In about a month, I’m going to launch a series of (tentatively) eight weekly articles discussing the book The Wisdom of Frugality by Emrys Westacott. It’s a book that covers what one might call the philosophy of frugality as it tackles a wide range of issues surrounding frugal living, why people choose to do frugal things, and how those frugal things impact the world.
It’s an excellent book, one that I’ve read several times now. I’ve attempted to write a single article summary of it multiple times, but I always end up with far more to say than could fit in a single article, so I decided to make a series of articles out of it. I’m giving plenty of notice in advance so that those who might want to read the book in advance or along with the articles will have plenty of time to check out the book from the library.
That being said, a big part of what underlines that whole series is the idea of what frugality is. What do I mean when I use the word “frugal” or “frugality”? One of the key lessons I’ve taken from The Wisdom of Frugality is that people often mean different things when they use the word “frugality,” and I wanted to somewhat define what the word means to me.
So, let’s dig in. You’ll find some useful things here, I promise.
Frugality = Bang for the Buck
When I say “frugality,” I simply mean a conscious effort to get the most value I can whenever I’m spending some of my resources. Usually, when I say “resources,” I mean dollars and cents, but not always (and I’ll get back to that in a little bit). Whenever I spend a dollar, it is important to me to get the most value I can for that dollar.
At first glance, one might think that would mean that I’m super price sensitive about everything and will always buy the lowest priced option, but that often ends up not being the case.
Why? To me, part of “value” means doing the job well, not just doing the job minimally.
I’ll use my favorite example of trash bags to make this clear. Many years ago, when I first started diving into frugality, I went the “cheap” route on virtually everything I could, and one of those things was trash bags.
Now, for most of the store brand and generic items I purchased, the item did exactly what was intended and I was very happy with that purchase. I was thrilled with store brand dish soap and store brand flour and store brand breakfast cereal and so on, as almost all of them were indistinguishable from the name brand for our purposes. Those were frugal purchases – I was getting the most “bang for the buck” for my dollar from those purchases because they worked just as well as more expensive name brand options for my needs.
With trash bags… that wasn’t the case. I found that I could only fill them up halfway, which meant that I was investing more time taking the trash out. Even worse, about one in 30 or so of the bags would split all over the kitchen floor, creating a big cleanup hassle that I had to deal with. These bags cost about $0.05 each, whereas the brand I was using before cost about $0.20 each, but I could fit twice as much in the more expensive bags and I never had blowouts.
In other words, there was a big extra hidden cost in the cheap bags. I was taking out the trash twice as often, which was eating up a minute or two here and a minute or two there, and about once a month there would be a huge mess in the kitchen that would take extra time to clean up. The generic bags were adding a time cost compared to the better bags.
So, while I might be able to buy a box of 100 cheap trash bags for $5 versus 100 good bags for $20, the truth is that I was using the cheap bags twice as often, so the real match was buying two boxes of those cheap bags, which cost me $10, and then watching lots of minutes here and minutes there come and go with the occasional blowout in the kitchen. All of that lost time didn’t add up to $10 in savings to me, so I switched away from the generics.
My point is this: There are more costs to the things you buy than just the initial dollars and cents. Using things costs time and energy, too. If you’re saving money on something that’s going to end up requiring additional time and energy to use, you need to make sure that the saved money is worth the extra time and energy.
Resources Are Transmutable
So, let’s back up to that definition of frugality again. When you choose to buy something, you’re essentially committing a certain amount of resources to it in the hopes of getting value out of it. Frugality is all about making sure that you’re getting maximum value out of the resources you commit, whatever they are.
There are lots of resources to consider. Money is the most obvious one, and time and energy and focus are right behind money. For example, if you buy cheap and hard to use trash bags instead of more expensive and easy to use trash bags, you’re not really being frugal because you’re just substituting time and effort for money.
There are more values even beyond those ones. What about supporting your local community? What about the environment? What about the value of treating guests in your home well? What about your stress level?
All of those are values that you’re either putting into a purchase or getting out of a purchase, and they all are part of what I consider when I think about “bang for the buck.”
The catch – there’s always a catch – is that all of these resources are actually transmutable, meaning that each one can actually be swapped for another one. This might seem hard to believe at first, but it’s actually true. All of the values you put into something or get out of something have a dollar amount that you put on them, whether you initially see it or not.
