Monday, January 16, 2006

The Prodigal Get Frugal and the Frugal Get Frustrated

Author: Nick
Category: Money
Topics: ,

As my ever-growing bank account can tell you, being frugal really has its rewards. Of course, being a spendthrift also has its rewards and those rewards are generally much more immediate and short-lived than those experienced by those who choose to save instead of squander. A youth full of charging up credit cards can be loads of fun … until the credit card bills come due.

And yet, more and more every day, those who have been loose with their wallets are being saved thanks to the advice of the frugal–those chosen few who have seen the light and decided to turn it off to save money on their electricity bills. The wave of frugality soon spreads across the land, and in the end we’re all saving so much money that the average retirement age drops to 35.

It goes without saying that this’ll never happen. The lure of “free money” that credit can provide is too strong for many people. And while I certainly don’t condone this sort of spending behavior, I can understand why the concept of saving money would not be attractive to someone more interested in living it up today than planning for tomorrow.

I’m fortunate that I never became one of those people drawn in by the lure of an easy life now at the expense of endless money troubles later. I’ve always practiced the basics of frugality–eating in, keeping energy costs down, and only spending money that I actually have and only when I really need something. The results: I’m out of college with no student loans or credit card bills, and I’m already saving for retirement. Now while I’m thrilled with all I’ve accomplished in my personal financial life, I’m a little dismayed that there aren’t any major steps I can take to become even more frugal without experiencing unnecessary hardships.

Yes, folks, I’m suffering from Frugality Frustration.

It’s easy enough to self-diagnose Frugality Frustration: symptoms include bank accounts full of money, credit cards with no balances or transactions for $300 shoes, bills that are paid on time, and countless measures taken to save money on groceries and utilities. Alas, you’ve seemingly reached your peak savings rate, and there’s nowhere else you can scrimp a few pennies without freezing your butt off in winter or eating bugs for breakfast.

This can be a turning point for a person following the path of frugality. Finding new ways of saving–arguably one of the best rewards of being frugal–becomes harder and harder the more you do it. And when that reward doesn’t keep coming, it becomes easier to slip back into a more prodigal life. Frugality Frustration, if not recognized and dealt with, can ultimately undo all the accomplishments you’ve worked so hard to achieve.

Lucky for you, there are ways to combat Frugality Frustration, and they all focus on helping you to more fully experience the rewards that come with a frugal life.

Five Ways of Fighting Frugality Frustration

  • Can’t find new ways to save? Get creative! So you’ve got your thermostat at the bare minimum, you’re eating out once a decade, and the clerks at the supermarket give you dirty looks when you pay six bucks for a cart full of groceries. Is this the true limit of your frugality? Probably not. While it might be true that it’s not worth it to chip at your budget any further because all you’ll get is a penny or two saved here and there, this doesn’t mean you should stop. Frugality isn’t just about saving money; it’s about having fun finding ways to save. The opportunities may not be as numerous once you’ve been at it for years, but when the chances come, it’s up to you to spot them. For example, now that energy-saving fluorescent light bulbs are relatively cheap, it might be time to go on a bulb-changing spree through your house. Or if you want to shave a few cents off your food bill, consider starting your own hydroponic garden. The point is that there’s always another way to save, and it’s not until you reach Frugality Frustration that some of the most creative ways make themselves apparent.
  • Remember how far you’ve come. If you’ve made it this far, then you’ve probably saved yourself thousands of dollars living a frugal lifestyle. While you might not have an Olympic swimming pool in your backyard or a French maid in your kitchen, you probably don’t have massive bad debt or bills you can’t afford to pay. It’s important to realize the difference between the frugal you and the you that could have destroyed your financial future. Look back at all you’ve achieved and give yourself a pat on the back. And while you’re at it, because you know you want to, feel free to snicker at your frugally-challenged friends who, while I’m sure they’re very nice people, will probably be working for the rest of their natural lives to pay for their extravagant lifestyles.
  • Consider the ultimate goals of your frugality. You’re saving money left and right, and you know you must keep saving or else some great calamity will befall you from the heavens! DON’T STOP SAVING OR YOU WILL BE EATEN BY WOLVES!!! I’m exaggerating a little (the wolves will merely nibble on you), and while frugality requires that you stick to it, it’s important to keep in mind why you’re doing it. Each person’s reasons for living a frugal lifestyle is a little different, but many people do so with an eye toward an early, comfortable retirement or some other lofty future goal. Saving lots of money takes years or even decades, so it can be easy to lose sight of that ultimate goal which seems so far off. When you’re sitting down to go over your finances, don’t forget what those dollar signs in your savings and retirement accounts mean. For you, they could mean that you can quit your back-breaking day job in ten or twenty years and work part time at your dream job where money is a secondary objective. Or they could mean making some improvements to your home in a few years like putting in that sauna or game room or time machine you’ve always wanted. Or they could mean that your children will have the secure financial upbringing you might not have had; they’ll always have a full tummy, nice clothes, toys to play with, and a good education. Whatever your reason for saving money, never ever forget it.
  • Don’t let yourself get burned out. If you’ve taken every measure you can think of to become more frugal and if keeping your ultimate goal in mind doesn’t cure your Frugality Frustration, it’s quite possible you may be burned out. You might be trying too hard to squeeze every penny out of your costs and into your savings, and it could be doing you more harm than good. The easiest place to spot this is in your pantry. If your cupboards are full of processed foods and bulk this ‘n’ thats just because you got them on special, you’re probably putting your wallet before your health. Eating right is not something you can fool around with just to trim a few bucks from your budget. In the end, it’ll end up costing you more in doctor’s bills than, say, making sure you eat a good amount of fresh fruits and veggies. And while you think keeping the thermostat at 52 degrees in the middle of a blizzard will save you lots on your utility bill, people are not built to live in those kind of temperatures. The whole point of living a frugal lifestyle is to save money without hardship to yourself or your family. You must take care of yourself today so that you’ll be able to enjoy the benefits of a frugal lifestyle tomorrow. Examine all of the steps you’ve taken on the path to frugality and see if there’s anything you’re doing that might hurt you more than help. Remember, a few bucks saved at the expense of your health is a few bucks you won’t be around to spend later.
  • Spread what you have learned to others. I was only joking earlier about laughing at your friends for their lack of frugality. Instead of mocking your buddy for his 600-channel cable setup that gets 472 channels of Swedish soap operas, show him how he can save $50 a month with a smaller package of his favorite channels. Or instead of leaving copies of your high-yield savings account statement on your neighbor’s doorstep with the APY circled and the words “Ha ha, I’m saving more than you!” written on it, help your neighbor set up her own account with ING Direct, Emigrant Direct, or HSBC. There’s plenty of frugality to go around, so there’s no point in keeping your tactics for saving money a secret. At the very least, instead of having a bunch of friends always trying to bum money off of you, you’ll have a bunch of friends trying to coax more money-saving tips out of you.

Now if you’ll excuse me, I need to break into my neighbors’ apartments and replace all their lights with fluorescent light bulbs. Good-bye, Frugality Frustration!

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