Several months ago there were a group of people going out to what I consider a fairly expensive dinner. Although the group is fun and I wanted to hang out, I passed, opting to say, “I’m trying to save money right now.” One person’s response to that was, “it’s only money!”
Seven or eight years ago I had that same mentality. After all, I was probably more inclined to fit in and do what my friends or co-workers were doing. I thought that certain things that involved spending money was the “adult” thing to do.
Money is hard-earned
You sacrifice your time, energy, creativity, etc. for every hard-earned dollar you make. Why on earth would you throw it away (potentially) so carelessly?
The easy answer is the hedonic treadmill that most of us are on. We sacrifice long-term security for short-term pleasure. When you’re stressed out about life stuff, it’s a whole lot easier and serotonin-releasing to go to happy hour and complain than it is to think, “I should probably bump up my 401k contribution.”
The crazy thing is with every dollar spent, you bind yourself to a crappy situation for that much longer.
Even if you love your life, if you do the math à la Your Money or Your Life, you might be surprised to see that your $1 earned is not really $1 earned when you think of factors like time spent on your commute, gas, car maintenance, clothes for work, daycare, pet care, etc.
It’s not that you shouldn’t spend money, but it’s that little nugget of info that’s in the back of my mind now when I think about 99% of the spending I do nowadays.
Because no life situation is ever a guarantee
If my previous layoff in 2008 taught me anything, it’s that no job or life situation is ever safe.
This is not to sound doom and gloom, but simply reality. In this post, I talked about how I struggle with thinking in the abundance mindset vs. the scarcity mindset, but I feel personally more comfortable siding with practicing scarcity but thinking abundance, i.e., expect (or plan for) the worst but hope for the best.
Just because you married your best friend and are over-the-moon happy does not guarantee that you will have a long-lasting and successful marriage. And it’s not just divorce, but sadly, death. I know, I know…I went there. But it’s the truth!
If you have an in-demand and high-paying job, it doesn’t mean something can’t change on a dime. IMHO you should always assume your job situation can change any day. It keeps me honest with my spending and savings habits. Speaking of spending habits, make sure you’re clear of chexsystems. That is not a road you want to head down.
Frugality creates less of a personal and environmental impact
Wanting to spend less means buying less crap. Less crap means you can live in a smaller space. Less space means less time cleaning (or having to outsource cleaning if it takes too much time), or energy consumption in the form of heat and/or AC.
It also means less time sucks in other ways. Just the other day some co-workers were shocked to hear I’ve never seen Game of Thrones. I said I don’t have HBO. They said, “Get it! You will love it!” The thing is having never seen it, I don’t know what I’m missing. Why add another financial and time suck to my life if I don’t have to?
I could afford a much nicer or more spacious apartment than I’m living in. One with a washer/dryer (dare to dream), a bigger kitchen (with a dishwasher – again, dare to dream), and definitely nicer furnishings. Literally, 90% of my apartment is filled with free hand-me-downs or very low-cost or secondhand items.
But I have not lived in a “nice” place since childhood, so unless I go stay with my dad and stepmom in Michigan and get a taste of “the good life” with them, I really don’t know what I’m missing by not living in a fancy place.
Frugality protects you against financial stress
If you combined all of the factors from above into one statement, it’s that frugality saves you from most financial stress.
If you hate your job or corporate ‘Murica, being frugal not only gets you closer to FIRE (Financial Independence/Retire Early) with each $1 saved, but also helps train you to want/need less.
Having a financial cushion just gives you MORE options in life, not less.
Car blew up? Instead of that $2,000 bill sending you into a tailspin of panic, you know that it’s only a tiny blip on your financial radar. Sure it sucks, but hey, no biggie.
Of course for people who practice frugality, I’m preaching to the choir. I’m not trying to turn anyone or convince my way of life is the best, just presenting you with a few options you might not have thought of before.
Sometimes (I’m raising my hand) you have to learn things the hard way to really want to change your life, whether that’s a job loss, divorce, illness, etc., but it doesn’t have to be that way…for you.
And it doesn’t have to be an all or nothing approach to the way you live your life. Perhaps you dip one tiny toe into the frugality waters to see what you can cut out, modify, or change completely.
I’m only here to tell you how it makes a huge and beneficial impact in my own life!
I use Personal Capital to track my net worth and expenses. I love it because it’s super easy to use, has all of my information in one place, and it’s completely free. Try it out and see why myself and other personal finance bloggers love this website. If you don’t know your net worth, it’s impossible to create a financial roadmap for yourself!
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