Some Thoughts on a Cultural Shift Towards Frugality

Jenna writes in:

Do you think frugality is more socially acceptable now than it was a few years ago? Many of my friends are spending less money than they used to and we swap tips on how to save money all the time. This is a new thing for us.

I’ve been asked questions along the same lines by reporters many, many times over the last year. “People are now acting frugal. Why is this? Do you think it will last?” The reaction seems to be that frugality is this once-despised behavior that is now socially acceptable at this moment in time.

First of all, I do believe that more people are open to frugality and cutting spending than there were a few years ago. The economic crisis of 2008, along with the stock market staggering like a drunken sailor over the last two years, has shocked a lot of people. Young people aren’t finding jobs easily, and older people are seeing their retirement funs shockingly depleted. Such economic shock waves lead people directly towards trying new behaviors, if only in the short term.

Beyond that, though, Jenna’s comment still reveals that there is some cultural negativity towards the “pop” idea of frugality. For her – and for many others – frugality is something new and a bit taboo to dabble in.

My belief is that for many people (not all, of course), this newfound frugality is a fad, much like going green was two or three years ago. For some people, a greater awareness of their money and where it goes will stick with them – for many others, though, it’s just a fad and will drift away whenever a new media-pushed cultural movement comes along.

Another factor that runs through Jenna’s comment is the sense that frugal means cheap. As I’ve said in so many words before, frugal isn’t cheap.

Frugality refers to finding the best value for your dollar in the overall context of your life. A frugal person might take everything into account in their life and decide that buying a bulk box of higher-cost trash bags is the best value for their family because of the time saved by not having ripped bags and the money saved by buying in bulk and the ability to fill the bag to the absolute limit without tearing, minimizing the financial cost per bag.

Cheapness means finding the absolute minimum cost for any situation. A cheap person will always buy the garbage bags that have the lowest cost per bag, ignoring the fact that the cheapest bags have a lower per-bag capacity and tend to tear more often than better bags.

The difference between frugality and cheapness is thought. A frugal person steps back and evaluates the situation for criteria beyond that of simple dollars and sense and then seeks the best value for all things considered. It’s often confused with cheapness because in many situations, the cheap person and the frugal person come to the same conclusion as to how to handle a situation – and it’s different than the one that’s considered the “normal, mainstream” choice.

For example, both the frugal person and the cheap person might have a vegetable garden. They might both make their homemade laundry detergent, and they might both drive used cars. However, the cheap person tends to avoid leaving a tip at a restaurant they won’t visit again, while the frugal person steps back and looks at the situation through the eyes of the people they’re dining with as well as the eyes of the staff at the restaurant and then leaves a reasonable tip.

What will happen in a year or two when it’s no longer cool to be frugal? I predict that many people will retain a good handful of the frugal tactics they learned in 2008 and 2009. However, the money they save through more sensible living in some areas will simply be poured into extravagance in other areas. The money saved by that programmable thermostat installed in 2008 will help buy an HDTV, for example.

Is that a “win” for frugality? I think it is, even if it’s not the home run life changer that it could be.

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  1. Craig says:

    More people have entered reality and realize what the recession and lack of job security can mean in the long run. It is difficult not to be more frugal these days. Being in mid 20′s and the recession not really affecting me or friends is tough because we still live in that bubble, so trying to live more frugal when others don’t care because mentally it means nothing yet is tough.

  2. Ryan says:

    It will pass, I fear.

    Those of us who were always frugal now get to be the people saying “I did that before it was cool”, but we’ll also be the people who do it a decade from now when “that’s so 2009″.

    Maybe some will learn, but people resist change.

    Besides, I want some people to go back to their stupid ways so I can profit off of them through good credit card / loan offers. :)

  3. Julia says:

    I think that for many people, the ‘trend’ will disappear once their stocks rebound, salaries and bonuses inch towards what they used to be, and forecasters call the economy stable.

    But, speaking as someone who graduated college in 2009- the worst year for job placement- I think that there is a large cohort of people that either couldn’t find jobs after school (still may not have) or lost the jobs that they were given when they graduated a few years ago. That cohort looks at money and credit and frugality very differently than their parents did. I’m sure there are others who lost their jobs in the recession and will likely never return to their former pay grade. For many of these people, I think the changes are long-lasting. If they’re not permanent, they will carry on for many years after the ‘trend’ is over.

