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The Limits of Frugality

A couple weeks back, in a roundup, I referenced Jim Wang’s Devil’s advocate: Being frugal is foolish. I pointed out to Jim that one can’t always turn their next hour of labor into money, that for many, this was a quick way to save cash. His reply, “but the risk of focusing too much on frugality, especially after the low hanging fruit, is that you start chasing savings that are mere pennies when you could be earning dollars (or at least trying to improve your skills so you can earn more dollars)” left me thinking. And reconsidering some of my view.

Maybe what struck me most after I re-read his post was the concept that there’s no limit to one’s income, yet frugality not only has a limit, but it can reach a point of diminishing return as you find the easy savings first, and may wind up putting in incrementally more effort to save even less. I think for those with a frugal mindset, it’s tough to break some habits and maybe there’s no need to. When the TP, laundry soap, canned soup is on sale for half price, I’m always going to stuff a closet with it. Yet, if my income isn’t high enough for my lifestyle, there’s a more fundamental change needed, I either need to Stop Acting Rich, or improve my situation by increasing my skills and earning power.

If you are still looking to carve some money out of your budget, read Tom Drake’s 10 Money Saving Tips. A good read to help you find some places to save.


  • Money Funk March 26, 2010, 10:02 am

    I just recently came to Jim’s conclusion about 3 weeks ago. You Can only be frugal so much, that you are living as minimal as possible. But what joy is in that?

    I became glum thinking I make a decent wage, yet I am cutting everything from my life because i feel the need, and that there is no joy when you can’t ‘Frugal ‘ anymore (sounds like a new dance step).

    Well, a couple things happened… one, my good friend got cancer and two my spouse and I decided to separate our finances. It told me to wake up and enjoy life a bit (no excessively though) and relax a bit on the finances.

    So, instead of penny pinching everything I have …I still found a way to stay on my snowball schedule and have fun. To know the debt will still be paid down as planned. Now, I am enjoying ‘living my life’ too by spending a bit of money on my time with family and friends.

    Anyway, to get back on subject… it has also made me realize I need to work my finances up; make money to gain more money. Not only am I setting up a new website in a niche market, I am compiling and working on ways to come out with informational products and such. I am looking forward to my success’ bearing fruit! 🙂

  • Ken March 26, 2010, 2:43 pm

    I think it’s wise to have a plan for both: 1) Cut expenses; and 2) Create more income….you get out of debt a lot faster IMO by having more income to throw at the debt. There are limits to what you can cut back….but living simply is always a good practice..if that’s what you want.

  • Mizé March 27, 2010, 8:10 pm

    I agree that frugality has different levels and there´s a limit to what you we cut back. Personally, I feel more comfortable now that I´ve managed to create an emergency fund than if I had spent that money on a new car (and amount more debt too).
    I reached a point in my life in which I was totally broke and felt really bad about it. From that moment on, I started appreciating more other things than material goods, for example a walk in the park/country with my daughter, swimming, painting, listening to music, writing, etc. Now that my savings are growing I´d rather spend my free time doing the things I enjoy (and don´t need much money to do those things) than going to the mall shopping all kinds of stuff I don´t really need. I also used some of my free time to study. One of my objectives was to develop myself but I always had in mind finding a better paying job.
    Being more frugal than I was and having my PF under control helped me feeling much better. I´m saving money for a specific goal which includes a big change in my lifestyle. I think each person has to find it´s own frugality “balance”.
    Good weekend 🙂

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