From a personal development point of view frugality as a lifestyle is flawed. It is not flawed in the sense that it does not work, but it is flawed because it makes you aim your focus at the wrong things.

Human beings are all full of desires that makes us want this and that; due to this fact being frugal is actually pretty hard for most people. The desires are the remnants of strategies that have worked very well for human beings in the past, so evolutionally speaking the desires have been immensely important but at the same time they have also played out their role. You can see the results of this in most developed countries, even though there is no shortage of food people are still eating like a famine is just around the corner – and scientist have actually discovered that if you start to eat less the body responds instinctively by lowering your metabolism and increasing the desire for food through chemical changes in the hypothalamus, effectively making it very difficult to loose weight. And this is not only a principle you see regarding food, but also a general psychological principle.

I am reminded of an episode of The Simpsons where Homer watches one of the home shopping-channels on TV, one of the products gets him really excited (I do not remember what it was though) and when the speaker mentions that the stock of the product is limited Homer gasps “Limited!!?” and immediately gets on the phone to order. Homer then asks the salesclerk whether they have any left, to which he responds “yeah, we’ve got a few” and the view changes so you can see that they have a whole storage facility full of them.

In the episode of The Simpsons it was clear that the “limited” supply was simply a marketing-trick and in fact it is one of the most common tricks in the trade. How often have you seen the phrase “WHILE SUPPLIES LAST “? While it also has a practical meaning, I suspect it is also used so often because it makes the product seem more rare, and rare things automatically rises in (perceived) value. A good example that rare things automatically increases in value can be seen in the coin and stamp collecting communities – in those communities the assumed value is a direct function of how rare the stamp or the coin is and a normally uninteresting stamp can suddenly be worth a lot if it happens to have a rare fault in the print. It is simply a psychological principle that people want more what is rare and do not care much for what is ubiquitous.

Another principle your brain works by, is that you can not decide to not think about a specific thing, let me show you : do not think about a pink elephant! Do not think about a pink elephant! See? You had to think about a pink elephant in order for your brain to know what it was you were not supposed to think about. As long as you consciously triy not to think of a pink elephant the thoughts of pink elephants will haunt you

Applying the two principles above to the concept of frugality, it is easy to conclude that in order to live a frugal live you have to focus on living frugally (to battle your natural desires) and when you focus on living a frugal life you must feel like there is a shortage in the world of all the things you would like to spend your money on (because you are artificially creating this shortage). When there is a shortage the natural way to cope is to focus on getting the basics working, and if the shortage never ends you will spend your life worrying about the small and unimportant stuff like how to decrease your electricity-bill.

Let me get one thing straight though, I am not advocating that abstinence from sloth is flawed – decreasing your electricity bill is a good thing both financially and environmentally – what I am specifically saying is flawed is the lifestyle of never spending money on anything you do not need to. You should not throw away your money, but at the same time you should not make money and abstinence from the pleasures they can give you a holy mantra.

Personal development is all about your development, and even though it will be different for all people, it is safe to say that harmony and balance should be a guiding principle. Typically there are two ways of increasing your wealth, by decreasing your expenses (being frugal) and increasing your income – you should find a balance between them but in my opinion it should be biased towards increasing your income as that is where the really big improvements come from, regarding both your finances and your personal development.