Europeans and Americans: attitude towards frugality

[syracusa]

I would like to ask for your opinions regarding public attitudes towards frugality as a philosophy of life in Europe and the US.

Here is the premise:

1. I am an Eastern European living in the US.

2. I have only become aware of this idea of "frugality" when I moved to the US at the age of 26.

3. I come from a society where individuals are not yet used to the idea of setting money aside and pinching pennies (the socialist system simply used to take care of life risks; money was for immediate spending and having a good time with friends and family).

It is a society where frugality has never really been a quality. Frugality is perceived to be plain ol' stinginess over there and it's thought of as something pretty nasty. One of my mom's friends always says: "don't torture your soul; if you are really desiring something go ahead and get it and then just live your life".
The majority tends to look down upon stingy people who need to control their money to the penny - while liberal, carefree spending is not only OK but actually invokes "class" images fueled by memories of the aristocratic strata for whom money or money-making pursuits had never been an issue. Ideally, the only concern should be quality, beauty, art, elegance, spirit and a good time.
And even if your family genealogy has never had anything to do with the aristocrats, it is still pretty cool over there to adopt an aristocratic attitude towards money.

4. Eastern Europe aside, I know that in general Europeans tend to buy less but better. For example, Europeans like high quality, durable, natural merchandise - which typically is more expensive. And they are ready to pay the heavy price that goes with it - when times comes.
They like to buy "heavy" but much more rarely than Americans. There are not as many "sales" and "deals" in Europe. When you need something you get set on a mission to find what you are looking for, at the highest quality you can afford - so that it will last you a long time and so that it will look good. And then you move on with your life and enjoy it.
Not much thought over saving, good deal or no deal and stuff.
Americans instead - given their frugality-related legacy - hunt sales and bargains like crazy and their lives are virtually about shopping and deal-hunting all the time.

That brings me to my question: granted their luxurious attitudes towards merchandise and life in general and their comparatively lower salaries - how come that Europeans have less debt than Americans, and more importantly, a more relaxed attitude towards money?

Why is it that they are so much better dressed with less money - and they never have this need to be frugal and pinch pennies?

I am pretty sure I know the answers to some of these questions, but I wanted to toss the issue out here for debate.

[poundwise]

I won't be able to give an adequate response to each of your questions, however, I did want to give a few simple answers.

Regarding the American perspective:

1) When Americans have wants, they want it NOW.

2) There is a growing sense of entitlement in America. That is, if you don't have something, you should.

Regarding the perceived European 'relaxed' view of money:

1) Socialized medicine - While there are certainly other problems with this, in many European countries, you don't have the fear that a medical issue will require cause you to have to spend a lot of money or, worse, wipe out your life's savings.

2) Less stressful workload - Europeans, on the whole, work less hours per week and have much more vacation (holiday) time.

I would also add that your portrayal of Europeans as smarter shoppers (in the sense that they buy more durable goods) and 'better dressed' is too broad of a generalization.

I do agree, however, that shopping every sale and clipping every coupon, while it can serve a purpose for many, can become a way of life, even an obsession for some here who end up exchanging peace-of-mind and time, as valuable as they are, for a few dollars a month.

By the way, just for the record, I am an American. Also, I have lived in Eastern Europe.

[PRICEPLUS]

American thoughts about money are still greatly influnced by the "Puritan Work Ethic". The idea is that God rewards us for working hard and not being wasteful. Saving is a virtue and waste and idleness are frowned upon.

Sadly American Citizens are refered to as Consumers. Some are conspicuous in their consumption some are not. It is very hard to generalize about "all" Americans. Some items such as appliances or cars are where in my personal habits I will pay for quality above price. My thoughts on this are that if you buy cheap in the end you pay dear.

We are not a socialist country and Americans don't like the sound of that yet they enjoy all sorts of government programs. Go figure! I personally don't want to have to depend on the governmnet if I don't have to do so!

I want the best quality for the lowest price I can find! I would like to keep as much of "MY" money as possible! I worked for it, I earned it, and I want to spend as little of it as possible so I can buy more things I may need or possibly want!

