9 ms·

Frugality won’t make you rich, it makes it possible for you to get rich

75 points by joshuacc 15y ago

fleitz 15y ago
Frugality also makes you hungry. When you start your business after being frugal it makes your business frugal which makes it lean, which means that you'll raise (if necessary) on much better terms. Caesar: Let me have men about me that are fat, Sleek-headed men and such as sleep a-nights. Yond Cassius has a lean and hungry look, He thinks too much; such men are dangerous.
- LiveTheDream 15y ago
  I disagree with the general sentiment of the article, but this comment rings true. If you are aware of how to survive on a limited budget, that could give you the strength, knowledge, and confidence to power through a tough financial situation with your startup.
tomjen3 15y ago
That is nice in theory, but in practice it is a lot easier to double your income than to find that 25th hour a day. And much of what he suggest takes so much more time that you still couldn't make a business.
- ebiester 15y ago
  There are positive frugal actions and negative frugal actions. Negative actions include not spending as much money on the car, or the house, and skipping the starbucks. Negative actions are half the battle.
  - ghostshield11 15y ago
    Couldn't agree more. So many people buy things they don't need and then wonder where all their money went.
jdietrich 15y ago
"The only people who are obsessed with food are the anorexic and the morbidly obese" - Stephen Fry Likewise, it seems to me that misers and spendthrifts are both defined by their obsession with money. This sort of 'frugality' seems a particularly unpleasant fixation.
- MikeCapone 15y ago
  "This sort of 'frugality' seems a particularly unpleasant fixation." To some people it is, and to others it's actually fun and rewarding to do more with less and figure out new ways to save money for something more important in the long-term. If it's not for you, fine, but let's not generalize.
dev_jim 15y ago
Not really. What is going to help you get rich is to focus on increasing your top-line income. Doubling and tripling and more of your income is going to make whatever bottom line improvements described in this article irrelevant. Not to mention that you should be enjoying the money you make, not constantly worrying about whether you should brown bag it or eat $5 crappy street meat.
- hammock 15y ago
  I don't think your idea and the OP's are at odds. Abundant wealth growth comes from reinvestment of capital- the more capital you have the more you can invest. And cost-cutting, naturally constrained by current top-line revenue, increases earnings to be reinvested. Two sides of accounting, happening at the same time- cost and revenue.
  - cosmicman 15y ago
    I totally agree. Too many people act like they're mutually exclusive when they really aren't.
jellicle 15y ago
Ah, simple, worthless advice from the internet. Project not going well? Work harder. Not enough money? Save more. Not attractive enough? Be more attractive. I know I'm enlightened. Sigh. Median income in the U.S. is $40K. Which is about $110/day. Telling people to cut out some "small thing", a $5 daily expense, is telling them to magically save 5% of their total expenditures. Except he moves quickly to saving $250/month, which is now 10% of their total expenditures. Easy as pie! Just stop eating! Stop renting shelter! Stop purchasing clothes! And then you'll be free to have money to eat, rent shelter, and purchase clothes. Utter brilliance.
- usaar333 15y ago
  Generally cutting small things has too small of an impect. At least if you are young, childless, healthy, and making a software dev salary, there are really only three flexible items that matter: Rent (huge) Car Food (esp. if you eat out all the time) At least in expensive urban areas (Bay Area, NYC, etc), saving on rent is one of the easiest things for most of the software dev types to do. Dumping a car or getting a cheap used one helps a lot, and eating out can be exceptionally costly everyday. Once you flush those recurring costs down, you'll have plenty left over to save and/or splurge. Getting good deals on $50 electronic products really isn't worth your time; getting your rent lowered by $300 a month is.
  - lotharbot 15y ago
    > "cutting small things has too small of an impect" How small is "small" and how many things of that size are you cutting? What portion of your budget do those things make up? By what percentage could you increase your debt repayment/savings/investment plan by doing those things? Do the math; it might surprise you. Cutting a single meal out, for a single person, might save 5 or 10 bucks; cutting 20 meals out saves hundreds. Buying cheaper shampoo might save 2 bucks a month; buying cheaper household goods across the board saves hundreds. There are a number of ways the average person can save pretty good chunks of change -- thrift stores, coupons, generics, spending 3 minutes comparing prices on Amazon/Tiger Direct/Newegg, and so on. There's plenty room to splurge on the things you really care about if you save elsewhere. Save on the big things, and on the small things that add up, and you'll be way ahead.
lchengify 15y ago
I've seen a lot of people who are penny-wise pound-foolish, and I think that's actually a lot more damaging then not being frugal overall. Wasting $8/mo on Netflix doesn't matter that much, but having a habit of saying "screw it" and dropping $500 on a night out for no reason can be a much more damaging habit and much more cost-effective to stop. Also it's hard to write an article about smart money and not point out that some people simply do not know when to negotiate. You could spend all year depriving yourself of coffee or decent food to save $10,000, or you could spend 5 minutes remembering to make a counter offer on your salary or your next car purchase.
