frugality
The practice of being economical with money, avoiding waste and unnecessary spending.
Example
“His frugality allowed him to retire a decade earlier than his colleagues.”
Memory Tip
FRUGAL — getting full value from what you have.
Why It Matters
Frugality is foundational to building wealth and financial security because it directly increases the amount of money you can save and invest. By reducing unnecessary spending, you create a surplus that can be allocated toward emergency funds, debt repayment, and long-term financial goals.
Common Misconception
Many people confuse frugality with deprivation or believe it means never spending money on anything enjoyable. In reality, frugality is about being intentional with spending and eliminating waste while still allowing for purchases that genuinely add value to your life.
In Practice
A person earning 50,000 dollars annually might practice frugality by meal planning to reduce food waste from 200 dollars monthly to 120 dollars, switching to a cheaper phone plan saving 30 dollars per month, and canceling unused subscriptions worth 50 dollars monthly. These changes total 360 dollars annually in savings without sacrificing quality of life, which could be invested or used for meaningful purchases.
Etymology
From Latin 'frugalis' meaning virtuous and economical.
Common Misspellings
Build a budget and track your spending
Related Terms
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See Also
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