Frugality is Deferred Spending

Frugality Is Deferred Spending

Hello folks! Hope everyone’s day is starting out alright. I’ve been coming to a crossroads lately and I just have to share! Frugality means different things to different people. I’ve written before how my sense of frugality is different than others, such as the Frugalwoods. To me, frugality is a means to an end; the end being financial independence. And to a degree, frugality is deferred spending.

Wrestling with Frugality

Lucy and I have a long history with frugality going all the way back to our college days. At that point, frugality was more out of a necessity as we have only begun making above average wages the last 5 years or so. Today, frugality is not a necessity, but a choice as it is my view that frugality should be tailored to meet each of our individual long term goals and spending priorities.

While at some points in my delicate history with frugality it has been to a point of deprivation, more so it is a way of life in finding cheaper ways of doing the things we like. Frugality has always been about examining expenses to determine their necessity and the degree of value, comfort, or happiness it adds to your life that outweighs alternatives. I haven’t always been perfect in my frugal ways, but like most things in life I’ve gotten better with experience! Examining and re-examining spending habits, especially the largest expenditures, can lead to new money saving techniques.

To me, frugality is not necessarily permanent and it is not an overarching life philosophy for me. While my roots in frugality will never go away, I’ve always known there would be a point where I would loosen the belt.

The questions to be answered yet are how loose will the belt get and at what point I will take off my “frugality glasses” and stop looking at everything with my first consideration being financial. Well, the day is nearing, and that is the crossroads I’ve come to.

How will Frugality Change?

For me, there is no doubt that frugality is deferred spending. But what the means exactly is more complex. Somethings will never change, but something will. For instance, I don’t ever intend to go back to a barber now that my wife is cutting my hair at home. While she isn’t a natural barber, she has gotten the hang of it and does a nice job. And she’s only made me bleed once…but somehow that was my fault…

On the other hand, Lucy and I live for experiences and we also want to add more creature comforts to our life. Beginning this year with our trip to Greece, we intend to make an annual voyage out of country. And this will be on top of the various weekend getaways we make to the beach or to see family, etc. And while Greece will be just for Lucy and I this year, the annual voyage will eventually grow to include our little ones (currently just 4 and 1 years old).

The next thing on the list will be getting a golf membership and more regularly attending various sporting events. These expenditures would be made with the idea the whole family would enjoy experiencing together. This year I took the time to look into the golf memberships a bit more and it might be something we pull the trigger on as soon as next year. But that would entail an initiation fee of nearly $10K and ongoing monthly dues of around $500. Not cheap, but I could rationalize it…

As far as creature comforts, the biggest area of expected lifestyle inflation is on the home and auto fronts. I keep telling Lucy that my next car will be electric. That purchase could be just a few years away. And not out of necessity, but simply my frivolous desire.

Regarding the home, we don’t necessarily have ambitions of owning a second home or upgrading from our current $300K+ home for a million dollar home, but conversely we would like to re-do our master-bathroom, upgrade the kitchen and floors and re-paint the walls. If done all at once, this would easily be tens of thousands of dollars.

Bucking Frugality

Loosening the belt as outlined above would no doubt lead some folks to question our frugality. Maybe you’d consider this an outright bucking of frugality as we let our crazy spending selves free.

But again, for us frugality is a means to an end. Frugality has allowed us to save more over the last 10+ years than we otherwise would have, those savings have done well as they compound, and the whole point of it for us is that deferring “consumption” today (today being the last 10 years) will allow for more consumption in the future. Well the future isn’t far away; actually the future is about right now…

After all, life is about experiences, and some experiences are awfully expensive.

By nature, I’m curious soul. I enjoy experimenting with new hobbies. For instance, someday I may become a beekeeper, and the start-up costs aren’t cheap. But life has to be worth living.

I would be full of regret on my deathbed if experiences and the under-taking of new hobbies were limited by finances.

Will it be Worth It?

In terms of the happiness, comfort and value of the contemplated increased level of consumption, it may or may not be worth it. But how will I know unless I try? If it turns out to not be worth it (for instance, the golf membership isn’t what we thought it would be), we can always pull it back in a bit.

I don’t think there is any better time to try than upon reaching financial independence and nearing early retirement? I need to find my ideal spending level. While the last couple years we’ve been comfortably spending around $60K, once we no longer live by the confounds of deferred spending, maybe this increases to $80K per year…?

Consciously increasing our cost of living may be a slippery slope, but better to experiment with the comfort of a having a salary still to fall back upon rather than after pulling the retirement trigger. We can always adjust our target retirement number from $3 million as I estimate it today to something bigger if necessary.

Conceptually, once we reach our target retirement date, we’d have the flexibility to incur added lifestyle costs up to the point of our salaries without jeopardizing our nest egg. Why even consider doing this? Well when else could we experiment to see if living like the “rich and the famous” was suitable for us? And if it helps us find our happy medium (our true desired spending level), maybe that is what we’ll do! 🙂 Having a couple hundred thousand for an annual budget would be an interesting lifestyle to imagine…wouldn’t it?

So, as we stand here today with just a few more years until we plan to step off the hamster wheel, we recognize we are at a cross-roads. And oddly enough, to give us comfort and to help ensure we don’t have regrets later on down the road, we are beginning to look for all the ways possible to spend money and bring value to our lives. After all, for Lucy and I, frugality is deferred spending. It always has been.

Does that open us up to “one more year” syndrome? In a sense, yes, but I’ll save that discussion for another day. For now we plan to let the spending-pendulum swing until we find our nexus.

Thanks for taking a look!

The Green Swan

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  1. I think it all comes down to your definition of frugality. My husband is definitely more so in the ‘deprivation’ camp. 😉 For me, being frugal is all about spending money/time on what matters to me.

  2. There is nothing wrong with spending your money in ways that make you happiest. If that means $500 club fees but you go often, and you are still able to handle emergencies, pay for your children’s college, and still keep your lifestyle of FIRE, then you aren’t making a choice that changes your life for the worst 🙂

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