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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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Having goals motivates me to be frugal. It’s the other side of the coin that you mention. I deeply care about certain things (like getting a house) that I’m willing to cut or reduce the unimportant things.
Goals help you prioritize your spending and helps you examine what your really value in life.
For me, the simplest and truest answer to ‘why are you frugal’, can be summed up in two words: My Family.
I can’t even begin to explain how much my financial intelligence grew and how much more frugal I became, once my children entered this world.
“Why are you frugal?”
I agree with all of your reasons for being frugal. I think the main reason I am frugal is because I was raised seeing that as the norm.
My parents lived through some hard times, as did their parents, and being financially conscious was just a natural way of life for our family. While we definitely have everything we need, we do take a moment to rationalize things we want and their timing.
This has led us to a very comfortable retirement and I couldn’t be any happier with the whole situation.
I agree generally with your ideas. I’m generally frugal because I want to have a time when I don’t need to work in order to pay bills. I do waste money, like most people, on some things, but I’m conscious of what I spend money on and only spend one what I can afford.
Partly what drives me also is that my in-laws like to say I’m frugal (what they’re meaning is that they believe I’m cheap, even though I’m not), but then complain about money issues and how my wife and I go on vacations. We can do those things because we are aware of what we spend elsewhere.
I’m frugal for many reasons. One, it increases my enjoyment of life. I notice this most in restaurants – if I eat at fancy places often, I don’t enjoy them as much as the one special “date night” we do every other month or so to somewhere new, tasty and exciting. I fight lifestyle creep in all areas of my life because it makes what I have that much better and the special treats that much more special.
I’m frugal because it will create freedom. I have $40k+ in student loans and am working diligently to pay them off. When I’ve done that, I will be obligated to no one, and that will be wonderful.
The last big reason is that frugality is good for the planet. Reusing, using up, making do or doing without is inherently better for the environment than spending without discretion and throwing out perfectly good stuff. I am the one that takes home my coworkers leftover sandwiches and the extra pizza from the work party – win win win as far as I’m concerned. I reuse bottles and Ziploc bags.
Plus, I want to take a year-long trip around the world in the next 5 years and I won’t do it by spending frivolously!
I have two reasons:
1. Opportunity Cost.
2. It’s fun.
The Cost of not being frugal is higher than anyone would likely admit.
For many people (to paraphrase Tobias): “A Dollar spent is 2 dollars earned”. Once taxes and inflation take their piece of your income pie, There is quite a bit less to spend on stuff.
Simply put, you are either investing in your future or stealing from it. There is no equilibrium.
2.
Frugality is quite fun.
I absolutely love to get a bargain. I’ll have to tell you all about how I got a great deal on my tractor.
One of my favorite things to do in the spring is to go to Estate sales and/or yard sales. You can find some of the most amazing things. Have I told you about my car purchase? The (almost) Brand new Leather Sectional I got from Craigslist for a song. Maybe I’m crazy but I tend to like the things I have alot more just knowing I got it at a bargain.
Now, everyone’s definition of frugality is different. For me, frugality is simply being smart with your money. I’m not cheap and I rarely buy things because they are cheap. Most times it is quite better to buy a used high quality item for more than a cheaply made new one. I try to apply a total cost of ownership model to anything of value. This helps me get the best deal and may also convince me to just rent the thing instead.
I also like when I get a bargain. Sometimes its a little more work, but always more satisfying.
I think that it allows you to appreciate things more.
“Frugality is quite fun.
I absolutely love to get a bargain.”
I totally agree! Getting a great deal on something is very satisfying.
Necessity. Two years ago my truck finally died on me, and I had to get a new vehicle. This was right around tax time. Because the office manager had screwed up my W-2, I hadn’t been paying enough withholding. Between the down payment for my car and about $2000 in owed taxes, I had about $2000 left in the world, which was about 1-2 month’s expenses at the time. This woke me up and I started keeping track of what I spent my money on and was shocked at how much I was wasting. So now I try to watch how much I spend. I’m not perfect at it, (I still eat out way too often), but I’m making real progress, and I’m planning on having my car paid off in 9 months, which is my only debt.
