[KaeJS]

If we decided to "live up to" our income level for just a few years, my early retirement plans would take a serious hit - so our frugal ways will continue. To be honest, on 30k we don't really sacrifice much at all.

Just to add to this, being frugal is sort of like going on a diet.

At first, you really miss the fast food, chips, donuts, etc.

But after a while, it just becomes more natural to eat less food and eat healthier. You don't miss the garbage as much. It becomes a lifestyle.

 

[financialnoob]

Interesting....we're 'retired', (me since I was 46...I'm now pushing 70...my lady's 10 years younger), and hardly ever eat out. Our time is too valuable to waste driving to a restaurant, waiting to be served, and eating a meal that's probably not as good as the ones we prepare ourselves, and a helluva lot cheaper.

WRT 'frugality'....there's not much we 'want', (certainly no electronic gimmicks/gadgets and the like), therefore we live cheaply and don't feel that we're 'missing out' on anything......we also don't hesitate to buy the few things that we DO want.

Minimalists...I guess.

Different strokes for different folks

For our current lifestyle, it is actually a time-saver and allows me to put in some extra hours at work, which more than compensate for the cost of eating out more. But 5 years ago, that definitely wasn't the case and we ate at home way more. Which is why I really thought Causalien's earlier point was so good, because there really isn't a right or wrong here, just figuring out what works best for different people based on their circumstances.

We eat out a lot more than before because it saves us time and money right now. 5 years ago, under different circumstances, we ate at home more because it saved us time and money. Same people, same scenario, but different circumstances make us put different values on the same variables.

 

[Jungle]

Square Root is uncovering the problem that occurs in retirement with people that have built their own wealth from being extremely frugal with money. They have trained themselves their whole live to save and live well below their means. They have been finacially successful beyond an average person yet live in retirement, continue saving and hording, then they die with all that money. It gets passed down to someone who doesn't know how to handle that much money or build wealth, and bam it's gone.

 

[indexxx]

I like being frugal- depending on the situation. I make a low income, but spend my money where I get personal value- nice camera and guitar gear, extended travels in obscure places, etc. But when it comes to daily expenses, I live very cheaply, even to the point of being a bit of a tightwad. The reason is that I was very frivolous with my money in my 20's and 30's, so now it pains me to fritter it away (unless there's a sale on fritters...!!). I shop at Value Village, don't drink, rarely go out (prefer creative/intellectual pursuits in my leisure time) and buy everything off craigslist or on sale with my cashback credit card. I've learned that wealth is built incrementally, and that I've regretted wasting money that I could use when times get a bit tough. Having said all that, I could see myself spending pretty freely were I wealthy. My wife is much the same.

PS- I use most of my excess income on investments.

 

[GreenAvenue]

Waste is waste, there's no point in wasting money regardless of how wealthy you are. To me, frugality is about avoiding waste; it's about using your money wisely.

I couldn't agree more.

 

[MrMatt]

Interesting....we're 'retired', (me since I was 46...I'm now pushing 70...my lady's 10 years younger), and hardly ever eat out. Our time is too valuable to waste driving to a restaurant, waiting to be served, and eating a meal that's probably not as good as the ones we prepare ourselves, and a helluva lot cheaper.

That happened to me a while ago. We only go out when we feel like having a new flavour or food we can't easily make ourselves.
I'm horrible at pub fare, or higher end fancy meals. So when we go out for the 2 of us, it's either wings, or $150+ for dinner.

Not exactly frugal, but we're not dropping $50 for a cheap pasta dinner we could have done better at home.

 

[Nemo2]

Frugality means different things for different people. If we could agree on what is frugality this would be an easy question to answer.

Indeed. There's no one-size-fits-all; from our perspective we're not (overly) consciously 'frugal'.......we don't feel we're 'missing out' on anything, ergo we're not internally bombarded by concerns about what we don't have.

Moneywise, we live below our means, which imparts the 'illusion' (an 'illusion' we're well aware of), of security......our 'nut' remains untouched, and good luck to the friends and relatives who may someday inherit all/some.............that said, we went to Botswana 2 years ago, and Zambia and/or Sumatra are on our 'wish list', (Beemers & Mercs aren't).

