Frugality and Binge Buying

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Our one year old daughter has discovered a fun game in the family room. Whenever we are down there, she marches right over to the entertainment center and begins to pull DVDs off of the shelves. She refers to them as “books” and opens them up to show us, then throws them on the floor.

Obviously, this is a habit that we’re working hard to break, using the usual tactics one would use on a one-year old: clearly telling “no,” diverting from the situation, and so on. However, given the easy accessibility to the DVDs, our daughter is just attracted to them like a magnet each time we enter the room.

The best solution, obviously, would be to simply get the DVDs out of her way – but that would require either getting a new shelving solution or putting them into storage, neither of which is a particularly amenable option.

This leads us to a joking conversation I had with my wife the other night. We were both in the kitchen preparing a supper which used some leftovers as a primary ingredient, and I was commenting on all of the various frugal things we do – use leftovers, cook at home, clip coupons, use inexpensive bulbs, and so on. And then, in jest, I said the kicker: “With all the money we save with these things, we should just replace that entertainment center.”

We both laughed it off at the time – after all, I was basically making a joke. However, the moment stuck with me.

I realized that what I described was quite similar to a food binge after several days of dieting – a huge negative over-response to a series of small positive steps. Even more frightening, it was something I used to actually do myself – I’d behave well financially for a while, then binge on something foolish and completely undo my good work.

So, let’s look at our situation again. I’m sitting there listing out all of our good little frugal moves over the last week or so. We ate at home several times, saving $20 or so! We used leftovers, saving $10 or so! We used energy efficient light bulbs, saving $5 or so! We saved $10 at the grocery store on Sunday with our coupons (really, we actually did)!

Wow, we’re really doing good, aren’t we? With all that savings, we’ve already saved most of the cost of that entertainment center. And we deserve it, right? Don’t we deserve the good things in life?

Many people view frugality as exactly that – a bunch of little steps they can take in areas of their life that are less important so that they can afford to splurge in other areas. “If I eat a cheap meal the next few nights, I can afford to go out to that steak house with my date on Saturday.” “If I carpool, I can afford to buy that new gadget in a few months.” Instead of helping you build a financially stable life, frugal tactics are sometimes used as bartering trinkets to help you keep living the high life.

And that’s okay, as long as you’re honest with yourself about what you’re doing. This type of frugality doesn’t serve to put you in a better financial state – instead, it serves to help you maintain a lifestyle that, in some regards, is beyond your means.

This is equivalent to eating a piece of fruit for breakfast and a tuna sandwich for lunch so that you can have a steak for supper chased by a pint of Ben and Jerry’s. Sure, the piece of fruit and the tuna sandwich are good moves, and sure, you’re in a better state than if you had a bagel with cream cheese for breakfast and a Big Mac for lunch, but at the end of the day, you’re not truly getting ahead. You’re merely subsidizing other behavior.

Frugality is merely one tool in the toolbox if you’re seeking financial success. Patience is also vital – it’s going to take time to turn things around. Self-discipline plays a role, too, so you don’t fall into the binge trap.

The real question is, what do you want? Are you striving to get ahead financially over the long haul? Or are you content to just make ends meet while still enjoying most of your perks? In either case, frugality can be a valuable tool.

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89 thoughts on “Frugality and Binge Buying

  1. This closely describes what my wife and I do. We’re frugal to sometimes ridiculous extremes, then we occassionally make a big purchase without a second thought.

    You’re right, it makes absolutely no sense…and it’s something we’ll need to address in the near future.

    Good post.

  2. I find the moralistic tone of this post – and the implication that you can’t possibly be getting ahead if you’re not making the most frugal possible choice in every situation – kind of off-putting.

    You’ve written before about how we all have areas where we like to treat ourselves – I believe yours include food and kitchenware. I’m not sure how installing CFLs to help you save up for a Kitchenaid mixer is all that different from eating pasta all week so you can go to a steakhouse on the weekend.

    One of the things I like about being frugal is that it’s put me in a good enough financial situation that my treats don’t all have to be planned. If I see something I really want – whether it’s a new guitar or a trip to England – I don’t have to worry about whether I have enough money for it, because I know I do. It will mean less money going into the house downpayment fund, but there’s plenty of money already going into the house downpayment fund. (Plus, I’m not going to buy a house anytime soon anyway.)

    This does not make me a bad person.

  3. Queercents made a similar observation on this–the writer called it “frugal veiling.” Another excellent post, Trent.

  4. Yeah, Trent, I’m with Johanna on this one. I was kind of taken aback by phrases like “the high life” and “living beyond your means” since you’ve written about these exact things earlier in regards to your food choices, kitchen tools and other hobbies/ interests.

    I think your point that one needs to know why frugality is a tool in one’s life is a legitimate one. But I don’t agree that skimping and saving in one area and spending in another is tantamount to making a poor diet choice.

    I do understand what you’re trying to say. But this was just kind of an odd post, to me. And I think you have, and could again, say it better.

  5. I agree with Johanna as well. Deciding to purchase something to solve a problem – be it temporary or not – should be something you decide if you can afford. Just the fact that you buy something you didn’t think about buying 2 or 6 or 8 months ago, does not make it a “binge”. It means circumstances change. Now, if buying it means you have to go into debt, that’s a different choice. But there was nothing in this post to indicate that the purchase would bust the budget or anything else.

