Frugality is Over-Rated

First off, let’s get this out of the way: ‘frugal’ and ‘cheap’ are two different animals. A ‘cheap’ person (known by the scientific name, Cheaposaurus) is single-mindedly focused on spending as little as possible without regard to other costs or benefits (i.e., value, quality, time). As for someone who is ‘frugal’ (otherwise known as Homo Frugalis), think of them as an evolved Cheaposaurus.

Darwin’s Theory of Homo Frugality

Similar to Cheaposaurus, Homo Frugalis (HF) also watches spending and likes saving money but – and here’s the leap up the evolutionary ladder – these folks possess an advanced brain capable of processing a big picture, holistic view of money.

Meaning, low price alone does not determine what to buy or whether to buy. Rather, infused across the synapses of each spending decision are thoughts of whether the intended purchase lines up with personal values.


Enter Buddha

Between the extremes of indulgence and denial lays a path known as The Middle Way. This is a path of moderation; one that brings freedom and wisdom. Homo Frugalis consciously lives The Middle Way, striking a prudent balance between spending and saving.


Okay, let’s get more specific here and convert spiritual proclamation into a real world example.

Cutting the Cord and Loving It

Three years ago I cut the cable cord, figuratively speaking. My kids would click through tens of channels, complaining that there was nothing good to watch. When I stepped back and actually listened to their complaints, and considered that I rarely watch television, this allowed the proverbial light bulb to click.

Then I asked myself: why am I paying close to $1,000 annually for cable (do the frightening math – that’s $10,000 over 10 years!) when it’s hardly being used and certainly isn’t needed? The next day I informed the kids that I would follow through on my frequently invoked threat to get rid of the aptly named idiot box.

After allowing the kids to free fall into panic and various states of contortion for several minutes, it was then revealed that I, Maker of Rules of the Home, would allow Netflix to satisfy the all too common craving to sink into a passive vegetative state. The new cost for gluing eyeballs to screen: $9.99 per month or about $120 per year.

In shaving the cost of home entertainment by 90%, was I being cheap? Would I now be slotted into the category of the lesser evolved Cheaposaurus, knuckles scraping ground and all? Well, if I truly enjoyed watching shows on cable television and the only reason I cut the cord was to save money, then I would rightfully be relegated to roaming among my Cheaposaurus brethren.

But if I loved watching one or more shows aired on cable television, or let’s say that my job required me to review a variety of television shows, then a cable subscription would certainly have more value for me, the cost may be justified, and I could make a fine argument for maintaining HF ranking.

That said, cable offered me little value. And total cost (aside from dollars) was excessive because product quality was judged poor (by all supremely qualified judges in our household) and was of marginal importance (read: value).

So now, every year I have $900 more in my pocket that may be put toward savings and investments or spent on items that align with my values, safe in the knowledge that my knuckles comfortably rest a few feet from the ground. And that makes me happy. Knowing that I’m giving thought to how money is being spent, that I’m maximizing savings, not wasting money, and moving forward toward my financial goals.

Homo Frugalis Splurge

  • Clip coupons? Good for you. Take in $10 worth of coupons to the grocery store once a week for 52 weeks and you’re looking at an additional $520 to your name.
  • Bringing lunch to work? Then you now exactly what you’re eating and are likely eating healthier (feeding your brain leafy greens has been known to increase investing prowess, according to my unscientific study). Oh, and saving money. Right. Lots of money. If an inexpensive lunch on the town costs $10 and you’re dropping that money 5x/week, thats $50/week. Stretch out the work year to 48 weeks (hey, you have to take breaks, vacations, they’re good for the soul) and we’re talking $2400/yr. Sure, you’ll spend money on groceries that are used for lunch but not nearly as much as you will spend eating out.
  • Make coffee/tea at home and not buy $5 coffee concoctions at the local café? Let’s see … 30 days per month, one cup of coffee/day @ $5 works out to $150/month or $1800/year. Hmmm.
  • Bottled water. Even if saving the environment isn’t your thing, think about the savings to be generated for funding your financial freedom by buying your own water bottle and filling up at home. Give or take $20 for a good stainless steel water bottle that should last many years versus $2.50 for store bought bottled water times say 10 bottles/month = $25/month or $300/year.
  • How about growing your own food in a garden? I assure you, the taste and nutritional benefits of garden grown food is so, so, soooooo superior to store bought fruit and vegetables. And, of course, with the California drought five years in the making and counting, fruit and veg costs are only going up.
  • Maybe you prefer to dry clothes on a laundry rack or outside on a line instead of a drying machine. Good for you. Cut down on your power bill. More money for you. Kudos!

All of the above activities, and this is just a teeny, tiny, sampling of ways in which to reduce your spending, build your inner wealth (because your activities align with your personal values) as well as your material wealth (through more savings).

And the bonus is not only more money for you to invest, build your wealth, and get closer to your goal of financial freedom, but more options for splurging once in a while.

Splurge?

Can I do that?

What about staying true to frugality, true to the HF tribe?

Ach! The BuddhaMoney way is about balance, moderation, the Middle Way. Yes, frugal is good. Yes, fewer expenses is good. And yes, you can splurge once in a while. It’s not a crime and you will not be ex-communicated from the HF tribe.

In fact, you will be celebrated! Because HF folks live a conscious, balanced life, they align their actions with their values and their budget, which leads to a general sense of well-being and gosh-darn-blow-your-horn-the-sun-is-shining-life-is-good-happiness.

