The “Challenge”

A few days ago, I Will Teach You to Be Rich posted an article entitled Trent says The Scrooge Strategy is “short-sighted” — I respond with a challenge. The basic point of the post was that an average person is better off spending an hour eliminating their big bills instead of focusing on little frugal tips. For example, a person with $20,000 in credit card debt is better served spending an hour getting their interest rates reduced than they are spending an hour installing a programmable thermostat.

I don’t dispute that argument a bit. Instead, my feeling is that a person is in the best shape of all if they take two hours and do both. The programmable thermostat won’t be as big of a boon as the interest rate reductions would be, but if you can save $200 over two years from an hour’s worth of work, you should definitely do that, too.

It’s easy to focus on the five biggest financial drains in your life and take care of them. It’s a great way to get started on turning your financial life around. However, if you simply shut off the spigot after dealing with those five things, you’re missing out on a ton of things that are quite worthwhile.

I think that this “challenge” actually reveals several interesting things about personal finance.

First, there is a sizable group of people who really are only interested in the “big five” things. The only behavior that they’re interested in changing in their lives is the behavior that can result in a large, very tangible, and very straightforward financial benefit. For people in this group, calling the credit card company to get a rate reduction that reduces the monthly payment by $50 is worthwhile, but replacing a light bulb that can save $0.50 a month isn’t worthwhile. I think that Ramit is mostly speaking to this group.

There is also a sizable group that are interested in some degree of frugality. These are the people who are on board with the $0.50 a month saved due to a light bulb change, but they start to balk at things like rewashing Ziploc bags. For the most part, this group is governed by some form of “hourly rate” of frugality, whether they quantify it or not. Is this frugal act worth my time over the long haul? That’s the key question for this group. I’m in this group, and I think quite a large portion of my audience is as well.

There’s also a group of what I would call “frugality extremists.” These are the Ziploc bag washers, the people who will gladly invest quite a bit of time to save a dollar or two. I find these people and their ideas interesting, but not necessarily applicable to my life.

I think people tend to go through a few big, general stages during their financial recovery. At first, people try the “big” things. They make a debt repayment plan. They make a budget. They get their interest rates reduced on their credit cards. They eliminate a few monthly bills. They set up some automatic savings and automatic investing plans. And, for some people, that’s enough. These steps get their financial lives under some semblance of control, so they stop here, viewing further steps as an unnecessary incursion into their life.

Other people are empowered by reductions in their spending and continue to seek out smaller and smaller solutions. They tend to adopt what are traditionally called frugal tactics into their lives. They re-evaluate all of their spending carefully and start trimming the fat that they discover. They try things like shopping lists and installing new light bulbs and preparing meals at home and even things like making their own laundry detergent.

Eventually, people find a balance between the way they want to live their life and the desire to save more money. For some people, homemade laundry detergent is a step too far; for others, it’s a great tactic.

At this point, people tend to start getting into good financial shape. Their net worth goes from negative to positive and they start building up some serious savings. They pay off their house. They start investing.

And eventually, they reach a point where they can make serious life decisions. They can jump to the career of their dreams. They can retire really early.

As you can see, there is no single path that everyone follows to financial success, but there are some milestones that many of us share. The “challenge,” in my eyes, is simply figuring out that path for yourself. How far down the frugality path do you want to go? What are your dreams?

That, my friends, is the real challenge.

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  1. Johanna says:

    Wow. I wash Ziploc bags, and I wouldn’t consider myself any kind of extremist. But for me, reusing bags (and plastic utensils, and jars, bottles, and containers) is more about not being wasteful – why would I want to throw something perfectly good in the trash just because it’s dirty? – and less about piniching every penny. Although I do pick up pennies I see on the sidewalk. So maybe I *am* an extremist.

  2. RRPF says:

    Don’t forget the group who considers new car purchases to be good financial moves.

  3. Thanks for a well-tempered response to Ramit’s “challenge”. I found the whole thing a bit silly; it’s not war we’re fighting where people need to choose sides. I’ve found a middle ground for myself (always shop from lists, never make my own laundry detergent) and I can easily take advice from all sorts of personal finance gurus and apply it to my own life while leaving behind what’s inappropriate for me.

  4. Jimbo says:

    This post is what I call a complete cop-out – you neither accept the challenge nor apologize for your comment regarding his strategy.

  5. 444 says:

    I agree with your premise that people go through stages.

    We had an excellent January in which we made big changes and felt like we were doing big things (and we were.) But then we sort of hit a wall. We seemed to run out of things to cut and the extra income we could rustle up didn’t seem like it would make much of a difference.

    Then my husband started doing things like taking his lunch to work every day and proudly proclaiming what the savings will be. And I ratcheted up our restaurant-free resolution to include no fast food, too. Well, we’ve had some, I admit. But nowhere near what it used to be. And as for sit-down restaurants – that’s just not applicable, as you say, to our lives right now.

    I think that people oftentimes balk at cost-cutting measures like no-restaurants and brown-bagging lunch, when one way to look at it is that it does not have to be forever. There will come a time when we can return, to some degree, to being a little more free-spending with the meals out. But right now it’s time to shut that money-leaking-faucet tight. Little things do add up to augment the positive effects of the big changes.

  6. Kevin says:

    I am surprised you even responded to that piece. That was the article that finally made me take him off my RSS feed. His views and mine had just grown to far apart. He often writes like a forum troll and I don’t need that kind of thinking in my day.

  7. Battra92 says:

    I like Ramit’s site (the comments are a great place for lulz) but I have to say, touche, Trent, touche.

    I’ve done the big things, (Car insurance, sold some dust collectors, started more savings accounts, yadda yadda yadda) and then I tried a lot of the little things. Some work and some don’t. I use some CFLs and try to bake a lot at home when I can.

    Didn’t you do a post not long ago about finding what your level of frugality is?

  8. Looby says:

    This is a great response to Ramit- I disagree with Jimbo- I don’t think you need to apologise for your comments earlier, I feel he read too much into them.
    Ramit has his audience and if he is helping them that’s great but he has no advice for me- I’ve no car, no credit card debt, no cable or subscriptions to cancel. I already live well within my means.
    You on the other hand help me to remember the small things and while there are many things I’m not prepared to do (not an extremist) there is almost always something I can take away from your posts.
    Thanks!