  6. I think the main point that could be stressed a little more in the post is what is the outcome that you are looking for? Using your diet analogy then if I was wanting to lose weight then the splurge might hinder that goal overall but if I was just trying to maintain then the splurge is within limits because I accounted for those calories. If being frugal in some areas helps me achieve affording other areas to spend more, then great. It’s better than not being frugal at all.

  7. I didn’t really like this post. I don’t think it goes well with the one from the other day about how you’re not clipping coupons as much because you’re in a better place now then you were a few years ago.

    But, if you wanted to do the frugal thing, buy a $20 cd/dvd binder, put the dvds in there, save yourself the trouble of the entertainment center and de-clutter your living room. But help us all out and recycle the cases once you’re done with them. (or for Christmas, make home DVDs that are cheap and treasured and use the old DVD cases for the presents).

  8. I for one quite enjoyed this post. You never take a step back and think about this kind of behavior, but it’s so very common. This really brought to light some good points about how people act when they’re being frugal – either with dollars or calories.

    The issue I seem to come across with my wife is they you don’t necessarily realize you’re not getting ahead with this kind of behavior, and actually think you’ve been doing well the whole time. My wife sometimes seems to go down this path, thinking that some of the recent savings will earn us that XYZ trip we’ve been wanting, when in reality we would end up no further on our goals of reducing debt.

    I think this is a great post, which if nothing else makes you stand back and think about a common behavior. I do think this behavior is justified sometimes, but you definitely get the thought process moving along.

  9. my parents raised me with this exact mentality. if you save here you can splurge here b/c YOU DESERVE IT. now that i’m financially independent, i’m learning that i deserve to have money saved in case i have an emergency situation or so that i can take a day off from work when i want. i agree the most important aspect is to make sure you are honest with yourself.

  10. This post makes NO sense for reasons already articulated by commenters above. Trent, I suggest you take a good, hard look at your writing – this blog has been really slipping in recent times…

  11. Unrelated to the frugal part of this post, my son is 14 months old and also went through this phase. Our solution:

    As long as he wasn’t damaging the DVDs we let him do it, over and over again. After he was done with the exploration, and didn’t get a reaction from us, he stopped the behavior. I think in many cases these infant activities continue a long time because they get a cool reaction from Mom and Dad.

    This is not advice, as I would never give unsolicited (or in most cases even solicited) parenting advice, but just wanted to share our experience with the behavior, which had a very frugal solution.

  12. I find the moralistic tone of this post – and the implication that you can’t possibly be getting ahead if you’re not making the most frugal possible choice in every situation – kind of off-putting.

    I agree with this; I have never posted on this site before, but I have read it. Each time I read it, I do feel like Trent is a little self-righteous on many topics. I am always surprised more of his readers don’t call him out on this.

  13. you may find that a chest of draws or something that you may have already available in your house may work just as well.

    also, putting something on the shelf that you could play with that was similar may help, too. when my daugher was really little, i had a low drawer in the kitchen filled up with plastic ware and what not that she could play with while i was cooking.

  14. The DVD binder is a good idea (will have to suggest it to my husband, I hate looking at all those cases). Another idea is to put the DVDs in clear plastic bins (or nice baskets for a permanent solution) until she gets past this phase.

  15. While I can understand some of the criticism other commenters have brought up, I can see exactly where you’re coming from in this post.

    After experiencing both pigging out after a few days of crash dieting and binge spending at the mall after weeks or months of not buying anything new, I can definitely identify with this post. In Trent’s defense, I don’t think he is trying to say that you don’t ‘deserve’ to have good things in life, or that all expensive purchases are impulsive, uncessesary, and bad – he is simply saying that consistently saving and being frugal doesn’t RATIONALIZE an impulsive and expensive purchase(s).

    Since frugality and good saving habits/money management tend to go hand in hand, we may find ourselves with extra funds from time to time to spend on sometimes ‘extravagant’ things – which is okay – but consistent frugality doesn’t RATIONALIZE the spending. Ie, “I’m buying this entertainment center because I want it and (possibly because of my frugality) i’m actually able to afford it,” Not “I’m buying this entertainment center because i’ve been frugal (‘good’) and therefore I deserve a reward for my good behavior by buying it.”

  16. Once again you have a terrific post. As a Mom of three young boys, I thought I would pass along a suggestion for the DVDs. If you are not concerned with actually displaying the DVD case then this will work great!

    A CD Case (zipper style preferred)works great as a DVD holder. We had two in the house so we have one which holds only the kids movies and the other holds everything else. We took the cases and placed them in a box in the attic.

    Not only do we avoid the stacks of DVDs being knocked on the floor, they are all portable enough to place out of reach of tiny hands. The DVDs are protected by the felt which helps avoid scratches and prolongs the life of the DVD.

    Good luck!

  17. I’d suggest that “prioritizing” would be a better word and concept in this situation than “subsidizing”. Eating tuna fish and fruit isn’t “subsidizing” a meal of steak and designer ice cream, it’s prioritizing the food budget for that day. Sure, we could all save a ton of money by limiting our food choices to the cheapest and plainest, but who wants to live that way if they don’t have to?

  18. Have you considered building a new entertainment center? Or re-arranging the family room so the DVDs go somewhere she can’t reach?

