One question that I left out of the mailbag yesterday is this one, from Dana:
I find myself oscillating back and forth between frugality and spending recklessly. After a lot of reflection, I think the reason is that when I buckle down with frugality, I begin to feel “poor” after a while. I feel like I’ve intentionally cut myself off of what life has to offer. It leads to a spiral of negative thought, and then eventually I give up and splurge, and for a little while I feel “rich” like life is full of possibilities. Then, after a while, I start to see my life as a train wreck with no future, so I resolve to buckle down again. I have been in this oscillation more or less for two decades. I see frugality as a means to get to a healthy retirement, but when I’m actually doing it, I actively start to feel badly about myself and my daily life. When I spend without restraint, I feel better about myself and my daily life but then I realize that I’m never going to retire and my credit cards are creeping up and that feels awful, too. I’m hoping you’ll have some insight here.
There’s a lot to unpack here, so let’s dig in.
Feeling ‘Poor’ and Feeling ‘Rich’
The first thing I wanted to touch on was the idea of feeling “poor” versus the idea of feeling “rich.”
Dana described feeling “poor” as “cutting myself off from what life has to offer.” On the other hand, Dana described feeling “rich” as the sense that “life is full of possibilities.”
For Dana, the difference between the two seemed to be how freely she was able to spend money on short-term wants. Allowing herself to spend money as she wished on short-term desires conveyed a sense of freedom and possibility to her, whereas putting tight restrictions on those short-term spending desires transformed over time into a sense of being restricted and “un-free.”
To her, this felt like the difference between “rich” and “poor.” To her, a “rich” person is able to spend money on short term things without concern, whereas a “poor” person really isn’t able to. That sense of freedom translated to her psyche, leaving her feeling happier when she felt “rich” and sadder when she felt “poor.”
Rich, Poor, and Personal Options
If we stop and look at things from that angle, it’s pretty clear that Dana’s sense of “rich” and “poor” comes from the number of personal options she sees available to herself in a given moment, with “rich” representing an abundance of options and “poor” representing few options. In a way, that does represent some of the dichotomy between wealth and poverty, but I think that, in the situation where a person is choosing to place financial restrictions on themselves, it’s not a clear picture.
Remember, one of the main goals of voluntary frugality and voluntary simplicity is to not choose low value short-term options so that you can gain access to higher value long-term options. A person might choose to be “poor” in terms of short-term options in their life so that they can be “rich” in terms of long-term options.
Think of someone working two jobs to get out of a bad financial hole. That person is definitely choosing to restrict their day to day options in the hope of having more options later on in life.
Frugality is often used in the same way. You’re cutting off a lot of incidental spending and making price-sensitive choices when you do spend so that you can have more options later on in your life and in other areas of your life.
It’s a restriction that makes Dana feel “poor,” but I think that the restriction is an illusion.
Frugality and Purchasing Freedom
It’s worth noting here that I’m mostly talking about voluntary simplicity. I’m not talking about a situation where a family is pushed up near the poverty line and many frugal strategies become a requirement rather than an option. In those situations, you can feel as though you don’t have a choice.
However, that’s not the situation Dana is describing, nor is it the situation that a lot of Americans find themselves in. For many Americans, frugality is a choice, one that you make when you want to reduce the amount of money leaving your pocket this week or this month or this year.
Frugality simply means investing thought in order to figure out what option is going to give you the most value in exchange for your dollar.
If you look exclusively at the short term, it is really hard to perceive that spending less is going to be the best option. You’re often spending less to receive a somewhat lower quality item (though that depends on the situation) and, if there’s not something else you’re going to spend your money on in the short term, it can feel like a loss. If you are forcing yourself to repeatedly make choices like that, it can definitely feel constricting.
Frugality makes more and more sense the further out you stretch your time consideration, because then you’re starting to think abut choices in the future, beyond the next few days.
The thing is, human beings aren’t particularly good at this. Most of the time – in fact, almost all of the time – we’re thinking in the short term. We’re thinking about getting through the day or getting through the week.