It’s in the genes. Both parents raised in the great Depression, Mom in an orphanage,Dad barely scraping by on a farm. They knew how to stretch a dollar further than anyone I know… some of that rubbed off… and the idea there is nothing worse than wasting money, food or anything else on God’s green earth.
Rebellion.
I come from a very materialistic family where it’s believed that happiness = how often you upgrade your luxury car, the sq. footage of your house, the logos on your clothing, etc. They are living WAY above their means.
I work a low paying job because I LOVE it. I drive a modest Civic, I’m purposefully looking for a place that’s small (why waste money on utility bills to heat up space I don’t need?), and, gasp!, I don’t have a single Louis Vuitton bag, real or fake! Oh whoa is me! I must be sooooo miserable with my awesome credit score, cushy emergency fund, my retirement savings and my zero debt!
My mom worries about me. Just because I don’t wear my wealth she thinks I’m penniless, toiling away at a minimum wage job, miserable. I’m like, “You know what makes ME happy? Being able to sleep at night not worrying about how I’m going to pay the bills. Not having to FREAK OUT when something comes up because I have money saved to take care of it.”
Awesome!
I have friends and family just like that. I hear the “You have SO much money, why don’t you buy a bigger house/ newer car”.
This is advice coming from someone who drives a 2010 Mercedes, Lives in a 4500 Sq ft McMansion (way underwater) and lives paycheck to paycheck.
All I see are the same 4 wheels that I have and way too much space to furnish, clean, heat and cool.
uh, no thanks
-WR
I love your story… you are one smart rebel-rowser!
I like being frugal since it gives me the feeling that “I’ve got a good deal.” This makes me appreciate the things that I have purchased even more! For example, I was super excited to get a 4 Star hotel using Priceline for only $75/night ($90/night after taxes and fees) in Miami! When staying there I wasn’t too upset that the room didn’t have a minifrig since we were paying so little in comparison to others around us… Being frugal is fun and I enjoy being able to spend the money I’ve saved on other things such as yummy Cuban pastries!
Yeah! I’m frugal for some things in order to be able to splurge on other things. If I don’t eat out very often, I can treat myself to a new pair of shoes (or whatever) with the money I’ve saved.
“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.”
this. i feel the same way. Even if i really want somethig of value and am willing to pay for it I will do my homework and wait and find it at the best price. Plus, in my research sometimes i even find something comparable or better for a better price/deal.
“Experiences appreciate, things depreciate, and I fully intend to invest as much as possible in experiences. ”
This too. I will gladly eat a peanut butter sandwich every day for lunch at work and be able to go to all the concerts I want to see or go on two vacations. Cheap used 4 door car with good gas mileage? boom, more chances to travel around the northeast. it is all about weighing what you want out of life. Experiences are what make us who we are and give us our personality.
I’m frugal because it allows me to park more of my hard-earned dollars towards creating an income stream and retirement purposes. Also, by being frugal, I don’t mind splurging a bit more when my wife and I go on vacation together. It ends up being a more satisfying too!
Nice post
I am frugal so that I can focus on the things that are important to me, being with my family. With my furst baby on the way, my husband and I have spent the last few years trying to pay off everything and make sure we have enough in savings so that we have some flexability about whether I have to work or not. So, like a lot of people, being frugal = freedom to me to do the things I want, not the things I have too.
Once something that was so special becomes commonplace, it isn’t special anymore. Self-satisfaction and experiences are two things that should always be special and be worth frugality in order to have.
Shirley,
You hit the nail on the head. Things don’t make us happy, experiences do.
http://www.cnn.com/2009/HEALTH/02/10/happiness.possessions/index.html
Some of the best experiences in life are free (or near-free).
I’m frugal because one day I want to have the *option* to start my own business, or retire early, or work a lower-paying job. I never want to have my standard of living dictate what I need to do tomorrow – I’d rather let bigger life goals dictate that.
That kind of sense of security is really valuable!
A men. It is hard to not give in to the temptations of today when your are fighting for the rewards of tomorrow.
