The subtitle of a recent AARP article is “Spending is out, simplicity’s in. Why the nation’s thriftiest people are also the happiest”. This isn’t a story about middle class people giving up lattes and recreational shopping.
Instead the subjects are members of Jeff Yeager’s miser advisor network surveyed when he wrote The Cheapskate Next Door . These are people who won’t run the dishwasher because they perceive it wastes water and electricity and wear clothes until they’re threadbare.
I don’t aspire to live like them but think there’s something to learn from the superfrugal.
1. Develop income streams. One man owns a duplex and rents out the second unit. Two of the couples in the article started and work at their own businesses.
2. Delay Purchases. One couple won’t buy a major purchase until they’ve saved twice as much as it costs. I don’t use the same tactic but do have a delay tactic for online shopping by just adding to my Amazon wish list (and closing the broswer).
3. Eat at Home. Not only does preparing food at home save money but the family ends up spending more time together preparing and eating the meals.
4. Giving. A common trait in Yeager’s research was giving to others. The average amount of income donated among the group was 5% compared to less than 3% nationally. Bruce Jackson said, “the more careful I am with my money, the more I can pass on to someone who really needs it”.
I didn’t see where it was proven that these people are happier than others, but does it really matter? They’re happy with their lifestyle and can teach us all to be better stewards of our money and time.
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I think frugal people can be happier and it’s for two reasons that immediately come to mind. First, they’re not stressed chasing after material items. I think many of us (myself included) sometimes get caught up in ‘wanting’. If you’re frugal, I think you have less of that, and so you can focus your life on more positive things. The second is that, chances are, frugal people, by virtue of spending less, are able to save more. Therefore, you could make an argument that they have a more comfortable cushion by a combination of more assets and less debt. Not having this stress certainly makes it easier to live a more content and happy life.
Good point Money Beagle. I didn’t think about the stress that debt and dealing with a lot posessions brings.
There is something to be said for people who really, really watch their money. I always think if I could just bring home a few more dollars then I could….. My money just flies out the window.
Jeff @ Deliver Away Debt wrote about tracking spending this past week. It’s something I try to do periodically just to make sure I’m not getting too loose with spending.
I think point #3 above about saving money by eating at home has a lot of merit. I have an uncle that says it is impossible for him to save. When we sat down to talk about his finances, I found out that he and his wife eat out about 4 times a week. If you assume that they spend just $20 each time, that equates to $80 per week, $320 per month, and almost $4000 per year. Crazy how it can add up!
I can’t imagine spending that much on eating out but then would think nothing of spending the same amount on vacation. I guess it’s a matter of priorities.
I agree 100%. I was raised with the idea of spending more money on vacations to adventurous destinations instead of buying expensive cars, etc. To each his/her own I suppose…
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Barb, I closed comments so people wouldn’t continue to enter. Sorry!
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There does appear to be an association between frugality and happiness. Statistically, frugal people are much more likely to become financially independent than spendthrifts. Financial independence can certainly remove a lot of stress over money and give more time doing things that make you happy (museums, spending time with family and friend, etc.). Also, frugal people aren’t constantly trying to keep up with the Joneses, which is often a losing battle. Usually, the Joneses are just over-leveraged but sometimes they really do have more money. Thirdly, giving certainly plays a huge role to my happiness. To know that I am responsible enough to be in a position to support others or causes that I believe in does bring me joy. I also agree that I don’t aspire to be a cheapskate. I don’t think frugality and cheapness are the same at all.
Shawn, I never thought about how stressful it could be trying to keep up with the Joneses (or whoever has a higher living standard).
I did think though that some of these people carry it to such an extreme that it would add stress for me. As you say, there is a difference between being frugal and being cheap and I think some of these went over that line.
My financial circumstances changed significantly with a career change and a divorce but I think I’ve come to appreciate the purchases I make more because I’ve been more mindful about them. I rarely buy on impulse which gives me the chance to think about how much I need/want the item and to also comparison shop so if I decide to buy it, I know I’m paying a reasonable price.
Mandy, good point about mindfulness. I think anything we do is going to be more rewarding if it is done with full attention and thoughtfulness.
To hold me back, I usually decide to wait at least 24 hours before making discretionary purchases. Most of the time I don’t come back and buy.
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