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For example, I cook a *lot*. I love to prepare my own food and create a great meal that my whole family can sit down and enjoy. There is value in that for me far beyond the mere cost of the ingredients, so I don't skimp on them. I get fresh ingredients that I know are the best available to me, even though I could get "cheaper" stuff quite often. Why? The difference in quality in the ingredients adds enough value for me that the better stuff is a bargain.
On the other hand, I make my own laundry detergent out of borax and washing soda. It's as dirt cheap as I can possibly make it. Why? Because I don't see enough value added in buying Tide with Bleach Alternative, which is what Consumer Reports recommends.
A truly frugal person will ask themselves what total value they're getting for their dollar and buy the thing that gives the most value. It requires a lot of personal honesty to do that.
For me, I've come to value my time MORE than my money. With two kids and a busy family life, nothing is more important to me than time to pursue things that make me happy (some of which cost money but many of which don't).
A big decision I made recently was to pay someone to finish our basement... According to most estimates, I'll get maybe 50% of this money back when I sell the house. Out of the the 50% I "lost," I figure 20% was justified because the guy I hired simply does better work than I, but the other 30% was TIME. Time that I can spend w/ my family, or training for marathons or being better on the job... I consider myself to be fairly frugal w/ my money, but I'm a MISER about my time. :)
When you stop buying every "cool" thing that you come across, you may be surprised that you can actually afford those things that really mean something to you -- which may be the sports car or awesome vacation.
I have a sporty car, which I bought used and researched exhaustively before buying. It gets great gas mileage and provides me with a huge amount of enjoyment. Being in a LDR, I also travel cross-country a lot and eat out with my sweetie at nice restaurants in Manhattan (yiiiikes). At home, I splurge on some luxuries, but I also prepare many of my own meals, bike/walk around, use the library, and buy most of my clothes at discounters and thrift stores.
If the economy continues to go south, I'll have to rein in my travel and eating out a bit. And being a single person, I'd obviously have to make huge changes to my lifestyle if I lost my job and had to spend time looking for work in a sluggish market. I know how to live enjoyably on a shoestring, but for now, I'm enjoying some of the fruits of my labors while they're in season. :)
We may do without ever owning a home, because we refuse to pay interest, go into debt and make payments while saying we "own" something. We'd love to own a home if we could purchase it outright. We bought a new vehicle a few months ago outright, and it wasn't difficult because we see it as a practical purchase.
I have felt very poor because we haven't had cable TV. Expanded basic is $57 monthly here, and I highly object to the cable company's exploitation of the community, especially the poor. No cable means little reception, and the property owner won't allow anything put on the roof, like an antenna. We can't get a Dish signal, but I think the cable company's product is superior to it anyway. Now I've cut loose and ordered cable, and while I know we will love being able to watch TV and my husband will absolutely love watching the football draft, I'm going to continue to be irritated that the cable company is taking close to $700 a year from us, for something that should not cost at all. Chances are good that I'll find a way to make cuts elsewhere in our budget, even though we already spend as little as possible to get as much as we can. We are value-conscious.
The sports car I wouldn't mind having. But if I really wanted one I'd have it, so I must not want it too much. I compromised anyway and bought an used sports sedan a few years ago - its no slouch on the road - and its paid for.
The fine dining I do indulge in - but not all the time - maybe once a month. It is the cheapest of the vices you mentioned so why not enjoy?
But someone earlier say striking a balance and that's what frugality is to me. I'm striking a balance now so I can go "no holds barred" in the future (if I actually choose to do that when the time comes). And frankly I've had some nice things in my life. I used to live in the garage apt of my rich aunt & uncle. They included me in everything - nice meals, $80k Mercedes convertible, monster house, country club, yachting in Charleston, great parties. It was fun, but it was exhausting and I really didn't get that much out of it for the long term except some good stories.
Now that I am responsible for my own house and cars I see Mercedes & BMW as a lot of hassle because of required maintenace to stay on top of their performance. I see the monster house and yard as a lot of crap to keep mowed and cleaned. To me most of it just seems like "keeping up appearances" or "keeping up with the Joneses." But like I said, I do like to eat well - so I guess I won't be frugal in that department.
I will not, however, spend money on these things unless it's within budget. I will also not buy computers and ipods unless I save for them. I'm saving for a suped up Apple desktop which will be $7K when it's all said and done with. I could get it on credit or pay for it with the money in my savings account, but I choose to save the $7K instead.