  9. Sarah says:

    I think Ramit just comes out of a very middle-class world, in which saving $100/yr. doesn’t make a significant difference in lifestyle. There have been times in my life when that $100 would have been hugely worth it, times in my life where it wouldn’t be noticeable, and times in my life like now where I’d have to think about it. It really depends on your income level.

    Also, he’s clearly not driven by any ethic of thriftiness for thriftiness’s sake (i.e., any compulsion not to be wasteful for reasons beyond its financial impact). If he bought Item X two months ago and could get a brand-new identical replacement for absolutely free, I think he’d take it. That’s sort of a pity, but if your values don’t raise any questions in that kind of scenario you’re not going to be moved by certain appeals to frugality.

  10. Nick Dunlap says:

    I think that this is a great response to Ramit. In my opinion, people who find Ramit’s blog really useful are at the point where there is a lot of fat to cut from their monthly expenses. My wife and I are past that point, and we are looking for more ways to trim our costs. Trent’s blog has great tips for us in that regard.

    And to be fair, by no means does Trent spend each post talking about frugality. He often emphasizes increasing income.

    I read Ramit’s blog whenever he posts, and I found this challenge a little ridiculous.

  11. JD says:

    I’ve been reading The Simple Dollar for a while now, and I find it very informational and helpful. I just wanted to support your post and your blog, because I feel like “I Will Teach You To Be Rich” is making this big awkard, contest about which methods for personal finance is better.

    In the end, I agree with you Trent. I think personal finance is exactly that: personal. Why does Ramit blast frugality so much? I find it ironic that his website is named “I Will Teach You To Be Rich” by blasting a core concept of people becoming rich: frugality. I’ve read “The Millionaire Next Door”, and a lot of personal finance blogs/books talk about people being frugal but are actually millionaires. So yes, his methods to save big amounts of money, but so does someone who keeps frugal ways.

    It doesn’t take a degree from Stanford (in psychology and technology, I might add…) to figure out that if you want more money, you either have to A) earn more or B) spend less. Frugality is one way to spend less. It’s as simple as that. Like you mentioned, for some people, it’s not worth the time and energy to wash out plastic bags to spend less, but to others it is. In the end, it’s a personal choice of how you want to have more money, and blasting a proven method of spending less money seems…short-sighted and narrow-minded.

    I stopped reading his blog since he’s HEAVILY advertising his scrooge method for only a mere $8.00 a month. I mean, what’s a mere $8.00 a month a *newsletter*?! It’s just $8.00 right? WRONG! How many magazines do you know cost $8? Probably not many if any. Even those magazines that you purchase from the checkout aisle at convenience store are only $4 compared to his $8 newsletter! And his tips are supposed to save you money?! by signing you up in a monthly commitment to lose $8 for something you can read for free elsewhere. I’m really, really curious as to what are in those newsletters that can’t be found somewhere else for free, aren’t common-sense, or soooo insightful that they would cost $8. It just sounds like a “get rich quick” scheme for Ramit to me… :-(

    Long story short…keep up the good work Trent! You still have a great amount of loyal readers, who still believe and love frugality!

  12. Merry says:

    Sometimes doing the little things like changing light bulbs and washing plastic bags is more than about saving money, but also about saving the earth. These things also reduce our carbon footprint and the need for ever bigger landfills and if lots of people did them, it would make a huge difference, not just economically but environmentally.

    This year our school district challenged each school to an “Energy Smackdown”, which of our five schools could save the most energy from September to December. They did all the little things they could think of and as a result, district wide the energy bill was lowered 12% and they saved more than $30,000 in just three months. The winning school was treated to an ice cream party.

    There are lots of areas where simple living, environmentally conscious living, and frugal living intersect, and for me it’s always been more than just about how much money is in the bank.

  13. CJ says:

    Why not engage both strategies (as mentioned above) and do what works. Every person is different with what works. As a frequent reader of your blog (and owner of your book), I would have liked to have seen an argument about where his methods are short-sighted based on your personal experience with his methods.

    I believe both you and Ramit make valid points and I have used tips and pointers from both parties to become more fiscally responsible regardless of how frugal the idea is.

    Keep up the good work.

  14. DCH says:

    I just posted the following comment on Ramit’s blog, worth repeating here:

    “I’m glad Trent didn’t sink to your level in his response to this post. He simply advises people to “do both” and to take frugality to whatever level of extreme (or not) they are comfortable with. BTW, I just unsubscribed you on my Google Reader…”

  15. Classy response Trent. It is certainly an easy bait to take for a little PR hype in the blogosphere, but well played.

  16. Aron says:

    Why should Trent have to apologize? Ramit took Trent’s “short-sighted” comment way out of context. Trent wasn’t talking about Ramit’s Scrooge Strategy being short-sighted; he was referring to Ramit’s view of frugality (i.e. CFL’s and programmable thermostats being a waste of time). They may not save but $5-10 a month, but in bulk and over time this can add up to significant savings.

    Ramit continually thumbs his nose at frugality websites but he and Trent have more overlap in their views than he would like to admit (spending money on things that matter to you, increasing your income, etc.)

    Also, a challenge would be pointless. I don’t think it’s a stretch to say readers of thesimpledollar have less room to cut spending compared to readers of iwillteachyoutoberich, thanks to a more frugal mindset and behavior.

  17. Johnny says:

    I am not interested in the “Scrooge” strategy… Why? I’m light years beyond any of that crap.

    How? Being frugal. I’m getting a little tired of Ramit knocking frugality, it adds up… He can tell me how foolish I am when I retire at 30…

    Coincidentally, the only time I actually read and enjoyed Ramit’s blog, was when he was dishing out frugality tips daily.

    Ramit’s audience is apparently people who haven’t done the obvious yet. Lower monthly payments, cut luxuries, pay down debt with the lowest interest rate possible. Stuff the majority of Simple Dollar readers don’t have to concern themselves with.

    I guess if my monthlies weren’t researched and I have a boatload of debt to refinance I would check out Ramit… Thus the “Challenge” it’s a joke.

  18. Amanda says:

    Just went over to read the “challenge.” It’s ridiculous–it fails to understand the basic principle of this particular blog, which Trent restated with his response. People are ALREADY doing ‘the big things’ & they add to it, if they choose, with additional little frugalities/smart moves. No way of being frugal is ultimately more correct–it’s like having a contest for the most beautiful song…everyone will have different preferences.

