Why are you frugal?

[kcowan]

Since we started living in Mexico for 6 months, our budget has gone out the window because we are spending 40% less including a one month trip to Europe each year. So we have eased off on the budget for accommodation in Europe. We still prefer taking the train while there.

We also "treat" ourselves to better quality wine more often and splurge on dinners more often. But compared to our tight budget in 2002 - 2008, we are absolutely extravagant!

Also our charitable budget has more than tripled. Gifting to family has doubled.

 

[6miths]

Mother, father, Scottish maternal and paternal grandmothers.

 

[Meadbh]

I was raised to LBYM, but I took a career path that required much investment of risk, time and money, for significant rewards. I was never a wild spender, but I became frugal when my NW almost doubled after an inheritance. Suddenly, I could see ER in my future, and I didn't want to mess it up. I am frugal every day, so that I can achieve my objectives, which include an extravagant vacation/journey that I am currently enjoying, guilt free.

 

[Danmar]

ERs almost by definition live below their means, but many of us (myself included) should probably not be considered frugal. We were not spendthrifts, but our incomes were high enough that we could live comfortably without scrimping, and also save a fair amount of money.

Agree. But now that you are retired how would you describe your spending habits?

 

[FI by 2024]

There have been a few posts about the difference between frugality and LBYM. I think of it like this:

- LBYM is the fact that I can afford and budget for $5000 worth of travel each year, but I usually spend ~$3000 each year and put any remainder into investments early in January each year. That way I can afford even more vacations in retirement

- Frugality is picking the airfare that is $100 cheaper, the room that is $30 cheaper, and walking from the hotel to the museum instead of taking a cab when I'm on those vacations. That way I can afford extra trips on that same $3000

Happy to hear different interpretations.

 

[RobbieB]

That's what I used to do.

Now I pick the airline that has a non-stop and the hotel with a Jacuzzi in the room.

But I always pack some booze in my suitcase because drinks are expensive at hotel bars -

 

[FI by 2024]

Oh don't get me wrong, I'm still picking the 4* or 5* hotel! I'm just picking the cheaper one

 

[Walt34]

For me it was learned. As a kid I would spend any money I had almost instantly on candy and comic books. We did get an allowance but I think it started out as a dime and then later a quarter. My parents also grew up in the Depression and WWII so they learned frugality out of necessity. While we had all the necessities there wasn't much extra for luxuries - a day at an amusement park was something that happened maybe once or twice a year at best. Vacations were to see relatives and I was in high school before I saw the inside of a restaurant.

But to me frugality also has a strong connection to efficient use of the means available, and I like efficiency.

 

[Danmar]

I'm not frugal per se...

It's just that my money seems way better than anything it could buy !

Really, how could that be? Can't eat it, drive it, wear it. Can certainly give it away. That must be your end game?

 

[Danmar]

There have been a few posts about the difference between frugality and LBYM. I think of it like this:

- LBYM is the fact that I can afford and budget for $5000 worth of travel each year, but I usually spend ~$3000 each year and put any remainder into investments early in January each year. That way I can afford even more vacations in retirement

- Frugality is picking the airfare that is $100 cheaper, the room that is $30 cheaper, and walking from the hotel to the museum instead of taking a cab when I'm on those vacations. That way I can afford extra trips on that same $3000

Happy to hear different interpretations.

That's sounds reasonble but will you still do this once your are retired and spending the money that you saved being frugal? That is, when does frugality and LBYM end? Or does it? Does it simply end up go to your heirs?

 

[Danmar]

But to me frugality also has a strong connection to efficient use of the means available, and I like efficiency.

Now, I can relate to this. Why would anyone want to waste money? I think we are pretty good at getting the biggest "bang" for our buck. Regardless of how many bucks you spend this would seem the best approach. Within reason of course.

 

[Which Roger]

That's sounds reasonble but will you still do this once your are retired and spending the money that you saved being frugal? That is, when does frugality and LBYM end? Or does it? Does it simply end up go to your heirs?

That's where safe withdrawal rate comes in. At that spending rate, in the worst case (subject to some assumptions, of course), you're living at your means, and in most cases you're living below your means.

How much one spends in retirement vs when w*rking varies. In my case, I pulled the plug when I could safely spend what I had been spending.

 

[travelover]

That's sounds reasonable but will you still do this once your are retired and spending the money that you saved being frugal? That is, when does frugality and LBYM end? Or does it? Does it simply end up go to your heirs?

If I knew when and how I'd die it would be a lot easier. I might just not wake up some morning or I might spend years in an Alzheimer's facility before I finally cash it in. So, in retirement I continue to be frugal. If I go easy and cheap someone gets an inheritance. If I go slow and expensive, it doesn't bankrupt my wife and I have a humane ending.

 

[Danmar]

Agree with last two posts. If I may summarize: " Intend to live at my means but keep a fairly good cushion just in case". That is my approach as well.