I guess a little cultural relativism is in order here!

[cschin4]

This is an interesting discussion. I have been to England, Scotland but never anywhere else. The Europeans do seem to be more relaxed and seem to enjoy living, enjoy eating, etc. Our lives do seem to revolve around shopping. Since I have become more aware of how to handle my money, I really dislike shopping. I shop when I have to but don't really like wasting my time looking for stuff. I used to shop sales, deals,etc but no longer have that mindset. Now, I only shop at a few stores and when I need something I just go buy it rather than running around everywhere looking for a deal. I find that I save more money with this attitude because I spend much less time in the stores. And, less time spent in stores means less chance of my impulse buying or buying other things I just don't need. Actually, yesterday my mother and I went shopping and our last stop was Walmart. I used to fill my cart with all kinds of things I "needed". Yesterday, I browsed, decided I didn't need anything and walked out without buying anything! A major accomplishment since I used to call Walmart the "$100 Dollar Store".

[Ima saver]

cschin4, I agree with you. I actually do not like to go shopping anymore. I feel like I am wasting my time and my money when I go to a mall, so I have not been in 5 years. I only buy something when I really need it. I enjoy saving and know that I will have to support myself when we retire.

[LuxLiving]

Syracusa - My buying habits are very much like you describe in #4. I don't buy often, but when I do I buy the highest quality I can get for my money.

[Borealis]

Hmm interesting. I'm European as well, a Norwegian. Let me tell you, people here do n o t historically have any aristocratic attitude towards money and spending. We never had much of an aristocracy here, we were poor farmers and fishermen. Since we found all our oil, however, and could afford good oil-funded Social Security and a Socialist health care system, good disability pensions and so on and so forth, it seems we have lost our old self reliance and become rather spoilt and somewhat useless. We don't seem to generate other significant industries. We mostly sell oil and invest a lot of the money (OilFund) internationally. Our own national economy is not able to absorb the profits from all the oil. Strange or what?

As to buying behaviour, I think we Europeans are just as "bad" as the americans. We have just as much advertising telling us this chewing gum is a quality lifestyle choice and that soft drink will make you more attractive to the opposite sex etc, etc.

[PRICEPLUS]

Maybe there is a difference between the old communist bloc countries and the Western European nations!

[frugalcollegestudent]

Very interesting topic, would make for a great paper. Too bad I already have enough papers to write from my over-zealous professors.

I have noticed through talks with my roommate and friends, even some students still in high school, that a disturbing overall trend has been developing among American youth; the sense of instant gratification. Today's younger generation (and I am generalizing here) really do not have a sense of working hard reaps benefits. They are part of what I call the "Laguna Beach" generation. For anyone who knows the show, you understand what I mean. For all the others, Laguna Beach is a show on MTV about 15-17 year old kids in Laguna Beach, California, who are very wealthy and live the life of Paris Hilton. However, they have not worked for what they have, instead they have simply asked Mommy and Daddy for more and more (another example of this would be another MTV show called My Super-Sweet Sixteen where every episode rich parents spend upwards of $200,000 on their child's sweet sixteen party and we get to witness the non-stop complaints coming from the kids about how they aren't getting what they want). The problem with shows like these is that today's youth are starting to idolize that. They believe that you can in fact have everything you want and not have to work for it. It is a plague that is sweeping the nation.

I do not know much about European youth, but I wonder if such ridiculous fantasies are as rampant there as it is here

[syracusa]

Originally Posted by frugalcollegestudent

Very interesting topic, would make for a great paper. Too bad I already have enough papers to write from my over-zealous professors.

I have noticed through talks with my roommate and friends, even some students still in high school, that a disturbing overall trend has been developing among American youth; the sense of instant gratification. Today's younger generation (and I am generalizing here) really do not have a sense of working hard reaps benefits. They are part of what I call the "Laguna Beach" generation. For anyone who knows the show, you understand what I mean. For all the others, Laguna Beach is a show on MTV about 15-17 year old kids in Laguna Beach, California, who are very wealthy and live the life of Paris Hilton. However, they have not worked for what they have, instead they have simply asked Mommy and Daddy for more and more (another example of this would be another MTV show called My Super-Sweet Sixteen where every episode rich parents spend upwards of $200,000 on their child's sweet sixteen party and we get to witness the non-stop complaints coming from the kids about how they aren't getting what they want). The problem with shows like these is that today's youth are starting to idolize that. They believe that you can in fact have everything you want and not have to work for it. It is a plague that is sweeping the nation.