- deleted 15y ago
  [deleted]
- LiveTheDream 15y ago
  There was a deleted reply that said: > On the other hand, a daily habit of frugality makes it easier to not splurge. My response: that might not be true based on the recent information about decision fatigue[1]. [1] http://www.nytimes.com/2011/08/21/magazine/do-you-suffer-from-decision-fatigue.html?pagewanted=all http://www.nytimes.com/2011/08/21/magazine/do-you-suffer-fro...
  - michaeldhopkins 15y ago
    You're right but take it further. Willpower is a muscle. It gets fatigued on any particular day, but as it is exercised over time it becomes stronger. A daily practitioner of frugality is able to choose the right thing nearly effortlessly compared to someone just beginning to try to save money.
  - philwelch 15y ago
    From experience, that doesn't seem to be the case. If you worry about spending money at a certain level, you've defined the battle lines, and splurging desperately on the other side is utterly unthinkable. If $10 for a day's worth of food seems lavish to you, something like even setting foot in a decent restaurant becomes unthinkable. You start to lose the ability to even imagine splurging, because to you spending $15-20 on pizza is splurging. You understand from an intellectual perspective that you can easily spend over $100 at a good restaurant ordering dinner for two, but you don't consider it as a possibility for your own life.
bricestacey 15y ago
For those that wrote negative comments about this article, imagine for a minute you weren't such a hotshot and couldn't negotiate a $10,000 increase in salary at your minimum wage job as a ticket taker at the movie theater. Imagine you were one of those mechanical turk workers that you use in your shiny web application being paid next to nothing for your time. Then shut the hell up. This article isn't for you.
d_r 15y ago
Taken within the context of HN audience, this is generally poor advice. I'm not sure why it is being upvoted other than for the discussion itself. Don't scrounge those $9 Netflix dollars, and don't skip your coffee. Don't even spend countless hours lurking on SlickDeals to save twenty bucks here and there. Your time would much, much better spent if you work on increasing your income stream. Work harder and ship your darn iPhone/Android/web/whatever app.
- HeyLaughingBoy 15y ago
  This. It occurred to me a long time ago that as an absolute maximum, I couldn't reduce my expenses below $0 no matter what I do. But there is no preset ceiling on how much income I can have. Focus on increasing income, not cutting expenses.
- mdda 15y ago
  But it's also partly to do with the kinds of businesses that the HN crowd are setting up. If your business is a plain old-style cash-flow business, rather than having a fast-growth trajectory, it does much sense to optimize for the cents, since they turn into dollars because of the repetition. When first-mover advantage is important, don't let the small stuff get in the way of getting your product out ASAP.
gfaremil 15y ago
I'm not sure this is a smart advice. Of course, frugality is good thing. But it does not help you to become rich. There is a saying which says: Don't waste your time thinking about how to spend money, think about how to make money.
GeneralMaximus 15y ago
> Joe Average has $80,000 in student loan debt, $25,000 in credit card debt, and a $10,000 car loan. His total monthly debt payment is about $1,200 and he’s going to be making those payments for the next, say, ten years. Okay, I'll just go ahead and ask: why? Why are so many young people so heavily in debt? Is this an American thing? Or a Western thing in general? I see people like this in every online community. They barely make enough money to pay for housing, food and utilities, yet they use credit cards to purchase Xboxes, e-readers, smartphones, expensive computers, Netflix, Pandora/Last.fm/GrooveShark/whatever, iPods, tablets, games off Steam and FSM knows what else[1]. And then they go eat at the local fast-food chain because it's cheaper than eating real food. Sometimes I have serious doubts about the sanity of these people. Why are young people who don't make money being given credit cards? Why are they purchasing cars with money they don't have? I'm curious. This cultural phenomenon of spending more than you make is completely foreign to me. --- [1] List not limited to technology, of course.
- Woost 15y ago
  A big part of it (I think) is the student loan debt. 80,000 is huge, and can lead to just giving up and spiraling(I already owe 80k, what's another 2?) The car loan is really low, 10k is just about as cheap as you can get a new car for, and you'll never get a loan for a used car (so if you don't have 2-5k in savings to buy it used...you're SOL) Biking/walking is only really feasible in certain cities. And if you really want to know why young people are being given credit cards...it's because they don't make money! No, really. Not a conspiracy, but without a steady income they can only make the minimum payments for a while, which gives the card issuers more money than someone who has a job. Plus, they get to charge higher interest on it.
  - philwelch 15y ago
    and you'll never get a loan for a used car (so if you don't have 2-5k in savings to buy it used...you're SOL) This isn't true at all. You might not be able to get a car loan in the 2-5k range, but for a used car, especially a certified used car in the 10k range, those are almost always financed. One also makes a down payment on a car, so a 10K car loan may be for a car that's up to $15k. $15k is plenty for a decent used car.
aculver 15y ago
