Frugality: spending less beats earning more

Verdict

Weak diagnosis

The arithmetic that saving requires spending less than income is true, and the data tie saving to income: saving rates rise with income in the UK data and the US panel study, and saving in dollars rises steeply with income in the Australian data. Income and thrift therefore arrive together, and the claim that frugality beats income leaves the question of who accumulates wealth open.

The cost, from the book's own figures. Taken as stated, the claim asks a household on 40,000 to save 20 per cent to match the 8,000 that a household on 80,000 saves at 10 per cent, and the lowest Australian fifth, with gross saving of minus A$5,769 a year in 2021–22, would need A$5,769 more income or less spending before saving anything.