Frugal Or Financial Freedom? Dilemma Now For The Global Indian

Frugality and Financial Freedom: A Quiet Revolution for

There exists, in almost every Indian family abroad, a mythical uncle or aunty who embodies what we often whisper about but rarely practise: frugality.

You’ll find them tucked away in London’s suburban townhouses, in a modest flat in Sharjah, or perhaps a rent-controlled apartment in Queens. No luxury car. No designer wardrobe. No photoshoots in Santorini. Yet, when the time comes to support a cousin’s education or donate to a temple’s renovation, they step up—quietly but generously.

This quiet wealth, built not on the back of flashy investments but consistent prudence, raises a pertinent question: Is frugality the key to financial freedom?

In this edition of The WFY, we unpack the psychology, strategy, and practicality of frugality—not as austerity, but as an empowering financial mindset that may serve the Indian diaspora in profound and lasting ways.

The Myth of More: What We Spend vs. What We Need

In 2024, the average Indian household income in the UK was approximately £45,000 per annum (ONS), while Indian-American households had a median income of over $123,000 per year, making them among the highest-earning ethnic groups in the United States (Pew Research, 2023). In the Gulf, Indian expatriates dominate the middle-class band, with a monthly average income between AED 7,000 and 18,000.

Yet, across all these geographies, anecdotal and behavioural data suggest a similar trend: as income rises, so do wants.

The desire to “upgrade” is often marketed as success. A new car after a promotion. A larger villa after a second child. An exotic vacation every summer. But here’s the catch—happiness rarely scales with expenditure.

Harvard psychologist Daniel Gilbert once noted that after a certain point (about $75,000 annual income in the U.S., adjusted for inflation), more money doesn’t necessarily mean more happiness. What matters more is how you spend it.

Frugality is Not Misery—It’s Mastery

Let’s define frugality not as penny-pinching, but as conscious consumption. It is not the denial of joy, but the rejection of unexamined expenses.

Take the story of Mr Arun (name changed), a 68-year-old NRI living in Mumbai with a net worth of over ₹100 crore. He lives in a simple 2BHK, doesn’t own a car, and gives more to charity each year than he spends on himself.

His daughters’ weddings were simple, elegant affairs—far from the crorepati extravaganzas that dot Indian diaspora weddings from Toronto to Trivandrum.

In the last 45 years, his lifestyle has barely changed. But his financial confidence, peace of mind, and ability to help others have grown exponentially.

Frugality vs. Financial Freedom: The Trade-off We Must Confront

Here’s a brutal, and often ignored, equation:

Price of Item ÷ Annual Income = Years of Life Spent

If you are a 38-year-old NRI earning ₹25 lakh a year, and you buy a house worth ₹1.25 crore with ₹90 lakh financed through a loan, your effective outflow including interest over 20 years could be close to ₹2.25 crore.

That’s 9 years of income, locked into a single purchase.

A high-end SUV? That could be two years. A recurring vacation to Europe? Another two.

These numbers are not just financial—they’re existential. Every unnecessary expense delays something deeply personal: financial freedom.

Understanding Financial Freedom: Beyond Retirement

Financial freedom isn’t just about retiring early. For many in the diaspora, it means:

• The freedom to return to India if needed.
• The power to walk away from toxic jobs.
• The ability to support ageing parents or raise children with cultural values.
• The capacity to fund a dream—be it writing a book, starting a foundation, or building a school.

A 2023 global survey by HSBC found that 43% of NRIs would consider returning to India if they were financially free, but only 18% had actually planned for it.

Why? Because consumption often takes precedence over clarity.

The Three-Legged Stool: Earnings, Expenditure, and Emotions

How much money you end up with in life is not just a factor of what you earn—but:

1. How well you manage your wants
2. How wisely you invest
3. How maturely you manage your emotions

Let’s explore each leg briefly.

1. Managing Wants: The Behavioural Gap

It is rarely income that causes financial stress—it is lifestyle creep. Economist Thomas J. Stanley, in his book The Millionaire Next Door, found that most millionaires in America live in average homes, drive used cars, and do not indulge in luxury brands.

It’s not that they cannot afford more. They just value freedom over flaunting.

2. Managing Portfolios: Simplicity is Strength

Frugality complements smart investing. A frugal individual does not panic-sell during a market crash because they aren’t over-leveraged. They maintain disciplined SIPs (Systematic Investment Plans), avoid exotic schemes, and rebalance yearly.

According to AMFI (2024), NRIs invested over ₹1.82 lakh crore in Indian mutual funds. However, a large portion of this went into short-term, speculative bets.

A frugal mindset encourages long-term, index-based investing with low churn—ironically yielding higher returns than most active investors chasing trends.

3. Managing Emotions: The Real Challenge

Greed during a bull run, fear during a crash, and envy while scrolling through social media are what derail even the best financial plans.

Frugality is emotional discipline. It is saying, “I do not need this today, so I won’t buy it today.”

What the Numbers Tell Us

Here are some key statistical insights relevant to frugal living and financial independence:

• India’s inflation rate has averaged between 4-6% over the past decade (MOSPI, 2024), meaning savings must outpace inflation just to preserve value.
• Rupee depreciation: The INR has weakened against the USD at an average of 3.5% per annum over the last 10 years (RBI), making overseas spending more expensive.
• Debt burden: Over 40% of Indian urban households carry a housing loan, with EMIs consuming 30-50% of income (NHB, 2023).
• Consumer goods trend: Indians spend 12-18% of their income on lifestyle gadgets, fast fashion, and brand-driven purchases (KPMG, 2024)—items with depreciating value.

The lesson? Frugality protects your capital from lifestyle inflation, currency risk, and mindless consumption.

Frugal Indians Abroad: Cultural Shifts in Practice

In the UK, the slow living and minimalist movements have caught on among South Asian communities. NRIs are increasingly shifting away from lavish weddings towards ‘eco-conscious, value-based events’, as seen in a 2023 British Asian Wedding Trends report.

In the U.S., FIRE (Financial Independence, Retire Early) has found adopters among second-gen Indian-Americans who prefer experiences over ownership, like national park travel, co-living spaces, and investing in dividend stocks.

In the Gulf, the surge in Indian remittances—$23.6 billion in 2023 from UAE alone (World Bank)—has not just gone into family support but into planned investments, gold ETFs, and second homes, rather than splurging on local consumerism.

The diaspora is evolving.

Practical Ways to Adopt Frugality Without Guilt

Frugality does not mean living poorly—it means living wisely. Here’s how:

1. Value experiences over objects: Memories last longer than luxury.
2. Avoid EMI traps: If you can’t buy it twice in cash, don’t buy it on credit.
3. Cook more often: Healthier for your body and your budget.
4. Travel simply: Replace luxury hotels with culture-rich homestays.
5. Buy quality, not quantity: One good pair of shoes beats five that fall apart.
6. Track expenses: Use budgeting apps that sync across geographies.
7. Say no gracefully: You don’t owe anyone an explanation for your financial choices.

Final Thought: Your Life, Your Values

In the end, whether you choose to spend or save is entirely your decision. But remember—wealth is not what you show, but what you keep.

Financial freedom is not a number. It is a feeling—a life lived on your own terms. The house you don’t buy. The car you don’t upgrade. The holiday you delay.

Each of these is a vote for independence, not indulgence.

As we tell our readers across continents, “You didn’t leave your homeland to become a slave to another currency. You moved to build a life of meaning. Let your money reflect that meaning.”

In a world of overconsumption, frugality is not a compromise—it is a quiet rebellion. One that frees you to live the life you truly want.