The second reason I think it is worth it to live frugally now is so I can stay out of debt.
Debt is a pervasive part of our society's way of living, but I am determined to avoid it. After all, if you take on debt to pay for an item, you have to pay interest for it. Since I can hardly stomach the idea of paying full price for an item, you can imagine how much I like paying full price AND interest on an item (hint: not even a little bit).
Having debt also means you are obligated to pay an additional monthly bill, which means less of your income is going to you and more of your income is going to pay for something that you bought months or years ago! You're paying for a meal that's long since been eaten or for a shirt that isn't new and thrilling anymore (and might already be stained or snagged or shrunk). Your expenses are going up instead of down and the money you could have spent on something else, something more worthwhile and longlasting, is now tied up in a monthly payment.
As several people mentioned in the comments here, it is very easy to get into debt (how many credit card offers do you get in the mail every month?), and very difficult to get out of. Swiping that card for a fun vacation or taking a line of store credit to pay for a new couch takes very little effort, but you'll end up paying far more than the ticket price of those items, and you'll be forced to pay on them for years afterwards.
And if you are living on the very edge of your means, instead of with some degree of frugality, debt may be your only option when your water heater explodes or when you have to pay for funeral expenses unexpectedly. And then you're paying interest for the most unpleasant things you can imagine, as if paying for them the first time wasn't bad enough.
I am more than willing to live frugally so that I don't pay extra money for items, vacations, or furniture, so that my income isn't all obligated to a credit card company (I want my income to be my money, not Visa's or Mastercard's or American Express'), and so that I don't have to spend huge amounts of effort trying to get back out from under that debt and own my own money again.
6 comments:
The biggest problem I always have with and see with debt is the balance between what is necessary and what is optional. Over the years, I've grown to realize that an awful lot of things are optional, more than you'd imagine. It's only those very, very bare essentials that keep you warm, clothed, and healthy that are worth going into high-interest debt for.
In a money shortage, everything that crops up seems like a crisis and it's VERY easy to justify putting groceries on a card, or clothes for work, or something like that. But if you take the attitude of, "What if I wait a week? Can I wait a week" and then at the end of that week, say again, "Can I wait another week?" Maybe you can't -- maybe it's desperate. But try. You can make it without a credit card or similar a lot longer than you imagine if you give yourself time to try.
Personal reason to live frugally? Able to pay for car repairs with cash instead of insanely large credit card bill. Whew!
AMEN!
What a fun blog, you awesome Gates women! I'll have to visit you often to gather all of your money saving wisdom!
One of the more interesting cultural differences between the US and the Netherlands (and I think pretty much Europe as a whole, though I'm not sure about that) is that we have a much less pervasive credit card culture. We pay through atm cards or cash - grocery stores usually don't even accept credit cards, for example. I've only had a credit card for a year or so (I'm 22) and only because I went to study abroad - in the US - and needed it there and for plane tickets and so forth. It's not even necessary for most internet purchases. And most credit cards actually act like a debit card, in that the entire bill is automatically subtracted from your checking account each month.
It's still easy to get debt, of course, since things can be bought on monthly payments. But all in all, it's not that acceptable to do so as it is in the US and most people save up for large items instead. (well, those that have the means. When you're living beneath or on the poverty line, debt is a lot easier to get, of course). I hope to stay out of that trap, myself.
Hah! You are fast learner, my girl. ;)
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