Frugal Chic

[Sara Noel]

Frugal Chic Anyone?

ONE thing I like about spending time with my husband's family on Cape Cod each year is that I get to enjoy a cornerstone of my own upbringing: the knack of being frugal.

Although there are various ways the family is mindful of how it spends money, I notice it most around food. We bring snacks to the beach, shop according to what we're going to cook, eat in rather than out and repurpose even the smallest leftover so nothing goes to waste.

I love it, not that I'm a paragon of thrift myself. There is something comforting to me about the chance to stay in touch with values that seem smart, resourceful and virtually extinct in the rest of my life.

When I complained to a friend recently that frugality just wasn't hip anymore, she laughed. "I don't think it was ever hip," she said.

Well, maybe not. But like many 30-something Americans, I was raised by parents who were children of the Depression and World War II. Back then being thrifty was largely born of necessity, but it also commanded a longstanding respect as a virtue on its own - not just a survival tactic in hard times. Even when I was growing up, phrases like "A penny saved is a penny earned" or "Use it up, wear it out, make it do or do without" were used in earnest. These days they seem about as quaint and useful as a hoop skirt.

One could argue that financial fashions come and go, but the fact that thrift seems out of style strikes me as a reflection of something strange and backward going on in people's attitudes and behaviors toward money.

It's not just that the personal savings rate (apart from retirement) is low - it is the lowest it has been in 60 years, near zero by some calculations. At the same time, individual debt is at a record high. While some people are wealthier thanks to the rise in property values, more Americans have tapped out that equity than ever before.

It's interesting that some of the debates in economics revolve around these trends. Pointing to the myriad ways people can get access to cash these days, even if it's borrowed, Christopher D. Carroll, a professor of economics at Johns Hopkins University, said: "There's no question that the savings rate has declined. There's no question that the virtue of thrift has declined."

But, he added, "This might be a rational response to a world that has less need for savings."

In the abstract, it does seem that the plethora of financial options available might have made thrift expendable, irrelevant, but at what cost? George Lowenstein, a professor of economics at Carnegie Mellon University who studies frugality, thinks that underneath all this getting and spending is a growing financial anxiety. "People are worried about money, they are worried about not saving enough, about making ends meet," he said, "so they try to persuade themselves they don't have a problem - by spending, which only makes the problem worse."

You might think that when push comes to shove, most people would be able to make sensible budget decisions, but Dr. Lowenstein isn't so sure anymore.

His most recent study on the difference between tightwads and spendthrifts produced an unexpected finding. In a neutral environment, subjects who tended to be more frugal naturally spent less than those who were more extravagant. But when frugal subjects were distracted, they tended to spend as much or more as their spendthrift counterparts.

He concluded that being frugal was not only a fragile quality, for many people "it's extremely vulnerable to environmental conditions."

I'd like to think that in the results of this study is a kernel of good news: under more supportive conditions frugality might thrive. I don't know what that would look like. You won't see "Waste not, want not" as a headline on the cover of InStyle magazine anytime soon. But if keeping up a facade of affluence is part of what's causing people to overspend and undersave, a quiet, unembarrassed acknowledgment of moderation might help one and all.

Or we can wait for the ball to drop. "We may value frugality again if it turns out, in 10 or 15 years, as baby boomers reach retirement, that they discover they haven't saved enough," Dr. Carroll said. "Then we may discover that frugality is more valuable than we thought."

Or perhaps we'll all sail well-heeled into our golden years, and the whole notion of thrift will simply fade away.

M. P. Dunleavey writes about personal finance for MSN Money.

source: NY Times

[forestdale]

I really like this sentence: "Back then being thrifty was largely born of necessity, but it also commanded a longstanding respect as a virtue on its own - not just a survival tactic in hard times. "

[ironmaiden]

Hi. I'm in MA and me and DH both had depression era parents. I have older sisters and I'm the surprise baby.

Americans despite all the talk of how independent we are, Americans follow "heard" mentality. The mentality of the moment is that the house is your retirement and bank and to dump all your money including equity into it. Just the latest fad. It is "okay" to have credit card debt - everybody does.

Being frugal was a learned skillset. Unfortunately the skill has been lost on a whole generation. But like knitting, it can come back

[Katybird]

Great article Sara. Thanks for posting it for us.

[emmycita]

Being frugal was a learned skillset. Unfortunately the skill has been lost on a whole generation. But like knitting, it can come back

Frugality, as an overall social value, appears to be crepping its way slowly but steadily into popularity. With the cost of gas and retirement looming even further away for most Americans, ther is no other choice than saving a little here and there. What really gets most people from what I've heard, is that they forget about a little here and there. As so many people have said, just giving up that trip to Starbucks or that random magazine that you'll be done with after an hour makes a big difference in the long run. Part of that, too, is that Americans also tend to want results immediately, but the very heart of frugality is that it's a serious commitment with few surprises.

But I'm pretty much babbling at this point. When I saw this topic, I thought of Napolean Dynamite where it's normal for all the kids to hold jobs to make money towards credible purposes. It was just great to see a movie that shows teenagers who value hard work and self-sufficiency.

[Emerald_Mommy]

He concluded that being frugal was not only a fragile quality, for many people "it's extremely vulnerable to environmental conditions."


That thought grabbed me. Maybe if I acknowledge that my frugality is a fragile quality I won't feel so much failure when we "fall off the frugal train". I feel like we're swimming upstream compared to so many of our friends. I guess I just have to remind myself that we're "living like no one else, so that later we can live like no one else."