I've found the interest rate on outstanding debt to be a tremendous motivation to try and limit the number of frivolous things I buy. For example, our interest rate is 5.5% and we're not due to pay off our mortgage for 28 years. That means (more or less) that for every dollar I spend, I could have put that on my mortgage and saved 5.5% interest (compounded) over 28 years. Another way of looking at it is that I'm going to be paying 5.5% interest (tax-deductible) on anything I buy instead of putting the money in an extra payment on my mortgage. Given the terms of my mortgage, that makes an $500 iPad actually cost about $500 now and another $481.06 in interest over the next 28 years. My $2300 MacBook Pro will actually end up costing me $4512.88. The great thing about this approach is that it doesn't discourage me from buying nice things that are actually worth their value. The MacBook Pro for example produces incredible value, much more than I paid for it. However, knowing that for every $5 smoothie I buy now, I'll be paying another $4.81 for it in 28 years? I don't buy $5 smoothies 2-3 times a week anymore. Instead I go to Rita's when they're doing $1 kids cones on Monday and I go again on Wednesday for the $1 Italian Ice. Anyways, I found this so helpful in curbing frivolous spending that I created a small iPhone app to help folks do the calculation on the fly. http://whatll-it-cost.limelightapp.com/ http://whatll-it-cost.limelightapp.com/ . I'd be happy to give a promo code to anyone who thinks it'll be helpful. (After all, that $0.99 would actually be $1.94 after 28 years at 5.5%. :p)
gonepostal 15y ago
Author makes some good points but comes to an incorrect conclusion. It is very important to live within your means (income + some delta > expenses). I don't think anyone would disagree with that statement. There is some debate how big that delta should but that isn't the root of the issue. But then concluding being frutal will provide opportunities is false. All frugality enables is the ability for one to take advantage of opportunities that someone that is in a lesser financial situation could not.
- lotharbot 15y ago
  If you can't take advantage of it, it's not really an opportunity. Frugality turns "can't take advantage of" situations into actual opportunities.
danielrhodes 15y ago
How does frugality help you when you have no debt?
- dakr 15y ago
  There are three major and important reasons: for retirement, to provide a cushion, and to be able to capitalize on opportunity. If you save more now, you can retire earlier or maintain a higher quality of life. If you save enough to provide a nice cushion, you can ride out the bad times or worse (child sick, lose job, car falls apart...). Again, and perhaps most excitingly, being able to draw on a reserve lets you leverage opportunity. This is not about debt. It's about making sure you have the ability and the freedom to live beyond the day to day.
yason 15y ago
Real frugality starts when you've over with the fact that you don't really need most of that stuff you think you needed anyway. And, further, those things you do need you choose because you like them, not because what you think others will like--and thus, think they like you too. However, there's an interesting issue there. Having little income but consuming even less approaches a certain point--a point that is the same point as consuming a lot but yet having even more income. Either way, at this point you consume less than you earn. And this point happens to be the one that calls you to think what is it that you're here, in life, for. The "what would you do if you had a million dollars question", but just in reality. You don't need millions; to reach this point you just need more income than you spend. This calling is always there but you really start hearing it louder as soon as you don't have to be so busy merely making a living. And that is a dreadful point for it takes away all excuses you're used to, and makes you either a weasel or someone who will begins to think hard, really hard.
Hyena 15y ago
My effective income is $17,280, pre-tax. Even pared back to that, I've accumulated about $3,000 in savings over a year. It helps not to buy stuff. Like, at all. I have only 14 major physical possessions, including where I live and "clothing" and "tools" as single objects. I have much more software, most of it purchased at steep discounts through Steam or the App Store/Market. Spotify provides music. Surplus monthly income is roughly $500. It's been a pretty successful experiment. So saving at low incomes is very possible. What I think bears mention is that this is mostly possible because of my age and disposition; I'm young and I'm picky, so I neither pile up expenses nor have a burning desire to possess most things.
- Impossible 15y ago
  Do you still live at home with your parents? If not where do you live? I saved a ton of money back when I had a low income but very little expenses because I lived with my parents.
horseracer999 15y ago
Frugality is a very important virtue.
sylax 15y ago
I agree with this. Similar to another phrase about how opportunity comes to those who prepare for it.
whiteduck 15y ago
Not the first I've heard of this sort of thing but I think it bears repeating.
keyboarder 15y ago
It's surprising how much you can save when you really put your mind to it.
arcanebook 15y ago
Frugality is a skill and like any other skill you have to work at it to improve.
redrising1 15y ago
Great advice.
deathmatch 15y ago
This is an excellent article.
tealtank 15y ago
While frugality is important I think mental effort effort is too. You can only focus on so much and sometimes its better to have that attention focused elsewhere.
gildedsuit 15y ago
Frugality can be great just for the change in mindset. It make you realize that you're in control.

