As if you haven’t noticed, I take frugality to an extreme. When I think of buying something that’s a “nice to have”, I think of an entire series of costs associated with it:
- Purchase price.
- Maintenance, storage, insurance, security and usage costs.
- Interest payments (if God forbid, I am financing the purchase).
- The investment amount required to pay for the purchase.
After considering these costs, if I still think I want to make the purchase, I put it on a list. In Amazon, I put it on my private wish list. If it’s not an Amazon purchase, I add it to a note on my iPhone.
Then I don’t buy it immediately.
I’ll comeback and review the list a few days or weeks later. Many times when I review my list, I no longer want the item – at all.
Occasionally, I still do want it. When that’s the case, I’ll do more research looking for the best price, checking reviews, etc.
After that, if it’s something I still want and have decided the costs the justify the purchase, I buy it.
I’ve done this for clothes, shoes, 2 drum sets, a car, my home, furniture, tools, floor mats, lamps, smart home devices.
I don’t go through this process for regular expenses related to the basics of life like groceries, dog food, medicine, taxes, insurance, and utilities. If I did, I’d make myself crazy.
This method of buying fits me perfectly – low impact, frugal and minimalistic.
A good friend of mine has a different approach. When he wants something, he does a bunch of research and then selects the best item he can possibly afford. He likes to own high quality goods and is personally invested and ego driven in his ownership of stuff.
It’s a different way me.
I too like owning high quality stuff. But I’d rather own nothing than have something I cannot afford or buy something I think is too expensive for my needs.
Neither his approach nor mine is better. Both are right for us.
So when my friend drops $6K on a dirt bike that he’ll use at most a few days a year, I listen but don’t say anything about the 25x cost of owning this toy.
When he told me bought a $2K amp for his guitar that is powerful enough for an auditorium full of concert attendees, I only asked, “Do you have any plans to start playing in concerts?” (He doesn’t, he plays alone in his spare room).
But when he told he financed the bike and the amp, I grimaced, because that’s exactly how I started down the road of living beyond my means back when I was in college and maxed out my first credit card outfitting my home gym.
I am pretty sure I paid 3x for that gym equipment by the time I paid off that debt many years later.
I liked having the gym equipment – just as I’m sure my friend likes his toys too.
I was convinced I “needed it”, deserved it and could afford it because I could afford the monthly minimum payments.
It took me 20 years, multiple stressful jobs, a career in a field that paid well but I didn’t enjoy, and years of giving my all to work before I was able to stop living under a seemingly insurmountable amount of debt.
Retirement and financial security to me isn’t “doing nothing”. It’s having the option to not do things I hate because I must have the money.
I wish I had figured this out back when I was 18 and got that first credit card. I would have made a lot of better choices and my life would have been quite different.