The penny-pinching, side-hustling lifestyle slowly started creeping into mainstream American society around the same time Macklemore and Ryan Lewis’s anthem “Thrift Shop” dominated the airwaves.
Considering most millennials graduate college saddled with debt and facing a recession, it isn’t hard to figure out why frugality is in vogue.
While keeping up with the Jonses may be the simplest way to get into debt, keeping up with the Frugalistas could send you to the nut house.
Extreme frugality may not work for you
I consider myself a relatively frugal person.
I do price comparisons before making most purchases, even groceries. I budget my money, save a portion of all my income and always run a cost-benefit analysis before handing over my hard-earned cash.
While I’ve been known to forgo installing air conditioning in my New York City apartment and instead carry a fan around various rooms (and occasionally put a frozen water bottle to my sweaty neck), I don’t consider myself extreme.
Watching just one episode of TLC’s Extreme Cheapskates will show you just how far people will go to save money.
Here is a sampling of extreme cheapskate behaviors:
- Asking other restaurant patrons for their leftovers.
- Deliberately dressing like a homeless person to dumpster dive behind restaurants for food to serve dinner guests.
- Reusing cloth hand towels as toilet paper.
Don’t copy other people’s extreme tactics.
If A/C is a must-have for you, then my methods to save $300 to $500 each summer won’t work. But maybe you prefer to pinch pennies in another arena that I find abhorrent.
Regardless, you can probably spring for T.P., even if you’re digging out from under a mountain of debt.
Saving good, deprivation bad
This simple, but powerful advice can help set you on the right financial path. But paying yourself first doesn’t mean you need to stuff away the majority of your paycheck, leaving barely anything left for experiences in the present.
Some people prefer to live minimalist lives, saving huge chunks of their paychecks and retire young because they believe they won’t succumb to lifestyle inflation.
While these brave individuals can be admired, their lifestyle choices may not work for you.
Deprivation in your financial life is no different than in your physical life. Tweet this
Cutting sugar, carbs and other foods to drop weight often leads to binge eating and quick weight gain later. The same mentality applies to your money.
By socking it all away in savings (or debt repayment) and not allowing yourself to at least enjoy life a little bit, you’ll likely end up going on a harmful spending spree.
Before you head gung-ho towards throwing 20% into your 401(k), maxing out an IRA, and tucking another 40% of your paycheck into investments and savings, make sure you are being practical about how much you can actually save.
And don’t forget to live a little. You don’t want to spend your entire emergency fund in a fit of “I deserve this for saving so well”-induced craziness.
Figure out what works for you (not your frugal idol)
Role models are important, but that doesn’t mean we should emulate everything they do.
There is simply no one-size-fits-all solution to money. Tweet this
Your personality plays a huge role in your relationship with money, so what works for your financial idol may not work for you.
Perhaps you’re risk-adverse and wary about putting money in the stock market.
Or, you tend to overindulge with credit cards, so you shouldn’t try to churn cards for cheap travel.
Or, maybe you feel more comfortable having most of your financial life at one institution instead of always shopping around for the best deals.
The frugalistas next door, or who you read about on the web, may sound inspirational; after all, they did retire at 35 and raise their family on $30,000 per year, but does that lifestyle fit with what you want?
Perhaps you prefer to travel internationally, experience the occasional expensive restaurant or buy lattes at a coffee shop a few days a week.
Just because it works for the frugalistas, doesn’t mean it’s right for you.