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If you've come across my posts in the past, you might have noticed that I'm selectively frugal. I don't follow the traditional penny savings as many on this board.
This is an interesting article that I came across about why frugality might not be the best method to maximize your funds.
forget-frugality-focus-on-earning-more: Personal Finance News from Yahoo! Finance (http://finance.yahoo.com/banking-budgeting/article/112633/forget-frugality-focus-on-earning-more?mod=bb-budgeting - broken link)
I'm not saying that frugality is bad, but this is just a different outlook.
When I saw this, I thought, sounds like something Ramit (Ra-MEET) Sethi would write. And he did.
He was a blog with tons of great advice: http:// iwillteachyoutoberich.com
Yes, but the thing is that it is at cost of MORE of your life.
My whole goal is NOT to have to sell my life (By the hour) for the things I want, and the things I want to do.
The cash flow result may be the same, but the RESULT is NOT!
Now don't get me wrong, I have not one, but 2 Motorcycles, took off on a 6 week vacation last summer, eat out when I want to etc.
But the thing is, I have been frugal for so long, that when I spend money, it's on something I REALLY want, not just eating out "x times per week" etc.
The bit int he article about frugality not being sustainable in the long term is not only 100% incorrect, it's actually the OPPOSITE!
You BECOME relatively frugal, and it really doesn't occure to you to waste your money, unless it's something worth it. (Time value of money etc)
PART of the premise is correct. That's why I'm working towards a 6 figure job, while I'm content with a Sub $30K lifestyle.
But that's because given a few years....
I won't be selling my life by the hour.
Part of that is knowing what's worth your money.
If your outgo exceeds your income
Your upkeep will be your downfall!
I agree with frugality if it has no impact on your quality of life. If you're driving a car that you really don't enjoy or you hate mowing your own lawn but refuse to contract it out, then you're compromising on your quality of life.
I agree that selling your time for more money is not the best solution. The best solution is to increase the value of your time. Then you make more money for less time. I made it a point never to work anywhere close to 8 hours again because I don't see the point of giving up so much of my day.
So the solution is make more money in less time and purchase everything you want. But don't throw out the basic rules of money management which include saving and investing.
Did you know that 938,000 people were turned away on McDonald's job hiring day? (April 19th, goal to hire 50K people).
I don't know what planet you are living on, but with jobs outsourced, technology picking up the jobs that used to be done by people (helllo grocery check out stand!), just how is a person suppose to go out there and bump up their wages in an era in which wages are just being driven down?
Oh, and I just thought I'd provide the link. I think the premise of this thread comes from la la land.
Clearly if you cannot make any money, you have no choice but to compromise on the quality of life. But this is not the case for many. Many people are still valuable.
Retail POS customer service is not a good field to be in. Those 938,000 people would have been better off making themselves more marketable. There's plenty of jobs out there, and most of them are not in retail POS customer service.
I've brought this up on this forum before and it was largely met with hostility. Personally, I don't get the focus on penny-pinching and "savings", that is, finding ways to reduce one's total expenditures.
I find it much more desirable to focus on increasing my revenue and saving a portion of it then focusing on how to cut my current spending to save more of my current revenue.
Assuming you have those opportunities to put in the amount of OT you happen to need/want available whenever you would like and don't have other interests and activities to spend your evenings and weekends doing... then good for you.
Another solution is to increase your value for the same amount of time you work. Or create residual income.
You are incorrect. This thing has hit across all strata. That chart you showed me looks like it came from a college promoting the value of higher education.
FWIW, I have an MBA. I also am over 50. I spend plenty of time on forums with those who are unemployed and, trust me, these people are not lower skilled. Many are having to dumb down their resumes to look lower skilled though.
The person who made the chart is Bill McBride. He retired as a senior executive from a small public company in the '90s. He holds an MBA from the University of California, Irvine, and has a background in management, finance and economics. He is not affiliated with a higher education institution as you believe. He's actually in risk management, so he clearly has the expertise to discuss this topic.
A low-paid worker in the US, today, will make a million dollars in a lifetime. ($11 an hour, 2,000 hours a year, 45 years. If he makes less than $11 an hour, he'll qualify for social benefits to make up the difference.) In order to amass a savings of $10,000 for a rainy day, all he has to do is be frugal enough to spend only $990,000, instead of the whole million. How hard can that be?
A low-paid worker in the US, today, will make a million dollars in a lifetime. ($11 an hour, 2,000 hours a year, 45 years. If he makes less than $11 an hour, he'll qualify for social benefits to make up the difference.) In order to amass a savings of $10,000 for a rainy day, all he has to do is be frugal enough to spend only $990,000, instead of the whole million. How hard can that be?
But how does he live on that 10K, if Social Security goes away? He needs to earn more money.. or as we call it in our household DIFFERENT money.
I get massages every two weeks. We sell soda cans for massage money. We're going to buy a new tv and some furniture and do some redecorating on ebay sale money...
And I will still be able to continue stuffing cash away from work money.
I'm all for being frugal. I'm all for the slash and burn method of extreme cutting for really bad emergency times..... BUT you truly can only cut so far.... at some point you have to up the income.
A low-paid worker in the US, today, will make a million dollars in a lifetime. ($11 an hour, 2,000 hours a year, 45 years. If he makes less than $11 an hour, he'll qualify for social benefits to make up the difference.) In order to amass a savings of $10,000 for a rainy day, all he has to do is be frugal enough to spend only $990,000, instead of the whole million. How hard can that be?
Yes, or he/she can figure out how to make an extra $1 an hour and amass a savings of $90,0000. Which is preferable?
And a life savings of $10k? What are you going to do with that buy some candy bars?
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