Frugality and Tradeoffs

Is frugality always worth it? Is it always worth it to trade your time to save money?

And at what point does frugality simply become not worth it?

One of the interesting ironies of frugality is if you get really good at it, you get to a point where you don't have to do it any more. You'll have plenty of money left over because you're using that money as efficiently as possible.

Which then leaves you with a new decision layer: what types of frugality are worth it relative to the tradeoffs in time required?

Grocery shopping gives us an excellent example of this decision layer: A competent frugalista will reduce his or her grocery bill to a point where it takes up a smaller and smaller portion of the household budget. Then, all of a sudden, it stops being worth it to invest an extra 25 minutes driving to another grocery store to buy a couple of cheaper items there. The few bucks you save stops being worth it.

Now, granted, some frugality skills become automatic and thus require no effort. Like buying lower cost unbranded or store brand items. After all, the less expensive product is right there, buying it requires no extra effort. Further, some frugality techniques may remain worthwhile because they offer sustained payoffs. Examples here would be a one-time phone call every few years to renegotiate a cellphone or cable bill, or a quick call to tweak coverage on an insurance bill. That phone call could save you hundreds of dollars a year for years.

And then there are big-ticket frugality decisions that always stay worth it. Replacing a high fee mutual fund with a near-zero fee index fund is a prime example here. This single decision can save you tens or even hundreds of thousands of dollars over the course of an investing career, and the savings differential grows as your assets grow.

In our home we are grappling with this new decision layer too, and I finding I'm retaining the frugality habits I do automatically and habitually, the ones that come naturally to me and don't require any thinking or extra cognitive energy. And then I try to maintain any frugality habit that saves me both money and time, so I can entirely sidestep the money/time tradeoff above. And this often involves avoiding shopping and avoiding buying things entirely, and re-allocating that time to things I'd much rather do. It's another one of frugality's rich ironies.

One last thought. What happens to readers who "get" the value of frugality, learn and then master it… and then master it so well that they don't really need to be frugal any more?

They stop reading blog posts about frugality! It's an interesting second-order question for frugality and budget bloggers to think about.


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