We always pat ourselves on the back and say, "Well done, we didn't spend much, we aren't in cc debt, we save 60-80% of our income."
We aren't the consumer suckers who get themselves in consumer debt...
But based on previous estimations, people in cc debt are something like only 10-15% of people.
So why do we say we are doing better than them? It's like comparing against the worst.
So there are rich people who get into cc debt, and there are lower income people who get into cc debt.
But we don't compare against the worst so who should we benchmark against?
The true answer is. NOBODY... we should never compare ourselves with anyone, but then I'll have nothing else to write for today's post...
So next we have the rich people who are frugal and the lower income people who are frugal.
Now, we are likely going to be somewhere in this group.
Then there's the middle group, rich or lower income, and they spend normally.
There's the spend all their money but not in cc debt, and the not really frugal, but still spending lower than normal.
Then we hear many frugal people talk about how they aren't consumer suckers and they don't want to be in cc debt, etc... So I'm like... errm... a type E person shouldn't be comparing against a type A person. That's like the other end of the spectrum. Of course no one wants to be in cc debt.
But is being type E better than being type D? Is that so much better? Is it worth being more frugal?
So I'd consider myself as type E, then I have a friend who is likely type D. Saves a lot and doesn't spend much, but doesn't splurge much.
He was commenting so and so bought a Lexus and wondered when he would be able to afford an Audi...
And I told him, why not just get the Audi. He can afford it. Maybe it would drop him by a little bit to somewhere between C and D, but that wouldn't put him in group C. With his income, getting an Audi shouldn't be much of a problem.
He also has no intention to retire early. He likes his work and expects to be working til his later years.
So I do wonder, is this worth it? For me, I don't feel like I'm giving up anything when I don't buy stuff, I have little desire to spend. And it's a challenge for me, to try to cut expenses whilst trying to maintain my current standard of living. It's like playing a game to me.
But there's a lot of others who don't think it's fun. Like my friend, he spends money for convenience, he doesn't splurge on many stuff, but he doesn't mind eating at nice places, or going on trips, etc. He doesn't have the latest phones or big screen TV, etc.
That's when I feel, for someone like him... why not just get that Audi? 2nd hand one of course.
Now, there's a bunch of folks who don't like their jobs, so they try to keep a frugal lifestyle so that they can leave their jobs. That's a good enough reason to be frugal so that they can get FI, blah blah blah...
But what about those people who don't hate their jobs?
There are people who are neutral or love their jobs. They take it as a daily routine so they go to work. They may love it, or have no feelings towards it and plan to be working til their later years... in such an instance, does being entirely frugal make sense to them?
Assuming that they are resisting some form temptation. If they inherently have no desires, then there's nothing to talk about, cos being frugal is just 2nd nature to them...
But what if someone wants to maybe buy something nice once in a while? Once a year? Does that matter? To a frugal person, it matters, mathematically, it also matters, cos in the spreadsheet, it will say, so and so will retire 5 years later...
But in reality... does it matter?
Like if I want to buy an LV bag every year. That maybe would decrease my annual savings by 5%...
So instead of retiring by 45, I may need to retire at 50...
BUT... what if this person is planning to work til 65 anyway???
So I really think... different people different circumstances.
Maybe it's ok to relax a bit more.
I mean, if your target is to retire by 35, and you need to save X amount by Y date and every year spending must be kept to Z, then yes, the calculation and everything needs to be as precise as possible and being frugal is a must...
However, most people don't think like this. Many people are planning to work til 50-65 and if so... what's wrong with a little bit more spending...
Now, of course, with a little bit more spending, it's easy to drop into Type C, then if relax a bit more then maybe drop into type D, and it may get worse.
So I'm kinda thinking... maybe being absolutely frugal isn't worth it for most/many people. Spend a little to reward yourself (with limits). IF you aren't planning for retirement or early retirement, I think it's pretty ok, especially if you love your job or are planning to be working til 65.
I do think normal spending with 20% savings rate to be low, but if someone keeps their savings rate high and stays at type D levels, I personally think that's good enough.
I don't think it's about playing with the lowest common denominator, then basically the best way would be to be freegan and earn an income.
But that's besides the point. Life isn't about everyone playing for the same goals.
Different people different options and circumstances. And everyone should be playing the game according to their own objectives and situations.
Like when I see someone with an LV bag, or new phone, I don't judge them for being a consumer.
I don't go, "Tsk tsk... why would anyone buy such an expensive thing."
To me, he's made his decision, I hope he lives knowing the outcome of his decision. Maybe he/she has already budgeted very well and this is in their calculation for them to retire at 65.
So I don't pat myself on the back and say, "well done ERSG, you are more frugal than the next person."
To me, being frugal is pretty much a lifestyle decision. Pretty very much like, taking up a new language, or learning how to code, or playing golf, or being a vegetarian, etc.
Some choose to do more, some choose to do less, others might find no interest in being frugal.
In the end, it's really all about balance. How people balance their resources with what they want to achieve and accomplish and experience in their lives.
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