Is it worth it? The whole thing – whether you want to call it economising, penny-pinching or living frugally – is it really worth it? Should you just focus on earning more money instead?
My name is Lee, and you’re listening to the Homely Economics podcast.
Well, let’s think about this:
Sometimes we like to think that there are two different kinds of people in the world – those who do this, or those who do that. Those who do a, or those who do b. You hear it a lot in received wisdom or quotations. It’s easy to remember and easy to repeat… but the thing is, it’s just not true.
So when we think about how people use this in regards to personal finance, either you’ll be a spender, or a saver. Someone who gets money, or someone who doesn’t. The problem is, we don’t have to stay the same as we are; we can and do change.
One form of change we’re used to is the rags to riches story, or the journey out of debt story. With personal finance storytelling, we get a lot of this kind of story, thanks in large part to survivor bias and just the fact that it’s got the feel good factor. But let’s remember that as human beings, we don’t tend to stick to the large character arc; within our general personality framework – and by that I mean the way we usually are – we wibble and wobble and go back and forth depending on how we feel and how the circumstances around us are.
Some of us may tend to wobble more than others, of course, but it’s rare that we’re laser-focused arrows always heading towards a pin-point objective.
So when it comes to money, it’s not so straightforward to say that there are two kinds of people – those who are good with money and those who aren’t. Our personal relationships with money can be complicated, and of course, they can change.
Consider the person who used to be good with money, but dropped the ball after their relationship went off the rails. Or the person who generally keeps on top of their finances, but still feels a rumbling in the pit of their stomach when the post comes through the letterbox, because the idea of bills is enough to give them anxiety. What about the person who never had money growing up, but feels the need to buy everything new to prove to themselves that they’re no longer poor.
They’re all moving through a journey with money, and not necessarily in one direction. And if you asked any of these people my original question – is it worth it? What would they say?
The person reeling from a breakup might not have the headspace for anything other than emotional recovery, but in time, they could very well change their mind. The one who naturally feels anxious about money might be using budgeting as a way to exercise control over their feelings, but they might find a different way to cope with them. The person who feels a compulsion to spend to prove their worth might always find it hard to cut back, but they may well come to a point in their life where they encounter something – maybe a project that they want to save up for, and making the effort to save becomes worth it to them because of having a specific reasoning behind it.
So if you ask anyone the question, is saving money worth it? or, is frugality worth it? or even further – is it worth picking up pennies? – you’ll get a different answer depending on what that person needs at the time.
Back in 2014, I felt the need to save every penny. I was really unhappy with the house we were living in, and it was having a negative effect on my frame of mind. My goal was to move, so I was picking up the pennies and doing the surveys for small change. Now? I don’t need it. That part of my life has passed, and we’ve achieved that goal.
Some of the things I did back then, like get paid to sites and surveys, are things that I no longer find to be worth it. For me. Some things that I did back then, like tracking expenses, are things that I still consider to be worth it.
Back to determining worth.
To figure out the worth of something, you have to weigh the reward you get from it against its cost. A lot of the time, what we’re talking about here has to do with time – doing things to save money or maybe make a bit of money. So we have to weigh up the time we’d spend against the reward we’re likely to receive.
Often that’s easy enough to work out, and it’s easy enough to justify ditching something when it doesn’t pay as much as you’d earn per hour at work. But it may be that what you’re expending isn’t just time, and the reward isn’t always financial.
You might be spending time, giving your attention, sacrificing your peace of mind, or maybe even your relationships, and you may find that what you get back doesn’t constitute a good return on investment.
This is where we need to be objective in our assessment, and to remember, it really isn’t all or nothing. You can pick and choose, and work out what’s worth it for you depending on where you are right now.
I believe that living a frugal lifestyle is worth it for different reasons, and not just for the pecuniary aspects.
Living frugally is a practice that reaffirms efficiency in your life. The process of examining your choices and going for the most cost-efficient option, especially in a society where for most of us it’s an option and not a necessity, can actually prime you to examine your choices in other aspects of your life.
For example, you may find yourself naturally moderating your consumption for the sake of the environment – that’s a worthwhile side effect. If you need to buy someone a gift, maybe you start to think more deeply about how you can make that gift more thoughtful and personalised – more worthwhile to the receiver. Or you may find yourself looking at the big picture – if you buy fewer things, will you be able to work fewer hours and spend more time on the things that make you happy?
Getting into the habit of asking these questions sets you up to find the options that are worth it for you. You’ve probably heard that if you look after the pennies then the pounds will look after themselves – well, it’s not magic; it works because you’re setting up a habit that will not only shape your bank balance, but shape your life.
But what if you feel as though you want to get into a frugal habit but you just don’t know if you can stick with it? How can you get the habit to stick? We’ll be talking about that in a future episode of the Homely Economics podcast.
Don’t forget to subscribe through your favourite podcast player, and if you’d like to read the transcription of this podcast you can find it at homelyeconomics.com/podcast-1. Feel free to leave your comments on the blog, and I’ll catch you next time!