I do not know much about European youth, but I wonder if such ridiculous fantasies are as rampant there as it is here

Yes, I am aware of the "Laguna Beach" phenomenon.
And yes, I agree with the poster above who said that there may be differences between the Eastern and Western blocs in Europe - as well as differences between the laid-back, pleasure-seeking, hedonistic south/central/east and the much more stern, bland, puritanical north.

The Laguna Beach phenomenon is probably present in Europe too. I know it will surface expolsively in mjy country when this first generation of "businessmen" with heavy money (made overnight, mind you) will start producing little empire heirs and heiresses. Actually, it already has.

What kills me about this kind of people today is not so much that they are rich and that they do not have to work for a living - while I have to.
After all, I am decent enough to admit to myself that I wouldn't work for a living either if I had a major fortune to live off of (at least not in the contemporary corporatist-governmental system where most work is).
What makes these youth so much more disgusting than the apparently "idle" aristocracy of yesterday is that they are allowed to grow completely vacuous inside. The perfect modern Narciss with no regard for anything other than their face lifts, orgasms and the latest fashion fad.

When life/gods/fate/whoever blessed you to be born in a family that allows you NOT to worry about putting food in your stomach and the accompanying petty competitions of life - you should probably be using all that free time for higher human purposes: educate yourself, read, travel with an open mind, cultivate thirst for knowledge and the arts, cultivate virtue, prepare for leadership for the larger public good - give some sense to your otherwise pathetic life - none of which these Laguna Beach people are prepared for or raised to do.

I mean...look at Paris Hilton. She is the poster girl for this culture of spiritual death and vacuity of the post-modern times. I swear that when I see her face and look in her eyes I get scared S***-less.
That blank, narcissistic, nasty stare is 100 times scarier than any walk at midnight in the inner city, ALONE - which I have done countless times when getting off graduate classes late in the evening and then staying in my office until late.
But oh, well.

On a previous note - yes, I think that the "stay away from malls and only buy quality when needing something badly" is a much better approach to financial ease than "hunt bargains, good deals and sales". That's the worst.

[BCHGRL]

If European culture is how you describe it, how do the Europeans cope with layoffs, health problems (even if you have free health care, it still may cost you financially for time away from work), natural diasters, identity theft, housing, health or family emergencies?

[syracusa]

Originally Posted by BCHGRL

If European culture is how you describe it, how do the Europeans cope with layoffs, health problems (even if you have free health care, it still may cost you financially for time away from work), natural diasters, identity theft, housing, health or family emergencies?

BCHGRL,

That's a good question. I am pretty sure that Europeans too will increasingly feel the effects of globalization while being forced to drop many aspects of their socialist, low-risk system. I mean yes, layoffs are starting to happen there too, etc.
But I would still argue that these issues related to life-risks are not as dire as they are in the US. For example, if you are sick - you have much better medical leave for a longer time than in the US. Consider that this thing happens all the time to pregnant women. Many European countries have unimaginable maternity leave benefits with some of them keeping a woman's position secure for 2 years plus during which she receives 80% of her regular pay while being at home with her child.

If you're laid off, there are better unemployment benefits etc. There simply is better social protection legislation in place (don't ask me for how much longer).

There are, of course, exceptions to the rule. The country I am coming from has a "wild jungle" free market system right now - nothing like what happens in western Europe.

Many, many people are expected to stay at work until 8, 9, 10pm. They come home at 11:00pm only to be back to work at 8 the next day. And we are not talking about workaholics who simply choose to stay late so they can make more money. It's simply expected of you to stay late, for the same initially negociated pay - even though your official work day is 8-5.
If not, you are subtley sent the message that there are other people out there waiting to take your spot if you don't like it.

