health · Step 4: Cutting Costs

The Limits of Frugality

Most of my frugality I learned from my mum. She has always had all sorts of tricks up her sleeves for saving: creative, inventive, sometimes hilarious approaches to stretching a dollar, most of which impress my mind and delight my soul.

Now that the book is complete and out, I had opportunity to drive the hours to her place and get in a good visit. It’s funny, watching our interactions through the framework of the book. She keeps thinking she’s “catching me” violating the principles set out in it, and jokes that she’s going to write a book to teach me to not spend.

What a great point for clarification!

Frugality is neither the point nor the goal of my presentation. It is also not the path I propose. Why?

Because frugality alone is worth far less than increased income is.

Check it out:

Sally brings in $500.
Sally spends $490.
Sally sets aside $10.
Cool!

George brings in $600.
George spends $550.
George sets aside $50.
Even cooler.

Sally is more frugal than George, but George enjoyed more spending AND set aside 5x the amount that Sally did. $50 is nothing to sneeze at, either. It’s a solid contribution toward an emergency savings account, an ‘FU’ account, or long term investment, all of which make it even more valuable than its original number.

This is the reason I strongly advocate:
(1) spending only on your highest priorities, and
(2) bringing in more cash.
The latter can be done via a small side job, investment returns, cash benefits, and cash grants (which I’m going to blog more about soon).

To break free of poverty, release your focus on “spending as little as possible.” Shift your approach to something more along the lines of “bring in as much as possible, spend only to improve your health, invest the rest.”

This morning, my mum balked when she learned I’d polished off two cups of carbonated water, and looked close to fainting when I said I buy approximately four litres per week.

Is this particular spending of mine necessary? Absolutely not!

Increasing health? In my case, yes, because this luxury helps me get down the sheer volume of water (and electrolytes) I need to stay hydrated in my semi-arid climate when we reach 100 Fahrenheit.

Affordable? Yep! While my mum focuses on saving $4.50 per week over me, she also actively avoids income immediately available to her, while I pursue and accept every source. In other words, she saves $4.50 for net zero, and I spend $6 while netting the hundreds of dollars she avoids.

You tell me which route is more financially savvy.

Frugality is one tool in the box. Use it, but only amongst the other ones: increasing income, setting aside more, improving your health.

Right now, my mum is halfway through my (somewhat large) book. By the time she gets to the end, she’ll have read this important difference in my method. Hopefully, we’ll enjoy another conversation about spending then…perhaps over two glasses of sparkling water. I’m buying!

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4 thoughts on “The Limits of Frugality

  1. Loved reading about this interaction with your mom, and your affirmation again that it isn’t ONLY about not spending money – it is ALSO about bringing in more, etc. Thanks for an entertaining post that helps keep the ideas clear and in front of me. 🙂

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  2. I love this story! Great example of your point.

    On a side note, I am a sparkling-water-lover, too, and found that I save a lot of money from having a SodaStream, so I can make it at home. Less recycling, too! Sometimes you can find a good deal on them on Amazon or at Bed Bath & Beyond. Really love mine tho 🙂

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  3. I love the spend on health only idea. You can really classify all the essentials under that category. I need to keep reminding myself to not spend on “unhealth”. It’s easy to fall into the common habits of those around you. It’s really a terrible waste to spend money on things that are also unhealthy, in anyway. Lately it’s been drinking alcohol for me. I barely drink as it is, but once in a while it’s the “normal” thing to do, and I have a drink out of habit or because it’s a social situation. But I never have more fun from drinking, and mostly just feel sick. Why the heck did I spend $8 the other day on a cider that just made me feel bad afterwards? Doing my best to stop that habit completely.

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