If you were rich, how frugal would you be?

If you were rich,  how frugal would you be?

This post is from staff writer Suba Iyer.

“What is now proved was once only imagined.” – William Blake

Most of us embrace frugality to save money. Typically though, there are a few areas where we wish we could spend more. If you come into a windfall, depending on the amount, you might not be as frugal as you are now. However, will you completely give up being frugal? Or is frugality, for you, an outcrop of trying to reduce waste rather than saving money? What would I do if I won the lottery? Would I be drive the same car? Live in a similar house? What would I do with my time if I didn’t have to work anymore?

How much would the money change you? Can you imagine living the same lifestyle you have now, with millions under your belt?

Defining frugality

By definition frugality means “prudence in avoiding waste.” In my life, I practice frugality by spending as little as possible in areas that don’t give me any pleasure and channeling that money toward something that has value in my life and makes me happy. I am not rich now, at least not by U.S. standards. Even so, I do not practice extreme frugality.

The simple concept of avoiding waste cultivates many great personal finance traits that doesn’t stop with saving money: spend less than I earn, spend based on priorities, be focused and disciplined, ignore the Joneses, delay gratification and continuously add new skills to save more.

Essentially I view frugality as a lifestyle that focuses on goals and a determination to achieve those goals.

What would money change for me?

Since I do not practice frugality just for the sake of saving money, not much would change. But I believe money can buy happiness if spent appropriately, so my spending and saving habits would change a little.

Realize my dream of starting a charity to work with mentally challenged kids much quicker than I can do now. As much as I would like to set aside most of our income to this cause, I am not there yet. I have started to take the first steps in this journey but I have a long way to go. Coming into a windfall would certainly make this go a lot faster.

I will travel the world. Traveling is one of my two luxuries (food is the other). Right now I cannot afford to take any international vacations. I would like to travel to different countries, meet different people, sample local cuisines and learn from all the cultures in the world. Having more money will certainly help me do that and without too much guilt of spending that money on me when it could have helped a few more kids.

Finally,  I will be a lot more frugal with my time. I do spend a lot of time in getting the best value for my money. While that is not entirely bad, I feel I spend a little too much time for the return to be worth it. Right now, my time is not worth much so even if I save $5 by spending one hour it is not a big deal. But if I do have a lot of money, I will be a lot more prudent with my time.

What would stay the same?

Pretty much everything else would stay the same.

My lifestyle would stay the same. I never fancied cars; they don’t give me any pleasure. A car to me is just a means to get from point A to point B. So I will drive the exact same car (will probably add cruise control and a rear-view camera).

I do not own a home yet. If I come into money, I will buy a house but that would be the same house I would have bought without the windfall anyway. I do not have TV/cable mainly because I do not have the time to spend in front of a TV, not because I do not have the money to buy a TV.

Last year I quit my job to concentrate on my business and volunteering. That would stay the same but now I will have an added benefit of financial security. So I will be able to concentrate more on my charity goal instead of sweating about everyday expenses.

In a nutshell, if I became rich today, I would still be the same frugal person.

Yes, it is nothing more than day dreaming, but I find this a very productive exercise in two ways:

(1) Motivating myself to work harder, to earn more money, to help me achieve everything I want to achieve, if only I had more money!

(2) To evaluate the attainability of my goals (that I think I need to be rich to accomplish) in my current financial situations. I do not want to delude myself in thinking a magical golden egg will realize my goals when in reality I could do a lot more with my current finances. My goal is a journey not a destination.

Would you still be frugal if you were rich? What does your dream life look like? Are you confident that part of your dream life is not attainable right now?

8 Responses to “If you were rich, how frugal would you be?”

  1. Anonymous

    Although I am not that much rich but these I am stable enough and still I am living a frugal live. Being frugal doesn’t mean that one can’t afford luxuries but means to spend the money wisely. I always go for retailmenot, lavishcoupon.com coupons for save my money and live a frugal life.

  2. Anonymous

    As my wife tells it: What did the little bird say when it flies over BG? “cheap, cheap!”

    If I came across a little pot of gold, I’d spend some money on myself for once. Maybe fix the AC in my 16 year old daily commuter…

  3. Anonymous

    I think this is definitely a questions everyone asks themselves. For me, if I was to become wealthy, a couple things will change. My home will be the first to change without a doubt. I must say, I would hire a financial consultant to make sure my money is reproducing some how.

  4. Anonymous

    *queues up a certain Barenaked Ladies song*

    Hmm, I don’t think I’ll follow the advice of that song now that I think of it. Feels like a way to get broke again quick.

    If I had a million dollars? Armed with knowledge I have now I say I’ll stay decently frugal. You hear many stories of people being worse off after winning the lottery and such.

    No doubt I would not upgrade my car/truck. I may buy a small car (using smart practices of course) to cut back on driving my truck. While I need a truck for work it would be nice to have smaller vehicle for personal use. I’d invest money toward fixing up my old farmhouse. This is work I’d do if I had the money so I say go at it. Finally I’d spend more on “going out”. Not blowing money for a night at the bar, just getting out and have more opportunity for social interactions. One of my big goals in life is to improve my self confidence, an area where I’ve made vast improvements in. Still, nothing beats experience. Having more money would certainly help speed up that journey.

    At the end of the day I’d still have to remember not to live beyond my means, at least for a prolonged period of time. Currently I honestly wouldn’t want to come upon a large sum of money. I haven’t yet gotten down to quite living within my means. Until then I want to have the pressure to make the changes I know I need to.

  5. Anonymous

    Almost exactly what you said! Frugality is a way of life for me that makes sense. It is not a lack of luxury, rather an avoidance of waste. Which may be true for most Five Cent Nickel readers.

    So yes, I would still be frugal if I had more money than I do now. I would absolutely stay in my same house and drive my same Prius C.

    I would do two things with more money. I would hire more local entrepreneurs to work for me at a good wage (yard work, home improvement, website work, etc.), and I would give more to charity.

    I heard someone recently say that money is not evil – when good people make a lot of money, they do a lot of good. It is unfortunate that so many good people avoid making a lot of money.

  6. Anonymous

    I like to think I’d be rich because I was/am frugal. I’ve played out scenarios in which I win money that makes me ultra rich. In those scenarios, I always hire an attorney and a financial adviser immediately to keep my money safe.

    I wouldn’t change my lifestyle or living situation all that much. I’d upgrade a bit, maybe just to have a place to myself. Otherwise, I know I could do more with my money if I stayed frugal.

    -Christian L. @ Smart Military Money

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