Nords at Work in Hawaii
Today’s guest post comes from Nords of The-Military-Guide.com, a blog that explores how military training and career benefits can be used to achieve financial independence at an early age. Nords has contributed to Early-Retirement.org and EarlyRetirementExtreme.com. His book, The Military Guide to Financial Independence and Retirement, was written with input from over 50 military members, with all royalties donated to military charities.
Frugality is Not Deprivation
I usually write for a specific audience—around four million people: U.S. military servicemembers, veterans, and their families. Of the 1.4 million servicemembers currently active, only about 15% will serve long enough to earn a 20-year military pension, which offers inflation-adjusted payments and affordable healthcare.
This brings up an interesting point: MMM (Mr. Money Mustache) has shown us how to achieve financial independence and retire early without any pension, while also managing the cost of healthcare. Given the guaranteed pension and healthcare that military retirees receive, you’d think that financial independence would be easy for anyone retiring from the military, right?
Unfortunately, this isn’t the case. Nearly 90% of military retirees end up working a “bridge” career after their military service. Although they’ve already solved two major retirement challenges—healthcare and inflation—most aren’t financially independent because they simply aren’t saving enough money. Ouch.
The military trains us to be financially responsible (e.g., “Stay out of credit card debt!”), but not necessarily to achieve financial independence. Many military members never considered retiring early—they were too busy working long hours in far-flung places to explore blogs on financial independence. Even though we live modestly, most of us are unaware of how high savings rates could accelerate early retirement.
I’m here to help change that. Let’s start by clarifying the difference between “frugality” and “deprivation.” If you’re not in the military, just follow along for a moment.
Interestingly, the military trains us to live extremely frugally. Regardless of your branch, you’ve likely lived in small rooms with little personal space, or maybe outdoors with no bathroom. Meals were basic, often mass-produced or packaged, and entertainment was sparse—no fancy gadgets, clubbing, or eating out.
So, if military members are already living this frugal lifestyle, why don’t we save 80% of our paychecks and retire early? Imagine it: eating every meal in the galley, spending spare time reading or studying, working out in the free base gym, and avoiding spending on unnecessary items. We wouldn’t need to buy civilian clothes or pay for gas, energy drinks, or video games. Veterans could maintain this lifestyle and easily retire.
But here’s the irony: some servicemembers do live like this, hoarding their money and avoiding socializing. Yet, this ultra-frugal lifestyle can be difficult to sustain. For most of us, it’s boring and unfulfilling. These individuals might meet their savings goals, but they’ll likely burn out and become resentful of the lifestyle. It’s not sustainable in the long run.
There’s a middle ground. Frugality, when practiced wisely, is just simple living. It means reducing waste and aligning your spending with your values. However, extreme frugality can lead to deprivation. While everyone can learn to minimize waste, we each have a personal standard of living we’re not willing to sacrifice.
Financial independence benefits from frugality, but it doesn’t require extremism. You can choose to balance your lifestyle with the time needed to reach financial independence. It could take as little as five years, or most military members could achieve it in 20 years.
The distinction between frugality and deprivation is based on your values. Everyone has a line where frugality feels like a positive challenge, while deprivation feels like a sacrifice. Frugality should energize you and inspire you to reach your goals. It should feel like a game you’re winning. You might even enjoy avoiding consumerism. On the other hand, deprivation sacrifices your values for a higher goal, leaving you feeling drained, and likely unhappy.
The military teaches frugality, but in a society driven by materialism, it can feel like you’re out of step. In the military, junior officers often drive flashy cars, senior enlisted members may own large pickup trucks, and senior officers buy luxury vehicles and homes. Even junior enlisted members might stand out with a fancy laptop or the latest smartphone. If you don’t conform, you may be looked down upon.
The key is how you feel about it. If you enjoy the frugality challenge and feel good about it, then you’re on the right path. But if you start feeling isolated or unhappy due to others’ remarks, you may be crossing the line into deprivation. It’s time to reevaluate your values.
Frugality and deprivation can alter your values—sometimes permanently. A historical example is the Great Depression. During the 1920s, many lived in luxury, but the 1930s saw society grappling with scarcity. While they didn’t choose deprivation, they adapted to it, developing frugal habits that became ingrained over time. Even after the Depression, many in the Greatest Generation remained frugal, often to the point of being reluctant to spend money on luxuries, avoiding credit, and shunning the stock market.
Frugality doesn’t have to be a chore. Cooking from scratch might take more time than dining out, but you might enjoy the process and get more value from it. Similarly, you may prefer cooking as a hobby rather than seeing it as a necessity. You could even find that restaurant meals don’t compare to the meals you prepare yourself.
But not all frugal practices will resonate with you. You might not care about reusing plastic bags, for example, even if others see it as a way to reduce waste. It’s important to practice frugality in a way that aligns with your values, without going overboard into deprivation.
Frugality is about choosing what’s right for you. If you save money on things that don’t matter to you, you can put more toward the things you value. Start small—maybe bike to work or dry clothes on a clothesline—and gradually make bigger changes. Family frugality can be a great way to teach your kids valuable life skills, but forcing deprivation can cause rebellion.
Cutting waste and reducing unnecessary consumption will naturally increase your savings. Once you start saving, you’re on the path to financial independence. How long it takes to reach that goal is up to you.