When I talk about frugality, I tend to focus on saving money, living simply, and making more. It’s a winning combination. By combining all three components, I knocked out nearly $40,000 of student loans, a car loan, and credit debt.
Unfortunately, I sometimes develop fatigue from concentrating on ways to prevent spending. It’s tiring to always keep watch for wasteful spending, and easier to simply swipe a card.
Thankfully, strong reasons such as reducing climate/carbon impact and disdain for contributing to major banks’ profits keep me motivated. I have a purpose, rationale, and philosophy undergirding everything I do. Without these, I’d fall off the wagon and spend crazily again.
Ironically, part of the reason I live this way is to spend money. I mean it. I save and save and save to spend money. Crazy, right?
The difference, now that I’m without debt, is that when I purchase something, there’s no interest against me. I’m following the age-old wisdom of the financially privileged/savvy to be liberated from banks’ powers to constrict and restrict.
Without loans and carried credit card balances, I’m free. And now, I can spend it the way I’d like. So after all the money gets deposited, invested, saved, what do I actually spend it on? What are all these efforts good for?
Since I’ve embraced frugality, three major spending areas continue to be of importance:
1. Travel
I’m currently in graduate school, which keeps me restrained from many travel opportunities. Frankly, that’s probably a good thing for my budget. But every now and then, I can save and purchase a flight — all interest free.
Most of my money actually gets spent to see family twice a year. Although, this fall break I’ll be going to Colombia!
When I fly, I look for the best deals possible by shopping various sites, check my frequent flyer mileage accounts, and book about 1.5 to 2 months out. I tend to decline most forms of trip and travel insurance, as my credit card provides those benefits for free. When I land in a new destination, I immediately try to find local shops and supermarkets to try and stock up on a few snacks/non-perishable foods. This planning allows me to experience the local cuisine and cultural foods, while managing the budgetary blast.
Travel is exceptionally important to me, but it has a powerful price tag. I don’t offer unsolicited advocacy for travel and don’t recommend that people travel to some faraway place. The fact is that travel remains relatively expensive, and it’s one luxury that I’ve been able to partake in with a positive net worth. It’s okay if you can’t travel today. Save for that opportunity.
2. Charity
Recently, I released my first book, Frugaling: Save more, live well, give generously. The title seemed to summarize everything about this site. The latter aspect – giving – is one of the most significant reasons for my frugality.
Throughout my life I’ve always given money to charity. Regardless of my current debt load, I’ve made efforts to give to others in time and donations. Today, charity holds great importance in my life, as I can give without going into debt. Every dollar to my favorite charities doesn’t represent a dollar to a bank, which will be placed under a horrific interest rate.
I don’t have a set percentage, amount, or expectation for giving each year. Rather, I find causes over the course of the year that mean a great deal and/or donate to what’s consistently moved me. Two organizations that I regularly donate to are Doctors without Borders and the Always Remember Never Surrender Endowment.
3. Professional opportunities
As a graduate student, I get paid a small stipend to work and study. Soon, I’ll be applying for internships (similar to a doctor’s residency) for counseling psychology. That process may cost $2000-3000, but is an essential part of the process to get a Ph.D. Afterwards, I’ll hopefully be hired at a site and begin to have more substantial paychecks.
Having my own savings allows me to pursue various options for employment without going into debt. Additionally, the process of becoming a licensed psychologist, which I desperately want, requires a formal examination. The test costs thousands of dollars – not to mention the study materials. It’s another area I’m saving and planning for.
From travel to charity to academic opportunities, these options became possible after I paid off the debt. Previously, I used loans as a method for travel and adventure and even giving. But I was simply digging into a deep, dark hole of debt. There was little hope or light before. All I can say is that good things come to those who can cut costs and pay off their debt fast.
A lot has changed during my journey to change my debt. What you’ll notice is that I’m not saving for a car, house, or large physical objects. I’m a product of the Great Recession, skeptical of big banks, and not ready to make such financial commitments. As such, I cannot envision taking on a mortgage, car loan, or anything else at this time. For now, I’m free from the trappings of debt and living well.
So what is your frugality good for and where do you ultimately spend money?
Your last point is one I don’t think is discussed in grad programs enough. It should be a major motivator for students saving during their programs, not just in an emergency fund. It’s not just applying for the jobs, either, but the whole moving process and getting set up in a new city. We recently went through this for both me and my husband, and even though many of our expenses were reimbursed by my husband’s employer, we still had to pay many thousands of dollars over the course of a few month, and the reimbursements were slow. I’m very glad we didn’t have to rely on credit cards!
You are on target that it is good to be frugal for a purpose. Our frugality over the years has been primarily for our children, so that we could be a major part of their formative years and that they have good educational opportunities.