So if you want to buy that fancy shmancy pricey new camera, gemstone earrings, or front row seats to a show by your favorite performer, go ahead, do it! And feel good about your spending because you’ve earned it by making little changes in your lifestyle, by cutting out the fat in your budget, and by deepening your pockets and your spirit at the same time.

Avoiding Holiday Debt Hangover

Why Give Gifts During the Holidays?

Yes, we live in a consumer society. Our economy would screech to a halt if, en masse, we did not heed the marketing call of the multi-tentacled beast known as … Retail Store.

And, once called, how may we possibly resist? Especially during Christmukkah (this year, 2016, Christmas and Hanukkah overlap so, to the dismay of purists, and the delight of Retail Store, the two holidays are teaming up in an effort to generate a power boost for the economy. My sense, call me naïve, is that conspiring corporate minds are behind the scheme).

The question is not how may we resist but why would we resist? My Buddha, there are gifts to be gotten! Family members, friends, co-workers, teachers, and endless others are counting on us. Because, because, because … this is what we do for others, and what we require of our self. For religious or secular reasons, or simply because gift giving during these holidays is our custom, we do not pause to question. And what’s wrong with that? Gift giving is a self less act. An act of kindness, generosity and goodwill. At this time of year, aren’t we entitled to simply buy without restraint, and take a break from psychoanalyzing our motives?

jingle-bells


Enter Buddha

Be conscious of, and understand, your actions. Know the reasons for doing what you do. Once there is understanding, you free your self of your own, and others, expectations.


Holiday Hangover

Okay, here’s what I’m getting at: do you know how much you spend during the holidays? Can you afford all the gifts? If you answer yes, and your finances will not be worse for wear come the New Year, then good for you. But if you’re in the ‘no’ camp, or say something along the lines of, ‘that’s what credit cards are for’, then I’m here to ask you to please REMOVE YOUR HEAD FROM THE SAND at your earliest convenience.

Kindness, generosity and goodwill must extend to your Self as well as others (for those who interpret my words as meaning you should buy your self gifts, hang in there, I’m about to explain myself better). This means not spending what you cannot afford. Why? Because breaking your budget means you’ll be visited by the Angel of Suffering not too long after the pretty lights come down or the last latke is eaten (lat-ke. Noun. Potato pancake fried in way too much oil, heavily salted, yummy taste, eat too many and arteries revolt).

And to be perfectly clear, if you have to make purchases using a credit card, knowing you will not be able to pay the balance in full by the due date, then this puts you in the ranks of Cannot Afford.

Not having enough money to buy all the gifts that you want is not an issue. Rather, the issue arises when you pretend to be in the Can Afford ranks. Because when you don’t celebrate the holidays within your financial means, the merry season is bound to end gloomy. What happens then? Suffering. And this suffering typically lasts a whole lot longer than a spiked eggnog high.

Once we’ve come down from the toasty endorphin rush that accompanies buying Stuff, and are confronted with the cold reality of a large bill that must be paid in full by the due date otherwise we’ll be charged interest at the prevailing rate as set out in the government approved Credit Card Mafioso Humungous Interest Charge the Sucker Law, we kinda feel … awful.

Our self-esteem takes a hit. We get anxious. Maybe we fall into panic once we’re past the denial stage and admit to our self that our debt has gone up. Again. And we don’t know when or how we’re going to pay it off. And we feel anything but jolly and free. No, just the opposite. Debt is prison.

Middle Way

Buy now, pay later. That’s what we’re sold on, not just during the holidays but all throughout the year. Sure, spending, consuming, benefits Retail Store and the general economy, but is it good for you?

I’m not going to get into what the holidays are all about, because that would be veering too far off the BuddhaMoney path. But I can tell you this: even if the primary purpose of the holidays is gift giving, this has to be done within budgetary constraints. Your budget. And your budget cannot include borrowing to buy gifts. It cannot include falling into debt. Because you will do too much damage to your self.

Think about it this way: when you borrow, you are taking what is not yours. You are taking from your future self; throwing the shackles of debt on to your future self. Why would you do that? Because it’s the holidays and you’ve told your self a story that supports your feeling of entitlement to buy what you want? Because you’ll punt the issue a month down the road, and let future self worry about debt and the accompanying ulcer? Because spending money you don’t have is ‘normal’ during the holidays? Because everyone you know carries debt?

Listen, anyone who cares about you would never accept a gift knowing it would cause you harm. That’s what debt is, financial and spiritual harm. But if we’re not spending money on gifts during the holidays, or giving what we feel are inadequate gifts, what should we do?


Enter Buddha

You are loved for who you are. Knowing how to touch the heart of another, and be touched, is the true gift. Your possessions, your roles, your achievements, your presents, are not you; these are but props, not evidence of your worth.


Hmmm. If you cannot afford to participate in Retail Store mania, give the gift of your self, your time and positive energy. Now there’s an idea. Maybe even priceless. Or, you do what you need to limit spending within a pre-set budget. Doing so avoids the holiday hangover, the terrible stress that comes part and parcel with debt. And just maybe the holidays will be that much more enjoyable this time around.

Pathway to Financial Freedom

If it’s okay with you, dear reader, I would like to step back from talking about investing to ask why we invest our money in stock, bond and other financial markets?

A softball question? A naïve question? Absurd? Do I know anything about investing and money, you may ask? Alright, before I have to fend off any more imaginary attacks on myself, I’ll say that, of course, a primary reason we invest is to make money. Sure, but why do we want to use our discretionary income to make more money? Drum roll please: Continue reading “Pathway to Financial Freedom”