The downside to frugality

The one thing that the economic crisis has taught us all is that we sometimes have to do certain things to save money. One of the ways we have learned how to save is to adjust our lifestyle to embrace frugality. Today I will discuss a favorite topic of personal finance blogs around the globe: the debate on being frugal and how frugal one needs to be.

Over the last year, while I was a full-time student, I decided to go ultra frugal – spend only the cash that I have left in savings and not put anything on my credit card unless it was absolutely necessary. I did pretty well – only my tuition expenses and books ended up going on my credit card. My life was pretty dull, though. Every time an opportunity for being social or doing something different came along, I thought about it….

….and then did nothing….

The biggest downside to living within your means is not the most obvious things (I will discuss these in the next post). The biggest “a-ha” for me was how you can get very comfortable with the situation you are in. Having the budget perfectly balanced can stop you from stepping out of your comfort zone into other aspects of your life, which could prove more meaningful.  It pulls you into a “I can’t afford it” mindset, rather than the healthier “how can I afford it?” mindset. The end result is that you end up stuck in a rut.

You want to go do something fun to re-connect with friends and loved ones? “Sorry, I don’t have any money”.

This is similar to falling into a comfort zone when everything is going comfortably in a relationship. Ask any woman what she thinks about the time in a relationship when their man gets comfortable and prefers holding hands on the couch to a romantic walk at dusk.

Truth is, there is more to life than just money.

I know some get a real rush out of saving a couple of percent on their bill by shopping around. There is nothing wrong with this, although one must ask: “at what overall cost?” You will never find me making my own shampoo or home-made washing detergent. Why? I value my time too much. I’ll rather be doing something else that I enjoy. Maybe it comes down to preferences: I get a rush from depositing money in my savings account.

Yes, you can say that the best things in life are free. I remember fondly, during my time in the US, when a couple of us would grab some fishing rods, a six-pack of beer and go sit at the lake all day or the many mornings I would  walk onto the mountain, strap on my snowboard and spend all day on the slopes using my employer-supplied ski pass. These activities cost next-to-nothing and I can tell you, it was sheer *bliss*.

Sometimes it is necessary to spend some money, though, to do things that add some meaning to your life.

There is merit in the view of not paying too much for something than you have to. I want to argue, though, that frugality has it’s place in the overall picture and should not overshadow everything else. Frugality is good as a safety valve to ensure that you do not live the champagne lifestyle on a beer budget. It definitely should not be the be-all and end-all in life.

Let me close with a good example to illustrate my point. Let’s say you meet this gorgeous person that makes your heart skip a beat. You know for a fact that you cannot afford to date them, but go ahead and do it anyway (you know how it is….). I can promise you that everything in your life will be looking up, no matter how dire your situation. Your perspective is suddenly expanded from “I can’t afford it” to “How can I afford it?” – a transformation from a position of weakness to a position of strength. Isn’t this a much better mindset to face life’s difficulties with?

Where do you fall in the spectrum? Do you think that your decisions on life opportunities should be dependent on the state of your finances? I’m looking forward to hearing your thoughts.

Kevin Mzansi

Image by frankh