I recently read a finance blogger who said he wasn’t into frugality. He could help you become wealthy but not by telling you to forego your daily takeout coffee.
Focus on the big wins?
This writer suggests you ignore the small stuff and focus instead on big wins to improve your finances. He talks about finding ways to achieve more income, getting a better job and creating wealth. The testimonials on his blog are from people who now earn a lot more than they used to so can still buy their morning cappuccinos.
I can see that creating extra income could mean the end of many people’s money woes. However, I also know that a more systematic and disciplined approach to finance is also essential for a lot of us who are rubbish at money management, whatever our income.
A question of attitude
I have listened to enough of the Dave Ramsey Show on You Tube to understand that there are folk out there earning large incomes who still spend more than they earn.
There comes a point when you have to look at your attitudes and spending habits in order to improve your finances. The person who earns £150k a year but spends £160k is no better off than the person who earns £25k but spends £30k. It could be that the high earner may be able to keep their daily latte but cancel their skiing holiday in order to get back on track. Whatever they do, they still have to make some sacrifices and learn to say no. It’s all relative.
Small but significant choices
Either way, in my view small daily choices towards frugality can help anyone. The more firmly you tighten the belt the quicker you can pay off debt, build an emergency fund, pay off your mortgage or begin to put your cash into investments. I can’t see why you can’t go for the big wins and work with the small ones. Surely that will get you to where you want to be faster?
For example, keeping a spending diary can be useful to see where your money is disappearing. Making a budget each week or each month will help you establish how much you can use to pay or debt or how much you could afford to put into savings. Meal planning and searching out bargains in the supermarket can be vital for those on low incomes but is likely to just be sound common sense for a few millionaires too! And, yes, cutting out that morning take out coffee could be worthwhile as well.
Perhaps some of them started on their road to wealth by saving the money they used to spend on coffee and investing it instead!
Prudence and frugality
I like to think that many of those with plenty of money got there through prudent and sensible money management rather than simply earning big bucks. After all, there are plenty of stories of celebrity bankruptcies. They had it all but made terrible financial decisions and ended up with nothing to show for all their hard work.
I may not ever be wealthy but at least by making daily choices towards frugality I will have peace of mind and control of my money. Check out my top 20 frugal habits here.
As usual, a lot of good, sound economic sense here, Jane. “Look after the pennies and the pounds will look after themselves.” That is a rather simplistic homily that was often said in my childhood, but there’s much truth in the saying, too and it’s what you have been saying in a more modern way for years – forget the carry-out-coffee, forget the expensive takeaway, save those pounds to reduce debt/mortgage or to put into savings/investments.
I think budgeting is the key to money management, and also for those who are truly ‘hopeless’ with money, to get into the habit of paying cash for things, in physical money I mean, so they can see the money actually disappearing when they stock up the larder, fill up the car with petrol/diesel, etc. It is a wakeup call when they see hundreds of pounds disappearing before their very eyes and not just a number of a receipt (a receipt that, no doubt, they have not scrutinized.)
I don’t know whether it is done these days, but when we were much younger and both we had a mortgage, we opened a separate bank account, a budget account, and into that paid what we considered a rather large chunk of money each money, i.e. 12 equal monthly portions. This was to take care of our major expenses, rates (council tax today), gas, electricity, insurances, water rates, and so forth. This meant that we knew those things were taken care of, and what we had left in our current account was for everything else, food, clothes, petrol, etc. Maybe opening a budget account is the way forward for some people? It might seem an old-fashioned idea, but some old-fashioned ideas, such as “looking after the pennies” are good ones.
PS I didn’t like the fact that no one has commented on your wonderful Composting post, Jane; you know I’m usually quick out of the blocks to make a comment, but we have such a tiny garden we have nowhere for a compost heap, even though we have loads of leaves each autumn from our walnut tree. We attempted to compost some leaves in black waste bags but the result was more slurry than compost, so gave up on that idea! But we do take all our garden waste to the garden waste section of the council tip (aka recycling centre) and I trust they make good use of it. (I could not add this comment to the Composting post because the comment box had disappeared but, again, what a lot of information on Composting.)
