5 Frugal Habits That Are Often Mocked (Even Though They Totally Work)
KEY TAKEAWAYS:
Some people might be hesitant or embarrassed to admit their frugal ways, but they shouldn't be
Wealthy people have frugal habits -- it's a big reason for their high net worths
Driving older cars, clipping coupons and buying generic are just some of the smart ways to save money
When the economy is rocky, frugal folks are often in much better shape to deal with it
Frugality can feel like a dirty secret. Confessing to clipping coupons may put you at risk of being labeled cheap. But being cheap and frugal are not necessarily the same thing, and in this economy, both should be considered savvy financial moves.
“America's consumer culture intertwines belonging and material possessions. When status is signaled by wearing the latest styles or driving a brand-new car, recycling clothing and owning an older vehicle can lead to social judgment,” said Wendy Molyneux, MSW, CFEI, Whole Person Finance.
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Here's a look at the frugal behaviors some people love to mock, and why you should keep doing them anyway.
1. Driving Older Cars
It may not be the shiniest car in the pickup lane, but keeping your old clunker will prove to be a great money move down the road. An American may inwardly prefer to buy a three-year-old car to avoid the steep depreciation of a new car, but because they're afraid of being looked down on by their peers, they buy the new car instead, said Molyneux.
With routine maintenance, many cars can easily run well past 200,000 miles. Driving an older car isn't a sign you're broke; it's often a quiet flex that your financial priorities are in order.
"One of my wealthiest clients drives a 2008 Toyota while his friends lease new BMWs. The difference: He's got $2 million plus invested while they're drowning in car payments," said Andrew Lokenauth, money expert and owner of BeFluentInFinance.
2. Extreme Couponing
“Although DIY, mending, recycling, home cooking, and deal-hunting all have global and historical roots, modern American culture has rebranded them as ‘embarrassing,’” said Molyneux. A big thanks is probably owed to end-stage capitalism here.
According to Lokenauth, from what he's seen with his clients, extreme couponing gets the most eye rolls and jokes. "But here's the thing -- I've watched people save $300 plus per month just by spending a few hours organizing their coupons,” he said.
3. Buying Generic Brands
Buying generic brands is another one people love to mock because so many people are susceptible to being a bit brainwashed by advertising budgets. It might not be the case that the name brand tastes better, but rather you just like the logo. Again, thank you, capitalism.
"Listen, I've done blind taste tests with my clients -- they literally can't tell the difference 80% of the time," Lokenauth said. He also added that markup on name brands is sometimes 50% higher just for prettier packaging. That's real money you're throwing away.
In most cases, generic products are made in the same factories, with nearly identical ingredients. You're paying extra for the name, not the quality.
4. Meal Prepping and Bringing Lunch to Work
Sure, your coworkers might tease you about never going out, but Lokenauth said he had a client who saved $4,800 in one year just by brown-bagging it.
"That's a pretty sweet vacation or a solid investment contribution," he added.
Skipping the $12 office salad or $15 sandwich might not seem like much at first, but those daily lunches add up -- fast. Meal prepping isn't just about saving money; it's also healthier, often tastier and gives you way more control over what you're eating.
5. Living in a Smaller House
Not giving in to lifestyle creep is hard, but living in a smaller house than you can afford is probably the most mocked choice, especially when trying to keep up with the Joneses. However, the families with the most financial security often live in modest homes. They're banking the difference and building real wealth while their house-poor neighbors struggle to maintain those massive properties.
“There are quite a few high-net-worth, sustainability-minded, or financially literate Americans who intentionally choose frugal options to align with their values…They're following their beliefs and care more about that than what the masses think,” said Molyneux.
It's easy to be dazzled by granite countertops and three-car garages, but financial freedom looks a lot better than a fancy mortgage. When the economy dips or unexpected expenses hit, the folks in the "smaller" homes often sleep a lot better at night.
Cindy Lamothe contributed to the reporting for this article.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.