As much as I am adamant on pursuing an early retirement, I’m just going to come out and say it. Frugality kind of sucks. Not many people want to spend their life living in a shithole miles away from their work, with no car, no cable, a cheap ass cell phone plan, no eating out, no alcohol, worn out clothing, no vacations, no entertainment, no pets, no gym membership, no social activities and the countless other discretionary expenses the average person tends to incur, that they could feasibly give up if they were to fully embrace frugalism.
Not Everyone Loves Simplicity
To embrace a totally frugal lifestyle you essentially have to love simplicity and give up all fathomable luxuries on the way. Not only is this not fun, for most people it is totally unsustainable. Sure, they could probably do it short-term, and if they’re extremely good at it they might even reach financial freedom by doing it. But then what? They’re unlikely to suddenly become content with lifelong frugalism, so they’ll probably want to have a buffer in their retirement to live a more comfortable remainder of their life.
Some people are just made for frugalism and they don’t really have to try. People like Mr. Money Mustache, who some people claim would sooner cut out his own appendix than pay for surgery, find frugalism to be the natural way of life. But what about people who don’t love frugalism and have to put in a lot of effort to reduce their cost of living?
It’s Not About Being Cheap, It’s About Prioritizing & Savviness
Money Miser never expects unrelenting frugalism in his or anybody else’s life, and each person can decide their own values when it comes to creating a strategy for reaching financial freedom. The key prioritizing what you do care about whilst remaining savvy, and minimizing or obliterating expenses for anything you don’t really care for. If you live a lifestyle without any restraint of any kind, in other words the opposite of frugalism, then sure you will likely struggle to ever reach financial freedom unless you are earning a ton of money. But if you tactically allocate money to some areas of life, whilst restraining in others, you are destined to increase your savings rate without wanting to jump off a bridge along the way.
Money Miser Examples
I’m not ashamed to admit the Money Miser household budgets $600 per month for vacations as this is something we both enjoy and would be pretty miserable without. We feel getting away from time to time allows us to re-energize ourselves, providing us with the necessary focus when we return to working. Whilst we do like to take vacations regularly, we also try to remain relatively frugal in the process, but we also don’t penny pinch our way out of activities and sightseeing just so we can keep our expenses down. We stay in average hotel’s/AirBNB’s for the most part, we balance international trips with local trips to ensure we can go on a few vacations each year without breaking the bank, and we also take advantage of credit card hacking to keep the cost of flights down.
Another area we care about is convenient living quarters. Mrs. Miser and I both work in downtown Vancouver, so we are happy to pay the premium for an apartment in the heart of the city, allowing us both to walk to work in 10 minutes. We are undoubtedly paying more than we would outside of the city, even though we are paying nothing to commute, but reducing our commute from potentially an hour each way to just 10 minutes is saving us a total of 3.33 hours between us in commuting each day. This time is precious to us as it allows us more time to spend together at home, unwind and re-energize. It also allows us to be more productive at home should we decide to pursue other ventures. Obviously I like to write this blog and Mrs. Miser likes to freelance from time to time. This additional free time gives us the time to pursue hobbies and any other ventures more easily than if we lived an hour away from work. Even though we choose to live downtown, we also live in the cheaper (older) area of the city in a smaller one bedroom apartment. We could easily afford a two bedroom apartment in a modern building, but that would probably cost at least another $1,000 per month that we don’t need to spend.
Since we live and work in Downtown, many people might look at our spending and immediately start to question the fact we own a car. Keeping this thing running costs us money in gas, insurance, parking and maintenance. We could feasibly give up the car and move to a car sharing service like Car2Go or ZipCar. While this would certainly be cheaper, it is also very limiting. First of all we have a dog and many of these services don’t allow a dog in the car. We also like to go on long road trips and day trips, which is difficult in car sharing services. Finally, we visit Mrs. Miser’s family frequently, whom live a fair drive away with no car sharing services in their area. Overall, we value having our own vehicle and would probably find life much more inconvenient if we didn’t have it.
Are you seeing a trend here? Clearly, we value time and convenience.
Where We Make Up For It
Clearly then, the Money Miser household isn’t 100% frugal as we undoubtedly incur discretionary expenses in areas of our lives we care for. This is made possible by spending little or nothing in other areas. For example:
- Alcohol – Neither of us care for alcohol at all so we spend nothing on going to bars or casual drinking at home or with friends.
- Clothing/Shoes – I spend very little on clothing. In fact, I can’t remember the last time I bought any clothes other than office shirts. Mrs. Miser doesn’t spend much either, so little in fact we don’t have a budget for clothing at all.
- Eating Out – We probably go to a restaurant less than once per month, making most of our food at home on a pretty frugal grocery budget.
- Hair, Beauty, Make Up – I don’t care for any of this and spend nothing on it, ever. For a lady, Mrs. Miser is pretty frugal in this area too, spending very little on it.
- Gas/Commuting – As much as we own a vehicle, it doesn’t cost us all that much as we don’t drive it too often. We spend nothing on commuting, so the higher cost of living in downtown is partly offset by that.
- Groceries – Obviously we buy food, but not very much and it’s all cheaper plant based food with practically no meat. Our monthly grocery cost is quite a bit cheaper than most.
- Gym – Neither of us goes to the gym, I prefer outdoor activities and Mrs. Miser does yoga from home to get her fill.
- Cable – We don’t have it as we don’t watch TV. We use Mrs. Miser’s parents Netflix account to get our fill of TV and movies.
- Coffee – Neither of us drink coffee or really tea, other than that provided by employers. We never go to Starbucks or anything similar.
- Activities – We don’t spend much money on activities or hobbies. Mrs. Miser is a bit of a homebody whilst I prefer free or cheap activities like hiking, writing, gaming (usually funded by receiving games as gifts), going to the beach or walking our pup.
As you can see, the few luxuries we like to afford ourselves are more than offset by the vast amount of cutting back in areas of our life we simply don’t care about. It’s not hard for us to cut back in these areas of our life and we don’t really notice any “pain” in doing so.
Sustainability & Flexibility
The great thing about prioritizing spending is that it is completely sustainable in the long-term. We would be more than happy to continue with our current way of living for the rest of our lives. We don’t feel like we are missing out with the expenses we don’t incur, and the areas we do care about like vacations are being covered by the reduced spending in other areas. If we reach financial freedom by 40 I don’t suspect a lot would change for us in terms of expenses, we might shuffle some things around a little, but for the most part I don’t envisage any drastic changes.
Another great thing is how flexible this all is. If we suddenly decide we want to join a gym as we are on a health drive, we can just add it to our prioritized list and potentially review other costs we could reduce to offset the additional expense. On a bigger scale, if we do reach financial freedom we can easily leave the downtown core, reduce our rent significantly, and re-allocate that expense to another area we might want to indulge in.
Overall, the Money Miser household will never be a 100% frugal home. We want to reach financial freedom on our own terms without hating the process. As such, I will try not to be judgmental as to other people’s spending, as long as it looks like they are properly prioritizing in the manner described in this post.