    Also, I have to admit, I read that guy’s blog twice & never went back…it just gives off a certain feel I don’t like & won’t go into. IMHO. I think this was a ‘publicity’ stunt to steal readership. The comments about this blog were just too snippy.

  19. Abby says:

    Trent, you make a great point. Drawing the line between “worthwhile” and “waste of time” is personal. We did five big things and changed our lives, but then we were curious – what *else* could we do? Turns out that giving up little things DOES have an impact. As of yesterday, we have six months’ expenses in an emergency fund – mostly due to big things, but at least a few thou are there because we resisted the urge to splurge on the little things, too.

    Johanna, i think we were separated at birth. :)

  20. CBus says:

    Oh geez, Let me grab the ruler….

    But honestly, I think frugality is to financial insecurity as David Ramsey’s Debt snowball is to debt.

    Ramit Ramsey is in the initial psychological turbo charge stage. Do concentrate one thing and notice the immediate impact. For frugality/debt, do the big things to show how powerful and simple they are. Then you realize how easy it is and how you could apply it to other areas of your life.

    I’m sure you, Trent, have experienced the all-out-pay-every-last-spare-cent-towards-debt…much like giving every single frugal idea a shot. It may keep a few more pennies in your pocket, but what are you trading off (new experiences with your family? networking with colleagues? the latest greatest car every year)?

    Eventually, you find an equilibrium that fits your current financial/psychological wants and needs.

  21. Michael says:

    Chicken!

  22. So much for a smackdown. I would have slapped Ramit with a half-washed Ziploc. That’s how we roll on Wall Street. Hmmm…it was probably just a marketing ploy for his new book.

  23. mellen says:

    I’m with Johanna, I am not the most frugal person by far (although I’m trying to be better) but I don’t want all that plastic winding up in landfill AND I save a few dollars every couple months or so by not having to buy bags as often – win/win situation as far as I’m concerned since it assuages my conscience a little and saves me some money. Once a bag has had chicken in it, it’s trash; an extremist would probably risk the salmonella poisoning while I definitely won’t!

  24. Brian says:

    I enjoy the idea of the challenge. I like that Ramit is drawing a line in the financial blogging sand. It’s friendly fire and I think everyone can get onboard for keeping this subject interesting and exciting. After all, how many tips/advice can these guys put out before they lose their steam. Lets keep things interesting!
    -How about a counter challenge, something that allows for an even battleground between your two slightly different demos/

  25. Matt says:

    It all comes down the value of the individual’s time. For example, if I earned $500,000 a year, I doubt I would continue to clip coupons for dish detergent. In fact, at a certain point, it may become wise for me to hire someone to do my grocery shopping altogether.

    If I possess a large amount of human ingenuity which produces value that others are willing to pay for, the opportunity cost of clipping coupons or making my own bread can scale quite high, when I could use that time to brainstorm ideas, write, network, and so on.

    However, Warren Buffet is an example of a wealthy individual who nevertheless is known for his frugality, so it’s not as if you must pick one or the other.

    I think Ramit and Trent speak to different crowds, with the Ramit’s focus on higher-earning young people, and Trent’s focus on middle-class families. I read both blogs because I’m somewhere between.

  26. Kris says:

    Classy response, Trent. I read both your blog and Ramit’s, and I take what I can from each.

  27. Melody says:

    I think #11 and I agree – I only read his blog once and haven’t gone back, even though I bookmarked it.
    He’s young, if memory serves, and I think that has a lot to do with it, as well. When I was in my 20’s we bought our home and did do some things right – but we also did a whole lot more *wrong*. Some financial blogs and advisers, tend to assume you are making solid choices and you just could ‘tighten’ a few things. There’s nothing to tighten if you self-finance a business for example, or lend a family member $$ for the first time and don’t realize you’ll probably never see it again. :-) I like this blog because it’s more ‘real’. It’s not a yuppie tooting his own horn. Trent is honest (from what we know) about his life and where he comes from and what he’s done.
    The other thing is I don’t think it’s frugality for frugality’s sake on Ramit’s end, either. I practice certain things that are frugal, but not *Because* they are frugal. Like composting, re-using plastic bags/ziploc’s and making my own detergent. For me, that’s just being a steward of my planet. And if it saves me $$ and doesn’t feed the consumerist beast, mores-the-better. :-)

  28. Scott says:

    Ramit lives in San Francisco. That is pratically a different country compared to most of the U.S. Trent seems to be much more down to earth and earth-friendly. Having a garden and making your own bread are a lot more in line with my beliefs. I-will-teach-you-to-be-rich feeds on the more is better type of people where the Simple Dollar appeals to more simplistic type people. Simplicity is good.

  29. Jim says:

    Neither strategy is right or wrong and they don’t conflict with one another. And its up to each of us to find the appropriate level of frugality that works best for us. I don’t think you can really pit one against the other since they are really more like sequential steps. You should do the 5 big things FIRST then if you want you can move on to next 5 things and maybe the next 5 etc.

    Ramits ‘challenge’ was meant in fun. No harm done if Ramit wants to make a fun challenge and no harm if Trent doesn’t agree to play.

    Trent did call Ramit’s system ‘short sighted’ though. I think Ramit could understandably take some offense at that, though he didn’t really seem seriously offended by the tone of his post. If both systems are good ideas then calling Ramits actions ‘short sighted’ isn’t really warranted nor any more legitimate than calling Trent’s suggestions ‘short sighted’.

    Jim

  30. Ian says:

    Great post Trent. Thanks for the site, it’s the first RSS feed I check each day. I always look forward to your posts.

    Ian

  31. JanB says:

    Great response Trent! TSD offers what he has and so much more. I love the frugal tips and ideas and they do add up. I think in the end Ramit will loss readers and you will gain them. Not sure what he was thinking with this.

    JanB

  32. liv says:

    I still think that you both have your faults. Your tips can work for anyone, but don’t necessarily have to…

    and both of you have books out that you need sold…so don’t think any of this is a book ploy.

  33. Daniel says:

    I thought Ramit’s challenge was interesting because it was only a month long. OF COURSE people who make big cuts are going to see bigger savings over a month. OF COURSE the contest, as he structured it, was unbalanced in his favor. One month isn’t nearly long enough to realize savings from the small changes Trent advocated in his post.