It's an abusive system that works for now because it found a vulnerable population to do this to.

As for how Europeans cope with family emergencies, do not forget that Europe is a much more collectivistic, socially cohesive society than the US where people are raised to be individualists (aka, "cope on your own").
In Europe people fall back on each other a whole lot more. You have a family emergency - there's often a grandparent, a relative or group of relatives, sometimes even friends or neighbors that may actually lend a hand. At least I know that this is how it was in my country.
But I am convinced that even western Europe is more like this than the US.

In the US you better have personal funds set aside to help yourself in case of a family emergency. If not, you may just be a tad bit S****-ed.

My husband is American and even though he has his family in the area we can absolutely not rely on them for anything family-related.
I work full-time, our son is 14 months - and he is neither in day care nor with a hired nanny. He stays at home with his grandma or aunt - not the American ones in the area - but the Eastern Europeans ones who fly a buzzilion miles over the ocean and take turns 6-12 months at a time just to help us.

By contrast, my son's American aunt lives in the area, she's a stay-at-home wife (not mom!!), her kids are out of the home, they have more money than they actually know what to do with, she gets royally bored at home everday (few to no friends, btw) - and yet not once has it crossed her mind to offer to baby-sit for her nephew. My husband never dares to ask for any family-related favor from his family either.

So - there's the explanation for family emergencies in Europe.
We have had one (the baby) - and we get by with family help.
Eastern Europe family help, I mean. Had it been for the American one, we would have gone to Hell in a hand basket by now.

[BCHGRL]

Thanks for the explanation. I am sorry to hear that your American family does not help out.

If I have a kid(s), my mom is willing to quit her job and drive 3 hours round-trip 3 times a week to watch my kid(s). I have two nephews and their great-grandmother watches them two or three times a week too. I guess we are lucky to have that family support system.

[BCHGRL]

Also, I can understand why frugalness is seen as pretty nasty in a society that is based on a collective support, not an individual support.

[JanH]

Maybe its a change in generation. Growing up, my family didnt have money. Most of my relatives didn't have money. A lot of them were farmers. They all lived in the same vicinity, worked hard, leaned on each other and didn't own much. Family was more important than stuff. And we lived in the south. So that generalization really doesn't fit. To this day, family is still more important than stuff. Getting together and spending time with each other and helping each other is the family way. I don't think you can use the "Hollywood crowd" as the norm for all families or even all teenagers. I know some really fine ones. That said, there is a sense of entitlement and wanting "stuff" that is growing in the younger generations, but I have a feeling that eventually, they will grow tired of stuff not fulfilling their needs and return to values we thought they had lost.

[rob62521]

Originally Posted by poundwise

I won't be able to give an adequate response to each of your questions, however, I did want to give a few simple answers.

Regarding the American perspective:

1) When Americans have wants, they want it NOW.

2) There is a growing sense of entitlement in America. That is, if you don't have something, you should.

Gee, you hit the nail on the head for most of America! Scary, isn't it?

[savvy06]

Most generations live together in the same home where help can be immediately available.

Yes, people are more laid back and don't worry much about savings but that's because they don't have mortgages on their homes like Americans do. Homes are passed on from generation to generation and property locations don't change like they do here in America, and the crime is almost non existant. When daughters get married they move into their in-laws' homes. If there's more than one son in the family, normally the youngest or the last that gets married brings his bride to live with him and his parents, perhaps even grandparents and the home goes to him. The other sons are most of the time taken care off by the parents by helping financially with a purchase of another home, or building an addition to the existing home. Most of the sons or daughters get married young, early twenties, even younger, and have kids right away, if they don't the gossip begins.

People over there don't have car payments. The cars are bought in cash, therefore not many people have them. All of the households that have cars have only one, and that one lasts 15 to 20 yrs. Most corporations provide their employees with free company transport, so there's no need to use their own car. Plus most cities are fairly small, less than 100,000 in population therefore their cars are not used as much. The last few years lots of private cabs have appeared, but their fees are so low, its laughable. They charge the same fee no matter where you went in town, and it's the price of a hershey's choc. bar. Yes, the gas is more expensive than here, but is not used as much.