- Read more: Hyperbolic Discounting and You
It takes conscious effort to look seriously at things beyond the immediate future. You have to train yourself to start considering the long-term consequences of your daily choices and use them as a pro-and-con with those immediate choices.
Let me give you a clear example of what I mean.
Let’s say I’m standing at the store and I’m trying to decide which box of breakfast cereal to buy. I can either buy a box of Cheerios or a box of store brand oat circles. They’re basically the same, but Cheerios is a brand that I trust. Buying the store brand, however, saves me about a dollar.
Now, I have the financial freedom to choose either one in the short term. That’s not a question, and I don’t believe it’s a question for Dana, either.
The question actually is, “Would I rather have that $1 used to get a box of Cheerios rather than a box of ‘toasted oat circles’ or would I rather have that $1 available for something else down the road and put those ‘toasted oat circles’ in my cart?”
That “something else” can potentially be a lot of things. It might be money put aside for retirement. It might be money put aside for next year’s family vacation. It might be used to pay off a debt. It might be money you can use to buy something fun this weekend.
The thing is, most momentary frugal choices feel like small potatoes. It’s just a dollar, right? Who cares? It’s often not worth active consideration – they’ll just grab the Cheerios, feel good, and keep going.
The thing is, we make those choices all the time. Obviously, a grocery store is rich with those choices, but we are making those kinds of decisions almost every time we spend money.
For me, the choice to spend less now as a default (meaning unless there’s a compelling reason not to do so) feels empowering. I don’t actually need a specific goal for the future. I just know that there’s probably going to be a better use for that dollar in the future than the difference in quality – if there is any – between Cheerios and “toasted oat circles.” I don’t even need to know what that future use for that dollar is. I just know that, through my own reflection, there are a ton of things in the future that are going to be uses for that dollar that I’m going to appreciate, and holding onto that dollar for now is a good choice.
In other words, I generally feel “rich” when I am frugal in the moment, because I’m considering the wide range of possibilities available in my future. When I go through the grocery store, make a bunch of little frugal choices, and think to myself, “Wow, I really didn’t spend much on these ten bags of groceries” at the checkout, I feel great because I’m thinking about how much I didn’t spend and how that money will be able to be used on other things that are important to me in the long term.
In other words, being frugal makes me feel rich.
At the same time, spending money on impulsive stuff often leaves me feeling poor. Often, because it was an impulsive buy, it wasn’t something that I deeply wanted. It was just something that I talked myself into buying right at the crest of my desire for that item or experience, when that wave came on quickly and will fade just as quickly. An hour later or a day later, that purchase will either be regretted or forgotten (at which point it’ll be regretted when I review my credit card statement). It is that feeling of regret, knowing I used the money on something unimportant when there are many more important things in my life, that leaves me feeling poor.
There’s another important aspect to my sense of “rich” and “poor”: time use.
Time Use and Feeling Rich
The single thing that makes me feel the most “rich” in my life is a big block of uninterrupted time to pursue something I’m doing solely for my own enjoyment and enrichment.
A whole afternoon to curl up with a book feels rich to me. A game night with old friends where we play some long strategic game and laugh and think and converse and strategize with each other feels rich to me. A day spent hiking in the woods feels rich to me. An afternoon making a batch of homebrew feels rich to me.
The idea that I could have a lot more of that in my life is intoxicating, and it’s a huge motivation for me to aim to retire early.
When I feel “poor” is when I’m so strapped for time that I can’t make time for those things that really matter to me. In fact, it is often in those “poor” moments (in terms of time) that I make my most foolish spending decisions, because I want to feel “rich” and I want to feel like my life has choices and possibilities, and when my time is tightly restricted, I don’t feel that way.
So, for me, time management is actually a form of frugality. It’s a way to make myself feel “rich.” Often, I tightly schedule my time during the week while dangling a big block of time or two during the weekend to enjoy some hobby or personal growth project, and that intense feeling of “richness” that I get during those blocks of time on the weekend really make me feel that I have a “rich” life. That sense of a “rich” life carries forth to frugal choices throughout the week and an adherence to some pretty overstuffed days in terms of things I’m trying to get done.
