Can We Break This Spending Cycle? Do We Want To?

Amy Dacyczyn, author of the wildly popular 1990s The Tightwad Gazette, wrote a post one time about the television show Roseanne.

She noted that Dan and Roseanne are always struggling financially.

One time, they get an unexpected bonus of $50, and each Dan and Roseanne spend the money on things for themselves without discussing their purchases with one another.  Now, instead of having an extra $50, they are $50 in the hole.

Dacyczyn noted that every time Dan or Roseanne got extra money or worked overtime, they developed a “Yipee!-We-can-spend” attitude.  Yet, when money is tight, they scrimp and save and “feel poor” because they can’t spend.

Is America a Nation of Dan and Roseanne Connors?

The last several years have been rough ones financially for American citizens.

Many people lost their houses, and even if they were able to keep up with payments, they may have found themselves underwater.  People lost their jobs, and even if they were able to stay employed, they may not have seen a raise for years while health care and other costs escalated.

Yet, there are signs that the economy is improving.

More people are beginning to buy houses.  According to Bloomberg, “Americans bought existing homes at the fastest pace in three years in February (2013).”  In preparation for last Christmas, The Huffington Post reported that “the average shopper planned to spend $854 on presents–a 32 percent jump from last year, approaching the $859 that Americans planned to spend in 2007 before the recession hit.”

Just like Dan and Roseanne, we tighten our belts when we need to, but at the first sign of healthier financial horizons, we loosen the purse strings.

Should we?

An Argument for Restraint

cash_change_moneyThose of us who are old enough to have grandparents who lived through the Great Depression know that their financial views were shaped during that difficult time.

My grandmother routinely washed aluminum foil to use again as well as plastic baggies well into her 80s.  She clipped coupons and bought groceries and clothes on sale.  She and my grandfather lived a fairly Spartan existence.

But they never had credit cards with balances, and they had enough retirement savings to see both of them through very long lives (dying at 88 and 90, respectively), and to have money leftover for a small inheritance for each of their 9 children.


They weren’t Dan and Roseanne Connor.

Sure, to us, such a life sounds rather drab.  But while my grandparents didn’t have the excitement that some of us have when charging up our credit cards and buying things we really can’t afford, they always had financial peace of mind.  My grandfather lost his job twice due to layoffs, but because they were steady savers, losing the job wasn’t a serious financial blow.

How many of us can say the same?

Most of us can and do cut corners when we need to–giving up eating out, cancelling vacations, putting off purchases, but very few of us embrace a life of continual cost cutting measures.  Because we only cut when we have to, doing so makes many of us feel “poor” and deprived.

But what if we had an attitude shift and realized that finding ways to pay less for everything and doing without things we don’t really need is a way to becoming financially secure and perhaps wealthy?

How Can Permanent Frugality Improve Your Life?

Think about it.

Without dinners out several nights a week, how many extra pounds might you lose (not to mention how much more money you’d keep in your wallet).  If you don’t buy “stuff”, how much more room would you have in your house?  How much more time would you have if you didn’t need to clean all of the clutter around your home?

If you make frugality a way of life, it no longer feels like deprivation.  It just feels like the way you live your life, perhaps as the anti-keeping up with the Jones’.

And let me tell you a little secret–you can often have many of the same luxuries as your neighbors without the added extra expense.

For instance, our television died in January.  We were too cheap to buy a new one, so we did without and put the word out asking family and friends if they had one they would like to sell.  Meanwhile, my kids still got to watch their favorite PBS shows on my computer, and that’s how I got to watch the news and my cable shows.

We didn’t really miss anything.

A few weeks later, a relative gave us one of her many extra tvs, and we saved the expense.  Even if we hadn’t gotten a television, we really didn’t miss much because we could watch everything on the Internet.

Finally

Now that the economy is improving, you may start to spend more, especially if you’ve tightened your budget over the last few years.

But don’t rush into spending.

Your frugal lifestyle, one that was born out of necessity, can be the same lifestyle that sees you through to financial security–if you don’t abandon frugality at the first sign of better times.

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Published or updated May 26, 2013.

Comments

  1. I spend so little on things like cars, clothes, and food that we have the money, when we want to, for luxuries like a real housekeeper when I’m super busy. We save enough on groceries in our area compared to the average family that it FULLY covers two part-days of housekeeping a week. Mostly, I don’t have this luxury–and it is a luxury!–but if work and homeschooling become too much, it’s an option that I can have.

    To me, frugality is about the freedom to make choices to spend your money where you appreciate it most. It’s not about deprivation. My car is 10 years old, but I’m in no hurry to get rid of it. I have much, much better things to spend my money on!

  2. I love when people use old shows or movies to discuss finances. This was a good article and I remember watching that show and how they were. It seems like America is all about keeping up with the jones’s. Your friend just got a new iphone 5 so you want an iphone 5 even though your iphone 3 or 4 is working just fine. You see a new car that you like and look at your your two year old car a lot more differently. Through advertising companies have learned what buttons to push for Americans to get us to spend spend spend when we should be saving, preparing for our future and moving towards our goals.

  3. I remember watching this show while growing up and often wondered why they were dong what they were doing from a financial standpoint. I think what you’re pointing to harkens back to the fact that we simply do not learn from history. It’s quite sad to see that savings rates went up from 08-09 but when things started to look just a little bit better the rates went back down to previous levels. Those who do not make changes and don’t remember history will be doomed to repeat it.

  4. Great points, here. There is definitely a pervasive culture of spending when you have money, and scrimping when you don’t. I wonder what the long term effects of our recent financial meltdown will be on financial psychology.

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