The word frugality has always sounded a bit negative to me, so I prefer not to use it. I noticed that Vicki Robin, author of Your Money or Your Life, agrees with me. She was bemoaning the fact that the English language doesn’t have a good word for maximizing the joy of every dollar. I agree that the goal is to live at peak fulfilment. This means you have enough and maximize joy with a creative combination of affluence and thrift.
Robin states, “Frugality is enjoying the virtue of getting good value for every minute of your life energy and from everything you have the use of.”
I remember reading Vicki Robin’s book years ago when I was still working at the bank in NYC. She asked one to calculate their real hourly rate after taking into account the commute, money spent on work clothing, lunches out, etc. Then, when you are about to buy something, ask yourself, “Is this worth 3 hours of my life energy at work to pay for it?” More often than not, you decide your life energy is more valuable than the thing.
I realized that even though I had a smaller salary than some colleagues, I had a much better hourly rate. They worked until 11pm every night and on weekends, if needed. Plus they had no time to enjoy the pleasures of living in NYC. Meanwhile, I had time to go out dancing, listen to jazz in the West Village, and see shows on Broadway. I could have made more money by moving into investment banking. But then I would have sacrificed the quality and enjoyment of my life. So, what was the point? I chose to live in NYC because I wanted to enjoy living there, not just spend my time there working.
Over the years, I’ve created my ideal life. In many ways, I live more richly than people who are much wealthier because I’m great at maximizing the things that matter to me and cutting costs on the things that don’t matter. We live in a beautiful, large five bedroom house with four bathrooms–excessive by most standards. But this works for us with two home-based businesses and two kids. We have two cars, a weekly housecleaner, weekly massages, gym memberships, and my husband has a daily coffee or two out. But we got here with a bit of creative frugality.
The house was originally a three bedroom, two bath home when we bought it, but it had “potential.” We were able to convert a loft into two more bedrooms and two baths without altering the footprint of the house. Yes, we have two cars (actually three now that my teenage daughter is learning to drive). But we have no car payment because they are all used cars. We found a barely used Smart Car for $6,000 with only 8,000 miles on it. Plus, there is no car tax on it because it is so fuel-efficient. Handy now that fuel has gone sky high! The seven-seater Honda was another bargain (super-efficient Japanese version with 60,000 miles on it). Yes, the gal in the dashboard speaks to us in Japanese, and we have no idea what she is saying. But that makes the car fun and unique.
Because we have no car payments, we can afford to get weekly messages and hire house cleaners which buys me time—the most precious commodity of all! My husband is extravagant with his personal trainer and gym membership at CrossFit. But he rarely buys new clothes and cuts his own hair. I love shopping but get my “fix” by poking around the charity shops looking for bargains. I think that is even more fun than buying something new. Plus, it is not only better for the pocketbook, but also it is better for the planet and the charities benefit, too.
We give the kids an allowance but we expect them to keep their rooms clean, change their sheets, and buy their own clothes. I’ll buy their school uniforms (in England all the kids wear a school uniform even in the public schools) and the basics. For extra stuff, they are on their own. I noticed that they are much more careful about purchasing things when it is their own money and not ours.
So, creative frugality is all about maximizing the quality and enjoyment of our lives. We spend lavishly in some areas and cut corners on big expenses like new vehicles. What’s important to you? Could you move closer to work and cut the commute? How much value would you place on being able to get an extra hour of sleep every morning? No commute and extra sleep? That is living richly!
What does your ideal life look like? Take some time to think about how you could maximize your spending to get the greatest joy. You don’t have to do what everyone else is doing.