The term Frugal has taken on a somewhat negative connotation in today’s consumption based society. When someone is labeled as frugal, what usually comes to mind for a lot of people is someone who is a cheapskate, or someone who is sacrificing their quality of life.
I pride myself on being frugal in my consumer spending for a number of reasons. It will allow me to reach FI faster, it guides me towards more mindful and responsible consumption habits, it will prepare my children and me for a future where maybe we have to get by on less that we do today.
Frugality definition: “the quality of being economical with money or food; thriftiness”
Example: “he scorned the finer things in life and valued frugality and simplicity”.
While I like the spirit of this definition, I disagree with with the idea that one who is frugal has scorned the finer things in life. While I am a high spender on things like groceries and education, I do consider myself more frugal than the average American in my income bracket.
Value should be measured over long term, not just in the immediate price of an item.
By putting a long term value lens on the dollars that I spend on consumer goods like cars, clothes, and other non edible objects I make more responsible and more valuable purchases. By looking at each thing that I buy as a longterm commitment that I am making, I ultimately purchase fewer things than if I looked only at the short term costs. I also almost always lean towards higher quality goods that will last longer, therefore providing more overall value per dollar, despite the higher immediate cost.
Say I need a rain jacket, I have many buying options. I can go to Walmart and buy a very inexpensive, low quality rain jacket. I can go to my local outdoor store and buy an expensive, high quality Patagonia rain jacket. Or even better, find last year’s model of that high quality jacket on clearance and save big. The obvious assumption is that if I’m frugal, the Walmart option is what I should choose. I don’t see it that way.
I like to look at a few factors when considering what purchases I am going to make. Do I really “need” to buy it, or do I just “want” it? Once I answer this question, I like to put a 30 day hold period on that decision and come back to it.
There are exceptions, but in general, it’s very rare that I truly need something immediately. If after 30 days, I remember that I wanted it at all, and I determine that I do indeed need a new rain jacket, or that I really, really want it (which is okay, I buy things I just really want sometimes), I figure out what level of quality and price is the best option.
In the rain jacket example I figure out what situations I will most likely need it for, hiking in the mountains, dog walks around the neighborhood, going out on the town, wearing to work as I go from building to building.
The next step is to ask myself if I can use a single jacket for all of these things, or are they different enough that they would require different jackets. Where will I be using it the most? In my case, dog walks are the most common scenario but I also want it to look decent when I arrive at a meeting or go out to a restaurant, yet be durable enough and waterproof/breathable when I’m in the mountains.
Here’a another really important factor for me, how long will I need this item? Well, I plan to be going outside, even when it’s raining until I’m no longer able to, so hopefully at least 40 more years. So buying the low quality option, which is likely going to last a few years is a bad choice and will ultimately result in having to buy multiple jackets over my lifetime.
Patagonia jackets are extremely durable, and come with a lifetime warranty that will guarantee a fix or replace option should it be defective or even wear out over time. Thumbs up on Patagonia for me. Probably best to get a dark color, so over time it hides the dirt better over time.
I like the idea of using things until they wear out. I have a 16 year old Subaru and a 20 year old Toyota 4Runner. I’ll likely drive the Subaru until it dies, or one of my kids buys it from me in 10+ years. The 4Runner is a little maxed out with 5 people and 2 full sized dogs, especially on road trips, but it continues to be reliable and nice to drive. I bought those cars when I made a whole heck of a lot less money than I do now, but I see little need to buy newer versions until it’s necessary.
Not having car payments means that I have a few hundred extra bucks every month to throw into investments. Win win situation!
Another bright spot in the buying of high quality goods, goes beyond longterm financial benefits. Every manufactured good has an impact on our environment. Unchecked consumerism is devastating our planet. If you choose a reputable company that produces high quality goods, many times you will find that they are striving for socially and environmentally responsible business practices as well, i.e. Patagonia. Do your due diligence to validate this before spending your valuable dollars, assuming this is important to you.
Areas where I get value for my dollars that may be a little more controversial are groceries and education. Our grocery bill is fairly ridiculous when compared to may frugalers and FIRE heads. I honestly have no idea how you can feed a family on $500 a month unless everything you eat is processed and comes out of a box or you’re eating beans, rice, oatmeal, and a cup of vegetable oil every day.
High quality food is a long term investment in your health. Obesity, heart disease, and diabetes are decimating this country. Roughly one third of Americans are obese, 1 of every 3 American deaths are caused by cardiovascular disease. Healthcare is a massive business and costs have spiraled completely out of control.
The majority of our farmlands are in terrible shape, which is a huge problem that wont get better until we support farmers who are using sustainable practices that nurture and heal the land.
The first chemical fertilizers were created from chemicals left over from weapons manufacturing after World War II…think about that for a minute.
For these reasons, this is an area where being cheap isn’t worth it. I understand that it’s hard to include your long term health and the health of the lands that nourish you when it comes with a higher bill at the grocery store, but the alternative path will ultimately carry a much greater long term price.
Education is another high spending category at our house. We tried public school and it was a disaster. Our oldest child was lost in the shuffle and chaos of 23 kids. The school system is set up really well for a certain percentage of kids. These are the kids who can sit for a long time, pay attention to subjects that do AND do not interest them, transition well, and are good book learners. In general, it’s better suited for girls than boys, but there certainly are boys who do well. Unfortunately, our oldest child does not fit that mold at all and public school kindergarten did not go well. We have two elementary schoolers in a private school and one hot on their tails…the bank account feels that harsh hammer of reality 10 months of the year.
A long term love of learning is one of the things that is going to set up this next generation for success. Good luck predicting what types of hard skills will be most useful or sought after in 10-15 years from now. And good luck to anyone who thinks that their kid won’t need to be constantly adapting and learning new skills in order to navigate their career path successfully. This isn’t by any means to say that public school is a bad choice, but it certainly wasn’t the right choice for us. Private school has been, and will continue to be, a very expensive choice, but one that hopefully is setting our kids up for long term success and happiness.
Who knows, maybe one or two will land a scholarship to college, or maybe become a successful entrepreneur who bypasses college altogether. That’s potentially the only way that this could turn out to be even a remotely frugal choice, but it’s not like we’re banking on that.
While frugal may be a stretch, it certainly can be considered a great value if it ultimately helps our children live a better life. What about if it puts them on a path to obtain skills that get them to FIRE earlier?
The cost of their education is probably the single biggest obstacle in navigating my way to FIRE, so it’s maybe not deserving of being in a post about frugality.
Hopefully this post gets you thinking about frugality in a new expanded way. Maybe that’s ridiculous and I’m just crazy!