 

[cyber888]

I guess I'm just an old reincarnated soul, so it's second nature not to waste things. Being frugal means not to waste resources or use more than needed. Early on in my life, I read a Zen Koan - "One day a monk disciple was trying to throw used bathwater away, and his Master told him - why are you wasting water ? You see the plants out there - they need that water. Don't waste a single drop." Why waste food when many people are hungry, why waste electricity when it pollutes the environment to generate power, why waste used water when plants need it. My wife tells me 'why eat out, when they are pumping hormones on those GMO food. It's cheaper to cook organic food at home'. We do eat out maybe 3x a month, but not much. We know someone who inherited $150,000 and he used that money to eat out everyday until it was gone. He literally ate his inheritance.

 

[FI by 2024]

That's sounds reasonble but will you still do this once your are retired and spending the money that you saved being frugal? That is, when does frugality and LBYM end? Or does it? Does it simply end up go to your heirs?

Short answer: yes
Long answer: I will most likely have way more than I need when I retire, so LBMyM will be inevitable. And even if I up my lifestyle to live at my means (unlikely), I still would probably do it in a frugal way. Like only upgrading to first class when it's a few hundred dollars more, not when it's $14,000 more (as was once offered to me). I can't imagine ever not being frugal. You can live a luxurious life and still be frugal.

 

[imoldernu]

'Cuz' ... nothing to add. Y'all covered my answers quite well.

 

[haha]

I am frugal because I am not a billionaire


Sent from my iPhone using Early Retirement Forum

 

[hnzw_rui]

There have been a few posts about the difference between frugality and LBYM. I think of it like this:

- LBYM is the fact that I can afford and budget for $5000 worth of travel each year, but I usually spend ~$3000 each year and put any remainder into investments early in January each year. That way I can afford even more vacations in retirement

- Frugality is picking the airfare that is $100 cheaper, the room that is $30 cheaper, and walking from the hotel to the museum instead of taking a cab when I'm on those vacations. That way I can afford extra trips on that same $3000

Guess that's proof I'm not frugal.

I'd rather pay more for a non-stop flight that fits my schedule. Also, a more expensive hotel that's on-site or closest to my planned destination to avoid having to rent a car (hate driving in unfamiliar areas) or take a cab. I find that saves me both time and frustration if not money. I may or may not spring for the suite with a Jacuzzi but the walkability factor is a big thing for me.

Granted, I'm willing to take less vacations (not like I have a lot of vacation time I can use anyway) as long as I can have them in relative comfort. I really am more homebody than adventurer.

Still, I reckon the fact that I'm saving 20-30% of gross (will be 30-40% after I receive some pay raises) qualifies me as LBYM even if I'm not exactly frugal.

 

[brett]

I come by it honestly. Hereditary....Scots Presbyterian background. Brought up to focus on value as well as price.

Now retired I think I focus on value even more. Not because of income but because I now have the time to do it for many things, not just the larger ones. But on the plus side 'things' and clothing have never done much for me. Just has happy in my old Honda as I would be in a new bimmer.

 

[Danmar]

I am frugal because I am not a billionaire


Sent from my iPhone using Early Retirement Forum

Do you think you would need $1billion to not be frugal? Maybe $100million? Or $10million? Just wondering where your frugality threshold is? Or are you just joking?

 

[Danmar]

I come by it honestly. Hereditary....Scots Presbyterian background. Brought up to focus on value as well as price.

Just has happy in my old Honda as I would be in a new bimmer.

Or more appropriately a new fully loaded F150 ( as discussed in a previous auto thread).

 

[NW-Bound]

If I had more money I might be even more frugal, if we define one's means as 3 or 3.5% WR.

How do I spend 3.5% of $100M each year? Or 3.5% of $1B? Society pressure would make me spend money on things I do not want to.

Good thing I do not have the above problem. It would drive me nuts.

 

[RobbieB]

Never forget this old tale;

Once upon a time there was a Miser who used to hide his gold at the foot of a tree in his garden; but every week he used to go and dig it up and gloat over his gains. A robber, who had noticed this, went and dug up the gold and decamped with it. When the Miser next came to gloat over his treasures, he found nothing but the empty hole. He tore his hair, and raised such an outcry that all the neighbours came around him, and he told them how he used to come and visit his gold. "Did you ever take any of it out?" asked one of them.

"Nay," said he, "I only came to look at it."

"Then come again and look at the hole," said a neighbour; "it will do you just as much good."

Moral of Aesops Fable: Wealth unused might as well not exist​

 

[NW-Bound]

Look at the hole? Nah, not unless I fill it with some fake gold coins.

Nowadays, we have no gold coins, not even paper money. And not even stock certificates. Just some numbers on the PC screen. It may be all in the matrix, for what we know.