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A Case Against Blind Frugality
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This is a guest blogging post by William Trent, editor of Stock Market Beat.
As an investor, I frequently look at things from the contrarian perspective (or maybe I’m just disagreeable.) So when I was considering what to post as a guest blogger on the home of the Festival of Frugality, I thought maybe a contrary perspective on the frugal life might be in order.
Don’t get me wrong – I’m all for being thrifty. In fact, I think “Live well within your means” is an excellent motto. It can be read two different ways – live well, but within your means or live well (far) within your means. If you strike the right balance between those two ways of looking at it you will be happy and, eventually, wealthy.
So my contrarian perspective on frugality is that I don’t think some people are doing the cost-benefit analysis. You know the ones I am talking about – they spend three hours combing through the coupons in the Sunday paper to save $10 on their groceries, when they could have made $25 or more by working those three hours instead. Taking a second job or working more hours at your primary job benefits your finances in two ways:
- You earn money
- You are too busy to spend it
You can’t get more frugal than that – 100 percent savings rate on your extra time. Even if you work in a salaried job (and thus don’t get paid extra today for the extra hours you work) in the long run hard work will pay off. When the next promotion becomes available, the conversation will go something like this:
Your Boss: “I think we should promote (your name.) (S)he is always working long hours.”
Big Boss: “What about Fred?”
Your Boss: “He is always trying to catch the early bird special at El Burro Barato.”
So don’t be Fred. Stay frugal, but make sure the time you spend doing it doesn’t have a more productive use.
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Ah, opportunity cost! Microeconomics was patting me on the back while I read about the coupon-cutter; it seems I can’t escape that class.
Lizard -
There’s no escaping the law – of supply and demand!
Trent
I like your office scenario! And, I agree with your theory.
Amanda,
Thanks for the kind words!
Nice article Trent. As with many things people can take them to the extreme…you illustrate the nicely.
I agree with you. My friends mom had a stack of papers, used for cutting coupns. Have you ever priced the subscriptions to newspapers? I figure that she could save more money by getting rid of the papers and just using store price cuts. Some people fail to look at the bigger picture.
LOL. Thanks for calling me frugal, but about the bedframe, but the reason why we don’t have one is that we have been unable to find a bedframe we like that fits up the damn staircase. We live in a 3 story townhouse that was built in 1880s victorian. Thus the doors, staircases are super narrow.
We had a queen size bed and frame, but it didn’t fit up the third floor so we stuck it in the guest bedroom. Then we had to buy a split box spring for a queen bed. We also ordered two bedroom sets which the armoires didn’t fit and one of the headboard didn’t fit either. One of these days we’re going to find something we both like and will fit.
I guess I am frugal. But I’m frugal about the big things, I buy coffee and find it no big deal. I also do not coupon shop and I enjoy vacationing. But my point is that lattes don’t matter, it’s the big ticket items.