75 points by joshuacc 15y ago

Frugality also makes you hungry. When you start your business after being frugal it makes your business frugal which makes it lean, which means that you'll raise (if necessary) on much better terms. Caesar: Let me have men about me that are fat, Sleek-headed men and such as sleep a-nights. Yond Cassius has a lean and hungry look, He thinks too much; such men are dangerous.

LiveTheDream 15y ago
I disagree with the general sentiment of the article, but this comment rings true. If you are aware of how to survive on a limited budget, that could give you the strength, knowledge, and confidence to power through a tough financial situation with your startup.

tomjen3 15y ago

That is nice in theory, but in practice it is a lot easier to double your income than to find that 25th hour a day. And much of what he suggest takes so much more time that you still couldn't make a business.

ebiester 15y ago
There are positive frugal actions and negative frugal actions. Negative actions include not spending as much money on the car, or the house, and skipping the starbucks. Negative actions are half the battle.
- ghostshield11 15y ago
  Couldn't agree more. So many people buy things they don't need and then wonder where all their money went.

jdietrich 15y ago

"The only people who are obsessed with food are the anorexic and the morbidly obese" - Stephen Fry Likewise, it seems to me that misers and spendthrifts are both defined by their obsession with money. This sort of 'frugality' seems a particularly unpleasant fixation.

MikeCapone 15y ago
"This sort of 'frugality' seems a particularly unpleasant fixation." To some people it is, and to others it's actually fun and rewarding to do more with less and figure out new ways to save money for something more important in the long-term. If it's not for you, fine, but let's not generalize.

dev_jim 15y ago

Not really. What is going to help you get rich is to focus on increasing your top-line income. Doubling and tripling and more of your income is going to make whatever bottom line improvements described in this article irrelevant. Not to mention that you should be enjoying the money you make, not constantly worrying about whether you should brown bag it or eat $5 crappy street meat.

