a person can be frugal without goal due to his brought up or sometime in life something happen.

    I think maybe a more important question to addressed is can we live a life be without goals?

    Or is the goal you planned for years ultimately the goal you really want?

    1. Hi Rolf

      Hahaha, live a life without goal? I think there are plenty of people who are doing that, maybe unconsciously knowing what is their goal.

      Also, some people may be forced to live life just to survive. Perhaps their goal is just to survive.

  7. I think you really have to believe in frugality to some extent to make it a permanent habit in your life. If you feel like you're just doing it to achieve a certain financial goal, and it feels like deprivation, then it's unlikely it's going to last. I think it really is a different mindset of viewing the resources of the world, and what you actually need to be happy.

    1. Hi Jason

      Exactly. It has to feel like it's not something that you are being forced to do without having consequences in mind. Otherwise, it could give up easily and you revert back to the old habits.

  8. You don't need a goal to adopt a frugal mindset.

    Frugality is freedom. It means we don't need material goods to make us happy. That frees up a lot of cash to further pursue more worthy goals. And even if we are not rich, frugality teaches us to find joy in simple everyday living.

    Frugality means also finding value in the things you spend money on. It forces you to make smart purchasing decisions and not succumb to advertising or instant gratification.

    If one's goal is to be happy, then maybe one should adopt the frugal mindset as a foundation.

    ( Sorry la I read a lot of Buddhist/Zen books in the past!)