    The whole premise of his 1-month challenge was a little –

    short sighted.

  34. I read both of your blogs. I appreciate your response. I think it was appropriate. I commented on Ramit’s blog and said that exact thing. That after I made the big changes I was so inspired I found other ways to save that, like you said, are extreme (washing baggies, reading by candle light, etc). But, again, you are correct. The real challenge is finding the balance that works. The goal is the same, financial independence!

  35. Robin says:

    I though I was frugal, but washing ziploc bags is even beyond me. I will only use them when nothing else will do, but I’m sure not washing them.

    I agree that sometimes we overlook the big things, while trying to pinch pennies. That is why it is good to stand back every once in awhile and look at the big picture. Of course many of us have already made the big cuts, now we are carefully trimming the scraps of fat that remain.

  36. Elisabeth says:

    I find it kind of suspect that he is asking his readers to take part in this “challenge” and (from what I understand from that post) making them pay to do so!

    I refuse to spend money to have someone tell me how to save money.

  37. Courtney says:

    Ramit barely updates his blog compared to The Simple Dollar. If he had 2 posts a day, he would start digging a little deeper as well.

  38. In order to get the big savings from the “Scrooge Strategy” you have to currently be wasting a lot of money. Since I’m already frugal I can’t save any money on the big things so it makes sense to concentrate on the little things.

  39. Dawn says:

    Heh. I’m a bag washer, but won’t make my own soap, so I guess everyone has lines they won’t cross.

    Here’s my thing – I need to have an extra $900 a month each and every month just to make my bills thanks to the aftermath of my divorce. There are only so many big obvious things you can do – and then it comes down to little things that can add up. Installing CFLs cut my electric bill in half, for example. Multiply that by 12 and you have a good number. I am constantly trying to earn more income, but I am also a big believer in saving money, and as I always say, from pennies dollars are made.

  40. justin says:

    When I read Rambit’s post yesterday I was wondering how you would respond… this response is even better than I imagined. Your obviously a good man. Thanks for the great blog.

  41. Anna says:

    I’m 25 and I don’t live outside of my means because I value frugality (I’m always up for a good time, but don’t spend my free time spending). I see many of my peers buying things that they don’t really need (flat panel tvs, enormous McMansions in suburbs far away from where they work), and getting deep into debt to do so. It is, as Trent pointed out, a matter of degree. The other site is addressed to them, and their concerns.

    Someday, these folks will probably realize that having money to squander on what you consciously choose (vacations, nights on the town, children) is better than having a 1600 sq ft basement filled with unused things.

    Overall, the whole ‘challenge’ seems like a ploy to drum up advertising dollars. I recognize that bloggers need readers to make money. But I also appreciate a little subtlety in my online reading, and like to let a blog’s substance speak for itself. Which is why I appreciate the Simple Dollar.

  42. Kevin says:

    Nice response Trent. I’m glad you’re not going to take part in his silly challenge. (That you have to subscribe to his Scrooge Strategy is laugable.) There is nothing more tedious than a blog pissing contest.

  43. Troy says:

    It was a classy response. Ahh the difference between smart and wise is the difference between….your two sites.

    I personally follow a bit of both strategies. Always focus on the big items, because they are a big chunk. But the small items add up, and that is likely your point.

    Yes a car and a house and a college education weddings, etc are major money movers, BUT they are INFREQUENT. They happen just a few times over ones lifetime.

    Reducing spending on boring daily activities happens several times daily every day over and over. It is those choices which actually lead to financial success. Those are the habits.

    So yeah, buy a modest home and a modest car. But then for the next 5-10 years when you are NOT buying houses or cars, spend less on the small things you are buying.

    PS. Not everyone on your site is lower or middle class “frugalites” as rammit Suggests. Some of us are very successful business owners, with million dollar homes & large 6 figure bank accounts.

    I wonder how some of your “frugal” readers got that way?

  44. Leslie says:

    Great post! I read both sites regularly and find helpful info in both, although maybe a bit more in this one. I have already made most of the “big changes” so I need to tweak the small areas, and my way of thinking about spending.

  45. JS says:

    Thank you for not “swinging your D**k” like Ramit’s. I am sure his is tiny.

  46. Sean says:

    Ramit’s a cool guy but he completely missed the point. Trent wasn’t rejecting his entire “Scrooge Strategy” as short-sighted, but rather the attitude that any kind of lower-level frugality is a waste of time.

    And I’m not too impressed with his mocking tone in that post.

  47. Michael says:

    The mocking tone is the best part of Ramit’s post.

  48. bethh says:

    Biting my tongue, as after that classy response I think it’s inappropriate to get snarky about the other guy. But I subscribe to this blog, and unsubbed from his quite a while ago. ’nuff said!

  49. To be honest, I found your response to the question to be completely non-combative. Not to mention that a lot of Ramit’s tips (from his “Save $1000 in 30 days” series) are exactly the same as the ones in your “31 days to fix your finances.” His presentation is different, of course, and was better suited to those of us who are young and without families. I think he may have overreacted a little.

    I don’t always agree with your blog (e.g. the recent toilet paper post, which kind of squicked me), but it was the most helpful blog when I was starting out trying to save money. And Ramit’s posts on conscious spending & weddings are my favorite blogs posts.. ever.

    You guys come from different places in regards to finances. Saving an extra $100 per year may not be a lot to me, but to someone who is truly struggling, that $100 is a lot. And if I can implement 10 small changes, I can save an extra $1000/year, which is a lot to me. Especially if it’s as simple as switching over to CFLs.

  50. Frugal Dad says:

    I’m actually a fan of both sites, though I must admit my philosophy is more aligned with Trent’s. Our family lives a middle-of-the road frugal lifestyle, but I enjoy hustling to increase my income as well. And I knocked out those “five big things” long ago.

    For me, frugal living is more a way of life than a style of personal finance. It is about being a good steward of our resources, financial and otherwise. Taking steps to reduce your energy consumption may not yield big savings up front, but the long-tail benefits last forever.

    In the end, I’m still a fan of both authors.

  51. Elsha says:

    I don’t use ziploc bags at all because I don’t think they are environmentally friendly so I’m not a bag washer, but hey I have personally used cloth bags for shopping since I was 12, well before it was “cool” to care for the environment.
    Not everyone is frugal or thrifty simply to save money, I try and waste as little as possible because I don’t want to be a wasteful person. If I save money doing that great.