  4. Eden Jaeger says:

    Until I discovered the personal finance blog world, I didn’t even know what frugality was. I thought it was something weird that maybe Ben Franklin had written about a couple hundred years ago. :)

    I think there has been a shift toward more awareness of frugality, and that’s a good thing. I think some of the newly-aware (I put myself in that camp) find a lot of value in frugality and see the ways it can change your life. Others will probably just save some money for a little while until the next economic bubble occurs again and the cycle will repeat.

    I hope to remain in the frugal camp no matter what comes next. I’m slowly discovering a whole new way of living and I like it a lot more than my old, consumerism-driven lifestyle.

  5. Mol says:

    I think that a lot of people mistake being cheap with being frugal. I think they really do make a frugal choice and are happy with it, but attribute it to being cheap even if it is not the cheapest item on the shelf.

  6. I think that more people have learned to become frugal and will stick with it, but for the most part, I have to agree with the fact that frugality is a fad.

  7. Katrina says:

    I absolutely agree with her that there seems to be a trend towards frugality, and it is one I applaud. It was the shift away from frugality, towards the ‘gimme’ mentality that created much of this financial dilemma we are in today. The ability to have a bigger, newer, better house to show off to friends and relatives was more important than having a manageable debt load and freedom from financial worries. The ability to buy whatever you want now, and let Future You pay the bills, including the sky-high interest on your credit card, was more important than being able to use those dollars in the future towards other things you might want.

    Perhaps I am wrong: perhaps this is just a momentary trendy thing, to be frugal. I hope I am not. Think about our grandparents, and how we made fun of the ‘Depression mentality’ for so long. Reusing wrapping paper and string to save money was laughable 10 years ago, but it was a habit our grandparents had to learn to survive the 1930′s, and the mentality behind those behaviors is one we ought to honor, not mock. Perhaps younger generations are learning those lessons now. Not necessarily in the extreme of reusing paper and string, but in the idea of not spending more than you earn, saving for a rainy day, and avoiding financial risk.

    You know, totally ground-breaking, novel, and revolutionary ideas like those!

  8. Kevin M says:

    I think it will last for only a small fraction of those “recent adopters” of frugality…maybe 10-15%. The rest will go back to their free-spending ways if the economy rebounds. Maybe it’s just where I live, but I don’t see the pain that the news media talks about.

    Those 10-15% of the people that stay frugal are the ones that previously thought frugal = cheap and have since learned it does not.

  9. Peter says:

    I honestly think that the current frugal trend is going to be nothing more than a quickly fading fad. As soon as the economy starts to turn around, people feel more secure in their jobs and things are seeming a bit rosier – the frugal bandwagon jumpers will be the first ones off. They’ll go back to spending on their credit cards and home equity loans, and frugality will once again seem quaint.

    I hope I’m wrong.

  10. lurker carl says:

    Only a fraction of those who lived through the Great Depression remained frugal. Otherwise, Cadillac would have gone the way of Packard and the flamboyant automobiles that followed WW2 would have never been built.

    Public interest in frugality ebbs and flows with economic prosperity, this one will be no different. Are more new cars now being sold without power windows, automatic transmissions or air conditioning? Fewer than ever, I presume.

  11. Tim says:

    so long as there are cool things to buy and do, the new frugality is only a fad. humans are naturally complacent and revert to old behavior. we haven’t gone through a universal devastation that would fundamentally change behavior. there aren’t soup lines, no rationing, etc. people are cutting back because they see practicality in doing so at this point. once things turn around, people will go back to same-o same-o.

  12. Melanie says:

    I also think that the frugality state of mind will pass once people feel safe again. I think that unfortunately it is more desirable for most people to want “stuff”. It is also easier to nit think about what you purchase than to be frugal.. I wish it were otherwise though and educating is the only way to shift this for people.

  13. guinness416 says:

    I dunno, I’m a bit more optimistic it’ll last to some degree. All of those awful pop-science books about “happiness” are selling a lot, there’s the small-house and other similar movements, people ARE living more green despite some consdering it “trendy” and education fees are at an all time high in many places so maybe it will stick around. There are gradations to frugality though, many people don’t even use the word at all to describe their lifestyle.

  14. partgypsy says:

    Unless the economic problems is sustained and induces a sea change in people’s views, I also agree much of the frugal behavior will be temporary. In general, people are not spending more money because they can’t.
    In contrast part of what helped Depression-era people live that way was that it was a different culture; role models were people you knew in the community, obligation to work and discipline was an understood, and there was way different norms of about acceptabile levels of consumption, entertainment, houses, cars, etc.

    Individually I think it’s very possible for people to make these changes, but as a cohort there are too many social and other pressures pushing the other way. Hopefully people will see the disconnect between popular culture and their own lives, and make up their own mind.