hammock 15y ago
I don't think your idea and the OP's are at odds. Abundant wealth growth comes from reinvestment of capital- the more capital you have the more you can invest. And cost-cutting, naturally constrained by current top-line revenue, increases earnings to be reinvested. Two sides of accounting, happening at the same time- cost and revenue.
- cosmicman 15y ago
  I totally agree. Too many people act like they're mutually exclusive when they really aren't.

jellicle 15y ago

Ah, simple, worthless advice from the internet. Project not going well? Work harder. Not enough money? Save more. Not attractive enough? Be more attractive. I know I'm enlightened. Sigh. Median income in the U.S. is $40K. Which is about $110/day. Telling people to cut out some "small thing", a $5 daily expense, is telling them to magically save 5% of their total expenditures. Except he moves quickly to saving $250/month, which is now 10% of their total expenditures. Easy as pie! Just stop eating! Stop renting shelter! Stop purchasing clothes! And then you'll be free to have money to eat, rent shelter, and purchase clothes. Utter brilliance.

usaar333 15y ago
Generally cutting small things has too small of an impect. At least if you are young, childless, healthy, and making a software dev salary, there are really only three flexible items that matter: Rent (huge) Car Food (esp. if you eat out all the time) At least in expensive urban areas (Bay Area, NYC, etc), saving on rent is one of the easiest things for most of the software dev types to do. Dumping a car or getting a cheap used one helps a lot, and eating out can be exceptionally costly everyday. Once you flush those recurring costs down, you'll have plenty left over to save and/or splurge. Getting good deals on $50 electronic products really isn't worth your time; getting your rent lowered by $300 a month is.
- lotharbot 15y ago
  > "cutting small things has too small of an impect" How small is "small" and how many things of that size are you cutting? What portion of your budget do those things make up? By what percentage could you increase your debt repayment/savings/investment plan by doing those things? Do the math; it might surprise you. Cutting a single meal out, for a single person, might save 5 or 10 bucks; cutting 20 meals out saves hundreds. Buying cheaper shampoo might save 2 bucks a month; buying cheaper household goods across the board saves hundreds. There are a number of ways the average person can save pretty good chunks of change -- thrift stores, coupons, generics, spending 3 minutes comparing prices on Amazon/Tiger Direct/Newegg, and so on. There's plenty room to splurge on the things you really care about if you save elsewhere. Save on the big things, and on the small things that add up, and you'll be way ahead.

lchengify 15y ago

I've seen a lot of people who are penny-wise pound-foolish, and I think that's actually a lot more damaging then not being frugal overall. Wasting $8/mo on Netflix doesn't matter that much, but having a habit of saying "screw it" and dropping $500 on a night out for no reason can be a much more damaging habit and much more cost-effective to stop. Also it's hard to write an article about smart money and not point out that some people simply do not know when to negotiate. You could spend all year depriving yourself of coffee or decent food to save $10,000, or you could spend 5 minutes remembering to make a counter offer on your salary or your next car purchase.

deleted 15y ago
[deleted]
LiveTheDream 15y ago
There was a deleted reply that said: > On the other hand, a daily habit of frugality makes it easier to not splurge. My response: that might not be true based on the recent information about decision fatigue[1]. [1] http://www.nytimes.com/2011/08/21/magazine/do-you-suffer-from-decision-fatigue.html?pagewanted=all http://www.nytimes.com/2011/08/21/magazine/do-you-suffer-fro...
- michaeldhopkins 15y ago
  You're right but take it further. Willpower is a muscle. It gets fatigued on any particular day, but as it is exercised over time it becomes stronger. A daily practitioner of frugality is able to choose the right thing nearly effortlessly compared to someone just beginning to try to save money.
- philwelch 15y ago
  From experience, that doesn't seem to be the case. If you worry about spending money at a certain level, you've defined the battle lines, and splurging desperately on the other side is utterly unthinkable. If $10 for a day's worth of food seems lavish to you, something like even setting foot in a decent restaurant becomes unthinkable. You start to lose the ability to even imagine splurging, because to you spending $15-20 on pizza is splurging. You understand from an intellectual perspective that you can easily spend over $100 at a good restaurant ordering dinner for two, but you don't consider it as a possibility for your own life.

