The Great Debate on How Best to Save Money

Ladies and gentlemen, I now bring you another Fighting Foreclosure rant...

Lately I have been reading a fair number of blogs debating the merits of making "large" financial choices versus "small" ones. I put these words in quotes because I think they are extremely relative, but examples of these large choices seem to be things like refinancing, changing cell phone plans, comparing interest rates on investments and so on. Small (or frugal) choices would be things like using coupons, reusing plastic bags, installing cfls and so on. Every time I see one of these posts they make my teeth curl.

The ones that really get to me say something along these lines, "Why spend your time clipping coupons when you would save far more money by spending that same time researching loan options for refinancing your high interest mortgage?" And at first blush, that seems to makes sense... until you realize all the other added advantages of "small" (aka frugal) choices. In my opinion it isn't about making large or small choices... do both! Do everything that makes sense for your lifestyle and family. Here's how I see it:

You can make frugal choices 24/7.

Okay, so you spend your one hour a day researching new loans. Does that mean you can't turn the lights off or shut down your computer when you leave the room? That you can't have a cfl in that room or have the temperature set a couple of degrees to save a little electricity? Small, big - they are not exclusive of one another. In fact, most little everyday frugal choices don't take a consecutive hour. They can be done in tiny increments throughout the day. In fact, some choices may save you time. Maybe you decide not to water the lawn as much this year, or you decide not go shopping, but to stay at home instead. These types of small changes require little to no effort. Why not do them?

Frugal Choices Add Up

The argument that "big" changes can save you more than frugal changes is really arbitrary. Talk to some of the coupon warriors out there and you'll see that the money they save is incredible! That adds up over time. I was able to cut my electric bill in half by switching to cfls and being responsible with my electric usage. That may only save me $25 a month, but over time it adds up. Especially when I start adding in the other changes I have made on other bills. These little amounts of money can be saved again and again and again. It isn't hard to see how over the course of year they can add up.

Small Choices are Frequently Environmentally Friendly

I wash and reuse tin foil and plastic ziplock bags. I use cloth napkins. I started a compost pile. I do these things not only because they save me money and decrease my trash, but they also are better for the planet. Being wise about gas mileage, installing cfls, using less water, making your own coffee for the morning drive, shopping at local markets... all of these things are good for the wallet while at the same time they reduce your carbon footprint. In fact, other than perhaps coupon clipping, which uses up a lot of paper, I can't think of one small change you can make that isn't also green.

And there is more...

Being Frugal Doesn't Mean Buying Cheap

Most frugal folks I know love getting a good deal, but that doesn't always mean they want the cheapest thing out there. They will do a some research first and then choose the brand/model that has the best value. This may mean buying a more expensive item, but knowing it will last a long, long time. This doesn't put money in your pocket the way that getting new lower auto insurance will, but it does mean that they get more for their money and it will last a lot longer. If they can find it on sale - all the better! I find that frugal folks appreciate good quality and good deals.

Frugal Changes are a Gateway Drug

Once you start saving money, it is hard to stop. Once you see how easy it is to shave off a few dollars here and there, it is hard not to want to see what else you can do. Say you start making a brown bag lunch 3 times a week instead of eating out every day, once you see how much cash you have at the end of a week, I think it is hard not to find other things to do. Actually I think both big and small changes are gateway drugs - people get hooked on saving money. Whether they start with big changes and then filter down to smaller, or if they start with smaller and then start looking at their bigger expenses, it's like potato chips - you don't stop at just one!

You Can Pick and Choose, You Know

It isn't like anyone should be expected to do every single frugal tip out there. Everyone should go through and see what works and what doesn't. I don't feel like making my own laundry soap, though there are those that do. I hired someone to plow my driveway this winter. I don't do my own oil changes. Oh sure, there will always be people out on the outer fringe, but honestly, those folks are rare. Remember your high school statistics and that old bell curve? Most folks are going to be somewhere in the middle. If you don't want to clip coupons - don't! I think it is fun, but I don't spend any more than maybe 20 minutes on it the day I am going to shop. The idea that you only have a limited amount of time to save money per day is a bit silly. The fact is every family and person has their own threshold of what will work for them. Make choices that make sense for your family.

Frugal Choices Can Be a Source of Pride

I am not talking about bragging to everyone you meet about your penny-wise ways. I am talking about that feeling you get from turning an old beat up bookcase into a beautiful piece of furniture with a little elbow grease and a can of paint. I mean the thrill of going out into the backyard and picking veggies out of your own backyard. When I look at home repairs I have done myself, I feel proud of what I have been able to accomplish. Though I paid off my credit card last month and am proud of that, it isn't the same feeling as looking out at my square foot garden. I've been making my own birthday cards and doing a lot of cooking, and while it takes some time, I feel good about it and love what I have been able to create. That's a pretty wonderful feeling.

Frugal Choices Can Improve Quality of Life

I remember reading an article a long time ago titled something like, "You Will Have To Pry My Cable Out of My Dead Cold Hands." The same could be said for some people's vente lattes or Taco Bell lunches. If that is how you feel about, then that is fine. Don't make that switch. Or try a smaller switch - drop some premium channels, get a tall rather than a vente, go out to lunch a few less times. Or don't. Try something else. However, what I keep hearing from people is how much they enjoy the alternatives: people who wouldn't give up some convenience foods loving their home cooked alternatives better, tv buffs who are enjoying having one night off and having family night instead, home cooked "pub nights" with snack foods and beer being better than going to the pub itself. These are the kinds of lifestyle changes that are going to stick, no matter what the economy is, simply because people enjoy them more.

There Are Only So Many Big Changes

Let's face it, there are only so many huge changes you can make in your life. Eventually you are going to get through them and put them on a maintenance list, to be reviewed monthly or more likely, yearly. If you want to keep saving money, you are going to have to start looking in other directions.

Believe it or not, Frugality can be Fun.

I suspect that people who think frugal tips are a waste of time feel that way because they don't personally want to do them themselves. I don't recommend making yourself miserable to save a few pennies. As I mentioned, I don't make my own laundry soap - it sounds like a long, tedious, messy process. But there are many who do. They don't just do it because it saves money, they do it because it is kind of fun - there is a mix of science and DIY pride there. Frugal tips should have an element of fun. I love seeing my grocery bill go down when I had over my stack of coupons - not just because of the money I save but because it is fun. I feel like a video game that I just won. I made my own pita bread the other day and watching them puff up on the stove was a hoot! I actually look forward to getting my utility bills to see if I was able to beat the company this month.

Honestly, I think everyone should look at their personal big picture. How much income do they have? What are their goals in 5, 10, 20 years? How much money do they need to achieve their goals? What kind of lifestyle is important to them? What will it take to get it? Based on current income you might have to pinch every penny until it squeals or maybe you're doing just fine, but would like a little extra folding money in your pocket. Mix the big and the small choices for what works - it shouldn't be an either/or thing.





Photo by: swister_p