I haven’t always been the biggest fan of frugality, but I know exactly why people are attracted to it.
My opinion is that there often bigger fish to fry and better way to make the gap between earnings and spending as large as possible (including earning more money!). But to each his own, and there’s a clear explanation for why the first step of personal finance for many is resorting to cutting costs.
What it comes down is that people are lazy. Increasing income doesn’t come easily. If we could wake up in the morning and say ‘I think I’m gonna earn something extra today’ we’d all be pretty happy. But in reality making money takes hard work. We either have to learn another skill or put in a lot of time and effort into a business plan. For most people who want to have an extra $1,000 in disposable income each month, why go that route when we have some low hanging fruit we can pick?
To me, the problem with frugality doesn’t have to do with picking the low hanging fruit. I think it’s admirable to cut out the first layer, which is often just waste. Once we get rid of the wasteful spending and become conscious of our spending habits, we get two positive outcomes: more savings and less clutter, both mentally and physically.
My issue is when the first layer leads into a second and third layer. Cutting out waste is great, but eventually we start cutting into the things we like and cut back on the things that make us happy. Right there is where it crosses the line for me. Once we save money for the sake of saving money (and get no additional benefits and in fact get some drawbacks), we’ve taken it too far.
It’s easy to save on our existing expenses, and we should all aim for this goal. However, just because it’s easier to cut back on expenses doesn’t mean that there’ s no limit to how far we can go. In fact, there’s a very clear limit. We only have so much we can save. There’s no limit to how much we can earn. If we spend $2,000 a month, we likely will be able to cut that a little bit but we’re not going to get an extra $1,500 in earning power per month.
But who’s to say we won’t be able to do that with a small business? Just $1,500 is definitely attainable! There really is no limit to how much more we can make by working hard and building a businesses using our existing skills, we can do anything.
Readers, are you over frugality yet? It has its place, but have you moved on to greener pastures yet?