    The problem with ignoring the small frugal ideas and concentrating just on the big dramatic savings, in my opinion, is that not everyone had big ways to save left. What if you have already done everything big that you are prepared or able to do. What if you have all your interest rates lowered, or you don’t have debt to pay off, what if you have enough money for your passions?

    In my case, saving money is a by-product of my commitment to being a steward of the earth, so Trent’s tips fit in with that, but I also like to think I’m a financially savy person, I have very little debt, I try to use as little as possible (although I admit I don’t worry about loo paper) without cutting my quality of life. I have also tackled my major expenses and those are as sorted as I can get them for now… so what do I just stop at that… or do I continue to try and improve by eliminating the small things.

    Reading the other guys blog, it comes across like a two year old having a tantrum, how sad that people get so worked up over a throw away comment. He just reminded me why I avoid so many “financial gurus” because they come across as pompous and arrogant when someone dares to have an opinion.

  52. Saver Queen says:

    The answer depends on a number of things, including how much money you earn, whether or not you enjoy a frugal lifestyle, and how far along you already are into your cost-cutting methods.

    As for me, I live a frugal life. It works for me, because:

    1. I’m unemployed so cost-cutting where ever possible is a important while I seek employment

    2. I’m saving for some big expenses in my future, such as a home, a new car, a wedding, and further into the future, children. If I were to run out and get a house with a tiny down-payment, I would pay premiums and lots more interest than if I maintained my frugal lifestyle now, saved up a bunch of money and then made those purchases. Being frugal now means I WILL SAVE on THE BIG STUFF in the future.

    3. I enjoy the frugal life. I find it deeply fulfilling, actually. Learning to be happy with what you have and who you are without the constant barrage of new “stuff” is tremendous asset, one that I wish more people knew about.

    4. My frugality co-exists with my goal to reduce my environmental footprint. like Joanna said, I’m not washing the ziplocks just to save money, I’m helping the environment too. In fact, Rabit assumes that the thoughtless approach to spending is okay. Why should we feel so entitled to drink that latte every day without considering the effect that those styrofoam cups have on the environment? Why shouldn’t we use a little less kleenex or toilet paper? I don’t think it actually has the “big impact on the quality of life” that he says, but it has a cumulative effect on the environment.

    5. Frugality is fun because it exercises my creative side.

    6. I actually use frugality to follow Rabit’s rule:

    “I’ve chosen to focus on helping people define rich and spend extravagantly on the things you love, while cutting costs mercilessly on the things you don’t.”

    Well, actually, I CAN afford to spend extravagantly on the things I love BECAUSE I’m frugal. We are taking vacations this year to Europe and Cuba and Las Vegas. We live in a beautiful, upscale condo. We can afford the things we LOVE because we save on everything else – groceries, coffee that I would guzzle down in 15 minutes and forget all about, you name it. Frugality can afford you the things you love if you pay attention to those little things that you don’t care about. Why assume the little things matter more? I mean, personally, I would rather save on my grocery bill than forgo a luxury vacation.

    7. I have already cut out the big stuff. No debt, no bank fees, no cable, cheapest internet possible, cell phone family plan, no car loan (paid cash) etc etc.

    Although Rabit makes some good points, his challenge is irrelevant, because Trent is arguing we should use both Rabit’s and his owns strategies, not use them exclusively. I think a better strategy might be to start with the big stuff, then realize where your values lie and what you would like to give up in order to save. It doesn’t need to get any more competitive than that.

  53. Donna says:

    Great response! And I do not wash Ziploc bags. I’d rather spend my time making extra money. :o)

  54. DCH says:

    Earlier today, I posted the following comment on Ramit’s blog, worth repeating here:

    “I’m glad Trent didn’t sink to your level in his response to this post. He simply advises people to ‘do both’ and to take frugality to whatever level of extreme (or not) they are comfortable with. BTW, I just unsubscribed you on my Google Reader…”

  55. Jenzer says:

    Trent wrote: “if you simply shut off the spigot after dealing with those five things, you’re missing out on a ton of things that are quite worthwhile.”

    Taking this analogy a step further … if you shut off the spigot, but it’s still dripping, you’re still wasting water. And if you’ve ever put a bowl underneath a dripping faucet overnight, you know those drips can add up to a considerable volume of water over time.

    Smaller increments of frugality are a means of slowing down or stopping the financial drips from going down the drain. For some, that reclaimed “bowlful” may mean a few extra debt re-payments, or the start of an emergency fund.

  56. Kelly says:

    I’ve never been able to stomach that guy. His condescending tone has been a major turn-off to me and I’m not sure why people take him seriously. I’ve never found him to have much useful information. Trent, I appreciate the tone of your posts.

  57. Alison says:

    I totally rewash ziplock bags, but I do so not to be extremely frugal, but to be somewhat environmentally conscious. If I can use that bag that held crackers 5 times, I’m keeping 4 plastic items out of landfills. (However, if I’ve used the bag for raw meat, I don’t reuse it, out of fear of illness.) Obviously it’s more environmentally friendly to NOT use the ziplock in the first place, but, like I said, I’m not an extremist.

    I really enjoy the intersection of being frugal and being green, for example, my veggie garden.

  58. Kel says:

    Oh please, Trent. Just because you don’t wash Ziploc bags doesn’t mean you aren’t in the extremist category. Your obsession is more with toilet paper conservation. Of course if you would have accepted his challenge, you would lose. Yes, you both are targeting different audiences and simply put your “short sighted” comment was rude because it lacked any other explanation as to why it was short sighted. Instead of saying that, why didn’t you just say, “He’s targeting a different audience…a different stage in finance.” Or SOMETHING. Your readers are more frugal minded, his aren’t. So bash all you want, say what you want – you both have different audiences. Anyway, I’m taking you off my RSS ’cause you aren’t worth reading anymore.

  59. Nancy says:

    If a person thinks that utility rates are going to stay where they are right now they need to think again. They have no place to go but up. Think about the value of the programmable thermostat over 5-10 years not just over a couple. As utility rate increase the value of that thermostat will increase.

