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Your Take: Why Are You Frugal?

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Frugality has become a very hot topic lately because of the recession. In fact, it became the topic of Chris Farrell’s The New Frugality and one that I think was overlooked for far too long. Despite my Devil’s Advocate post saying that frugality was foolish, I believe the being frugal is exceptionally important, especially if you’re young.

When you’re young, you usually have very little money but a whole lot of time. You’re able to turn that time into money through your work and that’s generally where you make the bulk of your income. As you get older, your savings grow and are able to generate income and, hopefully, generates the bulk of your income. The more you can save when your young, the faster that capital accumulates and you can live off that income. You go from depending on your labor for income to depending on your capital. I’m frugal because I believe my dollars can work on my behalf if I can keep them in my wallet.

The second reason I’m frugal is because there are things I value and things I don’t. For the things I don’t value, I want to pay as little as possible. I don’t pay top dollar for a brand new car, I buy used and off Ebay to get the best deal I can on something reliable. I don’t need a $40,000 or $30,000 or even a $20,000 car (and the car loan that comes with it) because that isn’t important to me. I’m able to save there so that I can spend my money on the things I do care about.

As I’ve often said in the past, my lovely wife and I love to travel and when we do, I pay for quality and value. I don’t spend freely without regard but I certainly budget a large amount for the trip and spend close to it (if not more!). As Greg Karp once said to me, Experiences appreciate, things depreciate, and I fully intend to invest as much as possible in experiences. :)

Why are you frugal?

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74 Responses to “Your Take: Why Are You Frugal?”

  1. Monevator says:

    I want to be free not to worry about where money is coming from. Ironically discovering this impulse in myself over a decade ago made me learn more than any sane person would choose to about money and investing (and in my 20s too – I must have been nuts!)

    I’ll probably be a little less frugal once I’ve secured my future income stream, but I’d never go crazy. It’s ingrained now!

  2. I’m frugal because I do not want to have to work my entire life. I would like to retire at an early age and enjoy my time. I am also frugal because I hate it when I overpay. It makes me angry if I buy something and I later find out I could have paid less.

  3. Yana says:

    I think it’s like most things, mostly nature and some nurture. I never had a support system as a child or young adult, and didn’t know that there was someone to depend on financially or otherwise. I developed the attitude that you don’t spend money unnecessarily, but use it to obtain quality and value. You don’t pay for what you can get for free, and you don’t buy cheap garbage to avoid paying more for the good stuff – instead, you buy nothing until you can afford acceptable quality. You also don’t need as much as you think you do. I highly prefer frugality and spending less to earning more. I have little control over my earnings, and don’t have the ambition to seek a large regular income. I always wanted to save, and did so even when my income was so small that others couldn’t imagine savings being possible. I consider it essential to save. And I think it’s fun to see how little you can live on (when you do it by choice), while still enjoying life.

    I was kind of deprived in the past because I wouldn’t be indulgent, but these days I feel very indulgent now that I’m not that poor. I do what I want, mostly, but the key here is that there are many things that don’t interest me in the least. We don’t do movies or DVDs, and it still doesn’t occur to me to order a beverage in a restaurant with a meal.

    I am frugal because I want to be rich without spending time and energy doing what I don’t want to do for money. My husband has toned down my frugality, as I have toned down his wastefulness – but he still orders beverages in restaurants ;)

  4. Dreamer says:

    I’ll agree with Saladdin: Fear.

    To elaborate. I grew up not poor, but close to it. We once spent a Thanksgiving meal at a soup kitchen, I knew that if a bill collector called, nobody was home, and my toys and books were from either Goodwill or the trash compactor behind my apartment complex. More than once, my name was on one of those “giving trees” for Christmas gifts. I was always fed and sheltered though, so I have no real complaints.

    We were always one bad turn away from being in real trouble, and occasionally, we did get in real trouble. My parents were in deep, deep debt just covering the bills.

    Even though I was a kid, it’s impossible to hide the fearfulness that’s in a house when people feel overwhelmed, and I felt it too.

    To avoid that fear, and that feeling, I learned from those lessons. Not only do I try to save my money and have smart personal finance strategies and, but I know that I don’t need brand names or expensive things to be happy since I never had a chance to get used to them in the first place. We had no cable TV service for most of my childhood; I’ve seen no need to purchase it now. We only had used cars; I see no point in buying new.

    As another, possibly negative side effect, I hoard money. I squirrel windfalls away into accounts I purposely don’t track, I keep cash hidden, and my emergency fund is a lot larger than a typical 3 month fund. I even save my credit card miles and pizza delivery points in case I need a plane ticket or food. There’s an opportunity cost for that, but I consider it sanity money.

    Even though I do all that, there are still times when I’ll have a dream where I’m completely out of options, out of money, and I have to tell my wife that I’ve failed. I usually wake up in a sweat, and don’t sleep again for the rest of the night.

    I’m very financially secure, both my wife and I have extremely stable jobs, very little debt, and we could pay all of our bills off of one of our paychecks, but I still remember that feeling of no savings, no health insurance, and no fallbacks, where the slightest extra expense means choosing between which bill gets paid this month.

    tl;dr: Wasn’t poor as a kid, but just on the edge of it, never wants to be there again.

  5. Wise Finish says:

    I am frugal because I believe that everything I have is a gift from God and I am called to use it wisely. Have you read the parable of the talents?

    http://www.biblegateway.com/passage/?search=Luke%2019:12-28&version=NASB

  6. Rosa Rugosa says:

    I guess I just finally realized that it is so foolish not to be frugal! And who wants to be foolish?

