I tend to notice when my neighbors get a new vehicle and I am sure others do as well. I wonder if a couple months ago when I got solar panels installed if anyone noticed and what their reaction would have been. Would it have been something around how much money I spent, going green, or realizing it was a way to save money instead? It’s natural to see things changing around you. I don’t think I am cheap, I think I have become frugal. Though I have a long way to go, my life has changed a lot since I quit buying stuff without a purpose.
I try not to keep up with the Joneses. That being said, I somehow convinced myself to buy a new car earlier this year. I drove my previous one for over 12 years, so it’s not like a do the new car every 4-5 year carousel. I like the new car, but am still considering trading it in, taking a loss, and getting a cheaper version with more miles on it. It was not a smart long-term financial decision, but most car purchases aren’t. I hope to just drive it for 10+ years and not worry about it anymore. I have only put 5,700 miles on it in about 10 months, so at least I have that going for me.
I have a feeling most of my neighbors carry some combination of large car loans, student loans, and credit card debt. I know several of them have much higher mortgages than I do, since Zillow gives you the last sale price of houses around you. Some of them bought at the peak and I bought at the trough. Some of them may have noticed that as well and could resent me for it. I tend to think people create their own successes and failures, so I don’t judge them based on their purchases. I will say when I see the 3 car garages overflowing with stuff, I get worried that another foreclosure will affect my home’s value.
Somehow the American way became who can accumulate the most stuff. I was in my mid 30’s before I realized how much advertising, movies, and even people reinforce that cultural shift. One day I realized that having choices was more important to me than filling my 2,500 square foot house with more furniture and other crap. I have always been more of a minimalist when it comes to decorating, but sometimes those few pieces of furniture and are are still expensive. Our new rule is pretty much stick with what we have and only purchase functional items at garage sales or at a steep discount.
Frugal living vs being cheap. What changed?
I used to spend more money on clothes, dining out, and other stuff I didn’t really need. What changed? Well, I want to see my kids more than a few hours in the evening. I decided to start focusing on retiring early enough to coach their basketball teams and go watch their school plays. I don’t want to work 50-60 hours a week and miss them grow up. I don’t care if other people don’t like that we sometimes decline dinner invites or don’t want to go tot he outlet malls. We still have discretionary spending funds, but they have been reduce A LOT.
Before that realization, I would buy a new softball bat for $250 or order a bunch of new shirts from Banana Republic just because they sent me a 30% discount code. I still have that almost new softball bat 3 years later. It has been used about 3 times. Most of those shirts have been donated or sold at a garage sale. Did I get much enjoyment out of them? Not really. I finally realized I wasn’t thinking about my spending the way I should. The dollars in my checking account empower me now instead of just being available to spend. I constantly look for ways to increase our savings rate and stash more money away in retirement and investment accounts.
Needless to say, my Amazon Prime spending has decreased so much that we may drop it next year (especially since the price increase). The Costco membership is now used for bulk savings opportunities.
All spending is based on a conscious choice now instead of just buying it without going through several steps:
- Do we really need it? (most items never make it past the first question)
- Can we get it cheaper, on sale, or find a used version?
- Is it something we can just borrow?
- Are we buying something that will last or just a cheap thing that will only make it a year?
- Do we already own something that will work instead?
- If applicable, can we just fix the item we currently have?
Interestingly enough, frugal living sometimes involves spending more money on a purchase! Take a set of knives for example. You can buy the $30 set at Target, or buy a $100 set on Amazon that can be resharpened and last for many, many years. The Target set will get dull fast and probably break or rust within 2 years. I have always leaned towards buying higher quality, so that was not much of a change for me.
I would direct people to Early Retirement Extreme to see some information about how to escape being a consumer and embrace frugal living. His site is all about the content and he doesn’t hold back his opinions. It really makes you think about what you need and what you want long-term (not what you want right now). While I may not be as extreme as Jacob, I still think frugal living will help me be retired in less than 8 years!
What about you? Do you friends, co-workers, and neighbors focus more on appearances than retirement?