$2,100,000,000,000. That’s the total annual global budget for spending on advertising. It’s an
astronomically astounding number: $2.1 trillion dollars. Every single part of
that multi-trillion dollar spend is targeted directly at you, trying to get you
to buy something you had no intention of buying. It’s so powerful the average American has spent over $15,000 more than they earn trying to keep
up. We spend so much on stuff most of us are one bump away from being broke. What if there was an alternative
option to a life of consuming so much stuff it left you impoverished?
What if you said “No,”?
The radical act
“Frugal” is a funny word, not least because it sounds like a
word straight from Dr. Seuss (or as a friend on Twitter put it, “Wasn’t ‘Frugal
Rock’ a Jim Henson show?”). When I recently asked around I was shocked to find
many of my friends felt calling someone “frugal” was pejorative in nature, a
putdown you wanted to avoid. Could that be true? Had the notion of spending
wisely become so obscene in a world of $2.1 trillion in advertising dollars
that being frugal was now a radical act?
It appears, dear reader, that that is exactly what has happened.
What is “frugality”?
True frugality is embracing a lifestyle that puts one’s own
happiness in front of one’s need to consume. It’s not about spending as little
as possible or leading an unfulfilled life: it’s about getting the most out of
the money that you do spend so you
can lead the most fulfilling life
possible. That’s a far cry from the notion of being sad while sitting on a
Scrooge McDuck-sized vault of dollar coins but when we see 5,000 ads each day is it any wonder we’re convinced that we’re
not happy unless we’re spending money?
So why are so many resources thrown at persuading us to do
or buy certain things? Because it empowers the people spending the money by gaining
them greater access to ours. When we say, “No!” we’re flipping that script on
its head and taking the power back. When we say, “I will spend my money on the
things I want, not the things you want,” we’re empowering ourselves to get the
most out of our capital, what we earn for our time spent working. We’re
literally maximizing the value of our time by using it only for things that
will improve our lives not the things that leave us broke and unhappy,
frittering away our time with things while toiling ever longer hours to get by.
Embracing frugality means looking at your phone bill and
wondering why you’re spending $100 when you could spend a third as much for the same product. It’s cutting the cord
from cable and anything else that costs you too much for not enough enjoyment. It’s putting your
money to work for you and harnessing the power of the most powerful force in the universe. It’s tackling 10 Steps that will redefine your future forever.
In short, embracing frugality and living the frugal lifestyle
is making the decision to pursue a politically radical act of long-term happiness
for yourself and saying, “No!” to the $2.1 trillion dollar “trick you into
poverty” industry.
Frugal versus cheap
For many the words “frugal” and “cheap” are synonymous but
for those radicals who adopt the frugal mentality there is a canyon of
difference between the two. Frugality is getting the most value out of the
dollars you spend; cheapness is simply spending the fewest dollars possible.
They’re entirely different and the latter can actually cost you more money in the long run as I found
out after moving to Seattle.
You see unlike the very flat plains of my Iowa childhood
Seattle is nestled between multiple mountain chains. That means lots of outdoor
activities like hiking, climbing, and mountain biking. It wasn’t long after I
had moved out West that one of my colleagues asked if I’d like to go hiking
near a mountain not far from my new home. I leaped at the chance to congregate with
coworkers outside the office and get to learn my new surroundings a bit better.
One problem: I didn’t have the appropriate footwear.
To solve that problem I headed off to my nearest big box
retailer, Target. I found a pair of men’s size 12 hiking boots for $30, handed
over my cash and set off on the hike that weekend with my new friends. It was a
lot of fun, the mountain was gorgeous and I returned from the hike invigorated
(if out of breath). When I got home I realized my hiking boots already had a
hole worn into the heel with the inner portion of the shoe stuffing exposed and
irritating my foot. I wound up with a blister and a $30 pair of “hiking” boots
I could no longer use.
I chalked that experience up to bad luck and when I was next
invited to go hiking I actually bought
another pair of those same boots from the same Target! In my defense this was before my wife had opened my eyes to the world of a better living so I
was a bit dense, but after a second hike and a second pair of ruined boots I
decided that if I was going to start enjoying the outdoors I needed to actually
invest in a high quality set of footwear.
I was the one inviting people to hike the next time around
and I came prepared: I went to my local R.E.I. and purchased a $100 pair of
Keen hiking boots. Over half a decade and dozens of hikes later those boots are
still going strong with nary a hole to speak of. The end result? When I was
focusing on being cheap and spending the least amount of money I could on
hiking boots I bought the $30 set, but I had to keep buying them. I spent $60
on two hikes; not so cheap when you consider the per-use price!
Compare that to the more frugal option of buying high
quality hiking gear: $100 for dozens of hikes, a price point well below $30/use
even when you consider the higher initial cost of buying the Keens. I had
learned a valuable lesson through hiking: being cheap can be really expensive
and literally painful. Instead, I decided, I would take the radical path and
make frugal purchases in the future.
