Does Frugality Beat Inflation?

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

On Facebook, Rebecca requested a post on “ways to live more frugally, and ‘beat’ inflation. ie: garden, raise own animals? (is it cost effective?) buying used/bartering/trading, public transportation vs driving pros/cons, saving in an economic nightmare (is it possible?)”

Here’s the real truth of the matter: frugality does beat inflation. Some methods of frugality, however, are much more effective at fighting inflation than others. Let’s look at what I mean.

Removing yourself from the cash economy (in bits)
Any move you can make to remove yourself from directly using money to buy things is a strong blow against inflation. Gardening, for example, is a great inflation fighter, particularly when it’s self-sustaining year over year using non-hybridized seeds. Bartering with your neighbors for tools and services is another great inflation fighter.

In each of these cases, your means of exchange are not related to money. When you’re gardening, your primary exchange is your time for your food. When you’re bartering with your neighbors, you’re offering the tools you already have and the services you can provide for the tools and services they can provide.

These exchanges do not involve cash in any direct way, so they’re not affected by inflation in any direct way. The more you can do things like this instead of spending money, the less impact that inflation will have on you, no matter what comes down the pike.

How can you increase your value set here without spending money? Build your skill set. Learn skills like plumbing and carpentry and home repair, the types of things that people always find useful.

Reducing the impact
Most frugality, however, falls under the realm of simply reducing the quantity of items that you need to buy regularly. The less you have to buy, the less impact inflation has on you directly.

For example, if you spend a weekend air sealing your home, you’re going to directly reduce the amount of energy that you have to buy from the electrical grid each month. If you install a wind turbine, you’re going to drastically reduce that amount. If you install a geothermal heating and cooling system, you’re also going to drastically reduce that amount.

If you are able to use mass transit regularly and buy a long-term pass on it, you’re again shielding yourself from the inflation of gas prices and, possibly, from other auto-related costs (if you’re able to sell your car). This does not shield you from future inflation of mass transit passes, but if this cost is much lower than the cost of upkeep on a car, then it’s a major victory.

Lifestyles
Some of the things Rebecca alludes to in her article are what I would call “lifestyle” choices. An example of this is raising livestock for food production. Certainly, such moves can be a way to reduce (or even eliminate) your reliance on outside sources of food (thus drastically reducing inflation’s impact on your life), but they often require a severe lifestyle change and commitment that few people are willing to do.

For example, raising livestock is a severe time commitment on a daily basis. Animals need to be fed and watered and checked for health concerns constantly.

They also need room in which to roam safely, which largely restricts you to living rurally if you have any significant amount of livestock. I’ve known people who have raised a goat in a suburban environment, but a single goat makes only a small dent in your food needs (via milk).

This amounts to a lifestyle choice, not just a frugal tactic. For some, it may be a great lifestyle choice that’s very life-affirming with the added bonus of drastically reducing or eliminating the connection between their food costs and inflation. However, they pay for that with their time and their energy. It is not a choice that everyone will want to make. In fact, few will make it.

I have some interest in raising chickens and perhaps a cow or two if we were to live in the country, but the big reason for me wouldn’t be to reduce the impact that inflation has in my life. It’s more of an issue that such a relationship with one’s food and with the animals that supply it is a valuable one to me.

Simply put, major lifestyle changes – the kind that shift how you spend a large portion of your time and where you live – shouldn’t be taken on solely for frugality purposes. There needs to be more of a reason than just saving money or reducing your connection to inflationary pressures if you’re going to radically alter your day-to-day life.

Being self-sustaining
Another point worth noting is that the more self-sustaining you are – meaning the more free you are from inflationary pressures – the more you’re free from many other types of modern pressures. You have less need to have a high-paying and stressful job. You have less drive to own material possessions that mostly serve to impress others, as others have less of an impact on your economic future.

Being more self-sustaining is quite rewarding beyond merely protecting you from inflation. It protects you from countless other concerns as well.