Many many years ago, when I lived in LA, it was common to have at least one trip a year to Disneyland. This could be through school or the church youth group, but as children we were set loose in the Happiest Place on Earth and expected to fend for ourselves (under the supervision of a non-parent adult). Since these trips took all day, we had to have a way of procuring nourishment, so my parents would give me $20 to cover the lunch and dinner. Sometimes this would be augmented with a packed lunch/snack of Spam Musubi.
Now, most of the other kids also got around $20. And they'd happily spend it all and a little of their saved allowance on little snacks and meals with sodas in the park. Some would be careful with their cash and keep any spare leftover money. I only spent around $10-$15 and gave the rest back to my parents.
Even as a young child I was extremely careful with money. It was a precious commodity, one that I got sparingly. I was instilled very early with the concept of saving. Doing the simple math calculations in grade school of Principle and Interest made me realize small amounts, if invested over time, could yield delayed gratification. Since all of my basic needs were taken care of, I saw no reason to splurge on much else and could save away the rest.
As I've grown older, a few things have changed. I know more about economics, inflation, returns on investments, and so on. But some things don't change. I continue to live frugally and minimize large purchases. Many people have heard me comment about how I really "need" a new car, or a keyboard, or a new bike. Some will raise an eyebrow and go "just run what you have into the ground." I will then respond that my car is 19 years old with original parts and a cracked CV boot that will seize any month now. Or that I've been riding the same undersized bike for over 6-7 years. When I say I "need" something, I'll end up "needing" it for a year before I finally get around to getting something new. Heck, my computer had at least 3 almost-failing parts. I moaned that I needed to replace it for almost a year. The only reason I got a new one was the old one finally broke and it wasn't worth it to find what broke out of the several parts I knew were already failing.
Even for the little things I check if there's a way to reduce expenses. When I lived alone I wouldn't run the heat except for a few minutes a day in the winter (I got tired of waking up in a 55F room), and didn't run the A/C lower than around 85 in the summer. Too cold? Just wear more layers! If I want, I can live off around $25 worth of groceries a week for all 3 meals, and I gain cooking skills to boot. I bike to work not just for a bit of exercise, but also to save just a touch on gas.
What do I do with all these savings? Obviously hoard it away like Scrooge!
Seriously though, I do save a lot away. Some into retirement accounts, other sums into safety nets, and still more for future investments like a house eventually. But most of all I save up so I can give it away. I have developed enough of a buffer I have no problems with getting the short end of the stick when it comes to a bill amongst friends. If someone is in need I can help bail them out. I support my local ministries and charities. It's really liberating to not have to check if I will be able to eat next month if I splurge on a donation. Because I know I save more than I need.
Obviously in my current state I'm a bit blessed with my job. But it wasn't long ago I was scraping things together on just a TA's salary in grad school. Without any spending I had at most $100 spare each month after bills. Oddly enough, I'm even more careful about some things now that I have a better source of income.
I'm frugal. I love money and managing it and watching my savings grow. But I don't live deprived, and I'm not a penny pincher who lives for more money. I save to protect myself, and to enable freedom when it comes to supporting and blessing others.
If you're interested in frugality, I recommend reading this blog. Guy retired at around 35 and is living a comfortable middle-class life since.
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