  15. Drew says:

    I like to think of the difference between frugality and cheapness as being perception. The same way some view anxiety vs. excitement. Riding a Roller coaster can be looked at as exciting and fun by one person or create a lot of fear and anxiety in another.

    Sometimes if we can just change the way we view many of the things in our world we begin to learn that it’s an opportunity to learn and better ourselves rather than a burden…

    -Andy

  16. I think that parts of frugality are fads, but not all. Right now there is a lot of hype to get out of debt and people are starting to gain praise and encouragement for their get-out-of-debt stories. I think that this part is a fad, unfortunately.

  17. Impossible to say when a fad is just a fad or will become reality.

    I take frugality as a serious, but not all-encompassing idea. My goal is not NOT waste money. Not on every decision, not as a way of life, but as a worthwhile goal – when feasible.

    That’s my style. Certainly not recommending it for anyone else.

  18. Kate says:

    frugality enjoys a come and go type of popularity. I remember when people used to turn their nose up at The Tightwad Gazette but there were also a lot of people who took her writings to heart. She came around in a similar kind of economic situation if I remember correctly (or maybe it was just my own economic situation). I think that real frugality comes from more than a reaction to bad economic times–mine comes from a frugal grandmother who I loved dearly. It also comes from reading books like Little House on the Prairie when I was a child (not the TV series–that family lived lavishly) when I was younger. I always realized how much love was in their house and they had so few material possessions.

  19. Rosa says:

    Was there a New Frugality in the ’70s? If there was, my parents never got over it, and they raised me just about the way we’re raising our son.

    I think this trend is permanent, though the pop-culture thing will fall back some. The underlying problems in wages, benefits, and inequality aren’t going to get better anytime soon – they’re not new, they were just driving debt instead of frugality before the bubble crashed.

    Even if people who are frugal now go back to their freespending ways, they’ll have the knowledge they gained to fall back on if they need it again.

  20. Rosa Rugosa says:

    I for one have learned a thing or two that will not evaporate with the next bull market!

  21. Rachel says:

    I think that frugality may not last, but a lot of the actions that have in the past been (and even now are still) considered frugal may end up part of the mainstream. Not doing it would be viewed as unnecessarily extravagant.
    It’s all a matter of perspective. If you look at three categories – extravagant, “normal” and frugal – actions can change category depending on the cultural and social norm at the time, which is what defines “normal”.
    So:
    Eating every meal out or with store-bought convenience foods = extravagant
    Eating out less, but lots of convenience foods = “normal”
    Cooking at home from scratch = frugal

    In an attempt to save money now, people in the normal group may be tending toward frugal, eating out less, and cooking more from scratch. As this finds its way into society, a new level of normal could be defined, so that any kind of eating out is extravagant, and cooking at home is normal. To be frugal in this category now, you would have to do some other technique, like bulk cooking to avoid running the oven as much, etc.

    So I think that frugal as a buzz-word might pass, but some of the habits of frugal people might move over into the realm of normal.

  22. Caroline says:

    I’ve always paid attention to my personal finances, even as young as 11. And I thought that frugality was something associated with older people (like my grandmother) – something people especially did during wars and the depression. I can’t even pinpoint when I realized that frugality is how you define it, Trent. I’ve always been somewhat frugal, but I still think I waste money on some things, and that is definitely the opposite of frugal and what I want to be doing. Waste sucks.

  23. Nancy says:

    As you already know, I DESPISE these people who are new to frugality and act like they invented it. $100 bet that once the economy gets better they’ll drop all their new ways and go right back to sucking the life out of the planet.

  24. Lenore says:

    The cultural awareness of problems like shopping addiction and hoarding has increased during this recession, so people may be asking themselves, “Do I need this?” more often. Once the genie of knowledge is out of the bottle, it rarely goes back in. (Case in point: parents will never be as lackadaisical about who has access to their children as they were before pedophilia was widely discussed.) Many people may resume overspending when times get better, but others are learning lessons about the psychology of money that will last a lifetime.

  25. tentaculistic says:

    I both agree and disagree that it is a fad. Maybe the large bulk of our population (here I’m probably being Western-centric) will go back to being frivolous with out money, but I really think there is a sizable sub-culture that is slowly adding strings from various counterculture movements, into one somewhat cohesive whole. I am feeling currents from the Voluntary Simplicity movement, the Organic Food/Slow Food movements, the Eco/Green movement, and now the Money Conscious movement… I just can’t help but see how they all tie in together.