    The big binges motivate me to do the little things. I’d rather spend a lot all at once than a little extra here and there. As long as I plan for it, I’m good.

  19. If you’ve got friends with power tools, that would be a great weekend project, and I’m sure that we’d all like to see pictures of the finished product.

  20. Nothing wrong with taking that extra money saved and splurging. That’s one of the reasons to stay frugal. If you reward yourself then you will set a goal and make reaching it that much more important. So whether it’s a new entertainment center or going out to dinner, nothing wrong with splurging after saving.

  21. I am surprised that so many find this post disturbing–I think the post points out a common psychological trait that people have, and in doing so and making us aware of it, can give us the awareness we need to stop and count till 10 when we get the *urge to splurge*, justified by recent “savings” of money. I suspect this post strikes close to home for most of us.

    More exactly, it gets at something I commented about a day ago–a high spending elasticity, or the tendency to increase our spending to match (or exceed) any increases in income or money that becomes available. In the case Trent is describing, the “money that is available” is the money they didn’t spend on the dinners out, etc.

    The thing to keep in mind is for this post is, Trent and his wife didn’t set out to reduce their spending on eating out, using leftovers, etc etc, with a goal in mind of buying a (completely unnecessary) new entertainment center. They did it to make money available for debt reduction and other reasons (reread the post). So all of a sudden deciding “let’s go buy that new entertainment center to “solve” our problem, rather than using our creativity and existing furniture to solve it” is *NOT* a positive decision for them.

    If they had decided 2 months ago that they really needed or wanted a different entertainment center, then buying it with the money they’ve set aside would be a different story.

  22. I agree with Jennifer in that I think may people missed the point of Trent’s post- it’s not whether or not you should buy the item, it’s about using frugality to rationalize overspending behavior you otherwise wouldn’t be OK with.

    Like he says, there’s no problem treating yourself with purchases if you’re honest with yourself about them. It’s just the rationalizing behavior that can be a trap for some people.

    Personally, I see my couponing as a treat fund- the money I save couponing goes directly toward special things that otherwise are not in my budget- like ice cream, fancy lates at the cafe, and going to the hamburger stand. Since the grocery cost BEFORE coupons is the one in my budget, and I am honest about this practice, it is OK. But if the POST-coupon grocery cost was the one in my budget, and I used it to rationalize treats, this would not be in line with budget.

    For example, I have a $40 grocery budget, but I only spent $30 due to coupons and deal shopping. The extra $10 goes to tasties. Now, if I spent bought $50 worth of groceries, but only spent $40 due to coupons, and THEN RATIONALIZED this $10 savings as an excuse to buy tasties, THAT would be a bad decision.

    The point is not the actual budget, or using saved money on treats for yourself- the point is falling in to a trap of rationalizing extraneous purchases.

  23. Another thing I’d like to point out (and I think this is intentional on Trent’s part) is the use of the concept of “saving” money that Trent uses in his portrayal of the “splurging” though process. In this system of justification, money is thought of as “saved” when we make a more frugal spending choice than another that has tempted us. In reality, no money is *saved* in this scenario, rather, expenditures are reduced. The only way to truly save money is to spend less than is coming in. That’s “savings”–spending less than you might have otherwise spent, although it may result in savings, is actually not savings per se, but a reduced expenditure. You’ve still spent money, just less than you might have. And you can only put that money in the bank if, as a whole, your overall spending is less than your income for the given time period.

  24. Rings true to me. I cook, so a kitchenaid?, now that’s just good sense. It’s an excellent piece of equipment that enhances one’s kitchen for decades to come, though it is expensive and by no means a necessity. IMO, for someone who enjoys cooking and does it regularly, a kitchenaid is a frugal purchase worth saving up for. Whereas, if you don’t cook, it’s a bit of a waste to have one.

    But an entertainment center. Eh? Big thingy that holds teevee, DVDs, maybe some other stuff. If watching movies at home is your thing, then maybe a new, fancy or high-end entertainment would make your life better. I don’t think Trent & Co. are in that situation. It would not be an enhancement in their home, rather, it would be a bit of a waste.

    Kinda like dieting all week and then having that big slice of cake on Friday because you’ve been ‘good’.

  25. @steve: It’s not so much the content of the post that I object to, but the tone. If he had said something like, “Right now our financial goals take priority over everything else, and it’s really important for us not to get sidetracked. So we need to make sure we keep a lid on unplanned spending like this, but for people in different situations, it might not be so important,” that would have been fine. But as it is, it sounds like he’s saying anybody who ever gives in to the urge to splurge must be financially unstable, and that’s just not true.

    If you get really caught up in working toward a long-term goal – whether it be a financial goal or a weight-loss goal – it’s easy to lose track of the fact that self-denial isn’t a virtue per se, but merely a tool to help you achieve your goal. You avoid indulging yourself not because indulging yourself is sinful, but because it keeps you from achieving something that you value more. Reading this post made me think that Trent’s starting to forget that. And that’s unfortunate.

  26. i enjoyed this post, trent.

    i have been guilty of justifying things in just this way. i think it is in my best interest to at least be conscious of this sort of self justification.

  27. @Johanna:

    I agree with you in that I think the post fell over in the last half couple paragraphs. Maybe it’s not the all-time-best post ever by Trent, but that’s ok with me, I don’t expect him to be right all the time, just to give some insight and interesting fodder for thought and conversation between and among TSD’s readers.