If I spend two dollars extra to buy a dozen eggs locally from a truly free range chicken farm, that means I’m putting a certain dollar amount on how much I value local farming and animal care. That doesn’t mean that either choice is wrong, just that I put a certain value on things.
If I buy a pineapple for $5 instead of buying an equivalent amount of cut up pineapple for $15, that means that I’m willing to save $10 to invest the time and energy needed to cut up that pineapple.
We all make lots of choices like this, mostly based on our gut instincts. Most of us don’t sit down and actually try to calculate out the exact ratios and dollars and cents that we put on a certain value. We mostly just trust our gut.
So, this leads me to refine my definition of frugality yet again. Frugality simply means that you’re paying a little more attention to how much you view various values to be worth in comparison to each other. The more you consider the actual cost of things or the actual value you’re getting, the more frugal you are.
A few examples here might be in order.
Let’s say I’m going to the grocery store to buy trash bags (I love the trash bag example because it’s so clear what I’m talking about).
A person who isn’t frugal is going to walk down the trash bag aisle, look at the options, grab the package that seems familiar because of good marketing, and keep rolling. They’re not very concerned at all about how well the trash bags will perform or anything like that. They want something that will hold their trash and do a good job of it and they put minimal effort or thought into meeting that need.
A slightly frugal person will walk down the trash bag aisle and buy the cheapest ones they can find. That person recognizes that the only real value they get out of trash bags is that they will transport trash out to the trash can, and thus spending the minimum possible amount on whatever gets that job done is a good choice.
A more frugal person will walk down the trash bag aisle and think about past purchases a little. Have they tried the cheap ones before? If so, did they do the job? If not, have they tried this next cheapest brand? How did that brand do? They’ll try to buy the least expensive brand that they know will do the job well and have minimal time and energy costs later on.
An even more frugal person might walk down the trash bag aisle and identify the best “bang for the buck” brand of trash bags – the cheapest one that gets the job done with minimal fuss – and then will seek out the best bargain on those bags or of higher quality ones. They’ll examine the cost per bag and the bulk buy options carefully and walk away with the lowest possible price per bag, which is probably a midrange bag in a big bulk box.
What’s the difference? At each step, a little more thought is given to the resources put in versus the value received and that additional thought is rewarded by either having to put in fewer resources or by getting better bags for the same resources.
The Value of Thought
This is just a simple example, of course, but it illustrates a very valuable key point about frugality: The more you think about something, the more likely it is that you’ll get more value for the resources you put in.
This leads to another interesting crossroads when it comes to frugality. Many people who reach this realization about frugality then come to see frugality as a sport of obsession. I see this a lot in the comments of posts I write about frugality. “You obsessed over something that will save four cents? What? Why?”
That utterly misses the point.
First of all, the time spent figuring out how to save four cents usually relates to something that repeats with a high level of frequency. If I’m worrying about something that saves four cents, it’s probably something that occurs at least once a day in my home.
Second, the time spent usually uncovers a good principle to follow that will last for a very long time. I can keep using that principle for the next decade to guide my purchases to a pretty good destination. This is because I do that kind of thinking once to uncover the best answer and then ride that answer for a very long time without thinking about it. I’ve already invested the thought – I don’t think it all out again the next time I buy trash bags or whatever the case might be.
Taking those two together, let’s say I obsess for a while over trying to optimize something that happens in our home every day and I figure out how to save four cents a day on it. I invest two hours trying out different strategies and thinking through it. “YOU INVESTED TWO HOURS TO SAVE FOUR CENTS?” No, I invested two hours to save four cents a day for the next decade, plus I basically don’t have to think at all about this again for a very long time, so I likely slowly recoup that time invested. That four cents a day for the next decade, by the way, turns into $146.
Third, when I write a post that dissects some specific frugal tactic, I’m usually doing it to share the results with a reader so that reader doesn’t have to think through all of this. They can just see the argument, borrow the conclusion, and use it in their own life as if they’d figured it out themselves. That’s the point of the article.
Finally, I actually enjoy figuring out the best way to do little things like this. I like to figure out how to optimize soap use or how to get the most value out of a garbage bag. If I can figure out a better way of doing things, that feels good to me. It’s the “engineer” side of me peeking out.
So, again, let’s redefine that definition of frugality. Frugality is about living by a series of well-considered principles that help to ensure that you get the most value out of the resources that you have.
We’re getting pretty close to what I think frugality means!
The Value of Principles
It’s worth noting that a big part of that last section is about living by a set of principles that guide your behavior. The idea of principles is really important here.
