In the comments on a recent post about peer pressure, I mentioned a quote that I’d edited from the original draft. (I write a lot of stuff that doesn’t make it into final articles. It’s as if there should be “bonus features” for GRS, like on DVDs.)
Anyhow, I re-read John T. Reed’s Succeeding recently, and was struck by this passage, which does an excellent job of encapsulating my current philosophy on frugality. Reed writes:
[Frugality] is a necessary evil early in your adult life — like getting an education. Most people are never frugal and, as a result, never rich either. A few people are rich as a result of frugality, but they never stop being frugal, so what’s the point? They live like poor people their whole lives.
The correct approach is to start out frugal when you first go out on your own, then gradually shift to an enjoy-life mode where you live up to your means.
Note that Reed never says to live beyond your means. You live below them until you’re established. Once things are running smoothly, it’s okay to spend on the things and experiences that make you happy.
I’m reminded of my own love of comic books. I used to buy comics, even when I couldn’t afford them. I went into debt and was unhappy. As I worked to overcome my debt, I cut my comic book habit. Now that I’m out of debt and building wealth, I’ve allowed myself to begin buying comic books again. This makes me happy — and as long as I’m not spending beyond my means, everything’s okay.
What do you think? Is frugality a means to an end? Or is it an end in and of itself? Is frugality a necessary evil — or is it a way of life?
Note: By coincidence, Trent at The Simple Dollar just posted an article breaking down the numbers on why frugality works. And just to be clear: I think frugality is an important part of personal finance, not matter which stage you’re in. But as I’ll discuss on Monday, balance is important.
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@ Samantha and Deb, those comparisons made me laugh! I do love my veggies, and my friends often tease me about it. I don’t consider healthy eating a hardship because I’ve embraced it and I find creative ways to do it. Besides, I think I enjoy the occasional piece of cake more because I don’t have it as often.
My approach to money is similar — I try to live well with what I’ve got, though I find myself joking that I’ll do something “someday when I’m rich”. Though it’s usually something I probably won’t do anyways.
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I guess it all depends on how you perceive frugality–you know, is there pleasure or pain associated with it in your mind? I see frugality as a means to an end, and a way to exercise better “stewardship” over my money and to be able to focus my money on things that I really want to spend it on, rather than being a victim of “loose spending” and not have anything to show for it.
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Thank you, Rob, for the story of how you paid off your mortgage.
For years it has been a dream of mine to own a house and we are planning to buy a cheap place (around 160k USD) on the countryside and do the restoration ourselves, but it still is a lot of money to pay off. I’m glad so see a practical example of someone who put the required effort into it, and became completely debt free within a reasonable time span.
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I agree with John T. Reed’s view on this one! Nobody want to live like Scrooge forever
(I couldn’t resist this reference)
It’s all about keeping a balance, life is too short to live like a miser. Pay off your debt (if you have any) – including your mortgage, setup an investment strategy that you follow forever, and have some “enjoy life” money.
Remember when you get older, you might not be able to enjoy the lifestyle you can afford at that time, so don’t hold onto your money too tightly! If you wait to long you’re not going to be able to go “to Barcelona to run with the bulls” when you are in your 70s!
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I like this. I was incredibly frugal for my early years (18-25) including the first years of my marriage. Now, at 28, we have been debt-free for years (except for student loans), have plenty in savings, and spend money on whatever we want WITHOUT feeling bad or worrying about it. My friends who charged things in their college years and scrimping now.
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This all reminds me of Dave Ramsey with his “Live like no one else today so you can live like no one else later”.
I think there is something to that – but at the same time, he is talking mainly about those that have a lot of debt to pay off when he touts his “beans and rice, rice and beans” mantra.
I don’t think being frugal is an evil, either. I agree with those that talk here about spending your money on things you value. I would add one more thing: spending money on things you are that you are responsible. I don’t feel like I value my medical bills, but I sure am responsible for them, lol.
Regarding education being a necessary evil, I think for some that truly is the case. I don’t think all degrees will have the effect of shaping a person. My opinion is that if you need specific training for a field (ie., health care, law, engineering, etc.) in order to work in it, by all means. While not having a degree may some what limit one’s employment potential, it isn’t always necessary either. I never finished college, and while I will admit I wish I had (and may some day), and that it has hampered my career a little bit, I make more money than the “average” person that has a two year degree, and sometimes the average person that has a 4 year degree (depending on what stats you are looking at).
This is all semantics, any way. What is one person’s evil isn’t to another. I do feel sorry for those that don’t know how to enjoy their money,though. Spending money can bring you some joy. I don’t understand how anyone can say that is NEVER true.
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As many people have already said, frugality as something to get through seems crazy to me. My guess is that this person is describing being cheap instead of frugal. Frugal is about having a high joy to stuff ratio, not about living a life with less joy. It’s a positive, life afirming trait. Also, you’re still being frugal if you spend a lot on something that provides a lot of value for you. It’s when you’re spending money and not thinking about the value something is providing you that you’re no longer being frugal.
In fact, I’d go as far as saying that frugality has nothing to do with money. It’s about being conscious about how much value you’re getting out of the stuff in your life. The fact that frugal people tend to have less stuff and more money is a nice biproduct of the trait.
Of course, you all know this already…
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Frugality overlaps with things like environmentalism and good stewardship of resources. Just b/c you accumulated enough wealth to retire doesn’t mean you can start eating on paper plates. Is the savings on the water bill the ONLY reason you don’t let it run constantly while you’re brushing your teeth?
