Over the years people have called me cheap. Okay, perhaps they’re right about that but I prefer the categorization of frugal. From where I sit people who can be called cheap just don’t want to spend money…for whatever reason. But my perception of frugal people is different. I see frugal people as those who fail to spend…on some things…with a purpose. My purpose in not spending, where possible, is related to my desire to retire early and live well for the rest of my days. With that goal in mind I’m happy to pay for the necessities of life and to enjoy life where possible without joining the masses who worship at the altar of consumerism. Things, in particular, have never excited me too much. Things like a fine leather sectional sofa or a new car or an expensive watch. There are so many things people love to spend their money on these days. We used to think back in the 1990s that the Home Shopping Network (HSN) was a niche channel on cable that catered to shopping addicts. But today the near immediate satisfaction offered by the internet has revealed just how much mass there is in mass consumerism. Not being excited by things I have not joined in the orgy of internet spending, at least not to the level of most American adults. I enjoy my 25-year old IKEA couch. I enjoy my 15-year old dining table and chairs. I enjoy my 20-year old mattress, to name a few household items I’ve had for a stretch. Because when I think of those things, and others, in my apartment the thought of replacing them doesn’t move me as much as the thought of retiring early and living well in later years moves me.
Oh sure, I’ve been known to love technology in my day so I do have a MacBook Air, an iPad, and a Windows laptop. But when I buy these things I keep them for years, not trading them in every year or two when new versions come out. I confess I went a few early iPhone cycles upgrading every year. I quit that somewhere around iPhone 6 though. I now have a Samsung Android phone that’s 2.5 years old. I’m quite happy with it and don’t feel the need to have the latest and greatest phone with Artificial Intelligence (AI) features. When I do buy a new phone I usually get one that’s been out for at least year, has been discounted, and doesn’t include all the pro features that top of the line smartphones are known for. When I moved last, about 3 years ago, I was really wanting an updated 4K TV so I gave my ten year old 50-inch LCD TV to a maintenance guy at the apartment complex where I was moving from. When I arrived at my new home I bought a new 50-inch OLED 4K TV. I also decided I wanted to have really nice sound to enjoy those 4K action movies I love so I added a companion soundbar. So I’ve been known to splurge on things from time to time! But my spending on things like that are the exception rather than the rule. After I moved into a condo I purchased in late 2022 I had problems with the refrigerator. People I talked to about it urged me to get a new refrigerator. Now there’s no shortage of places where you can order a refrigerator online, have them bring it to your door and have them take the old one away. I looked at comparable new refrigerators and they all cost over $1,000. So I decided to call a repairman. The person I got diagnosed the problem as a circuit board issue. He happened to have a circuit board because it’s a common fault of my quite common refrigerator. For $300 the fridge has worked well for almost three years since. The way my mind works doing what I did a) reduced the waste of having to junk a refrigerator; and b) freed up $700 that I could save and invest for either retirement or something more critical I’ll need to spend on down the line. That’s my mindset…for better or worse.
Then there’s my car. Friends, co-workers and even perfect strangers marvel when I tell them I’m driving a 2007 Honda Civic that I’ve owned since it was new. It only has 130,000 miles on it, which comes to a paltry average mileage of 7,200 miles per year. I paid cash for that car and thus have not had a car payment in almost 19 years. Most people I know have purchased 3-5 cars since I’ve owned my Civic. Everyone I know who’s bought newer cars has always paid more for each car and most have taken out car loans. They seem to be happy paying interest to the car company and I know for sure that the car company was happy too. That doesn’t do it for me though. I like having people pay me interest. Not the other way around if I can help it. Many people view their car as a status symbol that shows the world who they are and what they have. I don’t feel that way. I view my car as a way to get around in reasonable comfort and safety. My Civic meets those needs. One other benefit of such a car is that it doesn’t attract unwanted attention, such as that of thieves. I like that. If it gets a little ding or scratch here and there I’m not worried. It already has a number of minor scars. The insurance rates are quite reasonable too. Yes, maintenance and repairs are required just like they are for every car. In general, the car has been reliable and when repairs are truly necessary I shop around for the best deal if I can. The best part is, as much as anything, my Civic has supported my path to wealth. I’ve basically invested a car payment every month (and car payments have risen a lot over 19 years) I’ve had that car and it has allowed my to pay off my condominium and then some. So while many people would categorize me as cheap for having stuck with the 2007 Civic as my daily driver I see things differently of course.
While I definitely accept the moniker of frugal I don’t really consider myself to be radically frugal. When I think of that I think of people who’ve downsized to a studio apartment (I live in a 2 bed, 2 bath), find furniture that’s been left at the side of the road and enjoy eating mostly canned meals. I haven’t forsaken vacations or weekend trips. In recent years I’ve been to places like London, Buenos Aires, Costa Rica, Japan, Italy, Nashville, Las Vegas and on a Caribbean cruise. In fact, travel and experiences are things I do enjoy spending money on. Still, to look at my everyday life I could see why people would think I’m on the very frugal end when it comes to how I spend money. That’s the ironic thing. The things that we typically judge by in terms of material things rarely tell the whole story. Where most people have come to enjoy things and being able to show off to the world I enjoy the peace of knowing I’m building a solid financial future and while I’m working towards that goal enjoying experiences. I suppose what I want to impress on you with this post is the power of frugality. People often want to know how they can achieve their dreams and here I’ve found that if your dream is to be financially wealthy that the discipline of frugality can be the key that unlocks that dream. I’ve combined frugality with a good income and the discipline to invest over the long term to pave my road to wealth. It’s true that a person can find their way to wealth if they have an appetite for spending, but it’s much harder to do so. You need to have more of everything, especially more income and more luck.
There are so many things that people can spend money on these days that satisfy an immediate need but do little for us in the long run. I remember watching as every Friday and Saturday night a neighbor across the street had dinner delivered for their family, likely ordered from one of those popular food delivery apps. I’ve tried those apps a couple of times. They’re expensive! A home cooked meal is a fraction of the cost and probably healthier too. But it takes time! The immediate need (saving time on shopping and dinner prep) is met but in the long run the budget takes a hit. We live in an age when so many deals are being presented to people and in some cases you can get in on a deal and have a product delivered the same day. Instant gratification is costly and the benefits typically don’t last very long. Delaying gratification can lead to great rewards. I can’t say what the right balance of satisfying yourself versus delaying satisfaction is. I seem to have a high threshold for delaying gratification. I think that someone can enjoy a bit more instant gratification than I usually do and still win with money in the long run. But sometimes the loosening of discipline can become a habit that gets out of control. There are many people who earn high incomes that become used to increasing their lifestyle with each increase in income. Which is why sometimes strong income earners can end up in the most precarious financial situations.
A reasonable level of frugality frees up money to be saved and invested for the long run. The major benefit of such an approach is a future where money related stress (a very common form of stress) will be limited. Enjoying a little less while knowing you have more financial resources is a peace and freedom all its own. So I think it’s worth it to ask yourself if you could be more frugal to the benefit of your long term financial health. Even if you’ve been doing reasonably well with money so far I bet you could be. One thing that I believe holds people back is being concerned of what other people will think. Forget what other people think. They’re not paying your bills and are not ensuring your financial future. Remember that when you get the urge to splurge on something that’s really a want rather than a need. Happy wealth building!
In The Midst Of A Journey 