Frugal is the New Black: Living within Your Means (Part 1)

While sorting through the world’s most ginormous stack of unfiled pieces of paper (where does it all come from?!?!), I came across a Social Security statement from 2010. In case you’ve never gotten one, it summarizes all the taxable income you’ve ever received in your whole life and tells you what kind of retirement benefits you can expect (they stopped sending them out, after realizing all that paper and printing and postage was costing an exorbitant amount of money—you can still get this info online if you feel comfortable putting your social security number into a website).

Anyway, mine dates back to 1997, when I had my first job at Chik-Fil-A (I made $344 that year).  In 1999, my senior year of high school, I made $3,502 (Toys R Us).  That’s easy to live on when you have zero expenses and are living with your parents. But I was shocked to keep reading. In 2004, my first full year out of college, I made $12,504 (I’m pretty sure that is near the poverty line).  In 2009, I pulled in a whopping $5,760. How on earth did I survive on $5,000 without sinking into debt?

There are a lot of reasons, really.  Maybe it was luck (I got married, though he wasn’t making much either as an intern on an organic farm).  Maybe it was grit (we essentially lived in a 10x10 house and couldn’t take a shower without getting the rest of the bathroom soaking wet). Maybe it was genes (my Grandma, who is now in her 90s, once told me she insisted on leaving the hospital with her newborn well before the doctor wanted to release her, because she was out of money and that was that). But somehow I made it work.

If you think of my income as an accordion, growing and shrinking from year to year, I lived with my life squeezed in the middle. And it was always squeezed. When the accordion took on income, I thoughtlessly expanded my spending to meet the edges. When I made less, I shrunk my life to fit inside. I wasn’t exactly smart with my money (oh, I wish I had been!), but I was living within my means.

This is the first and most crucial step to getting your finances where you want them to go. It is also one of the most difficult. There is no shortcut here—if you are spending more than you are earning, you’re going to have to do the hard and painful work to figure out why. I know this might be overwhelming, but if you’re still reading this blog it’s because you want to get your head out of the sand. So if all you get out of this is a little more awareness before plunging your head back underground, I’ll take it.

If you have some negative cash flow, there are three ways to solve this problem:

·         Option one is to earn more money. This might be a valid option for some. Sometimes when we are feeling strapped, I will pick up some overtime to give us a buffer. But most of the time, my emotion makes this decision and decides that the added stress isn’t worth it.

·         Option two is to wait for the magic bullet. This would be, for example, an inheritance, or a super-winning lottery ticket. (Not recommended)

·         Option three, and the one I am going to talk about in this post and the next, is to spend less money.

This is the part of money where people get judgy and opinionated. As those of you who know me know all too well, I can be judgy and opinionated (there, I said it). But I have no wish to do that here. The only person who can judge the integrity of your spending is you. My only wish is to help you see where maybe you could make some more frugal choices. Notice I didn’t say cheap choices. Cheap isn’t necessarily bad, but it isn’t what I mean. A cheap person can be miserly, selfish, and still incredibly irresponsible with money. Being frugal is its own form of wisdom:

                               A frugal person doesn’t ask, “How much does this cost?”

                               A frugal person asks, “What is this worth to me?”

This is the part where finance gets personal, and why I talked last time about using your emotions and your logic to prioritize spending. For example, I care zero about fashion. One time in my adult life I tried on a pair of skinny jeans, and when I struggled to get them over my ankles I panicked and wondered what would happen in the dressing room if I couldn’t get them off. It was easy to say no to those pants.

But I absolutely love food. I am drooling at the thought of my favorite thinly sliced okra fries slathered in lime and cilantro and masala salt. If you put this in front of me and ask me if it’s worth $7, I am always going to say yes. This doesn’t get me into too much trouble because it involves a popular restaurant in a tourist town, so it takes some real effort to even get this plate in front of me. The stressful emotions elicited by a trip downtown on a Saturday night usually trump my palate (I don’t really like going downtown anymore. Seriously, one day I just woke up old. I don’t know how it happened).

So I can’t tell you how to prioritize your spending, because you would just waste all your money on food and wear the same pair of jeans every day (ah, the good life!). But I will tell the choices we have made to cut back on our spending and to readjust our priorities in order to live within our means. Sometimes this was easy (no skinny jeans for me!). But sometimes this was pretty hard (not having a second bathroom when we finally bought a house).

The important thing is that you are asking, “What is this worth to me/us?” You need to let your own values and goals answer this question. You can’t let your friends, your parents, your kids, your neighbors or your culture make this decision for you. Having a new iphone is well and good if you can afford it. But if that data plan is regularly making a dent in your grocery money/your emergency fund/your generosity/fill in whatever matters to you, you are letting your culture decide your values.

One of my favorite quotes about money comes from a little song writer named Bobby Jo Valentine, who says, “Wealth is a measure only decided by what you believe.”  Words like that make me feel hopeful about the world. It doesn’t matter if you are wealthy compared to someone else’s standards. But it matters if you are wealthy compared to your own. So before we have a financial house cleaning (coming up!), think for a minute about what you believe. Is living beyond your means keeping you from living up to your own standards? If so, stay tuned for Part 2: a little frugal can go a long way!