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Frugality essentially means trying to live on less of the assigned allotment. It is the process of creating a conscious surplus from what you are given and rolling that surplus to your advantage down the line. Being frugal is one of the main pillars of wealth building because a dollar saved is worth more than a dollar earned (because of taxes!). Unfortunately, frugality is not the quintessential element and solution for people outside of the six-figure income club.
(Holla if you are though – nicely done, high 5!)
I write these for my Soapy and all the Soapys we have in our own lives.
You can read part of Soapy’s briefing here:
Soaps is one of my best friends. She is a remarkable person and a free-spirited, creative genius. My Soap is the daughter of a very affluent multi-millionaire family. Her childhood was what one would call pure opulence. Today, she is in her 30s with a drinking problem. She has terrible health and cannot hold down a job.
Read the previous posts in Soapy’s Odessey:
To be honest with you, when I started The Frugal Gene, I didn’t have a clear goal in mind what I wanted to blog about or who I wanted to blog for. I wanted to make a blog, so I made one, ta-dah! Here we are.
All I had in mind was simply to document our money journey and demonstrate how powerful simple living could accelerate wealth. I chose that because frugality is something that I know and resonate with from the deepest depth of my soul.
We’re Happier Frugal
I still believe living with frugality is an integral component of building wealth. Frugality gets a bad rap sometimes because there’s a common concept that frugal people are living on the edge of squalor to save a dollar. I’m an opponent against that concept because the accusation made is a very personal one. Not to mention, they are assuming that frugality – the act of requiring fewer resources – somehow leads to misery when it can be more freeing. That’s one thing that’s fundamentally wrong with our “debt is normal” culture, we’re naturally drawn to more as a pre-requisite for happiness.
If the norm is broke then heyyyy, it’s good to be a freak! Hubby and I ENJOY living frugally; it actually brought us closer as a couple.
I find frugality intensely amusing and stimulating. Perhaps because I didn’t know much else growing up and all of those cost-cutting behaviors eventually stuck to me. It’s one of the main reasons why I love going thrift store shopping, why I skip meal planning and go straight for the discount meat bins, and why we still live car-free in the rural suburbs on the city’s edge.
It took us about 2 years to maximize all the ways our family can save. Messing around with our budget sheet was like sculpting a piece of art. I don’t recall exactly what we gave up but whatever we gave up has not been missed yet. Check out our income and expense reports from all of 2017 where our budget experienced some creative trimming.
But – but – but what do you do when…
When Frugality Isn’t Worth It
First of all, not everyone enjoys living frugally like we do. Second of all, the result of frugality on a high income is drastically different than frugality on a low income. It’s more stressful and less effective.
Without addressing the income component, I’m only reporting on half of the wealth building puzzle and that makes me as useful as a splinter for a doorstop.
That’s when I realize why my blog is not a useful source for the people that I want to help. What have I been doing?
Like the many other realizations that came along in November, a lot of feelings of inadequacy as an effective blogger snuck up on me as well.
I have 2 friends (1 close, 1 casual) that have been going through their individual form of financial hardship. Hubby and I only knew that about one of them; I didn’t have a clue about the other friend. Their concerns were legitimate although they couldn’t be more different in terms of life stage. One is married and expecting, the other is woefully single. After looking over the basic math with the information available for both of them, I realized that cutting expenses and living frugally was not going to be enough for either of them, not by a long shot.
For once, I carried my once unwavering beliefs about frugality over to the doubtful side. According to the cold numbers I got, there is very little room to cut or save anymore without endangering someone’s safety for one friend and risking a huge rubber band snapback response for the other friend. The worst part was that even if they both successfully stuck to the very tight budget, living frugally is not enough to get them to #NetWorthGoals – nowhere close.
1) Inadequate Income
You can’t squeeze a gallon of orange juice from just one orange. It doesn’t matter how hard you squeeze that poor orange, it only has a few ounces of juice in it in the first place. You could save as much as you want but when the income ceiling is low – it’s hard to maximize the power of simple living without feeling miserable and stuck.
Living frugally on a low income can feel like the retelling of Sisyphus, a Greek man, doomed by Zeus to push a giant boulder up a hill just for the boulder to fall back down again.
Case in point, I knew this girl – Susan (alias!) – who graduated with her Master’s degree in informational sciences and eventually landed work as a librarian in Minnesota. The humble librarian position is not reputed for having high salaries or much prospects in terms of sector job growth. She enjoys her work though. But Susan is also carrying 6 years worth of student debt that has compounded from $45,000 to $60,000 since her graduation. She has expenses similar to mine when I was single. Right now, she is doing everything that could possibly be done to save money. That includes having two other roommates, limiting her budget on food, trading down her phone, using only public transportation, goose-egging fat zeros for entertainment and all other expenses.
If you think our monthly budget is lean, Susan’s budget is anorexic. Most of her categories are not even categories, they’re just earmarked zeros.
It’s still not enough and a low income mixed with extreme frugality will lead to eventual burnout, likely before enough progress is made. I’ve seen it lotsssss of times.