    • jsbrendog says:

      exactly. it is just a solid life decision. And if you just skimp on things that aren’t important to yo you can splurge on things that are and not hurt yourself financially in the long term.

  7. Dreamer says:

    @Wise Finish. What a terrible story! A tyrant, slaves, the death penalty for people that dared to have a say in their government?

  8. hoht says:

    Hmmm, I have little money and lots of time. Although one wouldn’t get paid hourly to volunteer, I see dividends in the long run. It’s like I’m paying my future self now :D

    • Shirley says:

      In the end, what goes around also comes around and helping others in any way (other than enabling a destructive habit) is always self-satisfying.

  9. I think the reason I am frugal is the way I was raised. My family business is farming, and when I grew up in the 1980′s farming was tough. I saw my mom and dad stretching every penny and there was not a lot of extra cash around most of the time.

    I get teased at work for being frugal or cheap or whatever you want to call it. However, at the end of the day it is hard to change, at least for me.

  10. I guess the desire to be able to quit working sometime before I’m decrepit motivates my frugality. Also the idea that the more money you have the more money you make is really appealing to me. Someone giving you $2000 a year just for having money feels pretty good.

    The same rush people get from buying things I get from watching my savings grow. When I have to buy something large I feel bad. My Pentium 4 that I got in 2004 recently died and so I had to get a new computer. Even though I’ve been wanting one so I could play the latest video games I still felt the $900 hit to my savings.

    The furniture in my house consists of my bed, my computer desk, and my computer chair. I live alone so I don’t have a need for any more than that. Being smart with money means thinking about what you really need and what you could live without. You can’t be a sheep and buy into the consumerism.

  11. Yana says:

    Jim, just to clarify – you buy cars off eBay? My husband wants to get a classic car someday, and looks all the time at eBay. Is it a safe thing to do to buy cars there?

    • Jim says:

      My last two cars were purchased off eBay though I wouldn’t say I “buy cars off eBay.” It’s pretty safe as long as you talk to the seller, both times I bought from dealerships so it was pretty safe.

      • jsbrendog says:

        ok i was going to say…buying from a dealr off ebay, imo, isnt really “buying frmo ebay”

        it is when you use and independent seller that i would be suspicious. at least with a dealer if you have direct contact you can negotiate certain things and hold them liable.

  12. Ken says:

    I am frugal because I don’t like new debt. I have also taken 2 pay cuts in last 6 months…even more reason to seek out great deals. Who ever said you have to buy “new”?

  13. dmeanea says:

    As I read through these comments, I find myself agreeing most with the ones which seem to say: “I’m frugal whenever I can be so I can spend that money on experiences or things that really bring joy to my life.”

    Certainly there’s something to be said about saving for the future, and Jim’s post “Working Americans Have Almost No Retirement Savings” was quite sad news. But at the same time I don’t believe that future need always trumps enjoying life today.

    Jim, is there a potential Devil’s Advocate post here? :)

  14. bloodbath says:

    I’m frugal for several reasons (1) my modest savings has to sustain me now during a period of unemployment and at my retirement as well. (2) it makes me feel I’m getting over – I don’t know why it does, but it does. I feel sneaky/smug that I’m able to live on much less than people with the same assets as me. For example, one of my renters complain about her utility bills for a one bedroom house and my bill is 1/4 of hers for a home that is twice as large. (3)I think most of us live way beyond our means and destroy the environment while in the process. I think I’m doing my part to lessen the effects

  15. Clayton says:

    Here’s a few reasons I like being frugal

    I like feeling like I got a good deal

    I like knowing I’m in control of my money and not the creditors

    I like being able to deal with an emergency because I planned ahead so
    it’s not as horrible as it could have been.

    I want an AWESOME retirement

    It makes me feel smart and wise.

    Of course these are in no particular order, as always…

  16. Jane says:

    I’m frugal because I spent the first 8 years of my working career in housing that had less than 700 sq. feet. Even now that I don’t live in NYC I find I don’t need a lot of stuff to make me happy.

    • govenar says:

      hmm, your “frugal” housing was still twice as big as my apartment…

      • Jane says:

        No my housing made me more frugal. It taught me to evaluate if I really need that new whatever because I’d have to put it somewhere. Of course I now was just exposed to the the other side. A co-worker who just transferred to our Atlanta office was talking about the 8,000 s.ft. house he bought because it was “too good of a deal” to pass up even thought they are a family of three. I’d rater go back to 700 s.ft. (or less) than deal with 8000.

  17. mikestreb says:

    Cause I’m broke because my father-in-law spoiled the shit out of my wife and she isn’t one to ‘change her ways.’ So she spends money on stupid stuff that isn’t cheap.

  18. echidnina says:

    …Excuse me? Are you being for real?

  19. aua868s says:

    in most situations, i am just a few mins away from internet..so it makes me avoid the $30+ fee on cellphone data plan

  20. ebekele says:

    to retire before i turn 40 and the freedom to pursue my passion

  21. Chris says:

    So that my children may be well educated and learn to avoid financial servitude while experiencing greater achievements and happiness than I could ever dream for them.

  22. dymphna says:

    i think i was just born with the thrifty gene…..

  23. zapeta says:

    I’m frugal because work sucks and I want to retire as soon as possible!

  24. eric says:

    I absolutely agree. Frugality is just a process that lets you enjoy the things you enjoy even more. It’s a good habit to establish when you’re young and keep it going.


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