    One example: my best friend, a tried-and-true mega-consumer fast-food-eater as long as I knew her (20 years and counting), made big bucks in D.C. as a software engineer, married, sold her overpriced townhouse, bought an old suburban house in upstate NY, started some home-based businesses, and raises her 2 kids, 2 cows, and a rotating number of chickens (some lay eggs, most they eat) – all of them eating organic pesticide-free food.

    Ok, so she’s a bit extreme, but the small steps she took were not, they were little ones – and Michael Pollan’s books on food in the U.S. certainly fed into their decisions big-time!

    I guess my feeling is that there is a genuine ground-swell within a sub-section of our nation (I can’t speak beyond the U.S.) that will hold onto the frugality, not just for its own sake but because it has other healthy benefits for our bodies and environment.

  26. Evangeline says:

    I hope that as grownups, we wise up and refuse to repeat these horrible financial mistakes of the past. If it landed us in trouble before, it will do it again unless we’re much more careful.

  27. Natalie says:

    Well – I’ve always been a frugal person. Shopping sales, consignment sales, yard sales, etc. However, I have never had much more than a few thousand in savings at any given time. And this has never really stressed me too much – until now. My husband has been laid off since Nov. and now we both realize how important that emergency fund is. luckily we don’t have credit card debt – but we would like to contribue more to our savings and have our car paid off. i don’t think that is going to change with us – even once he gets back to working and is making good money again.

  28. Larabara says:

    I read an interesting article about the effects of wealth in China.

    In China there has been thousands-of-years-old culture of frugality and sensible spending. However, now that their economy is growing rapidly in the 21st century, there is a fast-growing group of consumers that spend their new wealth frivolously.

    It’s still a relatively small group (well, relative to a total of over 1 billion) that is mostly concentrated in the cities, but it became evident in the rise in cars vs. bicyles in the cities, growing personal debt, the rise in popularity of high fashion and fancy restaurants, and other signs of conspicuous consumption.

    The consumerism also happened in India when their economy took off in the eighties and nineties and again, was more concentrated in the cities.

    So it might not be a Western cultural phenomenon, but a real human trait to indulge onself in one’s perceived luxuries, even if it means risking bankrupcy in the future. For a lot of people, it took a drastic reduction in income to bring them back to frugal habits. But when the money started rolling in, even after thousands of years of poverty, the frugal habits are quickly forgotten by all but a fraction of people.

  29. KC says:

    As long as credit is not an easy option there will be frugality – at least as we know it from the pre-easy mortgage days. But I don’t think we’ll ever be as frugal as the Depression-era folks.

    But the key to recent spending was access to credit. Lots of people who have lost jobs (or fear the loss of) or who have a down portfolio are being frugal. But once those fears go away and their portfolios are doing a little better they’ll spend more again. But those who relied on credit for spending (and it was a good number of people) will not recover so quickly. They’ll only be able to spend what they have, not what their credit card allows.

  30. steve says:

    Many, though not all, of my frugal habits are informed by my need to make do on the fairly low income I have. If I had greater financial wealth or greater income, there are many things I might do, such as buy more expensive food, which just cannot be done by me if I’m to meet my current financial goals which require me to maximize my savings. Certain aspects of frugality are driven by financial need, so it’s natural that if the need goes away, the some frugality goes away, for better of for worse.

  31. I think it’s so odd how many blogs launch into a debate of “frugal” vs. “cheap.” In fact, I would argue that the trend toward being more efficient with money is in fact more toward cheapness, as you define it, than toward frugality, because being frugal really takes some thought and practice, and in a panic, more people just tend to do what they can to spend less.

    Of course, I might be taking it personally since my blog is called Cheap Like Me. I suppose by your definition, it’s about frugality, because my goal is to help people learn how to be cheap — but cheap with intention, using money to live by their values and in the style they want.

    But I notice that alongside the same post where you criticize cheapness, you advertise your book … 365 Ways to Live Cheap (not frugally)!

    Maybe we should drop the semantics and just admit that cheap sounds like more fun — and hopefully that will be a lasting trend.

  32. KJ says:

    I came here to raise precisely the point that Cheap Like Me raised regarding frugal vs cheap. I think the stigma surrounding being cheap is connected to the stigma surrounding and fear of being perceived as poor. You can be “frugal” because that just means you want to get the best value for your money, but if you call yourself “cheap” because that’s one step too far. Why should it not be ok to go off the cheap deep end? I don’t see Trent’s trash bag example as demonstrating cheapness or frugality – I see it as a failure to look at the big picture and at best only tangentially related to attitudes about money.

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