Negative Externalities of Frugality

Posted on | August 2, 2010 | 3 Comments

“…frugal shares a Latin root with frug (meaning virtue), frux (meaning fruit or value) and frui (meaning to enjoy or have the use of)…Frugality is enjoying the virtue of getting good value for every minute of your life energy and from everything you have the use of.” – Your Money or Your Life.

There is more to frugal living than saving money off the purchase price of products. Frugality is also about using the resources that you have to stretch your money to beyond its normal purchasing power. It’s about not being wasteful—whether we are talking about your time, money, or energy—and it’s learning to prioritize. It’s about taking care of what you have, and looking at your needs and wants with a discerning eye. Being frugal is a fantastic character trait with potentially fruitful rewards. By utilizing your resources to their utmost and using some creativity and ingenuity before spending money, you end up with a stockpile of extra that can be used to fund a multitude of things in your life: your retirement, a long trip, college education for your children/grandchildren, a home, a start-up business…the sky is the limit.

But when people forget about the non-monetary parts of the definition of frugality, negatives arise. While reading a passage on negative externalities (when someone takes an action but someone else, without agreeing, pays some or all the costs of that action) in the fabulous book Superfreakonomics (highly recommended, as well as their first book, Freakonomics), I started to think about the negative externalities associated with frugality, things that I have seen develop in other frugal people who have danced along the line of being frugal and being cheap—putting money above all else. In a perfectly frugal world, we would not see these externalities because everyone would be working towards conserving their resources, money and energy—the true definition of frugality. But hey, we don’t live in a perfect world, so here are some examples:

  • Feeding Crap to Yourself and Your Family: As an ardent couponer, I would like to state with total conviction that you can use coupons, save a lot of money, and eat a healthy balanced diet. In fact, I refuse to compromise on the food that I put into my body, or the body of my family. So when I see other people’s posts about scoring dozens of products for free that are preservative-ridden, processed, crap food, I cringe. I think this gives frugality a bad name, and I think it is bad to feed this type of food to your family in the name of saving a buck.
  • Increasing Waste in Our Landfills: When I see bloggers gloat about a deal where you can use a coupon to get a free travel-sized product, and they themselves have purchased about 25 of them, it makes me sad for the waste to our environment. True, you may be able to get smaller amounts of product for free, and you can get enough of them to amount to what you would get in a full-sized bottle, but think about all of that packaging waste.
  • Wasting Resources—Freebies Gone Wild: I love free things and free samples as much as the next person; but I will only send away for free samples that I will use (or I know someone directly who will use it, like my grandmother). I admit, I began my freebie journey on a sleepover at a friend’s house in high school, and we went crazy with sending away for anything and everything we could get a phone number or email address to. Sending away for freebies takes up your time, uses up money from companies hoping to get your business, can clutter up your home, and increases the amount of packaging mass produced for a small amount of product. On the other hand, freebies can be a great resource, as long as you send away for only what you will use. I have evolved since my high school days, and I hope others will as well.
  • Consuming More Than You Need: This coincides with the Freebies Gone Wild. Because frugal people can get products so cheaply, and a lot of them, there is a tendency to become wasteful and use a lot more than a person needs to or would if they had paid full price. The product becomes devalued because it is completely accessible with very little cost. Sometimes we see this in our own household; cokes seem to go much faster in our household when we have a stockpile of them versus when we only have enough for one week.
  • Unbalanced Allocation of Energy and Time for the Sake of Money: This is one that I fall prey to sometimes as well. Believe it or not, knowing to stop when you have enough can be a problem for frugal people as well. But instead of us spending too much money, we can spend too much energy and time. The idea of needing something in the future and having to pay full price for it makes some of us stockpile like crazy…like squirrels. Even though you are getting products at rock bottom prices, you are using up energy that could be allocated elsewhere (once you reach a certain point in your stockpile…like 26 cans of tomato sauce). The trick here is to balance future needs with the present.

I love being frugal (have you noticed?), and see its many merits. But sometimes, frugal becomes another extreme and can lead to other problems.

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Comments

3 Responses to “Negative Externalities of Frugality”

  1. Budgeting in the Fun Stuff
    August 2nd, 2010 @ 1:15 pm

    I’m mid-frugal. I don’t spend to spend and I prioritize savings goals first, but I won’t deny myself wants just to save money (hence our vacation account). The trick for us is to set savings goals, spend on our needs, and only spend on our highest-priority wants while ignoring all the other stuff.

    [Reply]

  2. BluSky
    August 2nd, 2010 @ 9:46 pm

    Consuming More Than You Need
    ~~~
    Ya know, if you are going to make references to me and my beer….just come right out and say it ;-)

    [Reply]

  3. Amanda L. Grossman
    August 3rd, 2010 @ 12:18 pm

    :) .

    [Reply]

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