    Gettting back to the substance of the issue, however, I do think that any time you have a situation where you are having an “urge to splurge”–what Trent is referring to as binge shopping–is definitely a problem and is revealing an underlying problem that needs to resolved. Essentially, in an “urge to splurge” situation, you are trying to release psychological tension by spending, at the same time knowing that it’s not a true fix. When you do the “splurge”, you aren’t going to feel better, except on a surface level and temporarily.

    Rather than doing that, it might be better to sit with oneself and figure out why you’re feeling this tension and what to do about it, besides drowning your sorrows in spending.

  28. Even better than buying an entertainment center, check with Freecycle and see if anyone has one to give away.

  29. Give yourself a pat on the back. That inspired a personal blog entry of my own. I’m impressed with not only the way you perceived a difficult concept, but the way you put it down on paper.

    Congrats for a really fantastic entry.

  30. @Scotty ;”My wife sometimes seems to go down this path, thinking that some of the recent savings will earn us that XYZ trip we’ve been wanting, when in reality we would end up no further on our goals of reducing debt.”

    yes, the monthly budget spreadsheet tells no lies!

    If the savings don’t show up there, they don’t really exist, do they? Tallying it all up at the end of the month, we are faced with the truth about our money situation, which can contrast with our *beliefs* about our money situation.

  31. I thought this was a good post b/c it rings true to some psychological games ppl play with themselves. It is tempting to want to splurge on something b/c you’ve been working hard to be frugal. I know it is something I struggle with occasionally. That is why it is so important to keep your goals in mind to keep you on the right track.

    I don’t see why other readers are getting so caught up in the wording… It seems they can’t see the forest for the trees… Just my 2 cents…

  32. One point that doesn’t seem to have been considered yet is that, much like dieting, if you find yourself frequently wanting to splurge, you may have tightened your belt a little too much. Dieters often go to extremes, switching from fast food to all salads, then are so hungry they pig out on ice cream. (I speak from experience here.) Frugality, especially if you’re a beginner, can be similar. You make drastic cuts in the budget, but those cuts may have been too deep. In both cases, the individual benefits from more realistic goals.

  33. I agree with others, in that this is exactly how we’ve been with our money (myself and my husband) prior to our current crisis. We’d be poor, due to our business cycle, then start getting $$ and buy all the things we ‘did without’ during the lean times. Instead of putting aside money *for* the lean times! Duh.

    Another thought for you re: the DVD’s – do you have hard drive space to store the movies digitally? Since this is what my company does (a small part) that was my first thought. :) Not necessarily frugal if you don’t have the equipment already, (like a large enough HD) but it does have the benefit of saving them from potential scratches, etc. And then you could put them in one of those flip cases and store it somewhere.

  34. Wow, why don’t we cut Trent a break? If you’ve been reading his blog for any length of time, you know what his views are on “treat” spending, this is clearly addressing people who stay in the short term cycle of saving and spending saving and spending, instead of living frugally as a lifestyle with scheduled expenditures for fun.

  35. @Jennifer, (comment #14): “I have never posted on this site before, but I have read it. Each time I read it, I do feel like Trent is a little self-righteous on many topics. I am always surprised more of his readers don’t call him out on this.”

    That’s a pretty harsh assessment. Why do you continue to read Trent’s blog if you find him self-righteous? I find him to be a very helpful person who is SHARING his thoughts and strategies with us on a topic of financial discipline! He’s been successful in paying off debts quickly and he’s offering (for free, mind you) to help you do the same- and you call him “self-righteous”?!

    Trent is just saying that if you’re not careful, you can slip (like he almost did) and ‘reward’ yourself with a spend on something you don’t really need. If you really need or want it and can afford it and are out of debt, then fine- but if you’re not out of debt, you should probably think about it and not just automatically assume that you ‘deserve’ a treat for being frugal.

    Come on folks, be NICE- once again, you’re going to discourage this man from sharing his useful advice, thoughts and observations by jumping all over him for something minor. I’d hate to have him quit blogging!

  36. Regarding comment #38…Maybe I am being harsh, but I do feel the tone of his posts are a little condescending; I continue to read because I am always interested to see if anyone ever makes a comment about the tone of his writing. I also keep reading to see if it is just my imagination that he seems condescending…Obviously, he has a lot of fans, which is great for him. He definitely will not stop blogging!

    I know what Trent is trying to say, I just don’t care for his style of writing.

  37. +1 to the idea of a DVD Wallet/Binder. I just store the clamshells in a storage room for when I really need to ‘browse’. There’s no real need for them unless you haven’t watched the majority of your collection, ever, which is unlikely given the nature of a DVD collection. I think a bunch of DVD’s sitting around looks unsightly, personally (unless it’s a TV room / Den anyway).

    Slightly off topic, one more thing to consider is to go a little more modern and put as much electronic componentry as possible in another room or the basement. It’s easy to do and really the only major expense is possibly a UHF universal remote (so you can control the devices from another room). There’s no real need to have anything more than the TV itself in your living room anymore.

    I recently did this and it makes a very big difference, because let’s face it DVD cases, DVD players, consoles, DVR’s, etc. are clutter if they’re not tucked away neatly in a cabinet of some sort. The only major expense is possibly needing an IR universal remote (so you can control your devices from the other room). These are very common now though and not overly expensive ($200 or $300 will get you a nice one).

