In the spirit of Financial Literacy Month, I wanted to tackle the epic battle of– frugality vs. earning more. A classic debate that will never end. Instead of fully re-opening it for today, I wanted to look at some of the negatives of frugality.
As you get acquainted with the world of personal finance, I don’t want you guys to think that you have to cut every single cost in your life just to save money. That’s not what Studenomics is about. Personal finance gets really boring once you start dwelling about finding more and more ways to cut back on your spending. I’d rather find a level of spending, where my savings are increasing and I’m happy overall with my lifestyle.
Let’s jump into the flip side of the coin and look at some of the negatives of frugality:
You don’t pay for value.
I could be wrong but it seems like frugality advice often entails cutting costs on every area of life. I’m a firm believer of saving money but I’m a stronger believer of paying for value. I like to pay more for good stuff. I won’t wear cheap cologne. I won’t wear second-hand clothes. I won’t cut my own hair. I won’t cut my gym membership to work out at home. These are all things I absolutely refuse to do simply because I believe in paying for value. In all of the scenarios mentioned above I see value, hence I’m willing to pay. If you find value in a purchase, go for it.
You don’t value your time properly.
I don’t mind squeezing in the odd frugal activity or money saving task into my schedule. I do have a limit though. There’s only so much time I’m willing to dedicate to cutting costs. I personally feel that my time could be better spent on something that I enjoy and could improve my financial situation (working on this blog for example).
There’s only so many costs you can cut.
You’ll eventually get to the point where you’ve cut every cost possible. What’s next? One summer I drastically cut all of my costs. It wasn’t long before I realized that I simply needed to earn more money if I wanted to improve my financial standing. Some of you might disagree with this. I do stress that frugality is an important tool for financial independence. It just isn’t the only tool.
Many people take it to the extreme.
Once you see your bank account hitting record numbers, a sense of euphoria will hit. Unfortunately, the next step usually involves figuring out how to become a complete miser. Many of us that follow the financial media and read about personal finance, have experienced this. It’s really easy to pass the point of being financially conscious and reach the infamous stage of pinching pennies. You need to watch out for this stage. You don’t want to get to the point that you save money by not getting your parents a Christmas gift. You also don’t want to reach the point where the quality of your life begins to deteriorate because you’re always worried about saving money.
Do you guys agree with my flip side of the coin for frugality tips? Or perhaps are you a major proponent of frugality no matter what?