Everyone has medical and dental insurance coverage, they don't have to face co-payments or other medical bills. My cousin's baby had complications at birth, had to be rushed to the supposedly best hospital in the country's capital, and was in there for over 6 months. They paid nothing. My cousin was also 9 months on maturnity leave, all paid. She complained, it used to be a year. But that's beginning to also change. Lots of doctors are opening their own private practices, and the citizens are not too happy about that.

Everyone gets government retirement pension. And if you don't have enough years you can pay off the rest in order to retire early, and depending on what job you had and who you know, you can get your son or daughter to take your spot if you retired early. That would enable you to stay home and watch your son's or daughter's kids. So no daycare costs.

There's no sales tax on any purchases, nor is social security, fica, state tax deducted from your monthly salary.

The reason the country has a " wild jungle " free market system right now, is because everything is becoming private; businesses, banks, stores, schools, etc. are bought off the government and run by private owners. Everything used to be government controlled. People were not used to work for more than 6 to 8 hrs a day, and they did not try to be productive, because nobady cared. They'd get paid either way. Plus, costumer service was non-existant, and still isn't in most places. Being forced to work longer hours for same pay is mostly exaggerated. People are for the first time really forced to think and be productive. Those who don't follow the new private company rules are mostly complainers. Complain they love to do, especially to a relative living in America. Dollars can go pretty far over there.

Yes, I am blessed to live here, but if I don't help myself, no one will help me. I learned that at very young age, and I've worked very, very hard to be where I am right now. I also never had the family support as most of my relatives in that country have or as some of my European friends that live here have. My friends here are hard working, good parents, but they also sometimes have a relative from the old country come here and help. Some of my friends who can't get that kind of help ( visa refusals ) most of the time don't see their spouces, or children because one works the morning shift and the other the midnight. They also have side jobs like cleaning homes, house painting, etc. They have goals, work hard, live frugally and they manage to accumulate enough down payment for some kind of property within few years of living in this country.

That said, frugality or living like there's no tomorrow can be an issue in any country in the world. It all depends on the person itself, especially in this country, the wiser you are the luckier you get.

[SavedintheCity]

Very interesting thread. Generalizations of course are in danger of caricturizing their subject, they are useful in definig broad cultural trends (with caveats). Although an American, I had the pleasure of living on the other side of the pond for quite some time in college. I do feel that Europeans (old and new alike) do have a different attitude toward money. Some of the previous posts have hit on the differences. Most can be linked to (IMHO) one central difference:
difficulty and expense in obtaining consumer credit.

You see in Europe as opposed to the US, they do not have a credit reporting system that ranks people based upon their credit. Don't misunderstand me, they do have a "black list" of bad creditors who have defaulted under previous loans. However, unless you specifically fall onto this Black List your credit history is completely invisible. The only thing the banks have to go on to loan money is tangible personal and real property. So lending and borrowing in Europe is more costly for both lender and borrower. Also, Europeans as opposed to Americans have a deep seeded distrust of borrowed money. It is a cultural phenomenon which relates to both deeply help classicist ideas (borrowing money seems to be reaching beyond your means) and a more collectivist society (families help each other out more). Most Americans save/borrow money for emergencies, education, retirement, and health care. In Europe, by and large, these items are richly subsidized by the government. Without venturing into a debate concerning which system is better, people have no need to save money if such items will be paid for them. So the risk/reward equation for saving is reversed in Europe. You do not gain any more security or independence by saving as opposed to spending your money. Therefore, Europeans are encouraged (macroeconomically speaking) to spend their money rather than save it. Borrowing is not necessary because you can easily forego short-term expenditures to save up for mid/large consumer items: you have no debt service payments so 100% of your disposable go be saved for the future consumer purchase. Americans, on the other hand, must independently fund debt service, retirement fund, long-term disability fund, health insurance, maternity leave, unemployment security, and whatever disposable "fun" money is left over. You can see that for Europeans, although they earn on average much lower salaries, their disposable income level is much higher than ours. Just my $0.02 or E0.01.