  60. E. Paul says:

    I think the fundamental issue is that the internet and blogs exist for each individual to make some sort of personal contribution and thinking people don’t generally only subscribe to ONE individual’s ideas as a whole. We all take in multiple points of view every day, and as thoughtful individuals we hopefully treat these points of view as a buffet from which we can select things that would be valuable to our own unique experience. Hopefully that’s not too esoteric, but I don’t need or want ONE guru in any area of my life, financial or otherwise. I am my own compass.

  61. Trent, I liked your post. I read a lot of fiance blogs, and I used to read “I will teach you to be rich” but what I found was the guy had no platform or background from which to speak.

    I know you’re not a finical expert yourself, but you have explained on this site and come across clearly, as a like minded person, who got into some trouble, and now is on a journey of financial freedom. You share advice, ideas, and tips along the way.

    Ramit on the otehr hand comes of like a con man to me. He’s trying to be something he’s not. His posting style doesn’t seem genuine. And most of his advice is against the grain of what the majority of long time proving advice has to say.

  62. Kevin M says:

    His “30 tips to save $1,000″ are things I bet 99% of the readers here already do.

    Like others have said, you have to be spending a lot of money already to find use for those tips. In my eyes, most of those are just “assumed”.

    Not to mention his writing comes off pretty cocky and used-car-salesman-ish.

  63. Valerie says:

    Oh, Ramit (shrug). I’ve never found him worth attending to.

    Trent has the proper attitude for a freelancer who has two young children and intends to have more. Or for anyone who understands that they aren’t exempt from fire, flood, sickness, disastrous injury, or major layoffs.

    (Although, Trent, if you say that silly stuff about washing ziplocs again, I’ll have to quote Amy at you. They come clean on the top rack of the dishwasher,too!)

  64. Trent, any chance you accept ‘the challenge’ he offered?

    -Nate

  65. Prasanth says:

    It’s a bit silly on Ramit’s part to make it a “challenge” and to me, it comes off as a marketing ploy for his “Scrooge Strategy”. If you have been ignorant of personal finance and have been living a pay check to pay check life with lots of bloat, then going after the big things will make a big difference. However, once you have finished going after the big stuff, you need to concentrate on the small stuff too. Moreover, he missed the point about what you said – it is not about conserving toilet paper – it is about the concept of frugality and achieving a balance.
    -Prasanth

  66. Diane says:

    Trent is correct that there is a place for both methods of reducing expenses.

    I definitely think there’s room for both approaches – at least in my life. And not only are there stages we go though, but perhaps we vary at different times in our lives, depending on the current circumstances.

    My first focus has been the BIG things, credit card fees, interest rates, bank fees, fixed costs that can be reduced – particularly 1 time fixes where you get it done once and its DONE.

    Now I’m working more on the small things, such as the CFL bulbs & programmable thermostat. I’m not planning to make my own laundry detergent- but I respect your decision to do so.

    I read both blogs (plus several others) and take what works for me from each. I have no interest in squabbles over differences in viewpoint – presumably we’re all adults who can decide what works for us and use it.

  67. Tessa says:

    I realize my 2 cents doesn’t mean much, but kudos to you Trent for the way you handled this situation. I see you as an honorable young man who thinks before he speaks (blogs) and it extends to your writing. Keep up the good work, please! I thoroughly enjoy reading your blog! Thanks!

  68. Shevy says:

    I went and looked at Ramit’s “challenge”. It reminded me of why I don’t read his blog.

  69. AM says:

    >>Kel @ 7:08 pm February 26th, 2009 (comment #38)

    I totally agree with what Kel said. I read both blogs and some advice applies to me, some doesn’t but you were rude and I found Ramit’s challenge to be in good spirit rather than a war between you to.

    I don’t agree with everything he says but he doesn’t go around bashing another blogger. This post is what you should have said instead of bashing his strategy. You’re off my list. And I will use as much toilet paper as I need to keep myself clean. Thankyou

  70. conny says:

    There is always five big things you can do….
    (the next five things…) so lets see I save a lot by….
    Not having a car,
    no credit card debt,
    no mortgage,
    no late,
    no airconditiong,
    (and probably a lot of other don’t have)

    and i ACTUALLY save money on…
    CLF lamps every where its economically sensible….,
    brown bagging my lunch
    very little on stand by
    lower temperature during winter
    making my own bread (my own sourdough ….)
    and so on …..
    a mixture of habits…

    I’m looking for the next big five….
    that’s a state of mind thing…

  71. conny says:

    As Jenzer put it if you’re still wasting water. And if you’ve ever put a bowl underneath a dripping faucet overnight, you know those drips can add up to a considerable volume of water over time.

    I actually discovered a leak, by just for fun calculate the amount of water spend on different things…
    It wasn’t a lot but but I didn’t know I was paying it…

    So by just marking the amount of water spent on everything i discovered a difference the next morning in the amount spent.

  72. Nobody has a franchise on all the good ideas– I say attack your finances on all fronts big or small– it all adds up.

  73. Char says:

    Jenser needs a blog, I absolutely loved that analogy about the bowl, and it made me snap up and realize I need to tighten up my faucet! LOL Anyway, I read both of you and really wish Ramit would have just sent you an email privately and said “hey, the comment about my ideas being short sighted – not cool”, because honestly I caught it for like a second and then forgot about it and went on to read his book. Then all of this happened and it just made me feel a bit yucky and a little scammed, like maybe this IS just some big marketing ploy to get more readers and people to sign up to his Scrooge Strategy – yuk! I hope I am wrong because I have always like you both, rather have a cup of coffee with you because you are so down to earth but I learn a lot from his get up and go attitude and action driven posts too.

  74. momof4 says:

    I read through Ramit site and the problem is that we’ve done most all of the things he’s mentioned, years ago. We’ve always been frugal, but now that we’ve seen a significant drop in income over the last year we need to stay encouraged on our frugal path because there is now where else to go ( Yes IF we could acquire another job or two we could increase our income, and we gladly would). The ideas on Ramits site seem like place to start when you are cutting back.

  75. K says:

    RRPF
    I don’t know what you meant by “Don’t forget the group who considers new car purchases to be good financial moves.” I bought a new car for $16,000 12 years ago and have had almost zero repairs on it (replaced a few lights, etc.) and still expect it to last a few more. Friends of mine who buy used might spend half that but have to buy a new one every 5 years or so, not to mention the hundreds they spend on repairs in the meantime. Our insurance is pretty much the same too. Making blanket statements about what method is best is a foolish way to think.

