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Dominate Economic Fear With Frugality

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As you not doubt have heard or read, the bailout bill never made it out of the House yesterday. The Dow was down seven hundred and seventy-seven points. 777. No very lucky. That’s a lot of points (single largest point loss ever and fourth larges percentage-wise). If you missed the roller-coaster ride, count yourself lucky because you and I and probably everyone you know (certainly most of the people I know anyway), none of us have any control over the matter. So rather than sweat the stuff we can’t control, start concentrating with something you can – being smart with your money.

Last week I had the pleasure of chatting once again with Lynnae of BeingFrugal.net, Steve over at Brip Blap, and Tess Vigeland of Marketplace Money in this interview. In our little discussion, Tess asked us what we thought the future would bring and Lynnae had a great answer. She said that she hopes this will bring out a new era of frugality as people ratchet back their consumer spending and boost their savings. She thinks that our years of excess are coming back to haunt us and hopes this will spur more people to save, rather than spend their last dollar.

Steve responded by saying that while frugality is important, looking to generate more income is another component of wealth management that we shouldn’t forget. While I agree with Steve, I think that we’re in an era where it’ll be far easier to spend less than it is to earn more. While you need to do all things in moderation and in balance (you can’t just be frugal, just as you can’t just focus on earning more money), right now frugality is the easier thing to focus on.

Being frugal is something that anyone can do and it can help you manage your fear of the economic unknown. No one can say where the stock market will go tomorrow, but you have all the say in where your next dollar will go. Will it go to your bank account where you can earn interest or will it go to your favorite store in the mall?

You don’t have to make your detergent or bake your bread or split two-ply toilet paper or buy a toothpaste roller to squeeze out ever last ounce, there are plenty of simple and fun things you can do to save money. Try cooking more meals and eating out less. Try line drying your clothes rather than using the dryer. Heck, if you need tips, check out Lynnae’s blog because it’s chock full of them! Or read the Festival of Frugality every week for great tips from all of the blogosphere’s frugal bloggers.

Control what you can, let the rest go where they’ll go.

{ 11 comments, please add your thoughts now! }

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11 Responses to “Dominate Economic Fear With Frugality”

  1. Ron says:

    Great ideas Jim. They key, in my opinion, is to do what you can and not worry about things beyond your control. I CAN drive less. I CAN maintain good health. I CAN do well on my job (so I get to keep it!). I CAN put on a sweater and turn down the heat. I CAN learn the lost art of contentment so I don’t spend every dime I make to buy stuff.

  2. jim says:

    To some it may sound stupid – the stock market tanks 10% and you’re telling me to put on a sweater and turn down the heat to save a few bucks? Sure, it sounds silly when you say it like that but ultimately it’s about doing what you can to control your life and letting the things you can’t control do what they will.

  3. Hi Jim,

    Thank you for highlighting frugality. I believe that if we all directed our focus on saving, there would be no need for the current bailout. We can solve the credit crisis ourselves by putting our money in savings accounts, thus giving banks the liquidity they need to lend out to other banks, businesses, and consumers.

    America has 300 million people. If 200 million of us put $100 in a savings account, we’d give the banks $20 billion. If those same 200 million people set up an automatic transfer to save $100 every month for three years, banks would have more than the $7 billion they need to solve this problem — and, instead of paying extra taxes for that money, we’d be earning interest on it.

    I just wish more people espoused this theory that we can fix the credit crisis on our own!

    -Erica

  4. Whoops, previous comment should say “…much of the $700 billion…” Sorry about that.

  5. Curt says:

    Sure, we can all put on a sweater and turn down the heat. But unless you have been doing that for the last ten years and paying down your debts, it’s too little and too late.

    In order to get out of debt, many are going to have to turn the heat OFF and put on there winter coats for a few years before they can get back to wearing a sweater.

  6. jim says:

    Erica: That is a good point but people are inherently selfish and saving kind of goes against that selfish mantra.

    Curt: But it’s better to do that than panic about the stock market!

  7. Jackson says:

    Luckily I’ve always being frugal so not much will change for me. However it’s so tempting to start buying up stocks right now since the prices are so low!

  8. Patrick says:

    Most Americans are impatient and want things immediately. Making meals on your own instead of going out to most is considered “wasting time” and are not patient enough. The same goes with buying stuff on sale. Instead of waiting for a product to go on sale, people have to buy it immediately. Hopefully many Americans will start to see that they cannot continue to spend so frivolously.

  9. Great advice. Control what you can and forget the rest. By being frugal you are insulating yourself from the worst of the economic shocks.

    For someone who is not used to being frugal the change can be difficult but in the end being frugal is one of the best ways to gain control over your finances.

    Easy? No way. Necessary? absolutely!

  10. Lynnae is great isn’t she? I’m so glad to be on the Walmart 11Moms program with her! I agree with her point about frugality becoming more mainstream-I’m hoping that “frugal” will stop being a “dirty word” in some people’s vocabulary! I’ve already noticed it popping up on tv commercials and in the print media more and more.

    And I disagree with Curt-sure, putting on a sweater and turning down the heat won’t FIX everything immediately, but you have to start SOMETIME in order to make a difference. And little things do add up rather quickly. Like the good old “latte factor”-cutting out that $1.89 cup of coffee (not even a latte) each week day 50 weeks a year (giving you 2 weeks of vacation there) comes out to a savings of over $450 a year. 4 or 5 changes like that (bringing lunch, cutting out a few nights out etc) could really make a big difference in the long term.

  11. Daphne says:

    Thankfully I live in a warm climate and don’t have heating bills. But we have big air-conditioning bills instead! In recent years I use the fan instead of air-con and it helps when the savings add up over time.

    Yes it’s much easier to control spending than increase income, and there’s no reason we can’t do both at the same time!


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