Let me ask you this. If your friend recently bought a $1 million dollar house, is that an act of frugality? What if she could actually buy a house worth $10 million but decided to spend only 1/10 of what she could really afford? Does that change your answer? A $500,000 house is VERY expensive amongst many social circles, but Warren Buffett, the billionaire investor, is always praised about his lack of desire to spend on luxury because he is still living in his house thought to be worth about $500,000.
Photo: Vanagas
When you are the second richest person in the world, are you frugal if you opted for a million dollar home instead of buying a multimillion dollar mansion? I mean, a million dollars to Warren Buffett is like the cost of dinner to most of the general public! Shouldn’t he be using a different scale when it comes to what is deemed frugal?
Frugality Is Relative
Most of the time, we judge others’ financial habits by what we can see from the outside — the clothes they wear, the cars they drive, and the house they buy. We never realize how much money they make, and never compare what they spend as it relates to what they can actually afford. Keeping up with the Joneses? What if Mr. Jones is a billionaire?
As you can see, the meaning of frugality is relative. What frugal living means to you may be totally different than what it means for someone else. Your neighbor could buy a $1,000 purse and she could still be frugal, while a $100 pair of shoes from another neighbor could mean that he spent too lavishly. So how can you compare? Your coworkers may have a large inheritance, your friends could have married rich, and your neighbors might be fortunate enough to run a successful business. You don’t know other people’s situation, and more importantly, why does it matter anyway?
- Does your neighbor’s BMW help you get to a comfortable retirement faster?
- Does your coworker’s lavish vacation make your retirement more relaxing?
- Does your friend’s purse hold more secrets to your financial independence?
Take frugal living personally. In other words, stop minding other people’s business like trying to keep up with the Joneses and be happy that you are frugal and that you are working towards your financial independence. In your own way of course.
I guess to me frugal living is buying only what you need and can afford, and no waste.
Buying only what you need and can afford is a way of life for a lot of people. I think we take for granted here in America that we can afford to buy more than just what we need. It's hard to say whether or not that's to a detriment of society though.
Thanks for the comment!