  76. Jose says:

    The best thing about your dispute with Sethi is what others can learn about psicology, money and behaviour. I am more commited to spend by cutting cost on little things because that way its easier for me, but I do understand the big saves are not these ones.

  77. AD says:

    @ K–I buy used cars, hold onto them for MUCH longer than five years, and the repairs have been minimal. Pretty much just maintenance, and I pay a LOT less for the car initially, which more than makes up it.

    Maybe these friends of yours need to have their potential purchases checked out by a better mechanic?

  78. partgypsy says:

    The problem is that your readers already DO the things that Ramit is going to suggest. I seriously doubt you don’t have at least 1 article on every suggestion he is going to make. Also there may be a demographic thing going on here where his readers may have more to cut, being the upwardly mobile young professional types while the people who read your blog may make less, have families etc (I don’t know).
    The fairer challenge is for him to give you randomly give you 25 subscribers to his new newletter he randomly takes 25 as well whose average demographics, earnings, etc are similar THEN compare. Otherwise it’s just an informercial.

  79. partgypsy says:

    Oh and reading your blog and Get Rich Slowly blog I was able to pay off over 27K in debt in less than 3 years. So now you have a testimonial too.

  80. Nick says:

    Here’s a frugality tip.

    You could save almost $100/year by not enrolling in the Scrooge Strategy.

    $96/year for personal finance tips? I could buy 6 of the best personal finance books for that and extract more value from them I’m sure.

    I like Ramit’s website a lot actually, but I would never pay $8/month for personal finance tips.

  81. rednikki says:

    I stopped reading Ramit’s blog during his 30 Days of Frugality (or whatever it was called) posts. It was the post where he made a REALLY BIG DEAL about lowering oneself to shop at Ross/Marshalls/TJ Maxx, talking about how most people wouldn’t deign to go in there but the deals were worth it.

    Um, what? There are people who refuse to go in those stores? WHAT???

    It was then that I realized he was on a different planet than I was.

    And as for Scott who says that the problem is that Ramit lives in San Francisco and is out of touch with the down-to-earth frugality of the rest of the world: I live right outside of SF, many of my friends live in SF, and his tips don’t apply to them, either. It’s less about where he lives and more about a certain lifestyle.

  82. Sharon says:

    @Nick
    And you could read very in-depth reviews on PF books Trent’s free site. And learn about paperback swap and maybe even ABE books and not even spend $96….

  83. Steven says:

    I agree Trent. For those of us who don’t have much debt, things like “The Big 5″ don’t really help us so much. Instead we have to focus our attention on ways to conserve our income. Frugality helps to do that. Thanks for the post!

  84. Matt says:

    The only thing I use Ziploc bags for are for meats I put in the freezer. It’s such a waste using them otherwise, when you can use a tuperware container of some sort. The cost of washing the bag probably wastes more than using a new bag, and using a bag in the first place is just throwing something away.

  85. kat says:

    Well-played. Thanks for the sane and mature response.

    BTW, new RSS subscriber here, checked you out after he posted his challenge. ;)

    I’m also in the camp of having done most of the big things already, and I actually live WELL within my means — as in, on less than 50% of my income. But still digging myself out from student loans. So I look forward to reading. :)

  86. Andrew says:

    This is a prime example of the “Law of Diminishing Returns” – eventually one reaches a point where the time involved is costing more than the savings it can/or will produce. All of us want to reduce cost as much as possible but your time is better spent on other tasks ( (i.e. – increase income) once you hit that point.

    First comment – long time reader. Keep up the good work.

  87. DrFunZ says:

    Blogs: they are there for the reading. Take ‘em or leave ‘em.

    Dueling blogs: Ridiculous waste of time that could be spent on changing lightbulbs – or comparing CD rates – or wahing baggie (that’s me-protect the landfills)

    Ramit: He has his followers and dispenses some decent advice on occasion. But the SIMPLE DOLLAR blog is MUCH more – some good advice – with a bit of homespun humor and a bunch of wild and crazy devotees that make it just pure fun to read!!

  88. aura says:

    I like both Trent’s and Ramit’s posts a lot, I read them almost every day and they keep me inspired. They both have very useful tips, many of the comments as well on both of their sites have been extremely helpful to me in saving money as well as being applicable in other areas. I don’t reuse Ziploc bags usually, but would consider it. I do try to practice a lot of frugality tips (like make my own bread, make shopping lists) as well as try to do the big things (like call companies for better rates)I have made my own laundry detergent for a year and a half and love it! I have saved so much by doing these simple and fun things! Thank you Trent and Ramit

  89. Sarah Eliza says:

    It does seem like Ramit is being purposefully dense (and ad hominem too) on this one. After the initial, obvious huge changes have been made, if you’re still not where you want to be financially then you continue to find smaller ways to cut back until you get there. I’m fine with people having differing levels of commitment to frugality, but I don’t appreciate the condescending attitude Ramit seems to have here. Having dealt with the huge changes and have gone on to scrupulously avoid waste and improvise on necessities in order to make an extra school-loan payment a month, I *don’t* appreciate being mocked for it.

    Thanks for responding with patience and grace Trent! Instead of being annoyed you took the opportunity to draw conclusions on sociological trends. I respect it! :)

  90. KCDesi says:

    Hello JD

    My thoughts exactly on this topic.

    KCDesi

  91. amit says:

    Lately I have been seeing that Remit is getting too aggressive. Sometimes when people get some recognition, their behavior changes and becoming aggressive is one of them. He might have good tips from time to time but since I dont like his writing style (it shows aggressiveness and more than required confidence), I have removed him from my RSS. Thanks but no thanks.

    There is no point in comparing these two strategies. Both are the way of achieving some long term target of having financial independence and enjoying the journey of life as we go along. You can choose either or them or both of them based on your comfort level.

    Trent, sometimes I feel that ignoring these kind of aggressive behavior is also good way to respond (personal opinion and my learning).

  92. Helen says:

    I’ve never read the other blog because the very title of it sounds condescending. I’m not an idiot and he’s probably not the guru he thinks he is. And yet, “the challenge” made me go take a look at his site and maybe that was his goal.

    Problem is, his writing was just as condescending as I had imagined it would be.

    Keep up the good work Trent – but PLEASE, no more references to your own personal TP requirements. That was just gross.

