If most people were told they could “only” spend $16,000 per year then they would feel very deprived. Do I feel deprived while spending around these levels? Absolutely not!
I recently had my boss tell me that I need to take some vacation time and “go out to spend my hard-earned money”. He knows I’m frugal really only from my vehicle choice where my diminutive 11 year old Toyota Echo stands out amidst a sea of jacked up 3/4 ton diesel pickups and Beamers. The idea that one needs to spend a bunch of money to gain happiness and self-worth is very sad and a vicious cycle that will leave someone always chasing the fanciest car, biggest house, and newest electronic gadget constantly to validate their self-worth. So this is my counter to the concept that one needs to spend large amounts of cash to have any fun or quality of life.
My lifestyle at $16,000 annual spending still allows high quality of life and even extravagance. In the first half of this year, I embarked upon a seven day vacation to California beaches (Laguna, Newport, & Santa Monica) and even four days to the Disneyland amusement park. I have additional vacations planned to a beautiful lake where I’ll stay in a luxurious vacation rental condo, and camping trips to scenic water-front state parks.
I dine out less frequently than the average American who feasts on the salt, sugar, and fat-laden Mc-heart attack meals daily. But, I still consume copious amounts of Chipotle, meals at delicious local seafood spots, a wide assortment of ethnic foods (Cuban, Mexican, Thai, Japanese), and the occassional greasy bacon cheese burger or delectable pizza.
I drive entirely too much primarily because my work locale changes frequently. I am on pace to drive much more than the average American to the tune of a pace for 23,000 miles on the year. However, I have minimized the cost by purchasing a reliable, used vehicle that often hovers around 45 MPG.
Sure it might have manual windows and locks, but hey it was paid for in cash and has allowed me to limit my driving cost per mile to just $0.12 per mile thus far. This amount includes fuel, insurance, maintenance and depreciation and absolutely destroys the $0.56 personal mileage vehicle reimbursement established by the IRS.
By choosing the right vehicle, I’m able to drive at nearly 80% less cost per mile than average, negating the financial impact of my obscene driving distances. Even better, I know that after hitting FI I will realize large cuts in spending when my driving amounts are slashed.
I live in a comfortable duplex with someone I love. This place allows my girlfriend and I to walk 1/4 mile to a beautiful city park with a wonderful scenic Seattle cityscape view. The location positions us for a quick bike ride to trails meandering along the lovely Puget Sound, or rides to a park with hundreds of acres of both lush forests and great sandy beaches. It also allows us to easily travel into downtown Seattle to hit the museums, library, pro sporting event or if we’re feeling touristy, a trip into the Pike Place Market.
Sure, the place isn’t 3,000 SF and doesn’t have granite countertops, stainless steel appliances and all the other features spouted as “must-haves” from the HGTV shoppers. But, it does allow us to live in a great metropolitan area for just $325 apiece monthly.
No, I’m not vegetarian, calorie-counting or by any means a light consumer of groceries. I have a large frame, 6′-5″ and consume ample protein to maintain my 220 lbs. I manage to not blow my budget by picking up the staples at Costco (eggs, chicken breasts, salmon, tuna, cottage cheese, protein powder, brown rice, potatoes, quinoa, frozen fruits & veggies, oatmeal, almonds, and olive oil). Shopping here allows me to still enjoy a wide variety of tasty healthy meals since these items are often 33-50% cheaper than a comparable supermarket product, while maintaining the steep caloric requirements of my large frame through consistent weight-training sessions.
As far as entertainment this year, I have attended local pro and minor league baseball games, beer and wine tasting festivals, purchased a three day pass to a major music festival, four day pass to Disneyland, and local music acts. I don’t have hundreds of cable channels to peruse, but I have plenty of viewing options thanks to Netflix, Redbox, and the library to still catch shows like the Walking Dead, Friday Night Lights, and the Game of Thrones and many hit Blu-Ray movies. More often than not, I’d rather not spend my free hours confined to staring at a talking box though, and would rather spend them reading, excercising, or hiking and exploring the wilderness.
I have read dozens of great books this year covering personal finance, cooking, biographies, and fiction without spending a dime or even leaving the house as they were downloaded from the library directly to my device.
I get tired of hearing complaints that living frugally means sacrificing one’s enjoyment and quality of life. Deprivation may be relative, but my life is blessed while having spending levels most of my peers would scoff at. Meanwhile, my net worth snowball continues rolling downhill as I accumulate more assets to eventually provide me with great opportunity, freedom, and financial independence.
Great post!
I think the key to living frugally and well at the same time is to minimize the big costs – housing, transportation, and to a lesser degree food. I would argue that there are a lot of people out there that don’t live particularly extravagantly, but spend so much on their too-big house and too-nice car that there is little left for fun.
I would agree with you that living frugally can be really fun. It makes it a lot easier to go out and enjoy that baseball game or that night out at the restaurant when there are no worries about money any longer. I look forward to one day moving to a bigger city, and living right in the middle of it all. But the key to enjoying all that a great city offers is to not bury yourself in giant bills and the worries that come along with it.
Best wishes!
Excellent points DM! Focus on the big three spending categories and the rest will take care of itself. It is very freeing to know that so many fun activities can be had for little cost in the big cities. and to be able to spend on the occasional splurge since you’re not weighed down with the requisite American albatross house and car payments.
Absolutely excellent post! Really puts in perspective the lifestyle you can live in the Western world for not a lot of money…
Thanks Dom and yes it all is relative and a matter of perspective
I think a big part of being frugal is that your consciously spending your money where you want to rather than just whatever feels right. If you aren’t getting the utility out of whatever expense you have then it’s best to minimize it as much as possible or eliminate if you can. By spending consciously you can achieve higher savings rates and still live a higher quality of life because you’re getting full enjoyment out of the dollars that you do spend.
Well said JC. Too many people mindlessly squander their cash before realizing there’s nothing left over to play with after their frivolous spending. I have always been very frugal but tracking my monthly spending helps encourage conscious spending and has created a subsequent boost in my savings rate by forcing me to evaluate and determine the actual value or enrichment from that spending.
Not only is it not deprivation, it’s mind-expanding as you learn to explore other ways to enjoy the world. Sure, you can take it too far and never do anything, but reasonable frugality only adds to your life.
Absolutely Nick. It’s very satisfying to realize you don’t need every last creature comfort to live a great life and that so many of the greatest things in life don’t require currency.
Oh man, I get that all the time:
Me: Let’s just stay in the Confrot Suites. It all looks the same and we’re not here to stay in the hotel room.
Moron friend: We can do better. Let’s treat ourselves to the Marriott.
The funny thing is that I know that at the core, I’m a much happier person.
You would think frugality would be a highly sought after trait by employers for this very reason. Like you, I also try and be a good custodian of my company’s money and treat it as my own by keeping expenses down. But you rarely hear of personal finance related questions during job interviews.
Great post!!
I think Mr. 1500 hit on something essential in his comment above: a lot of this comes down to happiness. That’s the missing link in most people’s lives and they feel they “deserve” all these frills like fattening meals out, expensive cars, brand-name clothes, etc., etc.
People just aren’t happy in their lives…