 

[Guigz]

I eat out a lot more now instead of cooking at home because my time is more valuable than it was 10 years ago. It's not that I've become less frugal, just that in my current work situation, it is sometimes more cost-effective to spend the extra hour in the office and buy a meal on the way home than a decade ago.

Maybe it is "cost effective" to work an extra hour to bring home dinner every night, but what about the cost effectiveness of the healthy time forgone by eating take out everyday? A home cooked meal and a restaurant meal are hardly comparable. I know I would have trouble eating take out all week. Most places just jam pack everything that we eat with salt and preservatives.

Maybe if you go really high end, you can get something that compares quality wise with a home cooked meal I guess.

Frugality means different things for different people. If we could agree on what is frugality this would be an easy question to answer. From my perspective the question isn't frugality but rather are you living within your means. What doesn't make sense to me are people who live below their means after retirement. They save right up untill the final sad moment. It makes good sense to live below your means to save for retirement. Perhaps in retirement you might live a little below your means just to be sure you don't run out. But the people who save like crazy( my inlaws) because they think it is morally right, baffle me. You can only do 2 things with money: spend it or give it away. The rest is only timing.
In my case no one would ever call me frugal but we live within our means-very well thank you. So whether we spend $10k or $1million a year so what?

Wikipedia defines frudality as: "Frugality is the quality of being frugal, sparing, thrifty, prudent or economical in the use of consumable resources such as food, time or money, and avoiding waste, lavishness or extravagance". Maybe a billionaire can live within his means by only spending 1M$ per year, but I have trouble seeing how this would not be considered lavish or extravagant. Living within his means? Yes. Frugal? No.


My personal take on frugality is this: Frugality is a tool that helps me achieve financial independence. I do not plan to stop using this tool when I reach financial independence since using it is a premise in my strategy. If I stop being frugal, then I need to go back to work to get a bunch more money to retire again.

 

[Square Root]

I think we can all agree that for a given expenditure level, everyone would want to get the "most" out of their spending. That is, each person would spend according to their tastes and personal utility function. Most of the debate around frugality centers on what people spend their money on, eg we don't go out much, or we drive old cars, or we never buy expensive clothes. These are matters of personal taste and quite frankly not worth debating in my view. Clearly our goal in life should be a balance between consumption (depending on personal goals and tastes) and a longer term desire for savings(to enable retirement) or to create a legacy. I see no virtue in frugality for it's own sake.

 

[kcowan]

We eat out a lot more than before because it saves us time and money right now. 5 years ago, under different circumstances, we ate at home more because it saved us time and money. Same people, same scenario, but different circumstances make us put different values on the same variables.

DW and I love eating our own food on our own patio. So dining out tends to be "an experience", better environment with superior food (perhaps ethnic) or a social event with friends and acquaintances. Aside from travel expenses, it is our largest expense. Call it an indulgence. But we very seldom eat out which is much cheaper than dining out.

Yet our car is 7 years old and the second (snowbird) is 19 years old. The Jones are way ahead. Good for them!

 

[Square Root]

Keith, I agree that it is stupid and pointless to try to "keep up with the Jones" but I also don't think it makes any sense to consciously under spend them either. I think the best approach is to ignore them, whoever the heck they are. Do what makes you happy. Maybe that's what you meant?

 

[CashMoney101]

I think frugality is important for all types of people. You know the interesting thing that I've learned over the years, is that the people who appear the most well off cause they're flashey are usually not that well off they just have a lease on a mercedes and $50k in credit card debt. The people I know who actually are well off, well those are the guys driving the old beat up vehicles and wearing clothes until they fall apart. I met this guy who's 20 years old and drives a brand new BMW works in the same building as me. I got to chatting with him and found out he makes $18/hour in the call centre, lives with his parents and pays $1000 a month in lease payments for that car. Oh I see. There is a lesson in there for sure.

