As a personal finance blogger, I have a confession to make. I’m not all that interested in frugality, at least not in the way most people seem to understand – and most importantly – practice it.
As I read other personal finance blogs that discuss being frugal, two ideas, often related, emerge with respect to frugality. The first idea is to spend as little money as possible, at all costs. This effort is often characterized by actions such as sacrificing some indulgences (e.g. daily Starbucks [or plug-in your favorite purveyor of coffee here] coffee), clipping coupons or bargain shopping.
Giving up the Daily Latte
Although I generally brew my own coffee at home, I have no problem going out and spending a few dollars on coffee. If I enjoyed visiting my local coffeehouse on a daily basis, I would do it. The wife and I have clipped coupons in the past, but quite honestly, I find it to be incredibly tedious; it just isn’t worth the effort for me. Regarding bargain shopping, I do pay attention to the price of goods when I’m out shopping. I will quickly scan the prices of competing goods at the grocery store and go with the lower priced item – generally the generic brand – if all else is basically equal. However, I’m not going to spend a great deal of time comparing each available product and I’m not going to go out of my way to save a few pennies. I know people who will drive out of their way to save a few pennies on gas. Not me. When I need gas, I pull over and fill up. I’m not losing any sleep worrying about the price of gas and thinking of creative ways to spend less on it.
The second idea is being frugal – as described above – is the means to the end of retiring early. The basic belief is that every nickel you save now will add to your ability to leave the workforce earlier than most. While I’m not opposed to leaving the workforce early, I’m not prepared to sacrifice some indulgences, relentlessly clip coupons or spend an inordinate amount of time comparing prices to do so.
Don’t be a Miser
Particularly in difficult economic times, there may be a tendency to make every effort to spend less no matter what. Blindly spending less is not frugal … it’s cheap. To me, being frugal means spending money wisely in an attempt to get as much value from selected products and services as possible. Being frugal does not mean deprivation, being miserly or feeling cheap.
One recent decision I made perfectly captures my view of frugality vice how others seem to define, and practice, it. About five months ago, I completely cut the cable cord. I canceled my television service, only maintaining the fastest available internet service from my provider. Along with my Netflix and Amazon Prime services, I picked up a subscription to HBO Now (I lost access to HBO Go when I cut the television service) and upgraded my Hulu subscription to Hulu with Live TV. When all was said and done, my service cost was cut almost in half. I was paying $250 previously, I now I pay about $135 for the internet service and the streaming subscriptions.
While I’m glad we’re saving some money each month, that was not the impetus. The wife and I found ourselves watching very little live, network television and we prefer the convenience and advantages offered by streaming our content. The savings is just a byproduct of choosing the services which work best for us. Contrast that with someone who perhaps enjoys a traditional cable TV package but gets rid of the service – and completely gives up her daily Starbucks coffee – as part of a larger overall plan to save more money with the express intent of retiring early.
I have some news for that would be super saver. Saving a nickel at every opportunity – particularly if it’s on something you enjoy – is not going to be the key factor in becoming wealthy and enjoying a comfortable retirement. There are other factors (e.g. salary, savings rate, time, healthcare expenses, etc.) which have a more direct, significant impact.
I’m not suggesting all out hedonism, however, life is to be enjoyed. Don’t be afraid to spend more on quality goods and services; and don’t be afraid to spend money to have fun and partake in the finer things in life.