One thing I’d strongly suggest to anyone who feels “poor” is to massage your schedule and your responsibilities so that you have some blocks of time to do things that you personally care deeply about. Give yourself a chunk of time each weekend to read or to work in the garden or to spend time in the wood shop or whatever it is that makes you feel joyous and happy and alive and in the flow. Block that time off and make it sacrosanct. If you’re wired anything like me, it will make you feel richer.
‘Poor’ Choices Aren’t Always Poor
I might be wrong here, but I think another aspect of what Dana is talking about is that she feels “poor” when she’s always choosing low end brands, which have a lower perception of product quality than higher end brands. It feels like you’re always going “cheap” and that “cheapness” is degrading your quality of life by a thousand small cuts.
My solution to this has been twofold.
First, I usually buy store brands, but occasionally I buy a name brand (usually with a coupon) and try to assess if it’s genuinely better at its job than the store brand. The vast majority of the time, I can’t detect a difference. When I can tell a difference, it’s not always in favor of the name brand. Even when the name brand is better, it’s not usually worth the price difference. When I come upon situations where the name brand really is significantly better, I buy that name brand. This used to be the case with trash bags until the store brand drastically improved in quality (I actually think the store brand I use is the same as Glad with a different color draw string).
Second, I read Consumer Reports and often follow their “best buy” recommendations. The above strategy works for nonperishable foods and household supplies; Consumer Reports usually guides me for bigger purchases. Very often, I buy their “best buy” item when I need an item of a particular type, particularly if I can find it on sale. Those items tend to offer incredible “bang for the buck.”
When I know I’m buying a good product, then I don’t feel “poor” for having bought it, even when the price I’m paying is a lot lower than the “premium” version.
- Read more: Breaking Out of the ‘Cheap’ Cycle
The catch here, of course, is that this requires some time and thought. Often, when we’re making purchases, we haven’t done all of that homework. We’re relying on other cues, like our familiarity with the name brand, the marketing on the label, and even the price (because the more expensive one must be better, right?). In that situation, if we choose the inexpensive version, it can feel like we’re choosing low quality to save a buck, and that can end up feeling like death by a thousand cuts.
There’s an overriding theme in all of this. Can you pick it out?
The Power of Introspection and Thinking
In almost all of these cases, that sense of feeling “poor” because you’re buying the cheap product is overcome by thinking about it carefully outside of the moment.
You can think about what your big goals are and what you’re working for.
You can think about how relatively unimportant this little purchase is in the big scheme of things.
You can think about your time use and whether you’re just wanting to buy out of a desire to feel “rich” because you’re strapped for time.
You can investigate whether a particular purchase or product is actually one that returns a lot of value to you for the money.
All of those factors center around thought and research and introspection outside of the moment when you’re making that purchase. If you’ve done those things and reflected on them, you start to internally realize that frugality actually means giving up something trivial for something more valuable. It’s only when you don’t do that thinking that you can feel that frugality is doing the opposite.
Frugality should never be about sacrificing something genuinely valuable to you. If you’re doing that, you are making “poor” choices.
Rather, a big part of frugality is figuring out which things are actually of genuine value to you. Trust me, choosing store brand oat circles over Cheerios is not an issue where I’m losing genuine value in my life. Where I lose genuine value is when I can’t spend a few hours reading or when I’m not able to retire until I’m old and infirm or that I can’t afford to buy something that I’ve decided is genuinely meaningful in my life.
In the end, if a sense of freedom of choice is what makes you feel “rich,” step back and look at your choices more carefully outside the heat of the moment. Which choices really bring more value into your life? When you’re sure about a particular choice, start doing it in the more meaningful way.
My belief is that if everyone did this, a lot of people would be far more frugal, and a lot of people would be buying store brand oat circles rather than Cheerios. That’s because for most people, the source of genuinely feeling “rich” in life doesn’t come from our minor spending decisions. Those minor decisions just feel more important in the moment and are often nudged to feel that way by good marketing. Step back and realize that the kind of products you buy at the store, for the most part, don’t really matter in terms of living a truly “rich” life or a “poor” one, then make your choices accordingly.
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