2) Running Negative
If you’re still running a negative or parking it in neutral, despite squeezing the last out of your budget for free cash, then the only thing left to do is to increase your income. In Susan’s case, frugality is not effective enough. She needs to increase her income. Increasing her income will knock off those student loans quicker than living on frugality since being frugal only keeps her afloat in the neutral standpoint. Susan’s take-home (after taxes!) will cover her living expenses and the interest rate on those school loans. She can’t always hit the principal of her student loans every month so she’s stuck on the debt treadmill until something gives (most likely her first, not the debt.)
People like Susan will not outlast an unforeseen event or economic recessions staying at the standstill point. They will likely be knocked back down to somewhere worst and erase all improvements made during unless there was progress in knocking the principal debt balance down consistently.
The assuring part about wealth building is that it compounds so anything better than running on neutral will come with the magnification of progress.
3) Living in Constant Misery
Living in constant misery is a BAD combo with frugality. Frugality is a lifestyle overhaul that should be permanent. Let’s not make this a yo-yo diet thing. Frugality works better when one is not living in guilt over every little decision about money. We’re not machines that could be programmed to be constantly frugal (especially if it’s a new concept for those who were never taught discipline). Everyone is allowed to have a frugal fail once in a while.
Why does frugality have to be self-punishing? What’s with the regret and guilt?
Frugality done wrong is when you’re constantly miserable. If you’re constantly miserable, it’s time to significantly dedicate time to increase income first before cutting so lean you end up snapping.
I have seen “the snap” first hand and it’s not pretty. A friend of mine was doing very well for a couple of months, then she suddenly brought a new laptop, new UGGs, a new phone. Like a rubber band, she snapped back and has since done more damage than before and she didn’t get very far in saving in the first place!
Do not beat yourself up for a one-time frugal fail. You are allowed to beat yourself up if you do it 2+ times 😜 and by the 3rd time you should kick your own beehive once and reevaluate what in the world is wrong with you twice.
What To Do
If frugality isn’t enough for the math to make sense, consider the following supplements to simple living:
Ask your employer
When I was in undergraduate, I had a work-study with my department that allowed extra shifts and “overtime” pay if I took the job of a person who happens to be absent that day. Not very many people at my school knew of this hack. I got on the good side of the receptionist when I gave her some mooncake during the autumn moon festival. She took a liking to me and she offered me multiple shifts.
My point is to ask your employer if there is room in the payroll for you to work more. It will show initiative, it will show how determined you are to get ahead, and how responsible you can be. It can also give you a general feel where the company is going.
If they said no to any additional shifts then you can easily gauge what your job means to them, where the company is going, where the company is at now, and if you should start looking for a new job!
Cohabitate with significant other
Cohabitating also reduces things like rent transportation utilities. There’s strength in numbers. I just wanted to add that cohabitating with the right significant other can be a very cost-effective method in the long-run – especially if the significant other is frugal or save money as well. You get to build upon each other like Hubby and I did when we started living together. We kept each other in line and in check. We are firm believers in cohabitating before marriage; you can learn a lot about that person.
Rent out a room
Airbnbs around me make an average of $3,000 and the $2,000 is the national average for Airbnbs. That figure is PER month. One can essentially increase their income by 50% just by renting out a room! Read up on me as a host – then if you’re like “yeah, making money is awesome” then use my link if you want to become a host.
Although it is not an option for some people, renting out a room is one of the easiest and most profitable options that you can do on the side to increase your income. Read our Airbnb tab above for the full run-down!
If you are a new traveler to Airbnb, you can get $40 in travel credit when you sign up here.
Hobbying + Gigs
Both in and after college, I was very, very good at sniffling out an extra dollar. After I met my husband and got married, I’ve become more or less accustomed to our life where income isn’t a big issue.
*Ahem, I became spoiled, pampered and lazy and stopped hustlin’*
I miss my hustler days. That was when I was the happiest. My crooked, cockroach DNA requires hardship to get going because I’m lazy.
I was using my smarts to wiggle out a few extra Benjamins at the end of the month. So far I have worked on Etsy, eBay, Rover, Airbnb, Mechanical Turk, Fiverr, Shopify (x2) and probably some others that I forgot / never made much from.
The best part about a side hustle is being able to take advantage of hobbies and reinvest the proceeds in yourself.
My favorite inspirational stories are those who founded small businesses by following their passion and growing that passion. I don’t care how many millions we’ll have in the bank when we’re old, if I don’t end up being one of those stories, I am going to throw the BIGGEST tantrum at my funeral.
Readers, what do you think a person should do when frugality isn’t enough? Is frugality worth it for those running at a standstill? Do you have any ongoing gigs that you are profiting from?
Top $ Resources That I Use:
Personal Capital: Sign up and use their net worth calculator for FREE. They are a free financial service platform that helps you analyze your portfolio, retirement, and financial health all on one simple & secure account.
Ibotta: I thought this app was overrated before trying it myself. The “any item” promos instantly save you money after scanning your grocery receipt. Ibotta also hosts promos and contests for your team to save more by working together. One of the guys on my Ibotta team list has earned and saved over $100,000 using Ibotta. You can get $10 if you sign up through my link.
BeFrugal: BeFrugal offer kickback money and referral savings to the user. Purchased a $50 sweater at a retailer that offers 10% back through their portal means you will receive $5 in savings payable from BeFrugal. They have over 5,000 retailers for shoppers including Amazon and eBay for relevant categories. Sign up and get $10 free when you join.