I’ve been thinking a lot lately about frugality and the intersection of money and time. Sarah and I recorded a “frugal parenting tips” episode when I was in Miami. A lot of listeners requested this and sent in their tips as well. I quite enjoyed this New York Times article on the white-maleness of much of the “Financial independence/retire early” (or “early retirement” backwards) FIRE universe, and some of the alternate voices. I have looked through a few of the traditional voices’ websites. I also recently read Meet the Frugalwoods (not written by a white man!) after reading Elizabeth Willard Thames’s blog.
All of this FIRE consumption has helped clarify my thoughts about the financial independence/retire early world, and what I find useful, and what I find less so.
We all come to these things with our histories, so a bit about mine. I’m naturally frugal. Or possibly just cheap. This has its upsides. I have written in the past about my ability to live just fine on my $18,000/year salary during my year-long internship in Washington DC after college. When I moved to NYC and decided to freelance full time, I prioritized savings, building up well over 2 years of expenses by the time I got married and started merging finances. While this is not financial independence (that generally means having enough assets to live off an annual 4 percent withdrawal rate) having a reasonable quantity of assets removes the immediate pressure of needing to make money from most decisions. With 2+ years of runway, I was pretty sure I could find something.
My husband has turned out to be similar to me in this regard (though he does find it easier to spend money at the grocery store!). We save a decent proportion of our income automatically.
So in theory I should be naturally inclined to FIRE literature. And I probably am. But I have a few reservations that always temper my enthusiasm for the topic.
One is that so much of this literature is about scrimping on little things. Make your own shampoo, stack 50 cent coupons on cereal. People get very excited about these tips (and sometimes a wee bit judgmental about people who don’t do them), because you can do something about them in the near term. These tips on little things can create enough content to fill a book. But smart finance is really about getting the big pieces right. Spend less than the calculators say you theoretically could on housing and you open up massive space in your budget to save while still buying whatever shampoo you want.
Another complaint: A lot of FIRE literature is based on the idea that work is bad. It’s keeping you from living your real life. You are trading away your life for money! Hence the idea that you would work to earn money to pay for something you can do yourself is seen as regrettable.
But if you love what you do (and I’d note that what I do for a living now is what a reasonable number of FIRE people choose to do after they achieve financial independence) then many of the exhortations hold much less weight. Why are you working to earn money to pay a cleaning service when you could do it yourself? Well, I like writing and speaking and I don’t enjoy cleaning. That seems straightforward enough. Why am I working to pay someone else to be with my kids? Well, it turns out I spend copious quantities of time with my kids (I’ve got the time logs to prove it!) and I spend about 35-40 hours a week using my other talents to do something else I love, which I think has a positive impact on the world, or at the least on the people who write and tell me that it has. Sounds like a good balance to me.
Because I’m so naturally frugal (cheap) my evolution has had to go in a different direction from many of the FIRE sorts. I do recognize the contributions they are making to counter a larger cultural narrative where a surprising number of people believe that one of the first things you should do when you get serious money is go out and buy a Porsche. I’m not clawing out of debt. I’m not teaching myself to question consumer culture. I already wear clothes until they wear out. I color my own hair. My kids wear hand-me-downs and discount store clothes. I’m driving an 8-year-old car.
Instead, I have had to learn that spending money on things that matter to you is not evil. Money is a tool. It can be used to build the life you want.
That’s why I had to write down this statement in the Frugalwoods book that made me stop in my tracks: “Paying money is the laziest, least creative way to solve a problem or reach a desired end.”
At first this made me mad; the pejorative word “lazy” will do that.
But then I had to laugh at this. One woman’s “lazy” is another person’s “efficient, effective, and time-saving.” The entire genesis of money stemmed from humanity not wanting to reinvent the wheel every time it needed dinner. Even in the old barter economies, people often wound up using something as a currency (e.g. salt) because it kept that “dual coincidence of wants” from turning into “dual wants of coincidence.” Thank goodness we can rely on the least creative way of achieving something, so we can use our brains’ creativity to do other things! Like, oh, I don’t know, inventing air travel and modern medicine. Or even writing books and podcast scripts.
In any case, there’s nothing wrong with achieving financial independence. As a smaller step long before that: there’s nothing wrong, and much right, with accumulating enough assets to remove most money fears. If this is within people’s ability to do, having a solid emergency fund plus longer-term savings is an excellent goal. Getting rid of day-to-day financial worries is liberating. There’s nothing wrong with retiring early, but I think it’s also a useful question to ask what you’d like to do enough that you wouldn’t be counting the days until retirement. You could achieve financial independence and do that…or maybe you could do it on the way to financial independence, and really have an enjoyable life coming and going. There are lots of ways to work.
There are also lots of things money can do beyond buy you the ability not to work. It can enable life-changing experiences. For many people reading this blog, I imagine, there comes a point when we realize that time is more limited than money; money can be earned, but time gone never comes back.
Occasionally I’m not cheap. A great many years ago, I studied abroad in Australia. I lived in Melbourne, but figured while I was there I should see the country. I had some savings from summer and school year jobs and the copious freelancing I was doing even then. While I hated pulling money out of my bank account (for people like me, spending money is painful), I decided I should take advantage of the opportunity. I camped in Tasmania and went diving by the Great Barrier Reef. I went hiking in the monsoon vine forest near Kakadu National Park and saw Uluru and a show in the Sydney Opera House.
I’m glad I did. Twenty years later, I can earn the sums I spent then on discount air fare and hostels quickly. But I haven’t been back to Australia yet. I’m glad my money bought me memories.
In other news: Have you read my money book? It’s called All the Money in the World: What the Happiest People Know About Getting and Spending. Kirkus called it “Quirky, insightful and enjoyable — a welcome corrective to the typical advice from economists and financial managers steeped in the ‘dismal science.'”
In other other news: I read The Frugal Girl’s blog every day. I love that she is cheerful and non-judgmental about money matters!