Frugality or Frivolity is the Wrong Question

My aunt sat me down with the face of someone about to stage an intervention.

She started gently, listing the worries my cousins and other aunts had voiced about me over the past months. But then came her point.

They were all convinced I was being deprived. That David and I were too frugal, denying ourselves life’s pleasures for no good reason.

For years afterward, the hints came relentlessly.

“Money is made to be spent.”

“Life is meant to be enjoyed.”

Mum insisted we should “treat” ourselves on weekends. My sister would mention how she enjoyed life through travel, eating out and beautiful handbags. My aunt would talk about my cousins’ trips to Japan, South Korea, Thailand, France.

The subtext was always the same. The financial choices David and I made in our twenties were wrong.

We still get grief about it today.

Over time, though, I noticed the irony when my aunt began letting slip contradictory truths. How my cousins started eating out less. How restaurants were expensive and disappointing anyway. How they needed to save more because of mortgage rates. A complete reversal.

But still, from my family’s perspective, David and I appeared to be living a joyless, unnecessarily austere life.

Meanwhile, we lived quite contentedly, enthusiastic about the future we were building. Especially the time we were buying back.

The Frugality Trap

Frugality gets both championed and condemned, depending on who’s talking. But like any mental model, it’s a meme — knowledge that evolved through trial and error, proved useful in certain contexts, then got transmitted culturally.

The underlying principles were sound.

Don’t spend beyond your means.

Prepare for an uncertain future.

Be measured, not excessive, in your consumption.

These ideas emerged because they helped people survive economic volatility and build stability over time. But like all knowledge, it’s fallible. And when followed dogmatically without understanding why it worked, it fractures.

During times of scarcity, the virtuosity of frugality made sense. It helped the meme spread and genuinely helped people survive. But in times of abundance, a backlash arose as those who wished to indulge felt morally judged for doing so.

This is where frugality started getting its bad rep.

It often gets interpreted as self-imposed deprivation.

The idea that spending less is inherently virtuous.

That austerity is morally superior.

That denial builds character.

Some people even revel in this, gaining a sense of superiority from their supposed self-control. They’ve turned frugality into a form of egoism, missing life’s genuine joys for no reason other than buffing their self-image.

The flaw is in confusing the principle (optimise resource allocation under uncertainty) with the tactic (spend as little as possible). The principle is rational. The tactic, taken to its extreme, is just performative self-denial.

David and I don’t consider ourselves frugal in that sense. Objectively, we do appear frugal relative to our peers. But, we’ve genuinely enjoyed our lives to date.

The difference? We’ve developed an accurate assessment of a dollar’s lifetime value. We view our expenditure through the lens of opportunity cost using a lifetime perspective. This allows us to derive the most value from each dollar given our current knowledge, priorities and circumstances.

The Social Algorithm Running in the Background

Before we can make accurate opportunity cost assessments, we need to confront an uncomfortable truth: most of what we think we want isn’t actually ours.

The people we surround ourselves with shape our desires far more than we realise. We’re social animals, with default behaviours coded by millions of years of evolution. Fitting in with the tribe meant survival. Standing out meant exile, possibly death. Therefore, we evolved powerful psychological mechanisms to conform.

Just to name a few:

• Social proof — if others are doing it, it must be right.
• Conformity bias — align with group norms to belong.
• Herd mentality — safety in numbers.

These evolutionary forces don’t disappear in modern life. They continue to play out, reinforcing the cultural norms of our times. They even get utilised by clever marketers deeply versed in human psychology.

So before you even attempt opportunity cost assessments, your value framework is already skewed by your social circle.

I used to think I loved dining out at hip restaurants and cafes. That I was a “foodie”. But I eventually realised the desire to dine out was driven more by the need to fit in, to signal I was cultured and thriving.

In reality, I was often disappointed with the food. The experience rarely matched the price tag. Therefore, I started testing the hypothesis: Do I actually want this, or do I think I should want this?

The hypothesis failed. I didn’t love dining out all the time. I loved the idea of being someone who dines out. I loved the idea that dining out somehow meant I was living well.

Your value assessment is also heavily influenced by past experiences. If you regularly buy takeaway meals, that becomes your baseline. Therefore, you need to upgrade to cafes to feel like you’ve treated yourself. Soon, cafes become the norm, and you need fancy restaurants for the same dopamine hit. Then even those feel ordinary, and you’re chasing the next level. Michelin stars, exclusive bookings, rare experiences.

If you’re not careful, hedonic adaptation keeps you running on a treadmill. You’re spending more to feel the same.