What do you have against banks? I work for a small bank and I like to think when I go to work I am contributing to the community. We’re not all bad. 🙂
No, not ALL banks are bad and what you do DOES contribute to your community. In my opinion, one of the biggest mistakes made by the U.S. Government was bailing out the “Big Banks” because the money deposited by the people was fully insured by the FDIC up to the level designated at that time. Unfortunately, after that happened the reputations of all banks were tarnished because both big and small were labeled as “the big guys”. its a lot like including the little “Mom and Pop” shops when people talk about the greed of the major stores whose sole purpose it is to swallow up the small businesses. Small businesses offer something the big ones can’t and that is respect for you as a consumer and quality services and goods not made in China. So keep doing what you are and be thankful that we still have small businesses that put a value on the people they serve and not just what’s in their wallet!
Interesting! I don’t understand why you’re against banks (the “establishment”) yet don’t see a similar issue with the licensing of psychologists and the process which, as you state, costs thousands of dollars! This is another “establishment.” If you understand we need to license and regulate counselors, then perhaps you will also agree we need to license and regulate money! If you’re against the big profits of large banks, then perhaps a smaller bank or credit union would resonate?
Our frugality is currently aimed at one big debt, and that is our mortgage. We’re currently on track to pay off our 15-year mortgage in three years, with one of those years behind us already. After that, frugality will be for freedom to work less hours at day jobs, possibly travel (we’ve always dreamed of living abroad as a family for a few months or a year), save more than we are now into the kids’ college funds, and resume our former standard of giving away ten percent or more of our earnings.
It’s really important to have a purpose for your “frugaling” to stay on track. It’s hard to stay on track when the rest of the world is designed to derail you. Choosing to spend with intention and save way beyond the average is abnormal, and without the dedication that comes from working towards a greater purpose, you are not likely to succeed.
Our purpose comes from wanting to live a more fulfilling life. One of creativity, purpose and self-actualization. Much like you, travel and charity are driving forces behind our frugaling behaviour.
Hello!
Really enjoy your blog. Have one small issue with the below quotes not really matching up…
“Thankfully, strong reasons such as reducing climate/carbon impact”
and then…
“But every now and then, I can save and purchase a flight — all interest free.”
Although it’s a tough decision I do think we need to stop or vastly reduce our flying and travel without our own country/area almost exclusively 🙂
This was also the point I noticed.
Plus, regarding travel, it tends to be the “what’s in it for us” interest – perhaps some consideration of “what’s in it for them” (apart from supporting the global tourist industry) is in order?! Are we doing “abroad” a favour by going there…
Obviously, I know that travel broadens the horizons etc. etc. and all the positives – for us – but look how we’ve taken our expectations to other parts of the world and simply made them miserable and envious and spread our perhaps not-so-wonderful western culture 🙁
I definitely agree swissrose.
Hopefully people will move to more local holidays and experiences.
Regarding the comment on flying . I recieve your email s on a regular basis and visit your website, I think you have well beyond the average capitalist in the western world in reducing your carbon footprint . No car , you cycle or walk use public transport . As far as I am concerned 10 out of 10
I’m also frugal with my energy; I have chronic pain issues, and can only work for so long, or push myself so hard, without triggering an incident and needing a longer time to recover. So I not only pace myself, i chose carefully what I want to spend my energy on.
We al need to be frugal with out time; thre are only so many hours in a day and so many years that we have on this earth. Why waste that precious, finite resource on things that don’t make us happy, spark our passions, and move us closer to the outcomes we desire?
I think these are all great things to spend money on. We save and spend for those as well.
Another thing we spend more on than many people is high quality food. We buy pasture-raised meats and eggs, raw grass-fed dairy products, and organic produce. While I work hard to keep our food expenses as low as I can (http://everydaymindfulliving.com/budget-tip-know-your-prices/), I also know there is food available much cheaper than what we buy. That said, I see it as an investment in our health as well as in encouraging more ecologically-sound farming practices.
I love that your new book focuses on generosity. It is really an under-addressed topic in the personal finance sphere, despite historically being a habit of the wealthy (not of all wealthy people, of course). We also prioritize travel and giving as spending areas, and also are willing to spend extra on hosting.
Funny, but so true — saving just to save is the definition of a miser. Saving to spend is the definition of frugal. Travel is our top priority as well, now and in the future, though we hope that our future travel will be a lot slower than our current travel while working! We place a big priority on charitable giving as well, but also focus on making sure the dollars we do spend on goods are going to socially and environmentally responsible companies. Nothing makes us grumpier than feeling like we have no choice but to spend money at a store that pays its employees poorly, sources its products from factories that exploit workers and pollute heavily, and donates a share of its profits to regressive causes. Thus, no Walmart for us, or a slew of other bad guy corporations. Not that we’re perfect on this, but we’d much rather spend a little more to shop at Whole Foods, knowing that all of its employees have health insurance and the farmers are getting paid fairly for their high-quality products than to spend a little less at a store paying minimum wage and selling mostly unhealthy, overpackaged crap. That’s what our frugality is good for!