At the same time, I have close relatives in Australia whom I've never met, which I think is ridiculous and sad. The cheapest flight possible is about $1000 (on economy, which is pretty much torture for a 12-hour flight) and the trip as a whole would probably be about $1500 (including food, transportation, unforeseen expenditures). I know about frequent flyer miles, but I don't have any as I'm not a frequent flyer (particularly on airlines that go to Australia), and even if I got a credit card that offered frequent flyer miles now, it would take me YEARS to accrue all the points I needed.
Now, I could save that $1500 in about a year, which according to most of your comments would be okay to spend: at least I wouldn't be going further into debt. However, it seems imperative to pay off this debt completely before making such a lavish, non-essential expenditure. Like, even spending the cash I actually "have" now is still spending borrowed cash (i.e. I wouldn't have it if not for those loans and interest accrues on every dollar I keep or spend instead of throwing at my debt). To pay the loans down though--even aggressively--would take 4 years, maybe 3 if I'm lucky.
Since I've never seen those relatives in my whole life, I suppose you could argue that whether I see them in one year or four makes little difference. But it's still a drag. Traveling itself is important regardless of where your relatives are, especially when you're young and don't have kids, etc. etc.
Even more on the fence, I feel, are expenditures for one's wanna-be career. To be able to pursue the field I want to pursue, I sometimes have to buy things to learn the business. As with everything, sometimes I can find them cheaply, sometimes I can't. But if I don't get them at all, it's impossible to remain competitive, which reduces future earning power (as unlikely as it may be). But I feel like I must nix even these things with this debt hanging over my head. However, I really don't want to wait on this one since I feel like I'm delayed in my career as it is and want to finally get it kick-started.
After having written all of this out, it seems to me that the solution is forgo Australia until the debt's paid off (and in the meantime, to get one of those frequent flyer credit cards) and to minimize business expenses as much as possible without forgoing them completely. What do you guys think?
I'm not completely against debt. I know that I should have been smarter in the past about using it, and I'm trying to get down the debt I have, but that doesn't mean that I'd do everything differently if I had the chance and I still value debt as a tool for getting ahead.
But you have to ask yourself if what you're buying is worth not just the initial price, but also the interest you'll pay -- and ask yourself if you're getting in too deep.
I definitely believe in investing in one's career. That doesn't mean to go crazy with it and buy the latest and greatest of everything. You can learn a lot online for free and you don't have to have an expensive work wardrobe so long as fits your needs. But if $1000 is keeping you from making $10,000, then spend the $1000.
There are other times where spending a little can save money in the long run. For example, I love avocados, but the tiny ones here are $1.25 a piece. I've been keeping my eye out for an opportunity to get a free tree, but rather than keep buying avocados, I recently decided to pay about $30 now to get a tree that will produce 2 pound avocados come this summer.
When it comes to family, you may want to make sooner than later. I hate to be a pessimist, but I've lost a lot of loved ones unexpectedly. You never know how long you have. And while that doesn't mean that you should go all out and spend half the year traveling the globe, it may be well worth it to cut back in other areas so that you can afford to spend more time with family and friends.
And to defer enjoyment of money is bad for other reasons too. As you get older, you can't have as much fun with the money. You don't have the energy or the physical ability to make as good of a use of it. Plus, the world changes and opportunities to travel to certain places go away. Think of The World Trade Center or the Buddist statues in Afghanistan which were both destroyed. With global warming, whole islands might disappear.
My strategy for saving and still enjoying my money is to force yourself to invest in your 401K or IRA and then watch your budget to make sure you're saving enough other money to have an emergency fund. With the rest, go to town, (as long as the stuff you buy doesn't become a burden on you in terms of responsibility and eating your time.)
Sorry for the ramble, but that's another point that has been alluded to already which I want to reaffirm. Some people spend so much time trying to save a few bucks that they lose time which you can never get back. My motto is... "You can always make a dollar later, but you can't make an hour later."
Atul
http://www.thingsivenoticed.com
And of course you can also always apply money saving frugal attitudes towards your frivolous expenses. I really wanted to get myself a sports car. I looked at Corvettes and BMWs. I finally came onto the idea of buying a classic car since they don't depreciate like new cars and can actually appreciate. I bought a fully restored less fasionable classic muscle car era car for a reasonable $7k and got a bargain. I had a $10k cash offer on the street for it and it should be worth more than that now.
