Frugality Or Austerity?

The re-discovery of frugality as a lifestyle choice


Austerity has become a real buzz-word of late, as anyone who keeps half an eye on European politics knows. In fact, governments across the globe are debating whether it’s better for an unstable economy to cut spending and so save money, or inject some more cash in to the pot to give things a capitalist boost and get everyone spending again.

On an individual level, these are questions we need to ask ourselves too if we are to look after our financial health. For most of us, austerity has a depressing ring to it. Who wants to give up spending our hard earned cash on stuff that makes us happy, huh? Saving every spare penny we have sounds kind of miserable. Yet we are all aware of the trend for curbing our consumption. So could frugality be the middle-way between two extremes that we are looking for? Whether rich or poor, people are wising up to the fact that spending a lot of money on shiny trinkets (or, as they are often sold to us, labour-saving or lifestyle-enhancing technologies) may not be making us happy in the long run.

Of course, the idea that less is more is nothing new. Remember the Spartans? Those ancient Greeks that were famous for keeping their soldiers hungry and never pandering to people’s desire for luxury? That was thousands of years ago, and it’s a philosophy which can be seen reflected in the ancient cultures of every continent. We still find some value in it today.

One of the most famous personal finance bloggers, known as Mr Money Mustache (check out the pic on his site if you’re wondering about his name) has gained a massive following for bringing the “less is more” philosophy embodied by him and his family to the masses. They prefer bikes to cars, camping trips to expensive resort holidays, and value time more than money. But what makes him such an interesting example is that he is by no means poor. He has the means to be living differently – and confesses that in the past he was on track to be that guy who owns multiple holiday homes and flashy cars – but then he discovered that living frugally was actually way more fun, healthy and enriching than living like Richie Rich.

He also freely admits that you can still take advantage of the amazing technology and advantages of living in a first world country, but still get the buzz of living simply. So no one’s suggesting building your own brick oven instead of buying a stove, or brewing your own medicines instead of visiting the GP when you’re sick. But there’s an important lesson to be learnt from looking at the lifestyles of people like MMM, because they embody the truth that capitalism can be made to work for you, not against you; that there’s a way of relishing the great gift of being a human in nature without going completely off-grid.

Another popular American writer, Bruce Piasecki, advocates in his book Doing More With Less: The New Way to Wealth, seeing time as an important a resource as money.  So whereas maybe you’re used to asking whether you should be austere or spendy with your cash, try asking yourself the same question about what you do with your time? This can apply to business owners and managers as much as individuals, as we all need to ask whether what we’re spending time on is wasteful and pointless in the long run, or whether it’s contributing to our ultimate goals. And as every Vestpod-er knows, those goals are ultimately more to do with freedom, not figures.

So how can we free ourselves with austerity? It’s not as simple as spending no money. We’ve talked before about investing for the future, and we don’t just mean adding to the pension pot. We’re talking about getting qualifications and training that will help us achieve the life we really want to be living; things that contribute to our physical health and wellbeing; planning ahead with good expert advice and self-knowledge so that the ups and downs of life can be relished and accepted rather than merely coped with.

As the world veers towards the re-discovery of frugality as a lifestyle choice (think artisan baking, home-fermenting, #vanlife and all the other myriad back-to-nature lifestyle phenoms that pop up on instagram), perhaps it’s time to take these ideas more seriously than they seem, and incorporate them into our own financial plans. Because you know as well as we do that spending a thousand pounds on a pair of shoes will not really add to your happiness: it might give you a crazy high for a little while, but five years (months, probably) down the line, you’re going to regret it. You don’t have to be extreme about it, but do take time to read some more books and blogs about how people get along without excessive spending. Check out the Netflix documentary The Minimalists too, for some truly inspiring examples of people discovering that wealth is not all about money.