    It’s also now very easy to make a digital collection and just have all your DVD’s sitting on a PC. I use an old PC for this, so the only expense was a few cheap hard drives.

  38. Frankly my frugality came out of always having to live with a slender purse! I also remember my Swedish grandmother who died with $20,000 in the bank. She saved on her Social Security! And also deprived herself of many small luxuries out of, I think, a fear of poverty. I have no one to leave anything to, no children to worry about – so I will allow myself small luxuries along the way. Life is only lived once.

  39. I’ve been reading Gail Vaz-Oxlade’s blog (that I found linked on Get Rich Slowly’s blog) and she talks about this all the time. She says that you aren’t really saving unless you actually put that money away. Let’s say your goal is to save money for your emergency fund. So you eat at home the whole week instead of eating out. What you need to do is take the difference that you saved (let’s say $50) and actually put it in a savings account for that emergency fund. If on the other hand, you take that $50 and buy a new sweater, you didn’t save anything at all, no matter how frugal you were the whole week.

    Now let’s say your goal in life is to just balance it so that you have money to splurge on sweaters and such. You might do that by cooking at home more. Ah, now this system is working for you.

    Clearly the person with the heavy credit card debt should probably opt for scenario one, where they take their savings and actually SAVE it. Splurging on sweaters or entertainment centers will definitely not get you out of your hole.

  40. Jennifer, I wonder if you’ve considered giving his posts on effective time management a second read.

  41. It is one thing to be frugal in lots of little ways in order to be unfrugal in other ways, as long as you know this and plan it this way. As in you are frugal in certain ways in order to go on a vacation each year, or something along those lines. To be frugal in little ways and then be unfrugal to reward yourself for being frugal is not the way to do it. Your posts always make me think and are usually right on.

  42. Sometimes you are frugal in one area so that you can spend more in another area that is more important to you. As long as it is all done within the overall budget then you are not splurging or “living above your means.” This is something that you have stated in other articles. I think the connection that people are failing to make with this article is that the money you save being frugal is not just free money. It is money that is earmarked for savings or paying down debt. It is money that has a purpose and isn’t excess money outside of your budget.
    This is a mistake my husband and I have made. We have done a good job of not taking on any debt but not a good job of saving for the future. We are very good at spending what money we have. But that puts us at risk to go into debt. So we’ve had to change our perspective on our paycheck and see that it provides not just for the here and now but for the future as well. That means we can’t buy this, that, or the other just because we have money in the bank for it and won’t go into debt.

  43. Regarding the person trying to “burn me” with the time management comment…You’re right; I quit.

  44. Interesting post, and I see nothing wrong with it, although I was sidetracked and waiting to find out if you would decide to just put the DVD’s somewhere until your toddler gets older. I’m partial to doing that and keeping those no’s to a minimum, but that’s not about frugality.

    The comments are especially interesting this time. You really hit a nerve with a lot of people! I guess there are a lot of people who like to treat themselves and don’t want to think about it.

  45. Eh. I agree with Jennifer, as well as Johanna and co. This entry seems somewhat hypocritical in light of your recent diaries about how priorities change.

    I think you’d reach a lot more people if you found a way to espouse the virtues of consistent frugality without writing in a way that makes you seem to be looking down on people.

    Between this post and the one you did on the economics of childrearing, you might benefit from (as someone noted in that entry) more personal, self-reflective posts, and fewer ones where you imply others are wrong for not living or thinking in certain ways.

  46. @ Karen:

    I’m not sure it’s denial, as you seem to be suggesting, as much as a reaction to a judgemental and somewhat hypocritical entry.

    It just doesn’t make sense for someone to post about how his approach to financial stability has changed, enabling him to spend more luxuriously than he did, and then return to criticize others for saving in one area of their lives to enable them to spend more in others.

  47. Trent, have you ever read Calvin Trillin? I think you’d like him a lot – he wrote three books on food in the 60s and 70′s, I think, that are sold together as “The Tummy Trilogy”. (The first was “Alice, Let’s Eat”. I can’t remember the other two.)

    Anyway, his wife considers any money that she even vaguely thought about spending but didn’t as money available to be spent on something else. If they spent 10 minutes talking about going to Hawaii but decided not to go, they then had those several thousand dollars available for other things. They clearly know this doesn’t make mathematical sense, but they do it anyway (and in their case, it doesn’t cause financial disaster).

    Give the books a shot – fun foodie writing and really funny.

  48. I think this article requires a certain context to work right.

    At first I read the bit “Many people view frugality as exactly that – a bunch of little steps they can take in areas of their life that are less important so that they can afford to splurge in other areas.” and I thought that this is my own personal opinion on things. I cut costs and save and skimp on some things in order to spend more on what I want. But then Trent goes on to say : “This type of frugality doesn’t serve to put you in a better financial state – instead, it serves to help you maintain a lifestyle that, in some regards, is beyond your means.”

    IF you are in debt with no savings or very low savings then this kind of thing is just treading water. If you cut coupons and turn down the heat but then use that money to buy a bunch of video games but don’t pay off debt or increase your savings then its not helpful long term.

    BUT if you have your debt under control, have a large emergency fund and save a good 10-20% of your income into savings/retirement then if you cut coupons but then also splurge on video games then theres nothing wrong with that whatsoever.

