How Frugal Are You?

Ask a bunch of people about what frugality means to them, and chances are you will have as many different answers as the number of people you spoke to. Frugality, to me, is like a dial with a spectrum of choices rather than one fixed way of doing things. Moreover, depending on the circumstances and the situation you are in, you may choose to set the knob on this dial to different points. At one end of the dial are severely miserly folks who are so cheap all the time that it disgusts you to be in the same room as them. At the other end of the spectrum you have the seriously non-frugal, spendthrift people, who give in to every indulgent thought that occurs to them and go into debt to fuel their extravagance. In the personal finance blogosphere though I think most people aim to find a balance between the two extremes. Yes, there are some admitted misers (names omitted - who am I to judge?). And there are several people who were spendthrifts at some point in time (including me, to a certain extent), but are now moving a knob of the dial a little bit at a time towards achieving a more frugal lifestyle.

Let’s look at this spectrum in reference to some of the discussion in the finance blogosphere. Let’s start at the extreme that disgusts many of us – the cheapskates. So what separates cheap from frugal?

There is a lot of discussion about this in the finance blogosphere. The two posts that I like a lot, as much for the content by the authors, as for the comments by the readers, are Ramit’s post about cheap vs frugal @ I will teach you to be rich and JLP’s Question of the day – frugal vs cheap @ All financial matters. From the discussion in those posts (and in my opinion) this is more of an attitude issue. It is about whether a person is responsible (frugal) or selfish (cheap). It is about whether a person tries to save money at the expense of others (cheap) or tries to save money provided it does not have negative impact on others (frugal). It’s about whether a person foregoes a coke but leaves a tip (frugal) or whether a person forgoes the tip, but has the coke, or not (cheap). It’s about character and behavior. I think the quote below by Ramit sums it up beautifully –

Cheap people care about the cost of something.
Frugal people care about the value of something.

As we move up the spectrum of frugality, the next set of people we see are the extreme frugalists. No, they are not necessarily cheap. But they take frugality to an extreme. Consider these posts for example - Extreme Frugality: Growing Tomatoes In A Bra And Other Interesting Frugal Ideas by Golbguru @ Money, Matter and More Musings and Seriously Thrifty? Some Wild Ways To Save by SVB @ The Digerati Life. Before the authors come at me with a stick, let me point out – the authors do not claim to be extremely frugal – these are just some amusing methods that they have come across and have presented it on their blogs for our amusements. There are a lot of possibly practical, but amazingly whacky ideas here that I could not bring myself to use no matter what. For instance, I would never smear mayonnaise on my body to save some money on moisturizers, or ever impose a limit on the number of squares of the toilet paper that can be used in my household. Eeewww.

That said, some people do practice extreme frugality. Maybe out of necessity, or maybe out of habit. I have an aunt back home who was raised in a family with limited resources. In her mind, telephone is a luxury not to be over indulged. Now, she is quite well off. But she has never owned a cell phone. And even when we call on a land line she is very abrupt in her conversation, even though back home, incoming calls are free. When she does talk, she speaks very briskly to cram as much as possible in as little time as possible – like in one of the ads that used to air on TV. No kidding. We have asked her several times to relax, but the habit is just too ingrained in her. Even though phone calls cost only a few pennies per minute, and we being so far away from home crave for these conversations, she scolds us that we should be more careful and not throw away all our money at the telephone companies, and hangs up!

The next part of the spectrum of frugality is where I believe most of us belong. It is a broad range though and different people find different things that work for them. For instance, Dawn at Frugal for life recommends that you use coupons and consider them equal to money while Nick @ Punny Money cannot make it a part of his life style even when he consciously tried. Some people prefer to drive an old car – for instance I wrote here why I was not going to buy a new car. While others prefer to go for it but make sure they get the best bang for the buck. For instance Nickel @ Five Cent Nickel wrote about his experience of buying the vehicle they really wanted here. Tricia @ Blogging Away Debt skips professional haircuts for her whole family (including herself!) as part of her frugal routine. On the other hand, the English major @ An English Major’s Money spent $200 in one visit to her hair stylist! While that may sound extravagant, based on her other articles, I get the feeling she is a fairly frugal person.

What I am trying to get at is, the knob on the frugality dial is set at different points for different people. What one person is comfortable being frugal about, the other person might consider his/her main indulgence. One of the frugal blogs I love reading is by Jenn @ Frugal Upstate as much for the great frugality tips as for the solid frugal philosophy. But I was quite surprised to read an article where she confesses that in her household, for two drivers, they have 3 motor cycles, 5 cars and a camper. Does that suddenly make Jenn any less frugal? Heck no! Like I said before, I believe that we not only choose which part of the frugal spectrum we want to be, but also, vary our choices based on a particular situation.

There is no hard and fast rule as to what is frugal or how frugal one should be. What I strive for is to make frugality a part of my subconscious mind, so that every time I have a choice to make, I find the spot that is most comfortable for me on the frugality dial, in terms of pleasure, dignity, self respect etc., while managing to remain frugal. It’s a balancing act - if you push too hard, the quality of your life and relationship will degrade dramatically. The graph below makes an effort to plot my frugal philosophy.







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