27 August 2012

Conspicuous Frugality

I'm sure you're all asking "Conspicuous frugality? Don't you mean conspicuous consumption?"

Nope, I said it right. Conspicuous frugality. Many of us have probably heard of conspicuous consumption, which is viewed more negatively than positively and associated with "rich snobs". On the other hand, frugality is associated with lentils and deprivation. It is gaining in popularity again after around half a century, but still isn't all the big rage yet. So based on those two viewpoints, the concept of conspicuous frugality might seem like an oxymoron. And that, my friends, is the mission for today: shine a little more light on this subject and explain why it isn't.

We all like to have things, even if we can't have them. But despite our love and desire for them, obtaining them can also set you back quite far and in short order--when purchased new. Fortunately, things are only new once! (This post assumes you have already gone through and made sure your spending aligns with your financial goals in life and that you have decided that object x will enhance your life. If you have not done that, read Your Money or Your Life then start with your very next purchase.) As a result, all nice things can be had for a fraction of their new price and often at a time not far removed from when they were new.

This applies to most everything imaginable. From cars to computers, lawn mowers to lawn chairs, purses to pots. Everything can be had at a discount price. At the same time, realize that not everything depreciates at the same rate. An in-demand item will take longer to drop in price than something that is more common. Also, high-end luxury items on "sale" may still cost far more than the normal version does brand new for quite some time. You must weigh that price difference against how "old" you think you could tolerate the item being.

Buy Stuff on Sale!

I've been practicing conspicuous frugality for years, though I've only recently started calling it that. Growing up, I've picked up skateboarding and later snowboarding. Both are sports that can quickly sap quite a pretty sum from your wallet (once your parents quit buying you stuff). Skate shoes and a new deck are big enemies, and I snowboard often enough to warrant owning my own stuff. Yet, I've been able to control my outflow by buying new shoes from the skateshop sale racks and decks in a similar fashion. The same applied to my snowboard equipment. I would buy from the sale rack, picking items from prior years that were on clearance sale but still very much brand new. I've saved well over 40-50% on most of my equipment that way. I purchase clothes in the same fashion, usually only buying off clearance racks or at thrift shops.

540i badge is legit
I paid less for my BMW than most people paid for a new Corolla.

My car (pictured at right) was also purchased in a similar fashion. At time of purchase, I paid a price that fits well within MMM's recommendation of car pricing for a car that was 13 years old with ~130,000 miles. Yet upon seeing it, most people think it's anywhere between 4 and 7 years newer than it actually is and that it certainly cost double or more than what I paid. It also helps that standard features in luxury cars of yesteryear still have not reached the cheapest new econoboxes. While I've yet to sit down and do the actual numbers, I'm inclined to believe based on expenditures that I've saved bountiful sums of money with this car vs. something new(er) with better fuel economy. (For a V8-powered tank sports sedan, high 20s on the highway is not anything to cry over anyway.)

My phones are also another area where I save. When disaster strikes and I decide to get another phone, I always dive headlong into ebay as one of my first stops. In the modern era, virtually anything electronic depreciates magnificently fast, which actually leads to deflation in the sector. Last month's hottest gadget is often literally outdated this month, despite it being a fully capable machine. Phone companies now make it much easier to try and keep up by giving away phones for "free" or with extremely reduced prices while requiring a 2-year contract with certain features. Often, the features are overcharged you end up paying far more than you'd have paid for the phone outright. As a result, I avoid that racket and just buy all my phones used. When I receive them, they're perfectly capable and functioning, often in "like new" condition. After a year or so of use, I can resell them for a decent fraction of what I paid for them.

As we've explored today, it is certainly possible to be frugal and still have nice things. While moderation is key in everything, there isn't any reason why your road to FI/RE should be one of wretched deprivation--even if you're in poverty. May I note that although I do own a "luxury" car, I still do ride my bike to work as often as practical (my start times vary from between 0400 and 1545, so I don't like pedaling late at night or in the wee hours because I prefer to be sleeping and due to safety) as well as other closer destinations. I line-dry those clothes I save money on as often as possible. I no longer get insurance on my phone because the deductible + yearly charge are more than I pay for them to begin with. I haven't really bought clothes in months because I can't seem to wear everything I have now. The list goes on. Find your own ways to cut back so you can have extra money to devote toward paying off debt if present or earning interest. you may come to the realization that you can usually meet the needs you currently fulfill with a lower-priced alternative.

On (the lack of) Updating
I apologize for not updating the blog as often as I would like to. Part of it is due to my work schedule, which sometimes includes lots of time away. But that really doesn't explain the majority of the time. Most of it is part laziness, part what someone called "thoughts uncut". I also have plenty topics started, but progress seems to languish for several days for no apparent reason. Now that I'm back from my vacations for the time being, I'll do my best to keep up with a once-weekly update at minimum, maybe 2-3 times if I really feel inspired. I do work two jobs, one of which is substitute teaching. During summer while most schools were out, opportunities for that were few. Now that school is back in session, I will likely be spending far more days reading books from my reading list teaching then evenings at my other job. That may make it harder to update, or it may make me more focused and result in more postings. We'll see how it turns out.

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