    The context of the individual personals financial situation is very important to get the right tone from this article. I think Trent is really talking about a hypothetical person who is using frugal methods to try and start a savings account or whittle down their credit card loans. In that situation you really should not be using your frugality to justify splurges since its not a net gain.

    Jim

  49. The writer Calvin Trillin calls this “Alice’s Law of Compensatory Cashflow” (after his wife, Alice). It goes like this: you think about buying a huge fancy TV with all the extras for, say $700. Then you decide you can’t afford it. So you saved $700! Now you have $700 extra to spend! I think the “I deserve it for being frugal” mentality we sometimes get ourselves in as a variant of this. It’s a real phenomenon and I appreciate the chance to think about it. I think the truth must be that if we’re feeling deprived by our frugal choices, so deprived that we feel like splurging, then either we’re either being too frugal or we’re not keeping our eyes on what we eventually will get for being frugal — greater security, a house down payment, or whatever.

  50. I get that your point about this post isn’t really about the videos, but I do have a tip. When my family moved into a smaller place a few years ago, and we didn’t have a good place to store videos, I bought a couple of those big nylon books with the zipper around the outside that holds CDs (a CD album, I think). Anyway, I got one for our CDs and one for the DVDs. I just threw out all the cases. This saved SO much room!! And of course, it kept our toddlers at the time from doing what you are talking about. Much more organized, and it saved us the time and money of finding more storage space as we add to our collections.

  51. My Scottish granny used to call this pattern ‘being penny wise and pound foolish’. She was a widowed single mom during the Depression and WWII and certainly was a master of frugal living!

    (I would also find another temporary storage solution for the DVDs and make sure your daughter has easy access to a shelf or bin of children’s books. Living in a book-rich environment can go a long ways towards encouraging reading.)

  52. I get your point, but I still think there should be moderation in all things… including frugality. If you don’t EVER buy yourself things, you will end up feeling deprived and more likely to binge on spending.

    I think you should just put out a request on Freecycle or Craigslist for a different entertainment center. Then you get to stay frugal and get what you want.

  53. Yeah, I thought I understood the point of this post but not sure how the examples relate. Eating cheap meals all week so I can have a nice date on Saturday night is a planned allocation of resources, which we all have to do (kind of like buying DVDs on the cheap instead of paying for cable). I’m not sure how it is a binge since it was planned out.

    I’m not sure how it relates to frugalness as I always thought of that as 1) keeping spending low enough as to still be saving a large amount of one’s income and 2) not being ‘wasteful’. The total costs of eating cheap meals all week and then steak at a Saturday night dinner is well within my food budget and still allows me to save a lot (eating a steak dinner out everynight would not). Just because I don’t choose to allocate the same amount of money to each meal during the week makes no difference, I stay within my weekly budget. I don’t see eating a steak dinner out as “wasteful” as I gain expected extra value from the added cost (true wastefulness would be throwing out the leftovers instead of boxing them up for my next meal, which I would never do).

  54. @Strick:

    It sounds like this doesn’t apply to you, because you are meeting the goals that you have set for yourself and following your plan.

    I think the crux of what Trent’s post was in addressing the person who thinks:

    “I ate cheap all week, so now I can afford the steak”–when their original plan was to eat cheap all week and not have the steak at all, but put the “steak” money towards their credit card debt or build up their savings with it.

    That person isn’t meeting his goals, rather he has just figured out a way to keep steak in his budget and tread water on his credit card debt/savings.
    He’s not getting ahead on his long term goals, because the money saved on those cheaper meals at home was just spent elsewhere on food out: “subsidizing” the steak dinner (“lifestyle [he]can’t really afford,” in Trent’s words) with the frugal meals during the week.

    As long as he is doing that intentionally, that’s fine, but if he’s doing that and deluding himself that somehow he is saving money and advancing a bottom line goal by being “frugal”–well, he isn’t. He’s not achieving his goal, he’s just spreading the cash he has around differently.

    He can’t build savings or decrease personal debt with those “frugal savings”, which is why it’s a great idea for anybody to take at least a monthly (if not weekly) a reality check and, again, look at the monthly budget and income/expense ledger. The *real* truth is listed there: are you or are you not advancing towards your stated goals?

    I think that was one of the main points of the post.

  55. As Trent says it is not about if you save and then spend it is if it was not planned that way. I sometimes save ‘extra’ on my budget in which 35-45% go to longterm savigs. The ‘extra savigs’ is e.g. spending allmost no money the month before vacation to be able to spend a bit more on vacation…however this is within the plan and I don’t think Trent has a problem with that??

  56. Add the cost of the new entertainment center to your child-rearing expenses and that $250,000 estimate (that everyone was questioning from your previous post) seems more accurate.

  57. I think “frugality” is becoming a bit too trendy.

    There is nothing wrong with frugality when applied appropriately, but some go too far in its idea and execution.

    There are always ways to spend less. And more. They key is balance.

    The entire point of money is to enhance your existence. IT is ok to enhance it somewhat nowinstead of postponing most of it until later.

