Have We Lost the Meaning of Frugality?

My grandparents were married during the Great Depression.  Their first few years together were spent in severe economic hardship, and the financial lessons they learned during that lean time never left them.

They always had one car.

My grandma wore the same dresses throughout my entire lifetime.  I think when she died, the dresses she still had were 25 to 30 years old.

They rarely went out to eat, opting instead to cook and eat simple meals at home.

My grandparents did without much of the time, and they were very frugal with their money.

They sold their house when they retired and lived in a 5th wheel trailer parked on the side of our lot, less than 20 steps from our house.  All of their possessions fit in that space, and their home was not cluttered.

Has the Meaning of Frugality Changed?

Lost FrugalityNow, the definition of frugal seems to be different.  People try hard to avoid doing without.

Now, the motto seems to be, “Why do without?”  Live like the Jones’ without spending money like the Jones’.

Whereas my grandparents carefully bought the groceries they needed, today’s frugal zealots clip coupons and create grocery storage spaces out of their garages.  They have rows and rows of processed food that they got for pennies on the dollar thanks to couponing.

Many mom bloggers are making their fortune sharing all the hottest deals available.  Kids’ winter jackets for $8!  Hurry, buy women’s turtlenecks for $4 today only!  Get your child the Barbie princess house for the low price of $48!

Hurry!  Hurry!  Buy the bargain.

Do You Really Need That Bargain?

So many consumers are on the hunt for a good deal that they never stop to ask themselves if they really need the item that is on sale.

What if your child doesn’t need the Barbie princess house?  What if your child has so many toys, she whines about picking them up and doesn’t take care of the ones she has?  Is that Barbie princess house still a good deal?

What if you never even thought about buying that item until you saw it on sale and didn’t want to miss out on the savings?

We’re Overwhelmed with Stuff

Look back at pictures of people’s homes from 60 or 70 years ago.  Their homes were not cluttered.  They were much more like the minimalists’ homes of today.

Now, we take advantage of so many “deals” that our homes are overflowing.  Here in Arizona where there are no basements, and therefore no built in storage, most people can’t park in their garages because they’re stuffed with possessions.

We don’t need all of this stuff.

Snagging a great deal on something we don’t need isn’t a deal.

It’s a waste of money.

Keep More Money in Your Pocket This Holiday Season

We’re entering into the busiest shopping season of the year.  There will be good deals, plenty of them.  You’ll likely be tempted to buy as many gifts for yourself as you will for others.  After all, the prices are so good.

But ask yourself one simple question–Do I need it?  If you don’t, it’s not a deal.

Do you think the definition of frugality has changed?  Do you or someone you know struggle with buying more than you need because something is on sale?

 

 

Embrace Abundance

One of the tried and true tenets of personal finance is frugality.  Either through penny-pinching and coupon clipping, or through budgets and smart spending, we aim for frugality.  We choose to be frugal either because we have high debt loads, or because we just want to save some money for some purchase.  In short, we’re reacting to a scarcity of some resource.  In the case of many of us, that resource is money.

Through scarcity, we find ways to make things last longer, or stretch further.  We find ways to turn something raw into something useful.  Scarcity teaches us to be resourceful; not only with our money, but with our food, clothing, supplies, our whole world.

But, sometimes we get so wrapped up in embracing scarcity, and learning from it, that we forget to also embrace abundance.

Sometimes we even participate in abundance, but only because we claim that it’s the scarcity that’s the driving force of our action.

Today, forget scarcity.  Embrace abundance.

Embrace Abundance

Just for a day.  (I think you’ll want to do so longer, but start with a day.)

Embrace the things in your life that are abundant.  Embrace the abundant opportunity to partake in the last few days of summer and go to the park.  Swing.  Play with your children.  Or pets.  Or friends.

Embrace the abundant knowledge that you have in your local library, or through services like PaperbackSwap, and learn something.  Read a book. (Even if it’s strictly for pleasure.)

Embrace the abundant joy that you have in your family.  Break out the cards or board games and enjoy their company.  (Even the one who’s ruthless at Monopoly. )

It doesn’t matter what it is.  But, don’t do it because of scarcity.  Do it because there’s something in abundance that you want to enjoy.

What do you have in your life that is overflowing in abundance?  Embrace it.

Change Your Thoughts, Change Your Wealth

Guaranteed to Keep You Poor

There is way too much propaganda on the web about living frugally, cutting expenses and eliminating debt. I think this movement came about because of so many people using credit irresponsibly and inappropriately borrowing against home equity to finance vacations. While it is moronic to have credit card debt, the right type of debt is good and can make you wealthier. This is one of the ways that rich people think differently than poor people. The mathematics of earning and spending are this:  you can only reduce your expenses to zero but earnings are unlimited.  Therefore, where should one logically place their attention to have more money: to reducing expenses or maximizing income? To have your focus on expense-minimization is guaranteed to keep you poor.

Stupid Spending vs. Frugal Living

That is not to say you should not eliminate stupid spending, credit card debt, the BMW you cannot currently afford, etc. But to have a “frugal living” goal as the answer to your money shortage is not the answer.

“But it is so much easier to minimize expenses than earn more,” you say. That is true but only if you think that way. When people who think like poor people want to buy something, they may think, “I can’t afford that.” A person who thinks like a rich person says to himself, “How can I afford that?”

How Rich People Think

Change Your Wealth

Note that I am defining rich people and poor people not by how much money they have but by how they think. You may recall the movie, “The Pursuit of Happiness” with Will Smith. In that movie, he was poor most of the time. But he always thought like a rich person. He had reduced his expenses to near zero by living in a subway station and realized that was not the optimal way to live. His principle rich person thought, that anything is possible, was a prerequisite for him to become a person with a lot of money. You may know that this story is not just a nice happy-ending story – it is the true account of Christopher Gardner .

How you think is not your fault. You have inherited the scarcity mentality of our culture . Most people in our culture think like poor people and that’s why the top few percent have a concentration of the wealth. Notice that there is a bank on every corner in our country and each has a window sign urging you to come in and borrow their money at a very low interest rate. Yet, you think that money is scarce and hard to come by. Do you recall the dot-com boom? That era was earmarked by companies with no products, no revenues and no earnings easily able to raise billions of dollars from investors who couldn’t wait to get in line. So you see, money is abundant and only in your thoughts is it scarce.

There are plenty of formulas for making money. But before you implement the tactics, make a decision to think like a rich person. Once you do, reality appears very differently and the probability of success is greatly increased. Here’s how to think like a rich person.

Train Yourself to Think Like a Rich Person

Your Current Thought Your New Thought
I can’t afford that Let me write down three ways I would be able to afford that
I need to spend less I need to earn more
My job does not pay me enough In what ways can I be of value to people who will pay me?
I don’t have the education/smarts/motivation to be rich How can I offer my talents, skills and action to others in a way they will find valuable?
If I had a few more dollars, I would buy….. When I get together xx dollars, I will INVEST in….
Money is scarce Money is abundant and flows to my commitment and action to provide what others value
Times are tough/the economy is weak Never have there been so many people on earth free of poverty—people have more desires and more ability to pay for them than ever before

 

Editor’s Note: I think that more of us need to change the way that we think about money, and, by extension, we can decide to change your wealth.  It means having more than a budget for saving, but a budget for spending and investing that sets you up to increase your earnings and wealth.  You can change your wealth.