FI and Frugality: What it Means to Me (and What it Doesn’t)


If you have done any reading within the FIRE community, you hear the word “Frugal” bandied about a good bit.  Unless you’ve won the lottery, are related to one of Google’s original employees, or sold your internet company for a billion dollars, it is likely that you are going to have to discover what Frugal means to you in order to successfully accumulate the funds necessary to retire (early or otherwise).  Then, depending on the level of success during your accumulation phase, you’ll have to apply your understanding to spending in retirement, or distribution phase of the cycle.  This word does not conjure up the same image in everyone’s mind.  My frugal may not be yours.

The primary dictionary definition of “frugal” is:  “careful about spending money or using things when you do not need to.”  That, my friends is a loaded definition.  I want to parse this definition a bit and discuss what it means to me.

The first word in the definition is “careful”, when you read that word it conjures up a particular state of mind in you.  Everyone understands being careful, but the level of care or concern in being “careful” is going to be a very subjective thing.  Careful for me may not be careful for you.  I tend to cross streets at corners, others look for cars and cut across the middle of the street.  Are we both being careful?  Probably, but I would never be comfortable crossing in the middle of the street.  That is not careful enough for me.  One person’s carefulness, may be another person’s carelessness.  Perspective is everything.

You are probably seeing where I’m going here, but let’s look at one more operative word in this definition:  “need”.  When you think about need, about what is necessary in your life, you are viewing things through the lens of your experience.  Some people feel they need to go and get their hair done by a professional every week or month.  Others may go to the discount barber twice a year (to the chagrin of their wives).  Does the second person’s lack of need of professional hair care obviate the need of the first person?  I would argue that it does not.

What I’m driving at here is that every one of us has a different view of what it is we need.  If we can restrict our spending to those things on that list, then by definition, we are frugal.  If we cannot, then we are not.  It is clear that there is going to be a largely common area in the Venn diagram of what two people need:  food, shelter, clothing, security, etc.  Where we will start to differ is in further defining those necessary items.  And we’ll continue to differ in the areas outside of the Venn diagram’s common area.

When I first started researching the FI community it was clear pretty quickly that most of the participants were young, relative to me at least, and that the movement collected people who were almost in competition to see who could live “well” on the least amount.  I was amazed at Mr. Money Mustache’s ability to live on $32,000 per year.  I was equally amazed at Justin of Root of Good’s ability to come in under budget on a $40,000 per year plan.  Don’t misunderstand me, I genuinely believe that these folks, and there are many of them, can and do live comfortably on much less than I ever considered possible.  I’m just not sure that this version of frugality is one that I can live with.  There are a couple of reasons why I’m skeptical of my ability to replicate their result.

One is that I’m significantly older than most of the folks in this community (not all, there are a sprinkling of over 50 folks, some even older than that, in the FI community, but still, the great majority are 20s to early 40s).  My wife and I have developed a system of living that works for us (that involves pricy hair treatments for her and good whisky for me).  That pushes our bar up a bit.

[SidebarI remember when I was in my late 20s I had an opportunity to take a job teaching German at a community college and they were offering a salary, with benefits, in the low $30k range.  I could not imagine making that much money (this was the 1980s), but chose to go to law school instead (yes, I’m a lawyer, try not to hate me).  It wasn’t long after graduation from law school that I could not imagine living on a salary that low.  Stoics call this “hedonic adaptation” and it is a real thing, and not a good one.  If you are interested in a thumb nail look at Stoicism from MMM (my perspective on which, will be the subject of a future post), click here.]

The bottom line is that in my situation it could be that being “frugal” has a different look than in yours.  It could be that it will take more of a nest egg for me to achieve an FI life that I can maintain, than it would for you.  I think that needs to be ok.  We all need to find our own level of comfortable frugality that we can live with for the long-term.  What that is for me, and how I’m going to get there, well, more on that coming up.

Until Next Time, FIRE On! – Oldster

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