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Sometimes I’ll be talking about frugality with somebody who says, “Why bother? Pinching pennies all the time makes me feel lousy. Besides, you can’t really save that much money. You really save money on the big stuff.”
This is a common response to frugal living. I have some standard replies:
- It is true that it’s important to save money on the big stuff, like a home or a car. Any time you make a large purchase, your opportunity to save is magnified. Take special care with these sorts of decisions. Don’t buy more than you need. Don’t buy more than you can afford. Strike the best deal you possibly can.
- But large transactions are rare. How often do you spend more than $100 on anything? You have more opportunities to save when shopping for groceries. Saving fifty cents a week on milk is inconsequential as a one-time occurrence, but over the course of a year, it amounts to $26. Taken together, many such small economies make a real difference. Small amounts matter.
- Remember: Don’t confuse frugality with depriving yourself. If pinching pennies makes you feel lousy, then loosen up. Spend a little more. I am not advocating “retail therapy” or spending above your means — I’m telling you that it’s okay to spend more for your favorite brand of yogurt or to get your favorite cut of beef. If you don’t like shopping in thrift stores, don’t.
Frugality doesn’t mean living like a pauper. Frugality means choosing to make the most of your money, to focus on everyday costs, to recognize that small amounts matter. Sometimes I think we frugal folk should be calling ourselves “thrifty” instead.
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March 29th, 2007 at 1:43 pm
Love this thread.
Thrift + Savings +Time = Wealth
I mean at the end of the day isn’t that what it all comes down to? And I agree being thrifty does not have to mean deprivation, however, it may mean exploring alternative sources of entertainment and leisure, it may mean coming up with more creative ways to not entertain yourself but also to make ends meet. Which, I can say from experience has only enRICHed my life. Really.
March 29th, 2007 at 1:47 pm
I heartily agree with the idea of letting oneself indulge (responsibly) on occassion.
Frugality is like having a good diet. You don’t want to deprive yourself or put too much will power in to it; if you do, you’ll just giving up. Instead, you just need to determine what things are most important for keeping you happy.
For example (both a diet and frugality example!), my husband and I will buy a pack of fancy cookies that cost as much as or more than a larger pack of lower quality cookies. We enjoy the expensive cookies a lot more, so we are willing to eat less of them to decrease the cost impact.
March 29th, 2007 at 5:32 pm
Had I discovered your blogsite earlier, I would have been salivating to get a piece of your previous post. Nonetheless, this is a good place to jump in. Definitely good threads.
Frugality probably sounds and looks worse than it really is. It does not seem to be a curse for a few wealthy people I have met. Penny wise and pound foolish can be the curse when the driving force is to cut costs at all costs. For example, I lived with someone for several years who had no problem asking me to drive with her across the state line to catch a “sale”.
What I find important about this discussion is the practicality of weighing the cost of, say, purchasing a higher quality package of cookies. I believe it to be a sign of balance in one’s ability to rationalize, when different alternatives come to mind. The proof of the benefits of being frugal might be in the way we grow our self-esteem. Gotta run, I think I hear my rainwater boiling.
March 29th, 2007 at 8:16 pm
My approach to frugality is that it is a game. I track my expenses and look at monthly and yearly totals. I enjoy the satisfaction of successfully keeping expenses down.
You know, all those stores at the mall - they are really conspiracies put together by the all of the employees. They want to retire on your money! Don’t fall for it. Keep your money and retire sooner.
March 29th, 2007 at 8:53 pm
[...] MIGHT ALSO ENJOY: Small Amounts Matter Don’t Confuse Frugality With Depriving [...]
March 30th, 2007 at 6:36 am
Like my grandfather would say: “Take care of the pennies and the pounds take care of themselves.”
