Because I had learned black belt frugality from my Depression Era grandparents I was able to survive when hard times hit, the collapse of the housing market, a financially devastating divorce and raising four teens by myself. These skills have increased the quality of my life not decreased it. I have everything I need and want and do not feel the pressure or stress of being deep in consumer debt.
Cheap versus frugal. What's the difference? For instance lets say your faucet breaks and instead of fixing your faucet you simply use a wrench to open and close it for years so you can save money, even though the fix would be less than $50 and you have it in your emergency fund. To me this is cheap (this is a true story about someone I used to know). Frugal is you go to the store and buy a quality faucet that will last because you have money saved to pay for it. If there are twenty five available to choose from so you research to find the most reliable. You may pick one you like that matches your decor but it won't be the most expensive and fancy one that you have to put on a credit card because you have planned for this kind of thing. This is frugal. You will have more quality items but not items that you cannot afford to pay cash for.
Another example is that you have a 3 pairs of quality fitting blue jeans that you purchased at a resale shop for $35 each. These jeans may have cost $100 or more brand new. You get them cheaper at resale but you could have purchased a pair of new lesser quality jeans at a big box store for $30 that wouldn't last as long or be as comfortable.
This is how I live my life. I have less but better quality. In my living room I have three high quality leather pieces. A $3500 Henredon sofa that I paid $300 for on Craigslist, a high quality leather recliner that a friend no longer needed (free), and a hand me down leather chair and ottoman from my family. New all of this would have cost me nearly $6000. I paid $300. I was patient and lived with only a couch for a while.
Some qualities of frugal people.
1. They put values first then live their life in accordance with their values. The live frugal to support their values. If health is a value they may forgo some expensive trips to afford high quality food and pay for a good treadmill. Forgoing extraneous expenses in other areas.
2. They have patience and wait for a good deal.
3. They do not use credit, they save for emergencies.
4. They save for big expenses like vacations and cars.
5. They avoid marketing (advertising) as much as possible. This may mean not watching cable t.v., staying off social media and not shopping for fun.
6. They save in areas that aren't as important to them so they can spend in areas that support their values. For me I save on the daily expenses like eating out, clothing and excessive living like a bigger fancier home and car so I can travel and spend more time with loved ones.
7. They find free and inexpensive ways to entertain themselves. Such as working out at home, reading from the library, having date nights in.
8. They budget their money. They know what comes in every month and they know what their expenses are. In the early days I had to budget every dollar. Now that we have no debt and a higher income I don't have to do this but I have some strict habits I've developed that allow me to have a high savings rate.
9. The live on less and save more. My husband of one year, who I have been with for seven, and I have not increased our standard of living as our incomes have grown. We now make two to three times what we made when we met but we still live on $45,000 a year. We save the rest and pay cash for expenses like cars and repairs. We also are paying our mortgage off quickly.
10. They have an emergency fund. Start with $500 then build up to two years in the bank by the time you retire or before (this does not include your retirement savings).
11. They keep a reserve in their checking and business accounts.
12. They are always learning and staying up to date on information that supports them in their journey.
13. They keep their mortgage or rent payments at less than 1/4 of their income. For couples it would be suggested that one income could support you in the event that one person lost their job or had to be off for an illness or special circumstance.
14. They are able to cut back on work if they choose to, in order to enjoy more of their values like exercise, travel, health etc.
15. They are planners. They think about what they want their life to look like and live day to day with accordance with that plan.