Recently, I’ve been getting more and more positive and negative feedback revolving around the subject of money. I’ve covered topics from retirement, to investing, to whether or not to own a home, and even the debate of whether debt freedom truly represents freedom at all. These have all spurred great conversations. The one topic I’ve had the most pushback on is the subject of being “frugal” vs. being “frivolous”. This is my favorite one and the reason is that I grew up with this internal debate.

I was raised “upper” lower class. My parents raised us on less than $30,000/year most years. I can recall around the age of 12 or 13 overhearing my parents have a conversation about the fact that their household income met the federal guidelines for poverty income. Because I was raised in this environment, I learned very fast the perceived importance of being “frugal”. Now the word frugal at its root comes from fruitful and profitable. I add that to show you just how far away we’ve wandered from the intended meaning of this word. Today in the dictionary, frugal means “entailing little expense and requiring few resources”. I grew up being this version of frugal. I lived by phrases like a penny saved is a penny earned and another day another dollar. I would look for the best way to save pennies and dollars every time I shopped. If I was going to buy gas I’d try and buy at the cheapest gas station.

Most people value being frugal. This causes a problem though. Frugal is treated like a blanket statement because our brains go into a binary mode regarding this subject. We become frugal with everything or we become frugal with nothing. So, over the years I’ve learned to identify when to be frugal and when to be frivolous. Recently I remodeled my entire office. From a utility standpoint, I was being frugal. I was getting rid of unused items, unused space, and overall economizing the area both functionally and cosmetically. However, I was not frugal in financially investing in the equipment and tools it would require making this happen. This is unique as an example because it shows the ability to be frugal and frivolous at the same time and in different aspects of the same thing.

Frugal does not work as a blanket statement. In fact, I want to suggest you get rid of that term from your vocabulary and replace it with economical. Why? Because you are an economy. You’re not victim to an economy but rather you are your own economy. This difference is important to specify because an economy cannot flourish by simply cutting expenses. That is part of it and, we must cut expenses at the right place, in the right time, and ensure we have income as well. We cannot blanket statement an economy with being frugal and expect that economy to survive.

Financial decisions come down to this: Cause & Effect. What is the effect we are trying to create? What is the result that we want? Based on that result we can choose the appropriate tool to achieve the result. The two primary tools we have in an economy are either decreasing expenses or increasing income.

So, the question remains “how do we determine which tool to choose?” The answer is simple: Are we trying to expand the area or shrink the area?

I believe that we are our own greatest investments! What does this mean? We should be looking for ways to expand our knowledge, our ability, our wellbeing, our confidence, and everything else that strengthens us as human beings. How does that translate? Invest frivolously in yourself! Spend money to eat healthy food, travel comfortably, spend money on relationships that enhance your own wellbeing, invest in your education. And don’t hold back! Too many times we sleep in the cheap bed, we eat the crappy food, we don’t want to spend on the gym membership, we don’t go to the $2,000 course, etc. Because we are too focused on being frugal in the wrong area. Your own ability is the greatest asset and tool you’ll ever be blessed with. Why on earth would you not spend and invest into enhancing that?

So, what do we do? Take inventory of your life. What exists as of now? Which areas should be strengthened? Go spend money wisely there. Which areas should be weakened? Go be frugal and cut back there. In doing this, you will be one step closer to creating a life by design!

If you’d like an expert to walk you through this process and most importantly, to hold you accountable to following through then click here to speak with one of our Wealth Coaches!

Jerry Fetta

Jerry Fetta is a husband, son of Yahweh, Entrepreneur and owner of 5 privately held businesses. Jerry lives in Alaska with his wife and 2 dogs. His no-nonsense approach to business, finances, and life speaks truth and provides clarity to his clients and followers. His personal mission in life is to empower millions of leaders to own their God-given, ultimate potential

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Jerry Fetta is the CEO and Founder of Wealth DynamX. Jerry’s mission in life is to help create millions of financially educated and wealthy families.