“Too many people spend money they earned to buy things they don’t want to impress people that they don’t like.” — Will Rogers

This is why it’s important to pause and challenge your own desires:

If nobody knew about this purchase, would I still want it?

If I already owned this, would I buy it again?

Am I chasing the thing itself, or the status the thing confers?

You won’t find the answers overnight (we’re highly skilled at fooling ourselves). But with repetition, you iterate towards clarity. This process is essential because you can’t optimise for what you want if you don’t know what you actually want.

Which leads us to the question of how we make better decisions on spending money.

What is a Dollar Worth Over Your Lifetime?

Once you’ve debugged inherited desires, you can start making better resource allocation decisions.

Every dollar spent on one thing is a dollar unavailable for something else. This is the reality of opportunity costs. Therefore, the question becomes: how do you spend your dollars to extract the most value from a lifetime perspective?

This temporal scope is critical. If you only consider “today” or “this week,” you’d spend everything now. But a lifetime lens forces trade-offs that account for your life goals, overcoming hyperbolic discounting.

The framework is simple. For any expenditure, ask yourself:

1. What is the value this dollar creates here?
2. What is the value this dollar could create if allocated elsewhere?
3. Given my life goals, which allocation maximises total lifetime value?

Here’s where it gets personal. This assessment differs radically based on your unique values, life goals, and circumstances. It also changes over time as your conditions evolve.

Example 1: Same Circumstances, Different Goals

Imagine two 28-year-olds, both earning $80,000 annually.

• Person A values adventure and novelty. Their life goal is to experience diverse cultures before settling into a career and family. For them, spending $10,000 on a month-long trip through Southeast Asia has enormous lifetime value. The memories, perspectives, and personal growth are worth more to them than letting the money compound in an index fund. They are willing to accept the opportunity cost of having less time and money in the future.
• Person B values time freedom and autonomy. Their life goal is to achieve financial independence by 40 so they can pursue creative work without economic pressure. For them, that same $10,000 invested in an index fund is worth more than the memories from a month-long trip. The opportunity cost of the trip is too high for them given their life goal of attaining time freedom asap.

Neither is wrong. They’re simply optimising for different things.

Example 2: Same Person, Different Stages

Now imagine Person B at 42. They’ve achieved financial independence. With the creative work they started doing, they generated a surplus of financial resources.
That same $10,000 trip now has a much lower opportunity cost. They’re no longer trading time freedom for the experience. They already have time freedom. Therefore, the calculation shifts. The trip might now maximise lifetime value because the marginal utility of additional invested capital is lower than the marginal utility of the experience.

Your opportunity cost assessment evolves as your circumstances change.

The point isn’t not to travel. The point is to make the assessment consciously, based on your values, goals and resources, rather than running the default script. If you’ve studied psychology, you know this task is easier said than done.

More Resources, Fewer Desires

Here’s the counterintuitive part.

When you strip away inherited desires, something strange happens: you need less to be content.

The designer clothing? You realise you wear the same three comfortable pieces on repeat.

The expensive restaurant? Turns out you prefer cooking at home with good ingredients.

The upgraded watch? Doesn’t actually bring you joy when nobody’s watching.

The latest smartphone? The novelty wore off in three weeks.

Therefore, you’re left with a smaller set of things you genuinely value. And because you’re no longer spending on the inherited stuff, you suddenly have more financial resources to allocate.

“The richest man is not he who has the most, but he who needs the least.” — Paulo Coelho

It’s almost unfair. You have more money to meet fewer wants. That surplus can now be deployed toward your actual life goals, which for us has always been clear.

Buying Back Time

“People who live far below their means enjoy a freedom that people busy upgrading their lifestyles can’t fathom. Money doesn’t buy happiness; it buys freedom.” — Naval Ravikant

We appear frugal because we don’t spend money the way that’s typical in our social circle.

But we’re not frugal. We’re making a conscious trade-off.

Our life goal is clear. Attain time freedom as soon as possible.

Not at 65.

Not “someday.”

But in our 30s.

Therefore, every dollar we spend today comes at the expense of investing that dollar to compound for the future. It delays time freedom. In many cases, the opportunity cost is far too high.

It’s not that we don’t spend. We do.

We’re just buying our future time and independence.

And boy, do we splurge on this.

But that doesn’t mean we don’t enjoy life now. We’ve just learned to accurately assess what brings us contentment. And when you go through that journey, you realise you don’t need much.

We value good-quality specialty coffee and matcha, so we spend more on these than most people. But we don’t spend on clothes and accessories beyond basics, the latest tech, streaming subscriptions, or frequent dining out. Not because we’re depriving ourselves, but because we tested those hypotheses and they failed our opportunity cost assessment for this point in our lives. Once we attain time freedom and have a surplus, that might change again.

