Monday, December 17, 2007

Are You Frugal or Just Downwardly Mobile, in Denial or Just Poor?

I recently spoke to a personal finance coach and she raised some tough issues: Are we frugal because we're simply committed to a thrifty lifestyle or are we struggling with other issues? Here's the deal: Sometimes a thrifty lifestyle masks a long list of hidden problems. The list is based on my recent telephone conversation with Mikelann R. Valterra, the author of Why Women Earn Less .

1) Under-earning: Your income is less than you need to take care of basic expenses (health care, housing, emergencies, clothing), a few perks (vacations, entertainment, hobbies) and savings/retirement goals. In this case, you're using thrift to avoid one big hard reality: You need to earn more, get a better job or raise your rates.

In this case, we're in denial. The push to be frugal may come from a dishonest place. We cut corners instead of earning more money. We call our lifestyle thrifty because we don't have the courage to ask for a raise or move out of a comfy-but unrewarding situation. Bottom line: We're not mindfully frugal; we're frugal by default.

2. Clueless about accounting. We may live on a shoestring because we don't track our finances or save enough to buy a longer shoe string. It sounds like a paradox, but in this situation, we may opt for sacrifices (no health care, broken down car, no vacations) because we lack the discipline to really track our money and to really save.

3. Starving artist myth: Under this scenario, a "lack of monetary success is often an integral part" of the starving artist image, Valterra says. Financial success is considered a "sell-out."

4. Noble poverty scenario: Like the starving artist syndrome, some of us distrust wealth and the strategies that lead to wealth. Here's what Valterra says: "Under-earners who live a life of noble poverty often follow the maxim: It is better to be good and poor, than rich and evil."

So where do I fit on that scale of financial honesty?

Quite frankly, I need to (#1) earn more and (#2) track my money better. Those issues represent about 85 percent of my financial goals. And yeah, in my heart of hearts, my inner poet subscribes to the starving artist myth (10 percent of my problem) and with that subscription, I also have a share in the noble poverty scenario (5 percent for me).

But as I've written earlier, even if I were wealthy I would still aim for a frugal life. It would remain a conscious choice. Valterrra calls it: "Voluntary Simplicity," and yeah, that's my bottom line goal. What about you? Please send an email: or leave a comment. Thanks!
Related Post:
"So When You're Rich, You Won't Have To Be Frugal," He Told Me

My Previous Posts
Recycled Cinderella: Same Outfits, Different Holiday Balls
Saving Money with CFLs: A Formula for Bright Lights & Lower Expenses
My Jane Austen Biz Plan: 10 Smart Career Moves: An English Major's Aria
Turn Garbage Into Liquid Cash: Save 1000s of Gallons of Water


Digg! src="" width=85>

The Frugal Duchess Booktique
The Frugal Duchess of Beauty Store

Book Shop of Fear
The Poetry & Drama Queen
Frugal Jazz & Blues
Frugal Comic Book Connection


Jacob said...

Oh this is almost crazy with these four choices. Frugality is much more than that. I'm frugal because it allowed me to become financially independent in five years. Another reason to be frugal is to make resources go further. There is an environmental aspect to this as well. For entrepreneurs, frugality is almost a must as it increases profit margins. I could keep going on for a while. Frugality is not always about deprivation and not everbody desire to spend money on knick knack :-)

Frugal Duchess said...

Hi Jacob:
Thanks so much for your comment.
I totally agree with you and I
talked about some of those other reasons for living frugally in another post.

I love your line: "Frugality is not always about deprivation!" Well Put!
Take Care & Thanks so much for stopping by.

Best Wishes,