bricestacey 15y ago

For those that wrote negative comments about this article, imagine for a minute you weren't such a hotshot and couldn't negotiate a $10,000 increase in salary at your minimum wage job as a ticket taker at the movie theater. Imagine you were one of those mechanical turk workers that you use in your shiny web application being paid next to nothing for your time. Then shut the hell up. This article isn't for you.

d_r 15y ago

Taken within the context of HN audience, this is generally poor advice. I'm not sure why it is being upvoted other than for the discussion itself. Don't scrounge those $9 Netflix dollars, and don't skip your coffee. Don't even spend countless hours lurking on SlickDeals to save twenty bucks here and there. Your time would much, much better spent if you work on increasing your income stream. Work harder and ship your darn iPhone/Android/web/whatever app.

HeyLaughingBoy 15y ago
This. It occurred to me a long time ago that as an absolute maximum, I couldn't reduce my expenses below $0 no matter what I do. But there is no preset ceiling on how much income I can have. Focus on increasing income, not cutting expenses.
mdda 15y ago
But it's also partly to do with the kinds of businesses that the HN crowd are setting up. If your business is a plain old-style cash-flow business, rather than having a fast-growth trajectory, it does much sense to optimize for the cents, since they turn into dollars because of the repetition. When first-mover advantage is important, don't let the small stuff get in the way of getting your product out ASAP.

gfaremil 15y ago

I'm not sure this is a smart advice. Of course, frugality is good thing. But it does not help you to become rich. There is a saying which says: Don't waste your time thinking about how to spend money, think about how to make money.

GeneralMaximus 15y ago

> Joe Average has $80,000 in student loan debt, $25,000 in credit card debt, and a $10,000 car loan. His total monthly debt payment is about $1,200 and he’s going to be making those payments for the next, say, ten years. Okay, I'll just go ahead and ask: why? Why are so many young people so heavily in debt? Is this an American thing? Or a Western thing in general? I see people like this in every online community. They barely make enough money to pay for housing, food and utilities, yet they use credit cards to purchase Xboxes, e-readers, smartphones, expensive computers, Netflix, Pandora/Last.fm/GrooveShark/whatever, iPods, tablets, games off Steam and FSM knows what else[1]. And then they go eat at the local fast-food chain because it's cheaper than eating real food. Sometimes I have serious doubts about the sanity of these people. Why are young people who don't make money being given credit cards? Why are they purchasing cars with money they don't have? I'm curious. This cultural phenomenon of spending more than you make is completely foreign to me. --- [1] List not limited to technology, of course.

Woost 15y ago
A big part of it (I think) is the student loan debt. 80,000 is huge, and can lead to just giving up and spiraling(I already owe 80k, what's another 2?) The car loan is really low, 10k is just about as cheap as you can get a new car for, and you'll never get a loan for a used car (so if you don't have 2-5k in savings to buy it used...you're SOL) Biking/walking is only really feasible in certain cities. And if you really want to know why young people are being given credit cards...it's because they don't make money! No, really. Not a conspiracy, but without a steady income they can only make the minimum payments for a while, which gives the card issuers more money than someone who has a job. Plus, they get to charge higher interest on it.
- philwelch 15y ago
  and you'll never get a loan for a used car (so if you don't have 2-5k in savings to buy it used...you're SOL) This isn't true at all. You might not be able to get a car loan in the 2-5k range, but for a used car, especially a certified used car in the 10k range, those are almost always financed. One also makes a down payment on a car, so a 10K car loan may be for a car that's up to $15k. $15k is plenty for a decent used car.