We’re splurging, just on something most people can’t see.

“What if I Die Tomorrow?”

This is the most common objection to frugality and delayed gratification.

And it’s valid.

You could die tomorrow. Or next year. Or in a freak accident at 35. David has no shortage of these stories from the hospital.

Life is uncertain. Therefore, why not spend everything now and experience all you can?

Here’s the issue. Most people who invoke this argument aren’t actually living like they’ll die tomorrow.

If you genuinely believed you’d die tomorrow, you’d quit your job today. You’d liquidate everything. You’d spend your last 24 hours with loved ones, not at a desk.

But you don’t do that.

Because you don’t actually believe it.

What you’re doing is using an emotional fantasy (“live like you’ll die tomorrow”) to rationalise unconsidered spending decisions and make yourself feel better now.

The rational version of this question is: How do I allocate my resources under uncertainty, given the probability distribution of possible futures?

Yes, there’s a non-zero chance you die young. But there’s a much higher probability you live to 60s, 70s, 80s or beyond.

Therefore, optimising only for the “die young” scenario is irrational. It leaves you exposed in the far more likely futures. Unless of course, you’ve conducted your opportunity cost assessment and were willing to accept the cost of not having a single dollar saved for the future.

For us, we invest heavily in time freedom for our most likely future (living into our 70s-80s). That means we don’t optimise fully for present consumption even for things we genuinely value, like high-quality food and ingredients.

We’ve consciously chosen a level of consumption that provides, say, 80% of the maximum value we could extract right now. That’s enough for contentment. The remaining? We’re investing those dollars into future freedom.

Once we achieve time freedom and surplus, we’ll likely increase what we spend on food and ingredients. But for now, the trade-off is clear.

If we die young, yes, we’ll have “left money on the table” and missed out on the full experience. But we made that trade-off consciously. More likely, we’ll have time freedom decades earlier than our peers and still have enjoyed the journey.

The opportunity cost assessment includes uncertainty. It just doesn’t only optimise for the least likely outcome.

Which brings us back to the original question: Is this deprivation or freedom? My family saw one thing. I experienced another.

Don’t Be a Sheep

There’s nothing wrong with spending on luxury goods, expensive holidays, or fancy restaurants if you’ve conducted the opportunity cost assessment and deemed it worthwhile given your unique goals and circumstances.

For people with wealth far beyond what’s required to meet basic needs, those already time-free with surplus to spare, the opportunity cost is genuinely low. The assessment makes sense.

But for most people, the spending isn’t conscious. It’s inherited. It’s performance.

Which is why reclaiming your financial decisions is also an act of reclaiming your independence. And ultimately, your time.

“Money’s greatest intrinsic value—and this can’t be overstated—is its ability to give you control over your time.” — Morgan Housel

I came across this perspective from Morgan Housel on a podcast with Shane Parrish, and I loved it:

Someone giving you grief about how you spend your money is a reminder that you’re being independent. Living and thinking for yourself rather than letting society dictate what you should want.

You’re not being a sheep.

I love this because from the very beginning of our relationship, David told me: “Don’t be a sheep.”

That’s how we’ve lived. We thought for ourselves rather than conformed to what everyone expected of us. It wasn’t easy, but it was worth it.

Years later, I still get grief from my family. They still don’t understand why we live the way we do.

But they don’t have to.

I no longer feel the need to explain myself. Not because I’m indifferent to them, but because I’m now confident in our choices. I’ve seen the results of our decisions. I’ve falsified the hypothesis that we were depriving ourselves. And we’re more content and grateful than ever.

The grief they give me isn’t a warning. It’s confirmation.

It means we’ve escaped the script.

The Real Freedom

This isn’t about adopting a new set of spending rules. It’s about conducting the diagnosis and building your own framework.

Real freedom is found when you have the clarity to make your own decisions. Not based on what you’ve been taught to want, but on what you actually want.

The meta-skill you’re building is intellectual independence in a world designed to make you dependent — financially, mentally, and in how you allocate all your life resources.

Most people outsource their desires to marketers and their peer group. They live by default, inheriting values from their environment. They spend to be approved of, to keep up with trends, to feel relevant and cultured. Then they wonder why they feel trapped, working jobs they tolerate to fund lifestyles they inherited.

You don’t have to live that way.

Nobody is watching. So stop performing for an audience that isn’t there.

The most expensive thing you can buy is someone else’s idea of a good life.