Frugal living without sacrifice

post by yboris · 2014-12-11T00:55:19.138Z · score: 12 (10 votes) · EA · GW · Legacy · 4 comments

Contents

  Frugal living
    Saving without sacrifice
      Benefits of being frugal:
      Psychological Principles:
      General principles:
      Specific advice:
      Miscellaneous:
      Sticking to your goals:
None
4 comments

Frugal living

Saving without sacrifice

TL;DR version:

I’m frugal because I want to give more to charity. Even if you don’t share my goal, I’d like to share advice that can help you achieve more of what you’d like.

Download the PDF or read:

Frugality is a word that may have several meanings. It could mean not being lavish or extravagant with one’s spending, or it could mean avoiding waste, or just being economical of monetary resources. I don’t intend to argue for definitions, I’d like to share the best advice I’ve come across to help you think about using your money wisely.

Because I am passionate about giving to charities, it’s useful for me to be more cautious about spending my money, not just because I have less to spend on myself but also because I can have more of my money left to give. I’ve been frugal most my life for various reasons; I now have an excellent reason. Regardless of why you’d like to be frugal, I want to help you succeed.

Personally I see frugality as using your money most effectively to achieve your goals. Because I don’t care about television shows I can save money by skipping cable. Someone who enjoys TV too much to give it up may be pleased that Netflix or some other service can provide the same pleasure but for less money; sometimes a substitute service may even end up being a better fit!

It’s always great if you can save without giving up something, but it’s not always possible; in the end, it’s a trade-off between different things you can do with your money. You might save by not watching TV, but be rewarded by having vacation money. Figuring out what you prefer most may be the best step towards smarter spending.

The most important principle I think everyone should be aware of is that we all have limited amount of money and thus must be discriminate about how to use it. Buying some things will bring us pleasures or allow us to accomplish some of our goals; but that spending necessarily means we’ll have less financial resources to spend on other things and other goals. Figure out your goals first!

Benefits of being frugal:

What follows is a list of numerous ideas and techniques. I don’t use all, nor would I recommend all; but some people found each one very useful on their path to greater frugality. These are not in any particular order. Categories overlap, but it’s nice to have some organization rather than none.

Psychological Principles:

General principles:

Specific advice:

Websites:
A short list of websites that can save you money.

Miscellaneous:

Sticking to your goals:

Even if you resolve to be frugal, it’s now a matter of putting your desires and goals into practice; for that you need a set of tricks to refrain from compulsive or impulsive spending.

4 comments

Comments sorted by top scores.

comment by Larks · 2014-12-13T18:45:52.118Z · score: 1 (1 votes) · EA(p) · GW(p)

Shopping around for a cell phone plan that saves you $5/month means $120 over 2 years (3 hours spent finding such a plan means you earned $40/hour)

This prompted me to spend a few minutes researching new plans. Turned out my mobile phone company had released a new plan since I joined them which strictly dominated my old plan; switching saved me around $9 a month. Thanks for the suggestion!

comment by Tom_Ash · 2014-12-12T16:08:47.345Z · score: 1 (1 votes) · EA(p) · GW(p)

Thanks for these valuable tips Boris! One comment on the following:

Remind yourself of what you really care about (e.g. “With every $1 I save, I can donate to a cost-effective charity like SCI and cure a child of parasitic worms”)

I'm a big fan of the idea of having set altruistic and personal budgets, so that every spending decision doesn't become a great moral question, which is psychologically unhealthy. Even on this approach you can try to be frugal and aim to underspend on your personal budget. After doing so you could decide that you can live a satisfying life on a slightly smaller personal budget next year. But taking this approach cuts the direct connection between every $1 spending decision and a child dewormed, which is helpful psychologically.

comment by yboris · 2014-12-15T00:41:33.237Z · score: 0 (0 votes) · EA(p) · GW(p)

I think you're exactly right that having a set altruistic and personal budget is the best strategy for EAs. I compiled the above list at a workshop we held at Giving What We Can: Rutgers some years back; I think this particular suggestion is a helpful reminder for students (with little spending money) that they are able to make a difference in the world with their donations.

One possible time this technique can be helpful is if you feel you're being suckered into a purchase you really don't want to make; you can just commit to giving the price you would have paid to charity.

I find frugality to be a habit - you discover some principles that work, you tinker with them, but after a while they are on auto-pilot.

comment by Tom_Ash · 2015-01-21T13:39:41.261Z · score: 0 (0 votes) · EA(p) · GW(p)

For the UK I'd add http://www.moneysavingexpert.com/