maslows hierarchy

Frugality gets a bad rap. Some make fun of it (here is a link to Ramit’s hilarious video on extreme frugality—watch at your own risk), while others express an overall disdain towards the lifestyle.

Personally, I’ve had people ask me why on earth I would make my own laundry detergent rather than just buy a bottle the next time I go grocery shopping, or why we would furnish our home with Craigslist finds and leftovers from family and friends instead of just buying new. I’ve even questioned myself after driving across town for $0.20 cans of tomato sauce, which later led me to better prioritize my time and my frugal aspirations. Sure, frugality has made a comeback over the last few years because of the recession, but it will most likely fade away from the spotlight again and be left to the use of an enthusiastic niche of the population once the economy strengthens.

Now that Paul and I are no longer in debt (outside of a mortgage), have built an emergency fund, and are on target in retirement savings, some might think that frugality has lost a purpose in our lives. But it hasn’t. We still refuse to pay full price on purchases, would rather shop our own cupboards, and we have found ourselves taking further steps in the direction of what some would deem extreme-frugality territory. We are still joyfully frugal and will remain so in both times of need and when our sacrifices have made an abundance for us.

This has led me to the conclusion that frugal people have motivations for their choices besides financial ones.

Understanding the motivations and the “why” behind our actions is critical as it can provide clarity, a defined purpose, and clear goals. In trying to understand our own motivations as well as those of others, I have come across many reasons for why people choose a frugal lifestyle. They can be clumsily grouped in accordance with Maslow’s Hierarchy of Needs—based upon human motivations—which starts at the base with survival and ends up with self-actualization.

Motivation: Financial

The obvious motivation of being frugal is to stretch dollars far beyond what each would typically buy in order to achieve something financial, which forms a solid base to achieve the other motivations listed. This could be paying off $25,000 in debt, making ends meet on a meager income, securing retirement, or saving up for a large purchase like Crystal from MoneySavingMom.com did when she ‘frugaled’ her way to saving 100% of the down payment on their first home (and no, she’s not 50).

Motivation: Control Over Your Life

Lots of people like to have as much control over their lives as possible, and money can provide this to an extent. Having control through finances can include owing no one, owning a vehicle to come and go as you please, managing your own finances, and working for yourself. The ultimate form of financial control is financial independence, which can be declared across a defined continuum. You can declare yourself financially independent when you no longer rely on your parents or others for money and resources. You can declare financial independence when you no longer have to work a full-time job, or when you have a set figure of savings/investments. Perhaps financial independence comes for you during retirement. We each define our own set of criteria for attaining what we deem to be “financial independence.”

Motivation: Self-Sufficiency

Many frugal people do not want to have to purchase products or services from others and would rather source their needs and wants from themselves. There are various reasons within this category for why people want to become self-sufficient: dignity or a sense of pride, not having to ask others for help, being able to shut out some of the world, believing that a catastrophic event is looming in which the skills of self-sufficiency will ensure survival (some of these floating around are the peak oil crisis or December 21, 2012 when the Mayan calendar ends), etc.

Motivation: Lifestyle Design

One of the perks of not needing much to live on is that you have a greater ability to live an unconventional life designed by you. With lower bills and savings in the bank, you or a spouse could choose to work part-time, have one spouse not work to take care of children/start their own business/etc., take a job that pays less but brings greater satisfaction, take mini-retirements, etc.

Motivation: To Help the Environment

One of the great benefits of frugality is that it tends to cut down on waste. Bulk purchases, repurposing items, and using sites such as freecycle and Craigslist instead of automatically purchasing new items not only saves us money, but it also reduces waste in landfills, reduces the amount of resources used to produce products, reduces water, and ultimately reduces pollution. Sustainability can help everyone, not just ourselves, and when we undertake frugality with this in mind we are elevating ourselves from individuals into a community.

Motivation: To Give Freely to Others

When you are in a financially stable situation, you feel secure and safe. And when you feel that all of your needs and emotions have been met, then you are more able and willing to financially give to others (note: you can at least always give of your time and energy no matter what financial situation you are in, and in some cases you can donate things that will still reap money for others). Dave Ramsey teaches others how to financially prosper so that they in turn can give generously to others. To me, this is the ultimate goal to a frugal lifestyle, and one that I am aspiring to achieve.

I hope that this sheds some light to those that do not understand all of the various reasons behind frugality, and provides clearer conviction to those who are frugal by nature but have not necessarily figured out why.

What are your motivations for living a frugal lifestyle?

6 replies
  1. Dana Twight, CFP
    Dana Twight, CFP says:

    Your post contains enough motivation choices for anyone to use one as a scaffold to build their new choices. Nice job of illustrating that frugality can go way beyond helping yourself to making a positive contribution to your community, your valued institutions and the country!

    Reply
  2. Shannon-ReadyForZero
    Shannon-ReadyForZero says:

    Great points! I identify with all of them but the strongest for me are control over my life and ability to give freely to others. I’m an only child and want to have the ability to help my parents out as they get older since they worked so incredibly hard to get me where I am now.

    Reply
  3. Chris @ Awesome Financial Future
    Chris @ Awesome Financial Future says:

    Amanda, linking frugality motivations with Maslow is an awesome angle. Very creative thinking, bravo! The question I always get is: do I really have to sign up for a lifetime of frugality in order to get to financial independence?

    Here’s the way I answer. Think of your financial life as three phases – red, yellow, green, traffic light style. You start in the red phase, where your job is to pay off all debts, build an ample emergency fund, and (if owning makes sense for you) save up for a down payment on your first house. When that’s done, you graduate to yellow, which is simply earn, save and invest. Green, of course, is when your investments reach a point where work becomes optional.

    In the red phase, frugality is NOT optional. (Sorry Ramit!) If you hate dryer lint blankets, then GOOD – that will motivate you to get out of the red phase as soon as possible! But in the yellow phase, frugality IS optional. It all depends on how fast you want to get to the green phase, weighed against your desire for a less frugal lifestyle. I’ve found that (some) people are more comfortable with a frugal lifestyle if they see a light at the end of the tunnel, specifically defined.

    Reply
  4. Amanda L Grossman
    Amanda L Grossman says:

    Thanks Chris!

    I agree–it is easier for some to see the merits of frugality when they see it as a means to an end.

    I wonder how many of them become frugal converts for life? I would imagien people can make the connection from “not only does frugality help me pay off debt, but now it can help me to accumulate wealth”.

    Thank you for your thoughts!

    Reply

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