I’m frugal on the things I don’t care about (like cars and furniture), and not as frugal on some other things that we enjoy like travel. Overall, however, we like to be frugal so that we can save up for our future, and so that we can give more and help others as well!
I’m frugal for these main reasons:
1. I grew up pretty poor.
2. I started working (babysitting) at about age 12 where I started understanding the value of a dollar.
3. I think frugality can also be a form of being environmentally conscious. When I can reuse and repurpose I save money plus help the environment.
I am frugal because its just the way I am. I have a very strong sense of want vs. needs. I understand that I don’t want to pay too much for things that I want, just what I need. But then again there are things, like you said where I enjoy a lot and hence I want to get the best. We too like to travel and when we do travel we like to do it well.
Great blog by the way. I just found it!
My frugality motivator: FREEEEEEEDOOOOOOOOOOOM
A very nice post. Here’s why I like being frugal:
1. As you rightly mentioned, I like to save so that I can spend on things I care.
2. It’s easier to save.
3. Being frugal helps me save for a rainy day plus helps me build a good savings that I can invest so that money makes money.
Fear.
saladdin
Could you elaborate?
As I read all these comments they can be summed up as “fear.” I’m no different.
Fear of dying broke.
Fear of working my whole life for nothing.
Fear of getting taken advantage of.
Fear of ending up like parents.
Fear of others thinking we make bad money decisions.
Fear of ending up making $7.25 in a factory.
Of course some will read this and say they don’t have “fear” when in fact fear drives all of us.
saladdin
Sometimes a healthy fear comes from knowledge, logic, or aforethought. Having followed your comments, I would imagine that yours is concerned with all three. Not at all a bad thing as long as it is not all-consuming.
I am a mad bargain-hunter… If I can help it, I try not to buy anything at full price. Once I realized that you didn’t HAVE to pay full retail $ for things, it became a game for me. How cheap can I find this printer ink/coat/set of knives/item I need? Then it becomes all about the ‘thrill of the chase’, so to speak.
Saving money can be a rush! And then you have that money left over to put towards savings or things that you want.
I think the reason I use coupons is that it’s like a game, trying to get the best deal, even though it only saves a few dollars and probably isn’t worth the time on a purely financial basis.
The rewards game! For a year or so my Discover CC had Staples as a cashback bonus where $20 was worth a $40 certificate at Staples where I bought computer related items. I would buy the needed item on sale there with the certificate and the price of that item would go on my Staples Rewards total for another quarterly bonus. That was a fun game while it lasted!
I’d say my parents… I watched my mother self destruct on debt(more than once), and my father burn out working 2-3 jobs at times trying to dig out after their divorce. I won’t say I haven’t made mistakes but I learned from them and I got thru school on as little in fed loans as I could get away with, no CC debt, started a IRA early, and save a good part of my meager PT pay both in school and now while I’m looking for a well paying full time career position. I am not interested in having the bigest, best, shiney new toys but would rather have the means to live comfortably without having others controlling my choices.
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!
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.
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
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.
Thank you. This is the most honest comment I have read.
Good luck.
saladdin
Dreamer, I love your honesty and self-awareness – and I can relate.
Wow, that definitely is a good reason to be frugal. It’s good that you are being frugal and hopefully pass that same trait onto your kids like my parents did with me.
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
I guess I just finally realized that it is so foolish not to be frugal! And who wants to be foolish?
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.
@Wise Finish. What a terrible story! A tyrant, slaves, the death penalty for people that dared to have a say in their government?
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
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.
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.
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.
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?
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.
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.
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”?
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?
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
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…
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.
hmm, your “frugal” housing was still twice as big as my apartment…
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.
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.
…Excuse me? Are you being for real?
I’m sorry you had to see that, antisemitism won’t be tolerated here and his comment was removed.
Thanks Jim, I’m glad you caught it.
in most situations, i am just a few mins away from internet..so it makes me avoid the $30+ fee on cellphone data plan
to retire before i turn 40 and the freedom to pursue my passion
that is quite an ambitious goal. I am shooting for maybe 55ish.
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.
i think i was just born with the thrifty gene…..
I’m frugal because work sucks and I want to retire as soon as possible!
Now that’s straight to the point! All the best.
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.