Why are some frugal?

Benjamin Franklin once said, "Industry, perseverance, and frugality make fortune yield". Obviously, he perceived growth as a balance sheet, when income is greater than spending, you make fortune. Frugality is a goal keeper along the path. 

Being frugal may be just a habit, regardless of personal wealth. Famous examples are Warren Buffet and Carols Slim. They have been living in the same houses for a long time. They can certainly afford more expensive houses and life style, but they don't. Another example, Bill Gates receives McDonald's coupons from Buffet and uses them regularly. In fact, in their recent trip to China together, the two reportedly used coupons together. Many of us discard these coupons regularly. By the contrast, some overspend to an extent way beyond their means. These cases may be habitual examples. 

However, when frugality mixes with logical and creative thoughts, things become very thoughtful, even funny for those deal with money all the time.


Every first week after the New Year, academic economists gather some place to hold the American Economic Association's annual meeting. Picking this time, of course, is university holiday. But a more important unspoken cause is, this weekend flights are usually the cheapest. You have to admit these guys have good brains to figure this out.


The author of a 2009 book, "In Cheap We Trust", Lauren Weber, told this story about her economist father. Her father used to keep thermostat so low in winter that her mother threatened they would move to a motel. Her father gave in eventually because he figured out moving to a motel was much more expensive than turning the thermostat higher. 


In a research by University of Washington, it is found that economics majors are less likely to donate money to charity than students in other fields. One of UoW professors who conducted the research, happened to also be an economist, had this comedy one-liner: "You might be an economist if you refuse to sell your children because they might be worth more later." They might have pulled a spread sheet and figured out cash flow, PE, revenue, and profit etc in their mind before the deal or even the children were born.


Economists may more concern about efficiency, monetary efficiency on their time and resources. When efficiency equations make sense to them, they will spend. But efficiency is a good way to explain frugality, consciously or unconsciously that make use of resources on better places. We can learn from them: 

• No matter how much you make, you still need to save
  
• Embrace frugality. Many have done that. You just don't see them doesn't mean famous people don't do that.
• If you're smart, find creative, logic ways to save money
• Turn frugality into one life style