When Sarah and I first moved into our new house in 2007, the inaugural electric bill was shocking to us. It was way higher than what we were used to from the days of our tiny apartment. Our old energy bill was around $80 a month — this was over $300! Image by Nucleartist (Shutterstock).
Right then and there, I was on a mission to get that bill lowered. I added caulk to windows. I installed a programmable thermostat and set it to basically turn off both heating and cooling during the day when most of us weren’t home. Over time, I swapped out every light bulb in the house and replaced it with an LED bulb. The actual list of things that I did went on and on and on.
Several years later, I open up an energy bill at the peak of the winter heating season in Iowa and, lo and behold, the bill is about $125, which is about our monthly average these days.
From the records I have, our annual average energy bill has dropped by about 50 per cent from our first year in the house. We’ve done many, many little things to save energy over the years, and those efforts have culminated in a savings of about $100 a month overall.
In my eyes, that $100 a month saved due to our frugal nature is no different than earning $100 a month extra after taxes on our take-home pay. That’s helpful in making ends meet around here, as I’m sure it would be in your own family. Who couldn’t use another $100 a month in their transaction account?
That’s frugality. We looked at our lives, made some changes to cut back on our spending on things relatively unimportant to us (like paying for warm or cold air that then escapes our house), and reaped the rewards from those changes.
The thing is, when people survey their lives and think about frugality, that’s usually not what they see. Instead, they see radical, painful, unwanted changes that don’t add up to much savings at all. They see endless effort dumped into a bottomless pit that merely saves them pennies. Who wants to bother with that?
However, those fears are entirely misplaced. Here are five fears that many people have when they hear the word “frugality” that leads them to reject a powerful personal finance tool outright.
Fear #1: I Will Have to Give Up All of This Stuff I Like
I like to think of myself as a frugal person. However, at the same time, I have a few hobbies that I care deeply about and I still spend money on those hobbies — probably too much. If being frugal meant completely giving up on things that I cared deeply about, I wouldn’t want to be frugal, either.
If you’re giving up stuff that you truly care about, then you’re not being frugal. You’re being cheap.
Frugality is about getting maximum value for your dollar. It’s not about self-deprivation, at least not regarding anything that holds true value in your life.
It is about cutting out the things that aren’t actually important to you. It is about seeking out less expensive ways to have the things that are important to you.
I think that many people get this impression of frugality because of the examples of frugality that they hear about. They hear about someone cutting some particular thing — say, a morning latte — and they immediately get uncomfortable because that thing that is getting cut is something that they really value. It’s a really joyful part of their day and cutting it seems miserable.
The thing is, you shouldn’t be cutting those things that really bring you joy. You should, however, always ask yourself what things actually are bringing you joy.
Another reason that people tend to have this fear about frugality is that, when you start talking about cutting things, people immediately reflect on the things they care about. The things that come to mind are the things you care about most, and cutting those things seems awfully miserable. People don’t usually think about things like setting their thermostat or airing up their car tyres when they think about frugality. They think about the things in their life that bring them joy and how joy would leave if they had to cut those things.
Again, if things bring you true joy, you shouldn’t cut them.
Fear #2: It’s a Lot of Extra Work
Many people have this impression that frugality is all about hand-washing Ziploc bags or spending hours cutting out coupons from the newspaper. They’re right — tactics like that are pretty labour intensive. They’re also tactics that I don’t bother with the vast majority of the time.
The best frugal tactics are the ones that don’t add extra work to your life and, surprisingly, there are thousands of such tactics.
For example, one thing I often do is make meals in advance for my family and freeze them. Let’s say we’re making chilli in the slow cooker. Instead of just making one pot, we’ll buy four times as much — enabling us to buy some ingredients in bulk, saving money — and make three extra batches, with the extra batches going in freezable containers. Those go in the freezer and then, later on, when we need a quick meal, we can just take out that freezer container, put the contents in the slow cooker, turn it on low and have about the easiest possible home-cooked meal there can be. That requires maybe a few minutes of extra effort while grocery shopping and a few minutes more while assembling the containers, but you get that time back and more each time you pull out a frozen meal from the freezer.
I can go on and on with examples like this. The next time you replace a light bulb, replace it with a long-lasting energy efficient one. When you go to the grocery store, make a quick meal plan and list first so that you don’t waste time (and money) wandering the aisles and buying stuff you don’t need just because you didn’t plan for it. Stick a weather strip on the bottom of a door where there’s a draft, which takes 15 minutes once and trims your electric bill for the rest of the time you live there.
