Too Frugal

Thursday, July 25, 2013

I wrote recently about my mysterious obsession with Get Rich Slowly. As noted, one of the most interesting parts of J.D’s journey for me was when he decided that he was being “too frugal.”

At the time, the statement reminded me of one of my favorite articles in The Tightwad Gazette where Amy Dacyczyn (a.k.a. the Frugal Zealot, or FZ) addresses that very question: Is it possible to be too frugal?

I considered posting a comment on GRS about it, and I considered putting up my own blog post to explore it more fully, but in the end, I did neither.

Lazy.

Though I did write up some thoughts, because I felt like this was one of the more important concepts that Amy Dacyzyn talked about. And it feels like this is a common theme, for people who want to spend less money but aren’t able to get there, to look at people who do spend less money and say, “Well maybe that works for them but it just isn’t possible for me, it’s too much.” (It sounds like Mr. Money Mustache also gets his fair share of comments from people who think he is “too extreme” and that his approach is not workable for the average person.)

So it seems like this remains a question worth looking at: Can one be too frugal?

As FZ notes:

Most people think of frugality only in terms of saving money. Under that narrow definition, the answer would clearly be “Yes, you can be too frugal.” But if you look up frugal in the dictionary, you’ll find it isn’t defined specifically as having to do only with money. It’s defined as “not wasteful,” “economical,” or “thrifty.” These terms can apply to the expenditure of any resource.

All of us attempt to achieve the highest quality of life possible by balancing four basic resources: money, time, space, and personal energy. Because these resources are interconnected in an intricate way, frugality must encompass more than money; we must manage these four things in relationship to one another.

When people think of frugality run amok, they’re usually reflecting on situations when these resources are out of balance and this imbalance hurts the quality of life.

She goes on to discuss the example of “Thelma,” a person whose brother refers to as a real frugal person who doesn’t throw anything away, instead saving items she might later find a use for — bread bags, egg cartons, toilet paper tubes, etc.

Her brother says, “I just can’t live that way. I guess I’m not the tightwad type.”

FZ points out that the problem with Thelma is not her frugality, but that she is out of balance.

While Thelma may save on having to buy plastic bags, her excessive “pack ratting” will cause her to spend far more time and energy than she would otherwise: she needs a larger house (or even rented storage space) to keep everything; she can’t find things when she needs them and ends up spending time looking for them or having to going out at the last minute to buy new things; she doesn’t have space to work on projects that could save much more money than she saves from not buying plastic bags.

In contrast, “a shrewd, successful frugal person constantly monitors how much is stored, never keeping more than the maximum amount of bread bags or Styrofoam meat trays than might be needed at a given time.”

FZ notes that saving more than you need is not inherently a problem, if you have the capacity to manage it: “It’s possible someone like Thelma may save more things than she needs, but because she has a surplus of space, stacks of meat trays might not cause her to be out of balance. Although she might not be saving money by keeping them, neither is she wasting other resources.”

And FZ explains that this lack of balance is not limited to frugal people: “Spendthrifts are frequently out of balance. If Thelma’s brother doesn’t have time to enjoy his new bass boat because he has to work overtime (at a job he hates) to pay for it, then he is out of balance as well.”

Which brings us to what I think is the most important point of the article:

In observing both the frugal and nonfrugal, this lack of balance is usually indicated by an expression of unhappiness or frustration about some aspect of their lives — when they complain about not being able to pay bills but aren’t making adjustments in their habits. Regardless of their spending style, I don’t worry about people when they are their families are clearly happy with the choices they’ve made.

When someone labels me “too extreme,” it’s usually because they’ve flipped through my books, picked out some obscure idea that doesn’t work for them, and made a judgment about me. But I’ve never had a journalist come to my home, observe the obvious harmony, and write that I’m “too frugal.” Although their values might be different from mine, they can’t find fault with our choices.

Because we all have different amounts of money, time space, and personal energy and different ideas about what constitutes quality of life, we each must find our own frugal balance.

If you think about frugality as I do, asking the question “Can you be too frugal?” is like asking, “Can you be too happy?

(The article is called “The Frugal Balance” and begins on page 483 in The Complete Tightwad Gazette. It is worth a read.)

Personal Finance Thoughts, Part I

Monday, July 8, 2013

Okay so I’ve been thinking a lot about personal finance lately, and I want to write about it but I’m not sure what direction things should go in. Most of my thoughts on personal finance come from a combination of my own experience and jumping off points provided by personal finance blogs, where I go to read about other people’s experiences, as well as books I’ve read on the subject by personal finance “experts” like Dave Ramsey, Suze Orman, Clark Howard, etc.

So I guess I’ll just start with a few thoughts on the blog part.

For many years, I was moderately obsessed with the blog Get Rich Slowly. I do not know why, except that it was the first “personal finance” blog I became aware of (in 2007, when I was looking for information on Amy Dacyzyn) and just after finding the blog, I discovered the author’s personal blog, foldedspace, where he noted that he was making $4,000 a month in revenue on GRS.

I was like, What??? Who knew that was even possible?

So then I was reading both foldedspace and GRS to see whether this seemed like easy money or a lot of work (answer: a lot of work), and then I kind of got hooked on the upstairs/downstairs thing, the professional blog on the front end and the personal one on the back.

I thought it was interesting that the blogger, J. D. Roth, noted that one of the things that helped kickstart him on his life of debt-free living was the book Your Money or Your Life, which, likewise, was instrumental in helping me figure out a different path for my own life. However I’ve had limited success recommending that book to people, because when you first read it, it seems completely crazy and you’re much more likely to respond with, “Okay, maybe, but this is not workable for normal people,” than you are with, “Hey, this sounds great!”

