It seems many personal finance writers and bloggers hate to spend a dime on anything that isn't absolutely essential. But, while pinching pennies this tightly may mean a rapid reduction in debt or a quickly growing net worth, is it any way to live?
Granted, some people are happy living very simply, and yes, extreme frugality advocates are absolutely right in a couple of regards. A penny saved is worth more than a penny earned (when taxes are considered), and spending frivolously or purchasing depreciating consumer goods on credit is not a wise long term financial choice.
Granted, some people are happy living very simply, and yes, extreme frugality advocates are absolutely right in a couple of regards. A penny saved is worth more than a penny earned (when taxes are considered), and spending frivolously or purchasing depreciating consumer goods on credit is not a wise long term financial choice.Despite knowing about the power of frugality, I can't do the extreme frugality thing.
Let me explain... I'm debt free except for the last of my student loans, which carry an interest rate of 3.25%. I save or invest around 50% of my pay, and research all I can about investing and sources of passive income.
But I don't can my own peaches, extreme coupon, or bike to work, despite how much money it could save me.
Don't get me wrong. I'd love to have the extra money that can be found through the strategic employment of these frugal tactics. There's just some things that to me, are worth paying for. I enjoy sleeping late, so I prefer to drive to work (even though I live within cycling distance). I like fresh, healthy food, and organic choices from the local market, so I don't dig through coupons for 5 for 1 Twinkies. And, guess what... sometimes I pay $5.00 for a cup of coffee.
I know, many personal finance bloggers are writhing in pain right now to read these words. That's fine.
The truth is, every person has to set their own priorities and choose what purchases are worth their hard earned money.
In my mind, there is a thin line between what constitutes frugal and what qualifies as conscious spending.
Frugality implies doing without things that you value or need for the purpose of saving money or acquiring more material wealth. Spending consciously, on the other hand, means paying attention to what you spend, how you spend, and what you spend it on in order to spend more money on the things that make you truly happy.
Spending consciously is an approach famously advocated in the brilliant book, Your Money or Your Life. The writers of Your Money or Your Life advocate tracking expenses and attempting to reduce spending only in the categories that don't provide fulfillment, while actually increasing spending in the categories that provide you with the most joy in life. Novel approach, right?
If you really want to change your relationship with money for good, you may want to consider giving up the budgeting attempts that make you feel deprived of the things that you love and value, and instead begin to track your finances using software such as Mint.com (or a regular old ledger), without setting arbitrary and often unrealistic spending limits.
Over time, you will develop a pattern of conscious spending that will allow you to change your spending patterns to reflect your true self. When you reach this point, you will have seen through the extreme frugality smokescreen and have developed a sustainable, long term spending plan that reflects your individual priorities in life.
You might think this type of no guilt, no budget spending plan would result in spending more money. In my personal experience, it has resulted in a gradual lowering of monthly expenses overall, while making me feel more fulfilled by concentrating my spending into the categories that give me the most joy in life.
If you are feeling stretched thin by the unrealistic expectations of your overly frugal budget, give conscious spending a try. It might just change your relationship with money all together.
Photo By: Alan Cleaver
The truth is, every person has to set their own priorities and choose what purchases are worth their hard earned money.
In my mind, there is a thin line between what constitutes frugal and what qualifies as conscious spending.
Frugality implies doing without things that you value or need for the purpose of saving money or acquiring more material wealth. Spending consciously, on the other hand, means paying attention to what you spend, how you spend, and what you spend it on in order to spend more money on the things that make you truly happy.
Spending consciously is an approach famously advocated in the brilliant book, Your Money or Your Life. The writers of Your Money or Your Life advocate tracking expenses and attempting to reduce spending only in the categories that don't provide fulfillment, while actually increasing spending in the categories that provide you with the most joy in life. Novel approach, right?
If you really want to change your relationship with money for good, you may want to consider giving up the budgeting attempts that make you feel deprived of the things that you love and value, and instead begin to track your finances using software such as Mint.com (or a regular old ledger), without setting arbitrary and often unrealistic spending limits.
Over time, you will develop a pattern of conscious spending that will allow you to change your spending patterns to reflect your true self. When you reach this point, you will have seen through the extreme frugality smokescreen and have developed a sustainable, long term spending plan that reflects your individual priorities in life.
You might think this type of no guilt, no budget spending plan would result in spending more money. In my personal experience, it has resulted in a gradual lowering of monthly expenses overall, while making me feel more fulfilled by concentrating my spending into the categories that give me the most joy in life.
If you are feeling stretched thin by the unrealistic expectations of your overly frugal budget, give conscious spending a try. It might just change your relationship with money all together.
Photo By: Alan Cleaver
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