I used to think frugality was the same as being cheap. My mother shopped at garage sales and did not spend money on herself beyond necessities. She wasn’t into clothes, jewelry, or girly pampering. My dad, in stark contrast, was a spender. He bought whatever he wanted, which mostly meant man toys: electronics and gadgets and tools. He also liked to sail, so we had a sailboat and a slip at the yacht club. My mom made me earn what money she gave me. I got a weekly or monthly allowance, and in exchange, I had to empty the dishwasher, fold the clothes, and iron the sheets. My dad, on occasion, would slip me a $20 bill with no chores attached. Since my mom had tight control over the purse strings, she always knew when this happened and would make me pay my father back. Or deduct it from the following month’s allowance. Until recently, I thought my mother was a tightwad and my father was a deliciously free spirit who didn’t live in fear of turning into a bag man.
Since my father died (nearly a year and a half ago), my perspective on money has shifted dramatically. I realize now my father was a spendthrift, and were it not for my mother, my parents very well may have been broke when my father died. As it was, they didn’t have a whole hell of a lot to show for all his hard work building and running his business for over 30 years. (In retrospect, paying his two alcoholic sons a salary when they did next to nothing didn’t help matters, however uncharitable that may sound.) So here we are–my brothers are dead, my father is dead, and my mother has a small amount of savings and two modest houses on which to live for her remaining years. My dad’s business is still operating, albeit with a skeleton crew, so that might be a source of income for her once they dig out of the hole they’re in. Even so, I find myself worrying over my mother’s medical and living expenses, and whether she’ll outlive her savings. And if things get bad, whether she’ll outlive mine.
This is the context in which I’m currently living. Some people might call it reality. It’s a big change from my prior existence. For years, I’d spent money freely, like my dad. I had the idea I’d work until I keeled over (like my dad), and so money wasn’t ever going to be a problem. But when people around you start dropping like flies, you begin to see life through a different lens. I no longer relish the idea of working until I die. In fact, I don’t want to work at my current profession at all any more. So I spend a lot of time with this retirement calculator working out different scenarios as to how I can get the hell out of corporate America and not waste my life, my precious time on this earth, sitting in my office. If only I’d followed my mother’s example from the time I got my law degree, I might be in a position to walk away now.
But as my great grandmother would have said, “Don’t worry about it. Do something about it.”
So I am doing. And I’ve discovered it’s easy to live on a lot less if you consume mindfully. To that end, I’ve begun asking myself the following questions:
Question 1: Do I really need this item? Or do I simply want this item?
Let’s say I see this terrific pair of cowboy boots. They’re on sale and I’m desperate for them. They’re not trendy and they’ll last for years. Despite the multiple pairs of boots in my closet, I tell myself I need them. I then go to Question 2.
Question 2: How much do these boots really cost?
Let’s say the boots are $250. I plug that number into a calculator assuming an annual rate of return of 10% over the next 10 years. Those $250 boots become $648.44. If, after performing that calculation, I’m still able to delude myself into thinking I need the boots, that $648.44 isn’t really all that much, I proceed to Question 3.
Question 3: Are these boots worth my freedom?
Are these $648.44 boots worth the time I’ll spend earning the money to pay for them? This question has a bigger impact when I ask it sitting in my office. Are these boots worth the money I could instead put into my retirement account to escape my office? Are these boots worth my freedom?
Usually, Question 3 puts an end to the analysis, and I realize not only do I not need the boots, I no longer want them. These questions have not only changed the way I see boots, they’ve changed the way I see the world. For example, when I drive through my parking garage at my office each morning and evening, all those shiny new Lexus and Mercedes and Audis flash nothing more than “Stupid!” at me when I imagine their owners slaving away in their offices to pay for them. We’ve all heard the story of the multi-millionaire who drives an old beat-up truck, as if his driving that beat-up truck when he has millions is silly. I now understand that millionaire has his millions because he didn’t buy into consumerism. Instead of feeling deprived while driving his beat-up pickup, he feels smug.
The other day the sole came loose from the bottom of my old boots. My office manager suggested I take them to the shoe repair shop down the street. I asked her why in the world I would do that, when there was a tube of superglue in the supply room. She suggested I was taking things too far. Not only was I not buying new boots, like I would have done a year ago, I was being cheap about the manner of repair. I picked up the glue, slathered some on the inside of the sole, and pressed it firmly for a few minutes. Voila. Good as new.
Cheap, or frugal? I’ll ask her that question again when I walk out the door wearing those old boots on the day I retire.