Frugalism is not a buzzword, but for some it is the path to happiness. The general public can also learn something from this. A guide
In a world that is often characterized by consumption and excess, the idea of frugalism seems almost like an alternative to the current way of life. Frugalism – derived from the Latin word “frugalis” (frugal) – is more than just a passing trend. It is a conscious decision to focus on the essentials with the goal of achieving financial independence and often retiring earlier. This movement, which originated in the USA, is also gaining increasing importance in Europe.
Frugalists follow the motto FIRE: Financial Independence, Retire Early. Translated, this means “financial independence, early retirement”. It’s about saving as much money as possible through a moderate and well-considered lifestyle in order to gain more freedom in the second half of life. The focus is not on doing without, but on consciously setting priorities: What is really important to you, and what can you safely do without?
Frugalism: Conscious renunciation for a better life
The first thought that comes to many people’s minds when they hear about frugalism is deprivation. At first it sounds like restrictions and a life that does without many comforts. But this view is too simplistic. Frugalism does not mean that you have to cut everything that brings you joy from your life. It is more about consciously deciding what is really necessary and what you do purely out of consumer behavior.
For example, by eating out at expensive restaurants less often or avoiding the latest technology trends, you gain financial flexibility. In the long term, this can be used to save money, which will give you more freedom later on. It is therefore an investment in your future – with the aim of retiring earlier than usual or having the opportunity to work less.
What is really important to you?
Frugalism requires an honest examination of your own values and needs. Which expenses really enrich your life, and which could you cut without a big loss? A central aspect is the concept of “lifestyle inflation”: When your income increases, your expenses often increase as well – be it for larger apartments, more expensive cars or luxurious vacations. Frugalists, on the other hand, resist this impulse and consciously live below their means in order to reach their financial goals more quickly.
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This doesn’t mean you have to forego all comforts. For example, if good food or travel are important to you, you can factor these expenses into your budget. The key is to be conscious of what you spend your money on and not just follow societal expectations.
The big lever: optimizing housing costs
A particularly big lever for reducing costs lies in the housing situation. For many people, housing costs represent the largest monthly expenditure item. There are numerous ways to make savings here without significantly affecting the quality of life.
One option could be to move into a smaller apartment. Although this may initially sound like a step backwards, a smaller living space can offer many advantages: less cleaning, lower utility costs and often a more central location, which may shorten commuting times. Especially in big cities, it is also a good idea to sublet a room and thereby achieve a significant monthly reduction.
Alternatively, you could consider alternative housing models. Tiny houses are small, often mobile homes that require significantly less space and resources than traditional homes. Shared housing or communal housing projects also offer the opportunity to share costs while maintaining a sense of community.
The small adjustments of everyday life
In addition to the big levers such as your living situation, there are many smaller adjustments you can make in your everyday life to save money. The first step is to get an overview of your expenses. Which items cost the most each month and where could you make savings without much effort?
A simple but effective method is to cook for yourself more often instead of eating out regularly. This not only saves money, but also allows you to live a healthier life. Even avoiding expensive leisure activities in favor of cheaper alternatives can make a big difference in the long term. For example, how about organizing a movie night at home instead of an expensive trip to the cinema? Or switching to jogging or hiking in nature instead of a gym membership?
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Another tip: Pay attention to offers and discounts, but don’t fall into blind consumption. Only buy what you really need and take advantage of special offers. Buying second-hand clothes and electronics can also be a sensible alternative to save money.
Flexibility and adaptability
Frugalism is not a rigid way of life that dictates a set of rules. Rather, it is about developing a flexible and adaptable attitude. Your life will change over the years – be it due to a family, a career change or other unforeseeable events. It is important that you continually review and adjust your financial goals.
A supportive environment can be a great help here. Share your ideas and plans with friends and family and let them inspire you. Maybe together you will discover new ways to live more frugally and consciously.
Conclusion: Frugalism as a path to more freedom
Frugalism is not the perfect way of life for everyone, but it offers exciting approaches that can be easily integrated into your everyday life. Those who live consciously and question their spending can create long-term financial freedom that allows them to live their lives the way they want – whether through an earlier retirement, more free time or the realization of personal dreams.
In the end, it’s about finding the path that suits you. Frugalism shows that living consciously with less consumption can not only lead to more financial independence, but also to a more fulfilling and satisfied life. Use these insights to achieve your own financial goals and bring more freedom into your life.
Claudia Müller is an economist and has headed the company she founded Female Finance Forumwhich educates women on how to handle money and make sustainable investments. Before that, she studied international economics and worked at the Deutsche Bundesbank, where she was responsible for green finance. In parallel to founding the Female Finance Forum, she applied this knowledge in a single family office, where she was responsible for sustainable liquid investments.
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