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I don’t believe anyone who says that more money would not make them happier. Even if your material wants are nil, can you honestly say you wouldn’t enjoy having enough in the bank to stay home with your family rather than spend that time at the office?
And if you DO prefer the office to being with your loved ones, well, then you’ve got a whole other set of issues.
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@Marie
I think I would feel more secure, but not necessarily happier. I feel very happy now and I know a lot of people with more money who are not nearly as happy. I think happiness comes primarily from inside, like how you look at your situation and your ability to enjoy the simple pleasures of life right now. I’ve had “friends” ask me why I live so “poor” and why don’t spend more like they do, but I feel like I live very richly and I can confidently say that I am happier than them even though they might have more stuff and eat out more.
It would be nice for my husband and I to not have to work so we could take some more time to travel, but I think we still would work plenty regardless of our financial situation. We love each other very much and have a fantastic marriage, but there is certainly a sense of pride that comes from doing good work and we’d both miss that. And, though we also work well together, we still do need our time apart. I think life without work would be boring because I really love challenges — and sometimes we avoid challenges if we aren’t sort of forced to them by work. And in fact, I recently read that one of the secrets to longevity is to keep working instead of retiring completely in old age. I believe it. The people I know that have retired have found it not nearly as fulfilling as they had hoped — which is why I’m glad to be focusing on living now and not waiting for some future that may or may not come and may or may not be as I expect.
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Reminds me of an old saying in Kannada, “hasige iddashtu kaalu chaachu”. Which means, stretch your legs only as much as the bed is….
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I got Succeeding from the library and I’m going to look up this quote in context. I’ve read some of John T. Reed’s other stuff and he seems like a logical, sensible kind of person to me, so I assume it’s a matter of word choice rather than life philosophy.
I certainly do know some people who view frugality as “evil” and spending money as “happiness,” but that view is neither logical nor sensible.
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I think John T. Reed’s quote is terrible! Frugality is NOT an evil–an evil is a vice–frugality is a virtue and in no way a vice. Frugality is closely related to stewardship, and stewardship is part of the Muslim, Christian, and Jewish tradition. Frugality is not some dirty word; it is a standard to live by and is very much a part of Eastern philosophy and spirituality. Those who misbelieve that being frugal is an evil only fall into the typical misguided materialistic and consumeristic worldview that produces selfishness and self-centeredness instead of empathy, compassion, and charity.
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i think frugality can lead to overconsumption. so you make your own laundry detergent and save yourself 60$ a year. that 60 goes into your pocket as many would say. so now what, you either spend that 60$ on something else or you die with it in your bank account.
at the end you have laundry detergent, PLUS whatever else you bought with your saved 60$. for some this is “stretching your dollar”, maybe they need that 60$ to buy food or shelter. what if you use that 60$ to buy a second home, or coffees, or books or a haircut or whatever. IMHO it can lead to overconsumption of a bunch of useless crap you probably don’t need anyways. buy the laundry detergent and spend the time you would have spent making your own on something useful. help someone else, spend time with your kids, go burn some calories.
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I think the advantage to practicing frugality while you’re young (during/right after college & during the early years of marriage) is that you can figure out which areas will be lifelong habits and which you’ll be eager to move past. While I was a low-income, single mom getting rid of my debt, my grocery budget was obscenely low. Now, 8 years later, I relish being able to spend what I want at the grocery store without having to worry whether I’ll have enough – very unfrugal of me (I still carry the cash envelope system though!). However, I have not felt a need to give up my Goodwill/thrift shop habit. I can buy much higher quality clothing at Goodwill at a much lower price, and I don’t feel the need to get it “firsthand.” I think we all have areas like this that if we had ever tried it the “frugal” way first, we might never have changed even once we were able to.
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Be Frugal. Things that you own, later start owning you.
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To me, Frugality = financial thoughtfulness. And as others mentioned, spending money only on things you want, value, and will get use of (and I consider ‘happiness’ a valid use, and cutting down or cutting out things you don’t need, use, or care about.
My goal in life is to have as few bills as possible so I can save enough each month to pay for things outright, so that I don’t have more monthly expenses. I only want to pay what is required in order for me to have and do the things I enjoy. I hate monthly expenses. I want to get to a point where I only HAVE to pay:
- property taxes (annually)
- homeowner’s insurance (annually, if possible)
- car insurance (bi-annually)
Everything else would be under my control and I love that. Even when it comes to necessities like food and utilities, I like that I can control the expenses and amount I purchase. I didn’t count health insurance as I’m expecting that to be automatically deducted from my paycheck pre-taxes, through my employer. Cell, prepaid; only paying for what I use etc etc. Aaannnnd, I would have everything autopayed from the credit card and pay that off once a month. I like thinking about saving money but I hate thinking about spending money and the more actively involved I am in paying bills the more aware I am how expensive it is just to exist in this country.
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Also, I view frugality as the difference between buying something because you like it, and buying something because you’re willing to pay the money for it.
I see stuff all day, everyday that I love and would like to have, but I wouldn’t spend the money on it, so obviously I didn’t love it enough to want to buy it at that price.
This thought process really helps me out when I see a ‘want’ that I like. If I like the item so much that the cost is not enough to deter me (even if I think it’s expensive, to a reasonable degree of course) then I rationalize that I should get it as it is more difficult for me to spend money on things than a lot of people.
As a result I rarely experience “Buyer’s Remorse.”
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