To me, principles are a really powerful tool for getting through life. Good principles that you trust will guide you through all kinds of situations with great results. I find that having a set of well-considered principles that you innately understand and trust will guide you to good things in almost every aspect of your life.
This requires two things.
One, you have to have good principles to begin with. In other words, you need to have some fundamental rules that you follow that guide your behavior. Frugality is just a way of describing some of those principles by simply saying that it’s important to you to get the most value out of the resources you spend.
Two, you have to trust those principles. Once you’ve figured out a really good way of doing things, you have to trust that those principles are right. I almost entirely trust my principles to guide me through lots of different kinds of situations – not just things related to finance, but everything in life.
I only start questioning principles when I start getting results I don’t like. For example, if I notice that my spending is going up a lot, then there’s probably some issue with my spending principles and I need to rethink them a little. As long as I’m getting results I like, I just keep living by my principles and I don’t really have to think about them too much.
(I will say that there’s usually at least one or two areas in life where I’m not getting the results I want and thus I’m questioning my principles in that area. Finances are quite often one of them, mostly because my mind is on my money quite a bit simply because I write about finances every day.)
This brings us to what I think is the final and fundamental point in all of this.
Frugality Is a Value
Principles – the rules we live by – are founded on values – the things that, at our core, define our sense of right and wrong and what we want to achieve and get out of life. Frugality is one of those values, a very fundamental one, in fact.
To me, frugality is simply a fundamental value that says “I consider it good to think about my choices in life carefully to ensure that I’m getting the most value out of those choices compared to what I’m putting in.”
Others may or may not hold that value. They may find such a use of thought and time and energy to be better used elsewhere and then base their decisions on other criteria, and they’re not necessarily right or wrong. I think that a lot of people reading The Simple Dollar do hold that value, though.
Most of the time, when we talk about frugality, we’re talking about money, of course, because money is the common medium of exchange. We value our time and energy in terms of money because we work for money. We value the things we own in terms of money because we spend that money to buy those things. Thus, frugality is easiest to see when it comes to money, but it applies in a broader way to almost everything in life.
So… What’s Practical Here?
If you’ve read through this whole article, you might be wondering what’s practical in all of this. For me, thinking about what frugality means to me exposed three very practical things.
First of all, a reasonable amount of time invested up front in thinking about a purchase or expense almost always pays off. That’s because if you’re thinking in depth about a small expense, it’s probably one that’s going to repeat often so even a small savings will add up, and if you’re thinking about a big expense, even a small percentage savings will result in a lot of money saved. In short, if you’re a frugal person, thinking carefully about a purchase is almost always worth it. This extends beyond purchases and dollars into almost anything you care about in life, in my opinion, but as I noted above, frugality is usually focused on dollars and cents.
At the same time, borrowing a frugal strategy from a trusted source is a good time saver. It’s not really even a money saver because it’s typically something that you’d figure out on your own with some time investment. The reason I read frugal websites and practical magazines like Consumer Reports, in the end, is to save time thinking through a purchasing decision or a “best” way of doing things. If a source I trust comes to a conclusion about something, I’ll just adopt that conclusion and use it. Spending ten minutes reading a blog post or a magazine article that results in something actionable is great because it probably means I saved two hours trying to figure the same thing out on my own. Even if only a small fraction of the things I read are actionable, it’s still worthwhile because the ones that are are really big wins. It’s worth noting here that “trusted” doesn’t mean you always have to agree with the source nor does it mean that the source is perfect, but that the source strives to always be honest and true to their values. A “trusted” source might give out a strategy that’s not perfect for you, but it’s probably perfect for someone.
Finally, the time you spend reflecting on any aspect of your life or idea that’s important to you is time that usually ends up paying for itself. If you find yourself struggling with a buying decision, a reasonable amount of time you spend really figuring out the right solution is time well spent. Sometimes, I’ll just make a choice in the moment that matches my gut instinct and then I’ll think about it in depth later on, which is a great strategy to rely on. I spend a lot of downtime reflecting on recent choices and asking myself if I made the right choice or if there was a better way to do things and that thinking either reinforces or refines one of the principles I live by. That time investment is almost always worth it. Don’t lament the past or a mistake you made in the past; instead, mine it for clues as to how to live better in the future. That works for frugal decisions and almost any aspect of life. Don’t be afraid to think things through.
Frugality is like any value that we have in life. The more we lean into it and trust it, the more value it brings to us.