All things in moderation, frugality included.
Jim
If there is a big ticket item I'm interested in, I can find a way to save up for it, and pay it in full. Frugality is not so much about sacrificing, but ofsetting priorities.
My eldest girl will be graduating soon. To attend the graduation, I have to come up with some major mullah, as she is studying in the UK.
I can't put the graduation off, and its once in a lifetime event for my girl and my family.
So I have decided to take option one. Forgo some savings or something else, but at the least my wife will attend this graduation, God Willing.
I really like the comment that frugality is first and foremost about setting priorities.
For example, a car is a necessary utility and nothing else. So I buy efficient and used (at auction); have a trusty mechanic; and combine trips. My total cost of ownership is about $3,500 per year driving 15,000 miles.
But I do like to drive a sports car! So when I travel for business, I rent a Mustang, Corvette or similar, and reimburse the company for the difference over a sedan. I get the same thrill for just a few hundred dollars a year. In fact, probably appreciate the thrill more than someone who owns one full-time. Try it some weekend (rates are lower!), then turn it back in on Monday happy that you don't have to buy it to enjoy it.
I like to go boating. But a boat is a money-drainer. So when I go boating with my friends, I pay $100 for gas for the day. We all come out ahead, but especially me!
Far from wanting a sports car, I regard the day I moved to a city with excellent public transportation, and gave away my car, as the single most liberating day of my life. Every day when I wake up I KNOW I won't be buying new tires, or making a car payment, or paying a car insurance premium, or making a surprise visit to the mechanic. I don't give myself "frugality points" for not having a sports car, because that would be claiming credit for doing without something I don't actually want.
Likewise, I don't give myself great credit for taking a pass on designer clothes: that would imply I wanted them but was good enough to sacrifice them. To the contrary, they simply exert no attraction to me whatsoever, and so I've not "given up" anything by not having them.
On the other hand, like other posters, I value my time more than my money, and so I am happy to pay someone else to clean my house.
Guess I will never understand.
I live in a big city now, have also sold my bimmer and enjoy the careless and cheap public transport. I do feel the urge for driving sometimes and satisfy it by renting a car for the weekend(book in advance to get good rates). And yes, just before returning it to the station I make a short trip to the supermarket to buy all those heavy good-deals (water, soda, cans) which I usually feel lazy to cary otherwise.
I know exactly how you feel! I, too, have a considerable amount of debt that I'm paying off as aggressively as possible so that I can finally start seriously saving for the future and purchase a home some day. I contribute to a retirement savings account each month (less than $100), but feel guilty about that, because it could be going toward my debt. I've had to turn down friends who want to travel for special occassions, because I'm so tightly budgeted and feel that if I save up $1500 or more, I should probably use it to negotiate a debt settlement on one of my accounts. But then I feel like I'm missing out on life. I know my debt is my own fault and my own responsibility, but I feel like a prisoner sometimes.
frugality IS like a prison sentence!
However hard I try to convince myself I am doing the right things by refraining myself from those little pleasures in life, I still feel unhappy and down.
I think part of the problem is that I am living in a big city, a city buzzing with "life" and distractions. In order to save easily, one has to go and live on a farm, but this is hard once you spoiled yourself in the city.
Unfortunately, I can only get a properly paid job in the cities, but again, most of my salary goes to c over bills, rent and travel.
I wonder how someone can have a $50-100 leisure monthly budget? In my experience only a night out with your girl can easily cost you that, and believe me, girls want to be pampered from time to time!
It is all complicated. I always believed if you cannot save a considerable amount of money per month, then the most sensible thing is to invest in yourself and try to sell your time for more. Of course, you can only do so until your inevitably hit the payment ceiling for your area of profession.
Get yourself a girlfriend who can live with romantic evenings (days, whatever) without having to go out and spend a lot of money. Grab your backpack, fill it with a nice bottle of wine and a couple of glasses, a corkscrew, a good piece of cheese and some great crackers and head to your city park. Surprise her when you arrive and start pulling out your treasures. Trust me, as a female who has been the recipient of such an event, it was fabulous and I was really impressed with my guy's ability to make something great without breaking the bank. It shows good taste, initiative, and fiscal responsibility. All plusses in my book.
Terri