Thanks to a down economy everyone is looking to improve their financial situation and frugality seems to be the magic pill to get you there.
But there’s a slight problem with focusing too much on frugality. And personally, the hype really bothers me.
Here’s why I think frugality is overrated.
Frugality Becomes an Obsession
After scoring your first really good deal you’re hooked. It may have started at the thrift store saving money on a pair of your favorite jeans but then, the addiction spreads.
Next thing you know you’ve got every grocery store’s ad scattered across your kitchen table, you’re clipping coupons like a mad person, and you’ve just bought all the ingredients to make your own soap, laundry detergent, cleaners, and toothpaste.
You’re scooping up all the best deals, because, hey that’s frugal people do, right? You have a stockpile full of diapers because one day you’ll have a baby and that baby will need diapers…. You start heading to the store the second it opens and with coupons in hand you clear the store shelves.
You become obsessed. And you might even become greedy.
All you can think about is saving money. You’re thrilled if you can shave $10 off of your grocery budget each week.
You eat, breath, and sleep saving money.
You Fail to See the Bigger Picture
You’re so caught up on saving a dollar here and a quarter there that you completely miss the big picture.
Your financial situation is what prompted you to learn more frugal ways but at the end of the day being frugal is only going to get you so far.
Saving $100 a month by cutting your costs is great, but it’s not life changing.
Yes, frugal habits are needed to build the financial life you want but by only focusing on saving money and not focusing on earning more money you’re missing a big part of the equation.
Contrary to what some personal finance gurus tell you skipping your morning coffee isn’t going to make you rich. And if you like coffee why skip it?!
You need to take a step back and look at the overall picture of your personal finances. Cut expenses where you can by doing things like finding cheaper car insurance, lowering or eliminating your cable package, moving to a cheaper area, or selling your car.
Once you put the core elements like these into place you won’t have to worry about saving fifty cents on toothpaste or buying diapers for your future children.
Moderation is the Key
I live a very low cost lifestyle and I am not a self-proclaimed frugalista. What I did was slash the costs of my large expenses like housing and transportation. I don’t waste a ton of money, but if I want a new outfit for a night out or a cup of coffee in the morning, I buy it.
My cleaners, shoes, and clothes come from the store shelves. My books come from Amazon. My groceries come from Kroger. And I live on less than $2,000 a month.
While you should maintain some level of frugality there’s really one thing you need to know about personal finance: spend less than you earn.
That doesn’t mean you have to clip coupons for hours, create a stockpile, never eat out, or make your own cleaners.
If being an extreme frugalist makes you happy, more power to you. BUT there are other ways you can (and should do to) improve your financial situation.
The Better Route
I understand that you may come across a time in your life where practicing extreme frugality is your only choice. But while you stretch your frugal muscles you need to be looking for other ways to improve your financial situation.
Once you get the basics financial practices down (like spending less than you earn and creating and working towards savings goals) your time is going to be much better spent on earning extra money than it is on saving money.
And earning extra money is a lot easier than it seems. With some hard work and creative thinking you can increase your income.
In the end saving money is limited and earning money is not, which is why frugality is only part of the equation.
Do you think frugality is overrated?