Yes, there are frugal tactics that gobble time like there’s no tomorrow, but, honestly, those usually aren’t very good frugal tactics. The best ones are just replacements for things you’re already doing or one-time projects that save money thereafter by trimming your bills.
Fear #3: You Don’t Save Much Money Anyway
I like to make a powdered laundry soap out of a cup of borax, a cup of washing soda and a grated bar of soap. I just get a grater, grate up the bar of soap while watching a television show, and mix the soap powder with the borax and soda (you can even buy soap flakes if you don’t mind spending a little more). It takes about five minutes to grate the soap and about a minute to mix together the powders, stick a spoon in the jar and sit it in the laundry room. This mix ends up saving about $0.20 per load, and that jar ends up lasting for about 50 loads or so.
Many people would fixate on that $0.20 figure. Twenty cents? That’s not worth doing this! I’ll just buy a jug of laundry detergent.
The thing is, you repeat that $0.20 over and over and over for no additional effort. You repeat it fifty times and that’s $10. I made $10 — post tax, mind you — for maybe six minutes of effort, five of which I can do while watching television. If I buy soap flakes, the savings probably goes down to $6 or $7, but then the effort goes down to just a minute — mixing the powders, sticking a spoon in the jar and putting it in the laundry room.
If you’d give me $6 for spending a minute doing something in my kitchen, I’d do it constantly.
Some frugal tactics don’t save you much money — that’s true. However, many tactics save you a lot of money, especially for the work involved. This is especially true of things that repeat over time, like an energy improvement whose benefit is essentially repeated every month when you get an energy bill or a batch of homemade laundry soap that gets used fifty times.
Fear #4: I Don’t Want to Live Like a Weirdo!
When people hear “frugality”, they often jump to visions of extreme frugality in the form of things that you’ll see on reality shows. The TV show Extreme Cheapskates is a perfect example — it depicts people taking frugality to an absolute extreme. Again, what those people are doing isn’t really frugality. They’re being cheap, and those are two different things.
Frugality is about maximising the value of your dollar. It doesn’t mean that you just buy the least expensive thing. It doesn’t mean that you turn away friends and guests with your super cheapness. It doesn’t mean that you abandon basic courtesy for others or basic sanitation or health.
If you find a behaviour “weird” or socially uncomfortable, you shouldn’t be doing it. It is always useful to reflect on yourself and ask yourself why you think it’s weird, but that’s a different subject entirely. You shouldn’t do something self-damaging or societally disruptive in order to save a buck. That’s not frugal and it’s not healthy.
Fear #5: The Store Brand Is Terrible, Period
Many people assume that the name brand item is going to be better than the store brand item by default. They look at the two items, see the one they recognise (due to lots of marketing effort), and assume that it must be the good one because they have never heard of the store brand. This often builds into a sense that the store brand must actually not be very good at all.
That’s not true. Quite often, the store brand is exactly the same as the name brand version of the product. Many other times, the store brand is functionally identical to the name brand version of the product. Every once in a while, you will notice a difference, but it’s not too often. Last week, for instance, my children had a bowl of store brand cereal for breakfast — they get to have a breakfast of their choice on Fridays and they usually request that we get specific cereals from the store. That store brand cereal has an identical ingredient list as an equivalent branded cereal, at least through the first dozen or so ingredients, and I honestly can’t tell any difference. The cereal tastes the same as the name brand.
There is one difference, though. The store brand box is actually larger than the Golden Grahams box and the store brand is $1.50 cheaper, too. Try store brands. Give them all a fair shake. You’ll find that the vast majority is actually perfect for your needs.
The Biggest Fear Is Simply Fear of Change
Most of the immediate fears of frugality are silly ones. They’re drawn from reality television, name brand product marketing and fear of losing the most important things rather than the least important.
But why do we have these fears? It’s because, as humans, we’re creatures of habit. We fear change. We tend to amplify the reasons not to change our habits and minimise the reasons for changing our habits.
Don’t let that fear rule you. Start making changes, a step at a time. Stick with the smart ones, the ones that will clearly offer more benefits than drawbacks, and soon you’ll start really feeling the benefits of frugality in the form of more and more breathing room in your monthly budget.
Five Reasons People Fear Frugality — and Why Those Reasons Are Wrong [The Simple Dollar]