The backlash against frugality

[Broken Arrow]

Some of you might find this interesting.

[Pupart]

That is an interesting article and some interesting comments.
I'm all for used clothing. Some of the bargains I have found at yard sales are terrific.
And free or low priced used solid wood furniture, often listed on Craigs, is
the best IMO. Some refinishing and you can have a great piece of furniture that many times is so much better that some furniture you can buy new.

[Fred333]

Good find on and interesting article like that one.

[sweeps]

I like the article, but "backlash" is too strong a word. The free-spenders out there just don't care about saving a buck.

If anything it's the frugal people who are fighting against the entrenched consumerism in our society.

[Ima saver]

They don't believe that being frugal can make you rich and we all know that it can. (and has)

[Aleta]

Actually being frugal does not mean living with less. I think that it is choosing how you want to spend your dollars that is important to you. I think that we are too consumed with what everyone else thinks. We have to stay focused on what is important to us and to stay true to it = regardless of what others say. Who' s to say that their opinion is the right one.

[herm4]

Absolutely Aleta! Well said.

[honestfinancialwork]

I would like to discuss the 100's of positives to debt. We never, ever, ever stick with any behavior ex: debt, addiction, over eating, gambling, bad relationships, smoking, not exercising, awful jobs etc... if there is not REWARDS. Once people learn that------- the money has nothing to do with debt. A recent class I taught on money management was fascinating. After I fully explained the positives of debt one lady raised her hand. She said"Karen I am 57 yrs. old and you have finally made all of my life make sense. No one ever explained debt in that way" sHE WENT ON TO SAY" I have stayed in debt like all these students because it was so positive in so many ways. The rewards from debt were greater than the rewards from being financially in control" tHAT WAS A LADY WHO GOT OUT OF DEBT(it was bad debt ) IN 8 MONTHS. Karen

[Ima saver]

Please tell us more about the 100's positives to debt. I am certainly interested.!!

[PauletteGoddard]

The two "positives" I can think of for debt

The two "positives" I can think of for debt:

1. Leveraging/Cash flow. If one has a mortgage APR at 5%, and decent-risk/very-decent return investments yielding greater than 8% are easy to come by, it may be better for the net worth overall to not be hasty in paying off the mortgage immediately and to diversify the extra money in those 8%+ returns.

2. Higher FICO scores/"preferred" insurance rates. On a recent blog entry, I received comments that were highly informative. Apparently, in many but not all states, how great a customer one is with extended loan payment history can determine, with consumer permission, what kind of insurance rates the consumer can expect. Never mind driving or insurance claim history or net worth. A person with a paid-for vehicle and owing only tax and insurance on a house might very well be denied for a gas card, or be given higher car insurance rates. A high FICO score alone does not guarantee one a credit card with excellent rewards, nor does it make the credit card issuer snap to attention and hop to every request a cardholder makes for better terms.

A questionable plus is lower APRs on credit cards. It's been written here many times that APRs don't matter if one pays every statement in full, but before I discovered how to opt out of credit card offers, I saw that my spouse received better APR offers than I did. I was the more money-conscious of the two, and not beholden to any car or student loan noteholders, so the preferred terms for my husband confused me before I was properly educated in consumer matters.

[InDebtInDC]

2. Higher FICO scores/"preferred" insurance rates. On a recent blog entry, I received comments that were highly informative. Apparently, in many but not all states, how great a customer one is with extended loan payment history can determine, with consumer permission, what kind of insurance rates the consumer can expect. Never mind driving or insurance claim history or net worth. A person with a paid-for vehicle and owing only tax and insurance on a house might very well be denied for a gas card, or be given higher car insurance rates.

I can confirm this. It is well known in the industry that insurance companies use your credit report to rate you.

They also use any information available on you or your demographics as part of underwriting. It's not just extended loan payment. It's everything!

[honestfinancialwork]

Hi, I will share what I just discussed with my money management students about positives to debt. I am so glad you asked. These are examples from the students once they decided I was not to be taken to the looney bin. Here we go.......