 

[Jungle]

Yes I see a concern with that example above, but for the frugally people that have amassed wealth and then die, you can't take it to the grave so what is the point?
Does dieing broke make sense? Working less? etc

 

[mrPPincer]

Just taking a counterpoint to the previous statement, one could say that money is only unimportant as long as you don't have a need for it, so a little overkill can't hurt, and as long as it's unimportant, maybe just leave it to your favorite charity rather than ruining your heir's chance to learn on their own, just a thought.

 

[Square Root]

@Cashmoney. While I also know of people like that, especially in the US, I know many more who don't owe a cent, drive expensive cars, own expensive real estate, take expensive trips, give a lot to charity, and still don't spend above their means. So what should these people do? Volunteer to pay more tax perhaps? No I think not as that would be a real waste.

 

[donald]

I think it depends on your money blueprint/how you were raised(how your parents handled money-your early enviroment around $)I don't think frugality is a rich or poor trait(alot of wealthly people got wealthly being srewd in business)and clipping coupons for example is no different than them shopping prices in business deals ect.(you look for vaule no matter what the $ amt is)I also think it depends from where one starts,people who grew-up poor never forget what that is like and NEVER want to go back.I always think it depends on the skill-set a person has and there personality....I actually think introverts and intellects build wealth from frugality more than extroverts and people strong in sales skills as a example.

 

[Square Root]

@Donald- Perhaps but also it depends on how well you do financially in life and your personal tastes and utility function. Are these set in childhood or develop as one attains more wealth. I don't know. We can probably dredge up a lot of anecdotal evidence either way.

 

[donald]

@square root-I'm not sure either,i would think there is a threshold when being frugal might leave someone*in there personal dealings*(i don't think imo it would leave a business man thou in his dealings in a professional setting)I think being frugal is a skill-set and some just have "it" and others(rich or poor)don't,almost in the same sense some people are natural athletes(genes).I also think some frugal people almost view it as a game-It's like it stimulates there mind to search and excute ways of being frugal.

 

[financialnoob]

Maybe it is "cost effective" to work an extra hour to bring home dinner every night, but what about the cost effectiveness of the healthy time forgone by eating take out everyday? A home cooked meal and a restaurant meal are hardly comparable. I know I would have trouble eating take out all week. Most places just jam pack everything that we eat with salt and preservatives.

Maybe if you go really high end, you can get something that compares quality wise with a home cooked meal I guess.

I agree. We don't (and couldn't) eat out every night, but more than most because of our current work situations. Though I do think you can find some pretty decent choices out there. A Vietnamese bun is quite delicious and nutritious and cheap too at under $8 as an example, or freshly-made steamed/boiled dumplings in Chinatown for $10 for a variety of dishes.

I certainly don't disagree that it's more frugal to eat at home most of the time, just that I'm learning more and more how time needs to be factored into the equation is all.

DW and I love eating our own food on our own patio. So dining out tends to be "an experience", better environment with superior food (perhaps ethnic) or a social event with friends and acquaintances. Aside from travel expenses, it is our largest expense. Call it an indulgence. But we very seldom eat out which is much cheaper than dining out.

Yet our car is 7 years old and the second (snowbird) is 19 years old. The Jones are way ahead. Good for them!

Dinner on the patio every night sounds amazing :encouragement:

The ethnic note is definitely an important one. I can make a decent plate of pasta for cheap, but to attempt a butter chicken wouldn't really save me much since I'd have to buy a ton of exotic spices/oils/sauces, and I doubt I'd make anything close to edible.

And now I'm really really craving Indian food and it's only 6:45 am...

 

[kcowan]

Keith, I agree that it is stupid and pointless to try to "keep up with the Jones" but I also don't think it makes any sense to consciously under spend them either. I think the best approach is to ignore them, whoever the heck they are. Do what makes you happy. Maybe that's what you meant?

I don't ignore them. We often have them over for a BBQ. They might bring their expensive wine and specially brewed beer. I serve cheapo but good Chilean red when theirs runs out and standard brewery beer. It does not matter to me. I tell them how my AWD Escape handles like my BMW 3 series did (except for turning circle). When I talk about my portfolio (seldom), they make some vague comments about their investment advisor. One of them was paying $750/mo for cell phone plans for the 4 of them! I just said that I hoped they held Rogers shares!