  58. When I decided to stay home and be a SAHM 14 years ago, I made all kinds of frugal decisions to be able to stay home. That was my “prize”, as in, what my eye was on. Sometimes I would forget that THAT was what I was frugal for, and, as my husband would say “double dip”, and use savings money for treats of one kind or the other. The money was there, because of the frugality and the choices we made. But when something shiny came along, I had to learn that I was already (by being a SAHM) “spending” the money. No Double Dipping!

  59. Wow! This is the first time I’ve felt the need to post. “Thou dost protest too loudly” I wasn’t at all offended and didn’t feel Trent was being self righteous – his point was quite clear to me. Seems a very sensitive nerve has been hit!

  60. Despite some of the comments, I think this post hits the nail on the head. It seems like most people are offended at your choice of words (which may sound slightly condescending although true, nonetheless) rather than the content of the post.

    After more than 6 months of “frugal living” (hardly), I spent a substantial lot of my “savings” on a very expensive home-office setup. Why? Because I “deserved” it. Call it buyer’s remorse or whatnot, but it is definitely one step backwards.

  61. I also think Trent hit a nerve with this post. I guess it’s like this: If I tell myself I AM ON A DIET – then suddently I want icecream, cake – when normally I don’t really care about those kinds of foods. If I say – I am going to eat sensibly MOST of the time – but allow myself treats now and then – poof! The cravings disappear. It’s like that with money too. If you never have ANY “fun” money – then you never have any fun. And life is just drudgery. I think you have to allow some “splurges” – within your means, of course.

  62. I think it’s pretty easy for any of us to sound self-righteous in our tone–especially when we are accusing others of being self-righteous. (See, I revised this sentence three times and still couldn’t avoid it.)

  63. “This type of frugality doesn’t serve to put you in a better financial state – instead, it serves to help you maintain a lifestyle that, in some regards, is beyond your means.”

    I still don’t get this. If, by saving through the week, you can now afford the Saturday night out, then you are not living beyond your means. Pretty much by definition.

    I don’t think many people would object to your distinguishing between “frugality as a means of permanently and significantly reducing your standard of living” and “frugality as a means of more effectively prioritizing your spending so you can keep buying things you like without going into debt.” But by saying things like “living beyond your means,” you are insinuating that people in the second category are being financially foolish and living an unsustainable lifestyle, when in fact whether they are or not has nothing to do with which category they are in, but whether they spend more than they earn. If you’re trying to raise a new baby on minimum wage, category one may be your only reasonable choice. If, on the other hand, you’re making an income that covers your costs (including reasonable retirement savings), you may find that you want to go into category one to meet some longer-term goal (early retirement, say) or you may find that you are basically on track and category two is your way of making sure you stay on that track.

  64. @Sarah:

    I think one thing to consider is that just because you have the cash in the bank and are able to swing buying something doesn’t mean you can afford it–it can still be beyond your means. You may be able to “swing” it, but that doesn’t mean you can afford it necessarily, if, for example, you aren’t saving enough for retirement or you are drowning in debt.

    I struggle with this myself, and as my savings grow I find myself more tempted to buy things I NEVER would have considered when I had only $700 in the bank. The fact is, just because I have $7000 in the bank (or whatever amount), doesn’t mean I am yet on track for meeting some important and necessary expenses, such as retirement planning. It just means I have a healthy cash cushion. Yet I am tempted to buy more because the money is there.

    My 2 cents.

  65. Oh yay–it’s another one of those posts where if you disagree with Trent, then either he must have “hit a nerve” (i.e., the disagreeing party must be in denial about their own life) or you must be reading it wrong/missing the point. Y’know, I only read the posts on the site anymore to if anyone’s actually willing to comment on Trent’s tone or poor writing habits.

  66. This seems like a gross overanalysis but makes sense for some people. If you can manage your time to earn enough money to have leftover cash to save while ensuring the basic and future needs are met – that’s the best you’ve done. Everything is just becomes noise, in a way, part of life is getting to do and see things. If you’re calculating every single bit and trying to rationalize every single little move, it takes the joy out of working and saving.

    If spending cash on a night out with family and friends once every 2 weeks or so considered is not frugal, that would be silly. Those things create memories for everyone and it’s a chance to put the hard earned cash to meaningful use.

  67. Too often we are faced with marketing that encourages us to live above our means. In contrast, using the internet allows us to become better educated consumers and to locate discounted offers. Frugality too me is knowing what you need and educating yourself to find the most efficient and economical way to acquire it. One site worthy of mentioning is http://www.CrazyBargain.com

  68. I have a question to ask since it jumps out at me every time Trent mentions it in a post, as a frugal activity. It’s about eating at home. Is it an American thing to see eating at home as frugal, as opposed to just normal?

    I would say that eating out isn’t (usually) frugal and can be outrageously luxurious, but would never assume the opposite to be true, ie that eating at home is a frugal option. I know some of this is cultural because it is possible to eat out in the US for not much more than cooking at home (so our American relatives tell us), so I am curious.

  69. I am not sure where your relatives are eating, but for us, we can often eat at home for less than (or very close to) what sodas alone would cost us at a regular mom and pop type restaurant. Of course I am a fairly frugal cook.

    As far as the rest of the topic, I sometimes don’t agree with Trent, but it does get me thinking.

  70. @Carmen:

    I don’t consider the mere act of eating at home to be frugal (though it could be, depending on what you’re cooking). In my experience, a meal at a restaurant (even in the US) is always going to cost more than an equivalent meal cooked at home – and that’s just for the food. By the time you figure in the tip, gas, wear and tear on the car, driving time, etc, eating out almost always seems like a huge extravagance.