1. I save for all my trips. My class members asked this" if you had the opportunity to travel with friends to Mexico in two months what would you do?" Well I told them I would have to say no as I would need to save for months first. I went on to share that my hubby and I missed a wedding in Mexico(family member) as we did not have proper time to save. They all said that it was so sad to have missed it. I asked what they would have done. The majority of the class said they would have not missed it and would have used credit cards. I shared that most other family members did just that. The positive(s) to that debt was that they did not have to say say "no" They acted spontaneously which can be so fun. They enjoyed planning every moment of the trip and got new clothes/shoes/gifts/cameras to take. They had wonderful pictures and memories to share. The class members said I am kind of boring if I save for even small trip.

Another example- My husband and I are often asked to go to nice restaurants , motels, concerts etc...with family. Most of them cannot really afford this. They may not be in super bad debt but savings is nonexistant. We always have to say no as we put that money towards bills or save it. We are left out of a great deal of fun, classy places. They have a great time(positive)


When I asked class members if they would be willing to cut out big gifts for kids they said that would be awful esp. with the older kids. oNE WOMAN SAID SHE HAS BEEN PROMISING HER TEEN A NEW dvd PLAYER. i ASKED IF SHE WOULD BE WILLING TO TELL THE GIRL THAT IT HAD TO WAIT FOR ANOTHER YR. tHE LADY SAID"NO WAY AM i GOING TO DEAL WITH MY DAUGHTERS RESENTMENTS AND STRONG EMOTIONS AS i MAD A PROmise to her.

Class members also said they did not want to thrift shop and save hundreds like I do as it is embarrassing. I asked if they defined their self worth through items. Most said "yes" in many ways we do. I said I feel great in a $5 outfit(the entire outfit I had on that day was $1.15). They said they grew up broke and really now don't want to wear hand me downs.I told them I grew up"with money" but love myself and my ability to be complimented on how I dress. I then asked if they would drive a $400 Honda Civic like my hubby does. He does have a nice truck but the civic gets 40 miles to the gallon. I showed them a picture of the car. They all said"no" I said that all the guys where my hubby works ask him why after 22 yrs. in a company he is driving that piece of crap. Students said they too would not feel comfortable in a car that was rusty. What would their kids, neighbors, family think??? I said that once again there are positives to debt. One does not have to face others and rude commments. One has to look at their self worth and recognize it is not about items. Most people said they need the items to feel good. Want more examples??? :Let me know. Is this making sense??? honestfinancialwork

[Ima saver]

Yes, I love it. Please give us more examples!!

[sweeps]

Honestfinancialwork, I'm afraid to say I kinda agree with your class members on some of the points. Sure, reckless spending and racking up debt is really bad, but living like a pauper is just as bad. Someday when you're 80 years old and sitting on piles and piles of cash, you may wish that you did some of these things (attend a family member's wedding, going to "fun, classy places", etc.) while you had the chance.

I'm worried that your students may associate being frugal with being a recluse, which of course doesn't have to be the case.

[PrincessPerky]

My husband and I often find that willy nilly spending can be countered with other suggestions..instead of missing a wedding if we REALLY cared we have savings for just such a purpose.

But say for a meet up at a restaurant..we can either order just drinks and eat first/after..or we can suggest an alternative..I might be a terrible cook, but I can host...someone else can bring food. (and it is their dollar if they want to cook or buy)

Maybe instead of a car with rust, one could pay a couple thousand vs a couple hundred and get one that looks safe as well as is safe...

I often hear people automatically suggesting bringing store bought food to church or other gathering, yet it doesn't stop me from going, I just bake and bring in a reusable container...no need to shun life, just need to choose the options that make the most sense for us.

And so long as I do all the work and thinking, no one really gets mad at us for choosing frugal over spendy....though I don't think they know how much thought we have to put into some things!

And on the other hand I have a friend who thinks we spend way to much, because every trip to PA involves a museum or a science center or the Ren Fest, or zoo, or the like...we saved up for it and those things are worth the money...I can think of a billion other little things we pass on so that what is important can be afforded. (not to mention they can't imagine the ability to make such a trip so often)