Instead of spending more time working at your job in the hopes of getting a raise, why not take advantage of the many opportunities to add to your income online? It’s not easy, and it’s not for everyone, but it’s worth considering.

I also agree strongly with your point about priorities. Spending more time with my family is my main goal. Making more money to give them a better life is important too, of course. But making money at the expense of spending time with them is counter-productive.

I would much rather have us pinch pennies (we do until Lincoln is crying in pain!) to allow for more family time.

As to V’s comments, frugality does not necessarily mean you have to have a lower standard of living. Frugality doesn’t require “doing without”… you just use the things you have more wisely, waste less, etc. Don’t mistake frugality for being “cheap”. And doing both will not end up squishing you like a grape. Look at Sam Walton… he did not live lavishly, and he could hardly be mistaken for road jelly… ;-)

Working hard for advancement AND keeping spending under control means a hiccup in your career development is not going to be a disaster.

Thanks for a great article! Go simpledollar!

Even after your company matures and you start earning a nice income, you still have to save a ton to prepare for inevitable growth pains and marketplace changes. I can tell you from experience that when new opportunities come knocking, it costs money to open the door. That big new client requires your infrastructure be in place right from the start — not 6 months into the contract after they’ve finally paid you enough money to upgrade your staff/hardware/software/inventory/etc.

So anyone who thinks they can be an entrepeneur and avoid frugality is sorely mistaken or is extremely lucky.

Championships (e.g., early retirement) require both.

By living frugally and making every penny count, you train yourself to be more focused and to simplify your life. And this increased focus and simplification leads to you becoming more productive which leads to a higher income.

I don’t necessarily think in terms of ‘higher pay’, but rather, in terms continuous self development. Then the increased wealth will follow naturally, whether through salaried income or from improving your business.

Besides, when you get paid more, you get taxed more.

I’m not saying one shouldn’t look into ways to makre more money, just that more often than not they don’t pan out.

I enjoy your blog and obviously you love your washing machine, but I think your analysis of the washing machine purchase is seriously flawed and you should quite using it as an example.

Why is your analysis flawed?

Flaw 1 – You used a 5 year life for the cheap top loader washing machine at $400 and a 12 year life for the front loader at $1200 a pop. The average top loader actually lasts 14 years* while your front loader on average will last 11* years (very similar to your 12). PS – My POS washer has lasted 8 years already.

Flaw 2 – You then assumed savings of only $400 over 20 years. The savings per year for an energy star model could actually be as $100 over a 1994 model washer.

Flaw 3 – You assumed you had to spend $1200 to get the energy star model front loader. I don’t know what consumer reports says about ge but the energy star front loader with a 3.5 capacity at home depot is $550. You can pick up a top loader cheapo for $299 (not energy star).

Flaw 4 – You ignored the time value of money. This is a huge flaw.

New assumptions based on the flaws above-
a.$1200 Trent washer lasts 12 years
b.$299 Cheapo washer only lasts 6 years (less than the 14 year average life of a top loader
c.Funds saved on the cheapo are used to pay mortgage at 6% (discount rate)
d.Cheapo costs $100 more per year to operate
e.Energy star models are the norm in 6 years and FIL buys a cheapo one negating the difference in energy usage.

Under these assumptions you father in law is $200 ahead of you in present value $’s

Alternatively, he could just buy the $550 energy star model at home depot when his POS breaks and have an extra $650 in his pocket (that’s what I would do).

Under either case, he is ahead of your $1200 washer. Like I said, please quit telling us how far ahead you are by blowing $1200 on washing machine. With the exception of that, I enjoy your blog.

Todd

*http://www.demesne.info/Home-Maintenance/Appliance-Life-Expectancy.htm

I think it was Andrew Tobias who pointed out that a penny saved is actually TWO pennies earned, because you’d have to earn two pennies to keep one! In it’s simplest form, saving a dollar puts an extra dollar in your pocket, whereas earning another dollar only gets you 80 cents. And under a progressive income tax, earning a 2 dollars doesn’t get you 1.60, it gets you 1.40, while saving 2 dollars let’s you keep (that’s right) 2 dollars.

Does that mean you should let the gub’mint quash your ambition by taxing your earnings? Not necessarily. If you can fit entrepreneurship into your career plans and get taxed favorably as business, then it’s not as much of an issue. But for the vast majority of workaday Americans (and others with similar tax laws) taxes are a huge factor in the “earn vs. save” issue.

Personally, Yoda and Miyagi aside, I do both. I maximize my heavily taxed earnings while living frugally and investing in starting my own business to take advantage of favorable taxation. I’ll bet I was the highest paid guy on the bus today packing leftovers for lunch and reading a library book.

It’s a balance. I’m thinking of quiting my current job and taking one that pays somewhat less. My current job expects 50 hour weeks and they think 60 isn’t unreasonable. The manager at the other company doesn’t want people working over 40 hours because she thinks they need a life. I agree.