So it was interesting for me to see someone who had more or less implemented the program, and then become very successful with it and gotten out of debt and started making more money than he’d ever imagined.

[Side note: I read the book in 1997 when I was living in DC, and one of my friends from work read it at the same time, and we were commenting on the fact that many of the stories in the book were about people who had followed the program, cut way back on their expenses, discovered something they loved to do that they were really good at, and then made a gazillion dollars doing that thing. My friend and I were laughing about that, we were like okay, if you’re going to make a gazillion dollars, what do you need to learn to live on nothing for? Couldn’t you just skip that step and head straight for the thing that makes you a gazillion dollars?]

One of the things I noted in my YMOYL experience was that at some point, the world feels like it flips. You suddenly can live on much less than most people and somehow you always have enough money. It starts to feel like you are living in a parallel universe.

J.D. had so many people following along, and I was looking forward to him getting to that point, hitting the parallel universe, and talking about it and people being able to see how it happened. It seemed like it might turn into something I could point people to instead of the book itself. Here’s what this person did and here’s how it turned out, and here’s where he wrote all about it.

But then it didn’t.

J.D. decided that he was being “too frugal” and started moving back towards living (for lack of a better term) like a normal person.

Later (much later) we learned that right around this time, he sold the blog for a large sum of money. So of course it felt like he was being too frugal, he now had a gazillion dollars at his disposal. And for the next few years, without letting his readers know he no longer needed to focus on getting rich slowly, since he had in fact gotten rich rather quickly, he emphasized “conscious spending” and repeated the mantra “do what works for you.”

It might have been more valuable to most people, but to me, it felt like a missed opportunity. Instead of showing people how to truly have a different life and what that looks like, he worked on helping people with average to above-average incomes choose bank accounts and life insurance policies. Woo hoo.

And now he’s moved on to a whole new life. And Get Rich Slowly is sill there, but it’s not the same. Though all of the old posts are archived there, so sometimes I still send people there for articles about specific topics.

Meanwhile, back in the blogosphere…

In 2011, Mr. Money Mustache came on to the scene, picking up well ahead of where J.D. left off, with a thoroughly YMOYL attitude, even though apparently he came to this approach on his own without actually reading the book.

In theory, I am in support of this.

I’m glad that someone is showing that it is possible to live happily for much less than most people think possible. I think MMM offers a great deal of useful information on his website. I think he has opened the eyes of many people to the possibility of a different kind of life. I like his anti-consumerist stance and that he focuses on the environmental impact of choices like living close to work and biking instead of driving. I like his emphasis on creative problem-solving and continuous questioning to make sure you are always learning, always improving, always thinking about your choices.

All good.

That being said, I cannot read that blog. The tone too often completely gets under my skin, despite the fact that I fully agree with almost everything he says.

I think the persona he has created is smug and arrogant. I think he is unwilling or unable to consider the possibility that his approach to life is not necessarily going to work for everyone, for all kinds of different reasons. Or that many people would not actually even want to live like that. And that not everyone has the capacity to make $50,000 to $100,000 a year and buy and fix up multiple houses, which they can then rent out to provide ongoing cashflow.

He has structured his comments section so that people who don’t agree with his articles or have any questions or concerns about them get a smackdown and are called a complainypants. (Which, by the way, is a great word.) This results in a large group of like-minded individuals gathering together to discuss how great and smart they are, and how much better they are than the rest of the world, who do not live in the enlightened manner in which they live and do not share their badassity. And anyone who doesn’t agree with them is a whiny complainypants. (Or possibly a jealous hater, though I think that term might be reserved for the anti-Pioneer Woman crowd. I might be getting my blog animosity people mixed up here.)

This is not enjoyable for me to read. This is cult-like. It feels like Rush Limbaugh with his dittoheads. (And it actually reminds me of a quote I read a long time ago, I think from Dave Barry, about being frightened by large groups of like-minded people. But I can’t remember the whole quote, and am unable to dig it up, so will just have to leave it at that.)

So…

What is the point of all this?

I don’t know.

Following Your Money or Your Life allows you to live in a parallel universe where everything is cheaper and you always have enough money.

J.D. Roth of Get Rich Slowly was heading in that direction but turned around. But it doesn’t matter because he made a gazillion dollars when he sold his blog so now he always has enough money anyways, who cares.

Mr. Money Mustache does live in the parallel universe but he’s so flipping annoying about it that I can’t read about it. But other people seem to like it. Maybe you would too.

That’s all I know about personal finance blogging.

One of my friends said to me the other day, “You need to write more about personal finance.” I’m guessing this wasn’t what she had in mind.

Sorry, sometimes what comes out is what comes out. But I do have more to say on the subject in general, so we’ll just have to wait and see what comes out next time around. Maybe it will be better.

Happy Birthday!

Wednesday, July 3, 2013

I got a message today from my friend Bryant telling me that today, July 3, is the anniversary of M.F.K. Fisher’s birth.

In my quick search for references, I found a great post from 2012 on the L.A. Weekly’s food blog commemorating the occasion, and suggesting that everyone celebrate over the next few weeks (M.F.K. Fisher reportedly celebrated her birthday from the beginning of July through Bastille Day, July 14 — yet another reason to like her, she knew how to celebrate) by reading An Alphabet for Gourmets. Two weeks to read twenty-seven short essays.

I can think of no better idea than that.

Happy birthday, M.F.K. Fisher.