  93. F says:

    I posted the following comment on Ramit’s blog:

    Ramit,

    So Trent called your little baby ‘ugly’ huh? Did he? What my eyes see is someone (Trent) defending HIS baby against one of YOUR fans who calls it UGLY. He defends himself by noting that it’s short-sighted to dismiss small savings because you’ve got to look at them long-term to see their value.

    Now you turn things around and play the victim? All I can say is that you’re a witty marketeer, haha! ;-)

  94. Cathy says:

    I draw the line at washing ziplock bags. I am anti ziplock bag, period actually. I bought some high quality Tuperware containers back in 2000 that I still I have today. They were not cheap, but considering I have used them for my lunches and washed them for who knows how many number of days since 2000, I’d say they more than paid for themselves. It’s far more eco friendly than washing ziplock bags. That’s smart use of frugality, imo.

  95. I’m so glad you responded this way… Ramit’s post was so immature and defensive (also a marketing ploy).

    I looked at his blog while he was doing the 30 days to save $1000 thing and it was so ridiculous for where I am in my personal financial situation. Bring your lunch to work a few times a week? I work from home (saving on gas too) and make my lunch every day. My husband “brown bags” every day that he’s not home for lunch too.

    Reducing interest rates? Doesn’t do anything if you are out of debt.

    No cable here, no landline (since we’re a military family, most of our calls are long distance so we do the cell thing)… we’re selling the things we no longer use, etc.

    We live on base now and utilities are included, but when we were off-base, we most certainly adjusted our thermostat at night and when we were out of the house. A programmable one would’ve been amazing.

    And once you do all the big things, you only have two choices for bettering your financial situation:
    1) Spend less
    2) Earn more

    We’re working on both of those at this point, building my business, and being frugal!
    (That said, I use as much toilet paper and hot cocoa mix as I want, but I do make my own bread, cook from scratch, and lots of other “too hard” things)

    Ramit’s blog is fine for people who are at that stage in their PF life. Most of your readers are beyond that though.

  96. Frugality extremists go to great lengths to conserve their earnings. They are less interested or adventurous in exploring ways to earn more money (maybe due to the risk).

    I guess, to each his own, not all frugal tips are applicable to us. I do like the moderate path, a mix between Trent’s and Ramit’s tips.

  97. Chris Yeh says:

    Here’s the bottom line on this conflict (full post on my blog: http://chrisyeh.blogspot.com/2009/02/when-frugality-insanity.html)

    Ramit’s blog is designed for young people with decent incomes who don’t think rationally about their finances, and rightly tackles automated big wins.

    Trent’s blog is designed for people are are already unusually frugal, and want to improve their frugality by learning about new ways to save even more money.

    You can even see the different in their styles…Ramit’s is written in an edgy, wiseass tone that in a previous era, would be been dubbed “extreme.” His job is to break through the clutter in an unfocused person’s life and shock them into taking the first, important steps.

    Trent’s is written in a soft-spoken, straightforward style that makes even my writing look impolite. His job is to preach to the converted and help move them even closer to perfection.

    This may be why Trent didn’t take the challenge–his readers are already so frugal, that they simply couldn’t save that much more (versus Ramit’s readers who include the profligate Manhattan “Sex and the City” types).

    It’s true that Ramit’s advice ignores certain opportunities to save money. But it’s also true that not many people have the discipline and willpower to follow Trent’s advice.

  98. David says:

    I’d like to start out by saying that I’m a fan of both Trent and Ramit, and I’ve found a way for their strategies to peacefully co-exist in my life.

    I was glad to see Trent acknowledge that there is value in Ramit’s approach.

    One thing I’ve noticed in the comments here, is that many people seem to be saying “I’m already all the big things right, so I have nothing to learn from Ramit.”

    But that’s a dangerous attitude to have. It’s rare for anyone to always be doing everything you can. Even if most of Ramit’s tips don’t apply to you, they are structured in such a way that when you find something that does, it can make a significant difference.

    There is always something new that we can learn of improve upon in our lifes. It’s much more beneficial to keep an open mind, than to assume that you have nothing to learn.

  99. David says:

    To follow up on my previous comment, my favorite advice that I’ve seen from Ramit is this: reach out to people you admire (or that you consider successful), and ask them if they’ll talk to you.

    People are more than willing to talk to others, and share the lessons they’ve learned from their successes – and more importantly – their mistakes. All you have to do is ask.

    I’ve done this twice since I read Ramit’s post (actually a guest post on another site), and both times, people that I admire from both a personal and financial point of view agreed to talk to me and answer ANY and all questions that I had.

    The lessons that I learned from those two people are priceless, and I can honestly say has changed my life.

    If that’s not good advice, I don’t know what is.

  100. Barbara Saunders says:

    Hmmm…I value minimizing waste for the environmental benefits, but don’t value frugality for frugality’s sake. I have more interesting hobbies, including some that earn me money.

  101. Noble Duncanson says:

    Trent, thanks for this post. I checked out the original post about the challenge on “I will Teach You To Be Rich” and, firstly, it’s difficult to read a blog that summarizes another blog. Secondly, it’s fairly petty for him to waste his readers’ time trying to defend “his strategy” when the instigating event was a reader’s question to you about YOUR OPINION of this strategy. Thirdly, you expressed very clearly how some of the frugal stretegies you have published posts about save money over an extended period of time, and yet he still wants to create a month-long competition pitting those strategies against his. Having said these thing that you have rightly left out of your post, I have to say that I admire you for not stooping to this other guy’s level. You’ve kept your eye on the ball, focused on the true values of what your blog is all about – personal finance (emphasis on personal). It is for precisely this type of understanding and approach that I read your blog as I’m sure this is true for other readers. I have to admit that I could care less about making detergent, toilet paper use, or gardening, but you do a great job of using these examples to demonstrate a way of thinking and approaching life that is considered. The post this guy wrote put me off completely. I’ll still take his tips that I find useful, but I’d never refer anyone curious about personal management or finance to him – I refer them to your website. Keep up the good work. Thanks.

  102. fathersez says:

    I just want to add that you replied like a true statesman.

    Well done. I am proud that my world of blogging started from reading one of your posts.

    Regards

  103. Ron says:

    I was rather offended by your reference to people who wash ziploc bags as “frugality extremeists”. With the exception of this post, I always heard a sincerity in your voice. However today I find your remarks rude and condescending.

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