What’s The Point of Frugal Living?June 8, 2015
I recently had a difficult conversation with a close friend about this blog and the idea of living a frugal lifestyle. As I explained to him the ins and outs of our views on money – ideas such as early retirement and life decisions such as sharing one vehicle to save money – he made the conclusion that our lifestyle was a bit too radical, and the views put forth by this blog could possibly fail to connect with others.
This was a tough pill to swallow. I respect this friend, so I began to think critically about the ideas that Mrs. Saver and I have cultivated over the past two years. Is a frugal lifestyle really worth it? What’s the point of saving our money?
Over the next few days, Mrs. Saver and I examined our lifestyle and developed an even stronger understanding of why we live the way we live. Here’s what we learned from each other.
Redefining What’s Important
Many of our views on money were shaped by our non-financial life experiences.
Soon after we married, we left behind our comfortable home town and moved away from everyone we knew. It was a decision that we both felt strongly about, as it was based on some advice we received from a trusted mentor – moving away from home is one of the best decisions you can make early in your marriage. Whether you agree with that advice or not, we took it to heart.
Once we arrived in our new town, we learned to better rely on just each other, and our marriage grew stronger as a result. Soon, we developed new friendships and discovered fresh new experiences.
It didn’t take long to see a harmful pattern developing amongst our new community of friendships. We watched as people grew stifled by the pressures of pre-existing lifelong friendships and local family members. Young adults were struggling to find their identity while balancing the friendships of those that they went to high school with, along with the looming influence of family members living just down the road.
This is when we realized the value in the advice we’d been given about moving away. Rather than being driven by the pressures of friends and family, we were fortunate enough to be able to examine these situation objectively. Making friends was done intentionally, and we could avoid the social pressures that we felt were harmful to our well being.
This experience allowed us to truly examine the people and experiences that we felt were important to us. Keeping up with the Joneses never felt necessary since we didn’t pursue any Jones-like friendships.
This brings us back to the money lesson that we drew from this experience. When you are no longer driven by the pressures that society lays on you, such as the pressure to buy a house, own a fancy car, and have children before you’re (financially) ready, you’re free to examine what truly matters to you. Are all of your friends buying houses and cars? There’s freedom in knowing that you simply do not have to keep up. It’s not a race.
Outside pressures can be a terribly destructive force in your financial life. Whether it’s a physical move or just an emotional transition, do yourself a favor and get away from these pressures. You’ll be happier for it in the end.
It’s Not Just About Us
Another major aspect of why we pursue a frugal lifestyle is that we know that the financial decisions we make today will have a dramatic impact on our future selves, as well as the family we might create one day.
Take our car situation as an example. We’ve made the decision to share one vehicle between us. This is something that’s been greatly misunderstood among our friends and family, but it’s become a decision that we’re very happy with. We’ve come to view an additional vehicle as an incredible luxury that we simply don’t need at this point in our lives.
Buying a car would involve around $5,000 or more of our net worth, along with ongoing maintenance costs. If we were to instead invest this $5,000 in index funds, along with a monthly contribution of $500 (which represents below-average costs of owning a car!), we’d have around $250,000 after 20 years (based on the average 6% yearly return).
What could you do with this $250,000 to improve your future or the future of those you care about? What kind of education could this money provide for a child? How could you help your community with this money?
When it comes to you and your money, it’s not just about you. Spending money today removes your ability to make a better decision with it later down the road.
The Pursuit of Financial Freedom
Most importantly, our dream is to save and invest enough of our money to achieve financial independence. This doesn’t mean we’ll retire in the traditional sense. Financial independence ensures that you no longer have to work for money.
When you no longer have to work for money, it means that you can pursue hobbies and ventures that might not pay enough to cover the bills. Your time could be safely spent volunteering, enjoying more time with friends and family, or finally getting around to writing that novel you’ve been meaning to start. What would you do if Monday morning didn’t begin with an alarm clock?
Also, for us, it means that we could retire from the rat race in order to have time to build a family. If we did have children in the future, it would mean both of us having the privilege of taking time away from work to spend with our kids. Monday mornings would bring the excitement of a week of quality family time, rather than the stresses of sending kids away to be raised at expensive day care. This is sadly a very common reality for many parents, and one that’s very important for us to avoid if possible.
For Mrs. Saver and I, living a frugal lifestyle has become a worthy goal; one that brings far-reaching benefits beyond the vain outlook of “getting rich” or trying to be trendy. It brings with it the means to examine what’s truly important in our lives and stay the course towards a life that matches closely to our values – family, non-materialism, and positive social change.
Is living a frugal lifestyle worth it? You bet your ass it is.