aculver 15y ago

I've found the interest rate on outstanding debt to be a tremendous motivation to try and limit the number of frivolous things I buy. For example, our interest rate is 5.5% and we're not due to pay off our mortgage for 28 years. That means (more or less) that for every dollar I spend, I could have put that on my mortgage and saved 5.5% interest (compounded) over 28 years. Another way of looking at it is that I'm going to be paying 5.5% interest (tax-deductible) on anything I buy instead of putting the money in an extra payment on my mortgage. Given the terms of my mortgage, that makes an $500 iPad actually cost about $500 now and another $481.06 in interest over the next 28 years. My $2300 MacBook Pro will actually end up costing me $4512.88. The great thing about this approach is that it doesn't discourage me from buying nice things that are actually worth their value. The MacBook Pro for example produces incredible value, much more than I paid for it. However, knowing that for every $5 smoothie I buy now, I'll be paying another $4.81 for it in 28 years? I don't buy $5 smoothies 2-3 times a week anymore. Instead I go to Rita's when they're doing $1 kids cones on Monday and I go again on Wednesday for the $1 Italian Ice. Anyways, I found this so helpful in curbing frivolous spending that I created a small iPhone app to help folks do the calculation on the fly. http://whatll-it-cost.limelightapp.com/ http://whatll-it-cost.limelightapp.com/ . I'd be happy to give a promo code to anyone who thinks it'll be helpful. (After all, that $0.99 would actually be $1.94 after 28 years at 5.5%. :p)

gonepostal 15y ago

Author makes some good points but comes to an incorrect conclusion. It is very important to live within your means (income + some delta > expenses). I don't think anyone would disagree with that statement. There is some debate how big that delta should but that isn't the root of the issue. But then concluding being frutal will provide opportunities is false. All frugality enables is the ability for one to take advantage of opportunities that someone that is in a lesser financial situation could not.

lotharbot 15y ago
If you can't take advantage of it, it's not really an opportunity. Frugality turns "can't take advantage of" situations into actual opportunities.

danielrhodes 15y ago

How does frugality help you when you have no debt?

dakr 15y ago
There are three major and important reasons: for retirement, to provide a cushion, and to be able to capitalize on opportunity. If you save more now, you can retire earlier or maintain a higher quality of life. If you save enough to provide a nice cushion, you can ride out the bad times or worse (child sick, lose job, car falls apart...). Again, and perhaps most excitingly, being able to draw on a reserve lets you leverage opportunity. This is not about debt. It's about making sure you have the ability and the freedom to live beyond the day to day.

yason 15y ago

Real frugality starts when you've over with the fact that you don't really need most of that stuff you think you needed anyway. And, further, those things you do need you choose because you like them, not because what you think others will like--and thus, think they like you too. However, there's an interesting issue there. Having little income but consuming even less approaches a certain point--a point that is the same point as consuming a lot but yet having even more income. Either way, at this point you consume less than you earn. And this point happens to be the one that calls you to think what is it that you're here, in life, for. The "what would you do if you had a million dollars question", but just in reality. You don't need millions; to reach this point you just need more income than you spend. This calling is always there but you really start hearing it louder as soon as you don't have to be so busy merely making a living. And that is a dreadful point for it takes away all excuses you're used to, and makes you either a weasel or someone who will begins to think hard, really hard.

Hyena 15y ago

My effective income is $17,280, pre-tax. Even pared back to that, I've accumulated about $3,000 in savings over a year. It helps not to buy stuff. Like, at all. I have only 14 major physical possessions, including where I live and "clothing" and "tools" as single objects. I have much more software, most of it purchased at steep discounts through Steam or the App Store/Market. Spotify provides music. Surplus monthly income is roughly $500. It's been a pretty successful experiment. So saving at low incomes is very possible. What I think bears mention is that this is mostly possible because of my age and disposition; I'm young and I'm picky, so I neither pile up expenses nor have a burning desire to possess most things.

Impossible 15y ago
Do you still live at home with your parents? If not where do you live? I saved a ton of money back when I had a low income but very little expenses because I lived with my parents.

horseracer999 15y ago

Frugality is a very important virtue.

sylax 15y ago

I agree with this. Similar to another phrase about how opportunity comes to those who prepare for it.

whiteduck 15y ago

Not the first I've heard of this sort of thing but I think it bears repeating.

keyboarder 15y ago

It's surprising how much you can save when you really put your mind to it.

arcanebook 15y ago

Frugality is a skill and like any other skill you have to work at it to improve.

redrising1 15y ago

Great advice.

deathmatch 15y ago

This is an excellent article.

tealtank 15y ago

While frugality is important I think mental effort effort is too. You can only focus on so much and sometimes its better to have that attention focused elsewhere.

gildedsuit 15y ago

Frugality can be great just for the change in mindset. It make you realize that you're in control.