Frugality as a “Spending Transfer”

Of all the posts on The Simple Dollar, the post that seems to drive the most emails to me is my homemade laundry detergent guide. People seem to hardly believe that I actually make my own laundry detergent.

My response to these dumbfounded emails has evolved over time (yes, I get so many emails on this that I have a “standard response” that I insert into such emails), but now it looks something like this:

I make my own laundry detergent because I save about $18 per 100 loads – about three and a half months’ worth of laundry at my house. That $18 goes towards other goals in my life – paying down debt, saving for my dream home, and so on. I’d rather have my $18 go towards that than supporting a mega-corporation pumping out millions of gallons of detergent a week. Plus, it’s fun to make.

The real core idea here is that I’m “transferring” my money from spending it on detergent to saving for my dream home. Sure, it’s only $18 every three months or so, but that’s $72 a year. $720 a decade. And that’s assuming I don’t earn any interest or investment income at all on that money.

Homemade laundry detergent is just one avenue of such savings. I make up my own bottle of Windex and “transfer” $4 a year from household chemicals to debt repayment. I turn down the temperature on my hot water heater to 120 degrees Fahrenheit and transfer about $40 a year from the gas company to our dream home savings account. I eat leftovers for lunch and transfer $3 from a food producer to my emergency fund.

In each case, all I’m doing is taking money from something less important to me – household chemicals, natural gas, large food producers – and giving that money to something more important to me – debt freedom, our dream home, my emergency fund.

Once you’ve adopted this kind of mindset, many of the “ordinary” choices people make begin to seem a little odd to you. They certainly do to me. Every time I choose to not maximize my value in some relatively unimportant place in my life, I’m taking money away from the things that are truly important to me.

If I choose to just go buy Tide at the grocery store, $18 disappears from my debt repayment plan (and goes to Procter and Gamble) every three months, leaving me beholden to Chase (or some other entity) for longer.

If I leave my hot water heater at a high temperature, $40 disappears from our savings for our dream home (and goes to my energy company) every year, making that dream less and less attainable.

If I go out for lunch every day this month instead of eating leftovers, $60 (at least) disappears from my emergency fund (and goes to a food producer), making me more susceptible to major life emergencies.

The list goes on and on. In each case, I find it’s better to keep that money in the areas of my life that are truly important to me.

So, when I look at someone else spending money on Tide, I think to myself “they must place a higher personal value on Tide than on getting out of debt.” Perhaps they do – and that’s fine. However, I can certainly say that those values are far away from my own values.

I never advocate trimming spending on areas that are truly important to you. If something has a high value in your life, by all means, spend money on it.

But in areas in your life that don’t have a high value, why are you spending money? Every extra dollar you spend in an unimportant area is a dollar taken away from an important area.

Frugality, in the end, is just a “spending transfer” – transferring your money from an area that’s not important in your life to an area that is important in your life. People talk about frugal misery – that, to me, is the opposite of misery.

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