March 30th, 2007 at 6:49 am
[...] Small Amounts Matter - via JD at GetRichSlowly. That 50 cent coupon on milk isn’t that impressive, but amounts to $26/year if you buy milk every week. Find a couple of items like this and it starts to add up. digg_url=”; digg_skin = ‘compact’; digg_bgcolor = ‘#FFFFFF’; digg_title = ‘links for 3-30-07′; digg_bodytext = ”; digg_topic = ”; Powered by Gregarious [...]
March 30th, 2007 at 7:43 am
If you have got an exciting goal that you are working towards (paying down debt, saving for a first home, saving for a vacation/trip, saving to build your dream retirement home) I find that the denial of the Starbucks or the new shoes or the new/leased car can be enjoyable. I know that by denying myself I am rewarding myself in the long run. I think a lot of folks just don’t know where they stand when it comes to finances, they don’t know how much they owe in unsecured debt, how much they owe in secured debt, how much they have in investments, assets, etc. When you take the time (and boy does it take time) to figure out your finances and to track expenses and investments its a lot easier to stop spending money b/c you goals are TOMA (top of mind awareness).
Another trick, I go shopping on-line for clothes, books/music, furniture and leave the items in my shopping cart/shopping bag. I go back in a month or so and (1) determine what I still want and (2) pick 1 item to buy. The process of picking out things that I want on-line generally gives me the satisfaction without every purchasing the items.
March 30th, 2007 at 11:11 am
Let me explain my lifestyle and how I save and how the little things can add up, yet still be able to buy better quality and more expensive items. I love Starbucks coffee. But at $1.89 a cup twice a day, that can certainly add up. ($117.00 a month!)….So now I buy it from the supermarket. I can buy 1 pound of Sarbucks coffee from the supermarket that costs $16.00. Sure sounds like a lot, BUT I’m saving $100.00 a month! Still having my luxury, yet still saving. I do the same for lunches. I put $5.00 away a day when I bring my lunch to work and the money at the end of the month goes towards my grocery shopping! Very simply put, a little adds up to a lot.
March 30th, 2007 at 9:44 pm
Also remember the time value of money and interest. When you spent $1 a day, most people think this accounts for $365. This estimate is only half correct. You must also account for a year’s worth of missed interest, which may be between 3 to 10%, depending on how well you manage money. So the $365 sum turns out to be $400 assuming you would have invested the money wisely.
Just imagine this same outcome over the course of 20 years. That’s why wealthy people understand that small amount count.
Great post, not enough people stress the importance of small savings!
March 31st, 2007 at 8:11 am
[...] Rich Slowly reminds us that Small Amounts Matter! Here’s how you reply to all those people who wonder if it’s worth worrying about pocket [...]
March 31st, 2007 at 8:40 pm
Weekly Roundup - 03/30/07…
Here’s a quick look at some of the articles that caught my eye over the past week…
Flexo talks about ten ways to spend your tax refund for fun.
Jim reviewed the Chase Freedom reward credit card.
FMF talks about a simple move that could save you a…
July 27th, 2007 at 9:18 am
I do agree…small amounts do matter…as a student…i used to save up nickels in the 1 liter pepsi / coke bottles…at the end of my first year…i took the bottle to walmart where they have those coin change machines..and all teh pennies went into the machine…I got back $ 54.25 which was quite surprising.
I used to buy some grocery and my camping sleeping back ( $ 20 ) from Walmart.
Lesson Learnt:- Small amounts do matter..Save up your pennis you never know when you might need them
March 19th, 2008 at 9:32 am
I don’t go into debt with large purchases. I am the type of person who spends exactly what she earns by charging $5, $10 and $20. While I might hem and haw over spending $50, I barely blinked or considered the $30 purchases until I got my credit card bill for $1500-2000 a month on ’stuff’ that disappeared into my mouth or got lost in my home. I wasn’t going into debt, but I wasn’t saving either and found myself on the treadmill or spending my next month’s earnings before I saw it.
Cash saved me and my fiance. Paying cash means that extra dollar saved is really noticeable and dropping even $5 is more ‘painful’ if it’s not something I really want or need.