But I don’t want to be miserable
Frugality isn’t Ebenezer Scrooge, so cheap he won’t spring
for an extra piece of coal when his fingers are too cold to hold a pen. It’s
more like Robinson Crusoe: ingenuity and work ethic to maximize your resources
at all costs. I’ve had far too many experiences in which I talk about making the
radical decision to live frugally only for a friend’s excusitis to kick in and
explain away the very notion.
“I like traveling too much.”
“I could never do that, I love fancy food.”
“But aren’t you miserable not spending money?”
Embracing frugality doesn’t mean putting an end to traveling
or fine food or being miserable because you’re not spending money all the time.
It’s traveling on your own terms as you want, eating the food you want in the
conditions you want, and instead of being miserable not spending money you’re
doing the opposite: enjoying the benefits of a life lived without spending on
frivolous bullshit.
Last year my wife and I had a pretty good year. We started
the process of welcoming our first child into our family, made the most money
we had ever earned, and enjoyed a savings rate of 52% of our total income.
During that timeframe we:
·
Enjoyed a family vacation flying to Iowa and
Chicago to visit family
·
Carved out time for me to visit friends in Paris
and Belgium
·
Ate hundreds of exquisite meals
·
Flew to the Midwest for the holidays to visit
family once more
·
Maxed out numerous retirement accounts
·
Paid down thousands in debt accrued during our
days as students
Our total consumer expenses for the year? Counting every
single dollar we needed to survive but not what we spent on paying off debt or
saving we survived on $38,000 for the two and a half of us. That includes the
trips, it includes the food, and it includes an incredibly fulfilling life. And
it was possible because of our embrace of the frugal lifestyle: living
intelligently, not wastefully.
How to live frugally
Remember, living frugally isn’t synonymous with “not
spending money.” It’s spending that money intentionally which means considering
what you’re buying and why. The best way to do that? Using the most powerful financial tool around: your budget. That’s the first part
of the 10 Steps because of how conscious it makes you of what you’re spending and
why. Want to take a trip to Las Vegas? No problem; just save up for it by
cutting your $100 phone bill to $35, a 12 month savings of nearly $800, enough
for a plane ticket and the hotel. And next year? You can pocket the $800 in
savings and put it towards something else.
You’ll also want to pay off your debt using the avalanche
or snowball
method. Taking on debt isn’t necessarily a violation of the frugal tenets
(unless it’s a payday loan or credit card debt, in which case you are setting
your money on fire) but letting the interest eat at your net worth definitely is. After all when you take that debt on
you’re essentially hiring the world’s most powerful force to work against you. If you’re paying off
student loans be aware you have lots of payback options.
You’ll need to understand just how expensive it is to not be frugal.
And it’s embracing the right mentality if you’re already in too deep and worried about never beingable to dig out. If you’re ready to make the politically radical leap to
live the frugal lifestyle The Bill Stark Blog archives are your meat and
potatoes; you can’t go wrong reading pretty much any article.
The final form
Frugality done to the fullest extent is the ultimate form of
money freedom: financial independence. That’s when you’ve hired so many magic dollars they actually earn enough to pay you your salary. You no longer
need to rely on an employer to make a living but instead can rely on yourself
and the capital your lifestyle has allowed you to accrue. How would that impact
you?
Imagine living a lifestyle you’re comfortable with because
you know the value of each dollar you spend and put it towards exactly what it
is you need it to be. The siren call of $2.1 trillion in advertising is a sound
you’ve long ago left behind. You are your own consumer and to hell with what
the big companies want you to do.
Your work? Whatever you want. If you wake up in the morning
excited to get to the office you get to keep doing that every single day. If
your boss is a dick one afternoon? You can tell him off with no fears of
repercussions; what are they going to do, fire you? Who cares! You’ve already
got an employer who will pay you your salary no matter what: you!
If you hate your job? Even better! Financial independence
means walking away from the working world forever. Sell the house, pack up your
things and hit the road on that cross country trip you’ve always wanted to
take. Hit up every “world’s biggest…” stop on the way, get a picture in front
of the Field of Dreams, pull off at Wall Drug. When you’re financially
independent you set your schedule and your priorities to the maximum level
possible, even compared to a fellow frugalite who hasn’t yet leveled up to that
final form!
I’ll be writing more on financial independence at a later
date but know this for now: as the final step on the road of frugal living it
is the most empowering of all financial decisions. It’s truly being in control
of your destiny and the ultimate expression of politically radical frugality
that forever severs you from the ties to a marketing industry hellbent on
getting you to consume yourself beyond your means.
So take a radical step and start living a deliberate life
with your money. Choose frugality.
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