I think you’re totally right Jane! The small things totally add up, and they’re also way more achievable.
Personally I think that asking for/getting a raise or even getting a new job is much harder than cutting out the morning take out coffee. Which seems more daunting? I’d prefer to go with the easier option, I’ll see the results much quicker.
Plus I agree with keeping a spending diary. I started this year and am already seeing the benefits.
Thanks for sharing Jane 🙂
We only have a tiny courtyard garden in the back, though I do try to grow things in it.
I love the idea of composting and keep looking into the possibilities, but as the family is now trained to put ALL food into the kitchen caddy I fear it’d become polluted with the wrong stuff if I tried now!
Besides, I tried following Monty Don’s tips on making leaf mould in a black garden sack a couple of years ago, as we get a lot of leaves from a neighbouring pear tree, and, like Margaret, at the end of the year, instead of lovely rich leaf mould, I tripped a bag of slimy, stinky mush into the garden waste bin! :/
I can see a compost ending up the same, or becoming a haven for the ever present rats and foxes. :/
We make lots of good compost but I had an issue with leaf mould too. Ours were just bags of crispy leaves at the end!!
A very good post which I agree with. I no longer grow my own food or stock pile as my husband and I retired and do a lot of traveling, at the moment we are in the south of Spain in our motorhome so not a lot of room. But I do keep a spending diary and know exactly how much I spend. I am fed up with comments that we are rich, we are not poor. We take a pick nic for lunch when we go out practically never eat out or buy coffee in the UK in Spain prices are as lot lower and we do have some coffees and lunches out. With being frugal we were able to privately educate our daughters and pay for their university education and both are doing well. We saved long and hard for our retirement but after years of watching the pennies it is second nature and we find it hard to spend. Last year I went into Booths in Keswick, I had shopped at Saintsbury’s earlier in the year and the prices were fine, but I had to walk out I could not pay their prices, I ended up driving to Morrison’s in Penrith I have a small car so not to expensive . keep being frugal it stops debt and saves the planet
Good point. You managed your money to achieve what you wanted. Enjoy your trip!
Hi Jane
Another good post thank you!
Hubbie makes coffee to take in his travel mug each morning. He also takes a can of diet coke from the fridge (bought on offer in Asda) because he used to buy those expensive bottles in the petrol station! We are having leftovers regularly and I do a meal plan now – all things we didn’t used to do. We have even managed to save an emergency fund so when last week hubbie pranged the car on the black ice coming home from work, we have the money to get it fixed…….huge relief!
We’re starting on the veg plot in earnest this year and have sown seeds indoors of peas, broad beans and spouts which are now on the windowsill propagator!
Thank you for being such an inspiration to me – my attitude to money has changed hugely and we are literally turning things around!
Best wishes Sally
I think for that financial blogger to say that ignoring the small stuff as a means to saving is unnecessary, is missing the point somewhat.
Like you say, it’s all a matter of scale. For some, foregoing a daily coffee is the equivalent of cancelling a skiing trip for others. If you can’t afford something – no matter how little it may be, you can’t afford it!
Hello Jane,
I’ve recently read a book from a ‘financial expert’ saying the small stuff doesn’t matter, but I think you’re right and she’s wrong! Because too much small stuff can become big stuff when it adds up. I do allow some small stuff, but only some – everyone has to work out what is right for them and leave the rest alone, I think. We can all bring snacks from home, borrow from the library, and drink water from the tap instead of from a plastic bottle. You have the same result for far less money…as I know you know! But it’s always worth remembering.
Its a fine balance between little things and big stuff. Sometimes a little bunch of daffodils gladdens the heart!. Big things do i need a top of the range central heating boiler probably not!. So an expensive waste!. But old one has caused me so much stress so yes. Could have probably got boiler half the price but going through british gas. Cost of trust priceless.