A Gentler Way of Saving: or, Why You Should Learn to Stop Worrying and Love Thrift
Frugality and mindful spending should not be the punishment of the financially sinful — they should be the baseline for thinking about money.
You’ve either seen them in ads or gone searching for them in a moment of weakness and self-doubt. The deluge of dazzling apps, sleek calculators, and rapturous personal finance courses. By sheer volume of aids, it has never been easier to be a financial king with a fluorescent crown of graphs and pie-charts.
Yet despite all the help available, people throughout the world feel they’ve lost control over their money.
The simple explanation would be “the current tips and tricks on offer to improve personal finances are not very productive”. That’s a facetious statement, but it’s factually correct. The instruments work: only they don’t work all the time, nor do they work for everyone.
Of course, there are the overachievers who immediately improve their lives by using a single app. They’re welcome to bask in the starry glow of their savings account in the little hours of the night, while the spendthrifts lose sleep. But they shouldn’t make us forget about the hapless that will proceed to rack up thousands in debt despite counsel and a genuine desire to do better.
The same financial tips and tricks available today have been around since the 80s. Yet they continue to be reprinted in articles and listicles as if they’re new and revolutionary, and consumer debt continues to creep up.
Is there hope for those that don’t immediately benefit from a pie-chart?
Your Debt Is Not Your Own
First, let’s take a look at a state of debt in 2020 around the world. Credit card debt and personal loans rose 11% in the United Kingdom within two years, and if adjusted for inflation, credit card debt is close to a peak reached in early 2010. The share of Americans that pay off their credit card balance every month is only a bit over a third. The Australian government classified 29% of households as ‘over-indebted’, with most lacking assets to cover even a quarter of their debts.
The current easy availability of crippling debt is not the result of unknown and sinister forces. It is a conclusion to deliberate public policies:
· Usury laws were slackened around the late ’70s, allowing for excessive interest to develop
· Banks and financial institutions are less likely to conduct due diligence and ensure they are offering credit the client can realistically pay
· The mainstream economic consensus presents debt as ‘free money to grow the economy’. Mortgages and student loans are a tool for growth and a guaranteed return on investment. They are counted towards a healthy economy, though the debt may be impossible to pay in full
Spending today is deified: economies are healthy and growing as long as people are buying goods and services. The cheerful proclamations of economic health are made without caveats. There is no distinction for whether the spending sprees use well-secured funds, or gleefully rely on unsecured credit.
From a purely capitalist point of view, the goal is only to keep the economy going upwards and onwards. But that is not the case for the people who make up the economy. Debt is a source of stress and worry, an evil genie that scares you off looking at your bank balance while still enabling you to buy more things.
The deluge of credit was unleashed in the ’80s by politicians and economists that took no responsibility for the consequences of their decisions. The democratisation of banking and debt in our times means access is given to credit that, in times of old, was only available to the merchant and upper classes. Small loans for the working and middle-classes were once extended by communities, such as through building societies.
Credit was extended by people who lived with you, could assess whether you need the cash and if you can repay it. Counsellors, rigid schools of thought, and tradition likewise restrained bourgeois traders and aristocrats. These constraints taught agent how to best utilise the credit extended to them and control spending.
Giving the public at large access to impersonal, institutional credit meant the loans no longer had community ties and immediate feedback. In return, the banks and the government provided little more than a set of brochures on terms and conditions and nebulous promises of endless prosperity and splendour. Is it fair to expect people to make good use of a tool without a clear set of instructions for it?
A Common Man in Crisis
It’s helpful to discuss debt as a widespread phenomenon because that takes away from the debilitating shame of it. Many people who are overwhelmed by debt, especially young people, prefer to suffer in silence and tough it out with nothing but their wits. It’s better to be in needless trouble than admit to failing.
There shouldn’t be an automatic absolution when we talk about indebtedness. But discussions of struggle should go beyond the personal responsibility, pull yourself up by your bootstraps narrative. If one person fails at saving for their future, that is their personal problem. If millions of people can’t control their spending, then there is a systemic issue.
For example, society vilifies consumers when talking about self-indulgent lifestyles. Yet companies that offer these excess services are viewed as marketing and business geniuses. The seller is a mastermind, the buyer a fool. If a restaurant attracts a customer five times a week, the restaurant is a resounding success. The person who eats there is an irresponsible slacker.