    Cheers,
    Ken

  71. Indeed true that it’s easy to make excuses for eager spending – and I appreciate the comparison with dieting. I think it’s healthy to include a few small splurges in your budget in order to have a balanced financial life; otherwise you might end up overcompensating for all your frugal ways with a great bit spending spree, much like binge eating after dieting. A few little splurges and treats here and there might help you ward off such an event.

    Yesterday I also blogged about how “debt-forgiveness” or rather forgiving yourself for your financial sins of the past may actually help to break the cycle Trent refers to – http://saverqueen.com/2009/01/09/this-year-resolve-to-forgive/

  72. @Carmen and Ken:
    I’ve wondered about this too. Maybe Americans eat more takeout? Or maybe Trent’s referring to cooking from scratch?

  73. @Carmen:

    there is a very large group of 20- and 30-something americans that got very used to eating out almost every day, under the haze of easily accessible credit cards. And no, I have to say that eating out is NOT only marginally more expensive than eating in (assuming you cook from scratch) in the U.S. Eating out costs about 3-4 times what it costs to eat my own food at home, in my experience.

    So, to this large group of americans, staying in the house and preparing all of their meals from stuff they got at the grocery story feels strange and *frugal* not normal.

    Although it is true that, depending on what you buy for food and drink, you can probably spend almost as much eating meals at home as you can out in restaurants. But most people on blogs like this are focusing on saving cash and not on

  74. Trent, isn’t fringe buying exactly what you were doing when you bought yourself a “free” iPhone by “saving” $600?

  75. I went for about two years without doing anything more complicated than putting cheese on crackers for dinner–I was working 60-80 hours a week, earning a commensurate salary, and didn’t have the energy to cook, so I usually ate out when I didn’t eat at my desk (expensed to clients). I would not have believed it ten years ago, but it’s entirely possible to live this way in large U.S. cities. Personally, I missed cooking and am enjoying doing it again now that I have transitioned to a slower-paced (and less-well-paid) job. But it wasn’t a credit card issue. I could afford to eat out within my monthly budget–my energy/time was actually a much scarcer resource than money–and I did. So did the great majority of my colleagues (at least, the ones without a spouse at home to cook for them). It’s just not out of the reach of single professionals in certain sectors.

    Steve, since I pretty specifically said that meeting your expenses included proper savings for retirement and such, I’m not sure what you’re objecting to.

  76. Sorry Trent, I was turned of by the statement “getting ahead financially” Getting ahead how? I agree that one needs to be mindful of bingeing. But Remeber that there is no promuse of the future and so many who have held close the need to have for the future have lost it all. Be frugal, use common s but live your life.ense

  77. That’s funny – my twins (who are now 3) used to do exactly the same thing: go to the DVD shelf, open all the DVDs and toss them on the floor. All kids (and humans) are alike…

  78. @ Sarah,

    I’m not objecting (in the sense of “disapproving” ) to anything in your post, really. I actually liked the phrase about taking care of both present and future needs and, if you’re doing that, any extra cash is gravy. I would agree with that.

    I would also say that the number of people who are actually taking care of (have accounted for) their reasonably foreseeable future needs is probably pretty small. And I think that fact is revealed in the large audience that exists for personal finance blogs and websites. In other words, on some level, lots of people “get” that they have financial issues to work out and are interested in learning how to do that and to talk with others about what they’ve learned/what they do, etc.

    As to the work situation you describe, I would agree that anyone who works 60-80 hours a week needs to either eat out a lot (outsource the food preparation) , or have a spouse or partner who can prepare them meals to take to work.

  79. An “old” momma comment here. Trent, don’t put those cases where your daughter can’t reach them. Keep impressing your message on her. The sooner she understands the concept that some things are off limits and that she must control her urge to grab them, the easier all other discipline will be. Babies can learn this much earlier than we generally expect, before they are a year old, and with much less trauma to both parent and child than if you wait til they are closer to two or so.
    Or worse, like some children I know, til they are like 5 or 6, and royal brats!
    Sorry about being off topic, but after yesterday at church, I can’t help myself!

  80. I have a helpful suggestion for the videos, and not criticisim. I am very much like you in trying to save money so we cn get things we really want and need. We had the same situation with one of our children, and found “out of site out of mind.” We made a simple cloth curtain and hung it over the front of the movies with a tension rod, and that about took care of it.

  81. Excellent article. Got me thinking about how I do exactly that – save and binge. I’ll think twice before I binge next time, thanks to this article. Thanks, Trent!

  82. This brings up a point about how awful the Suze Orman and Dave Ramsey approaches to finances really are. Both of them take a crash diet approach; you eliminate everything until you have reached some financial goal. These goals are often decades away for many people. These stupid approaches are doomed to failure. Ramsey, in particular, makes tons of comments about human psychology, but fails to recognize that you can’t crash diet this way.

    When you create a budget, be sure you leave some room; some unspecified savings. In my budget I refer to this was “available”. It’s the money I can spend on most anything I want. If I want an entertainment center I can spend what has accumulated. But, if there’s not enough there I will have to let it accumulate. Create a budget that is sustainable and livable, not a crash diet budget and you can have things you want and be able to afford them.

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