We pretend to value thoughtful spending and sound economic decisions, and politicians love to talk about the common man with his common sense. Yet the powerful industries at the helm of economies work on eroding common sense by persuading us that luxury is essential for a good life and mental health.
There is no middle ground to discuss whether luxurious lifestyles are achievable, or even desirable, for most people. The conversation is either about how they are amazing, or how the people that strive to have them are irresponsible.
Breaking free of the cycle is possible by taking back control of your own narrative. To use debt to your advantage, you must understand what debt is and what it means for you.
Debt is not evil, but neither is it a panacea. It is dangerous when used thoughtlessly. That’s why, before you take out a loan or pay with a credit card, ask yourself simple questions such as:
· Do I want or need the thing I’m buying? How does it work with the rest of my belongings?
· Will I be paying interest on this over time? What will be the rough size of the interest charge?
· Do I see myself using it? For how long? Is it the same amount of time it takes to earn money to pay for it?
Significant financial decisions can come down to small questions about what you’re buying. These don’t have to be profoundly philosophical or advanced to be effective. Each person needs to find the right questions for his or her self. The tools available online are useless if you do not contextualise them: once you know what your goals are, you can start using the fancy apps and building spreadsheets.
Why Won’t You Mend Your Clothes?
Thrift has the unfortunate connotations of dour Victorians and wartime housewives applying their stiff upper lip to every aspect of life. Being thrifty feels like the solution of a terrible fairy godmother. She promisingly waves her wand, only to make you work extra hard to get that pumpkin carriage in a few months.
It is a bit more fashionable to talk of frugality: a word which signals level-headedness, responsibility, and market savvy. A frugal person is one that is well-balanced and in control of their life. You can picture them meditating before they go for a hard-core session with their spreadsheet. Contrast this with the thrifty person: a miser who is so caught up with counting the pennies, they live in constant fear of the pounds.
Most resort to thrift and frugality only when they have no other choice. Bountiful are the confessional posts on Reddit of those who feel they’ve lost control over their lives. They are overwhelmed; the situation is too much; they need to make drastic changes to their lives or else.
Looking at it from a typical Redditor’s perspective, saving and being responsible feels like a punishment. You’ve botched being carefree and enjoying life. Now you have to pay by staying at home cooking rice and beans and watching Netflix on some else’s account.
But thrift does not have to be about darning clothes or collecting coupons (though there are scores of people that will tell you sewing is, actually, fun). Thrift can have profound organisational and social dimensions. Putting effort into things, making active decisions about how you acquire and use them, gives mere objects extra levels of significance and pleasure.
A nearly perfect meal you’ve made yourself will feel like a delicious achievement. In a restaurant, anything less than perfect would be a scandalous rip-off. Gifting something with a personal touch takes away the anxiety of choosing it: the gift becomes precious, whether it’s a perfect fit for the receiver or not.
Save to Live, Don’t Live to Save
Saving does not have to be self-imposed exile and torment.
The more cruel and stringent the saving regime, the more likely you are to abandon it. Emotional exhaustion is a strong negative influence on savings behaviour, so the journey to financial health should bring about as little stress as possible.
Though optimistic overconfidence is great to jumpstart motivation, it is not a sound basis to take control for years to come. The idea of a crash savings strategy like a no-buy healing your bank account forever is the same as a crash diet turning you into an Instagram model. It’s a short-term cure, not a long-term solution.
Meaningful change happens in increments and over time, throughout life, not solely in times of crisis. You can incorporate minute but practical decisions into your everyday life. A series of short-term goals is a reliable approach to achieving an ambitious long-term goal: a long-lasting, sustainable strategy has to include room for flexibility, kindness, and creativity.
Understand how much you’re spending every month, or better yet every week, and ask yourself if you’re comfortable with these amounts. It is not enough to look at them: examine every number and decide for yourself if it aligns with your priorities.
If sticking to a precise budget is too daunting or overwhelming, calculate the maximum amount you can spend in a month, and stick to that amount no matter what. Don’t beat yourself up if you’ve failed: allow yourself to be human, and stick to the same goal starting the next month.
Check how much you’re paying on your subscription and services, and try to find ways to lower costs. Relax if you do not manage to find a cheaper option; what is important is awareness of how much you’re paying.
What we should be discussing is not tricks and shortcuts, but more meaningful ways of understanding how our money and our debt is working for us. Frugality is a financial tool that is not taught in school and not glamorised in pop-culture. That is why we, the consumers, have to reclaim it for ourselves.
