being frugal implies that there are limited resources in the world. People who focus on being frugal are also focusing on scarcity — that there’s not enough to go around, that there’s a limit to anything they want, and that they have to sacrifice to try and hold onto what they’ve got. One of the observations I’ve made in life is that there are primarily 2 views you can take when it comes to resources. The first view is that of scarcity — that there are limits on what you can have, and therefore you need to ration those resources, and grip them tightly so that they don’t leave you. The second view, to which I am a long-term subscriber, is that there is an abundance of resources in the world — that there is truly as much out there as you want .. as long as you’re clear on what it IS you want, and you are willing to do what it takes to attract it. Unfortunately, most of us are indoctrinated from birth to believe that “money doesn’t grow on trees” and that “a penny saved is a penny earned”. Most of us are raised with the scarcity mindset, as opposed to the abundance mindset. And this manifests into these ridiculous media stories on how to save $3 in gas costs by scouring the internet for websites that track gas prices, and then driving wherever the prices are lowest in your city. Are you kidding me? Look, I am all for trying to optimize what you’re spending, and the point here isn’t to just spend your money without thought of value. But that’s the point – there’s a difference between being value-minded and just plan cheap. Living life as a cheapskate SUCKS. And the worst part is, there’s no NEED to live as though it’s some kind of badge of honour to sacrifice and go without what you really want in your life, in the interest of somehow thinking of yourself as responsible. For those who think it’s smart to focus on saving the $3 on gas, what is their TIME worth? And by the way, if you’ve never thought about what YOUR time is worth, this is one of the most powerful exercises you’ll ever do in bring more ABUNDANCE into your life. Let’s look at what the cheap gas exercise “saves” us. Assume you’re going to follow the advice, and try to find the cheapest gas in town so you can feel like you’re doing something intelligent, or the right thing. Let’s assume that it it takes you 20 minutes to do an internet search on where the cheap gas is, and then you spend an extra 10 minutes driving to wherever that cheap gas is across town .. and then back. This means you’ve spent 40 minutes of your time in order to save $3 in gas. That means you’re valuing your time at $4.50 an hour! If you were an employer, in most jurisdictions you’d be arrested for paying yourself less than the required minimum wage! (and by the way, I’m ignoring the cost of the EXTRA gas you’ve burnt off, driving further than you would have had you not been paranoid about saving the $3 to begin with.) There is a diminishing return on this drive to save money and be ‘frugal’. Rather than focusing on how you can spend less .. focus instead on how you can create more. Putting this is financial terms, focus on how you can create more income, as opposed to spending all your time trying to cut expenses. Again, I am not saying that you shouldn’t be looking for ways to eliminate unnecessary expenses, or that you shouldn’t be mindful of them. However, most people focus exclusively on cutting, and never think through how they can expand .. grow .. and increase what they have in their life. The goal here is balance — look at things you can eliminate without making yourself miserable, but be sure to spend at LEAST as much time trying to figure out how to create and attract more. And that part is actually pretty simple. The world will reward you based on the value you bring to it. Don’t have what you want in your life? Figure out how to create more value. It’s really that simple. Because in the end, life is too short to live it trying to save $3 on gas. Life is meant to be fulfilling, rewarding and abundant. So choose to live it that way, starting today!]]>
8 Responses
Thanks for the reminder. I agree. That said we should be careful about what we discredit. The Millionaire Next Door (one of your oft-used references) speaks often of “frugality” and their use of the term and the behaviour is sound. Granted, they were not referring to your fuel example (and likely would never for the very reason you used) which is a great one, but the concept of frugality is a good one and does have it’s place. Next to keeping up with the Jones’s (the quickest way to kill your empire building) frugality looks like the most brilliant idea around.
All that aside, you are doing far better than me so…..:)
The Millionaire Next Door is a great book because it causes people to recognize that most millionaires are not living a life that most people assume they are.
However, I don’t agree with all points made in the book, and this is one of the issues I have with that book — a reader risks walking away assuming that being wealthy is about being a cheapskate.
And that’s entirely missing the real point, and not an accurate depiction. You’ve identified a key difference between doing it right and doing it wrong, which was the purpose of my post.
There’s a difference between not buying a car every year brand new just because you can afford it, vs. spending an hour of your time clipping coupons to save $7.
Again, this critical distinction is what most people never get — that there’s nothing wrong with being MINDFUL of how you use your resources, as long as you are not coming from a place of SCARCITY.
I can tell you, most millionaires don’t get there and stay there because they’re driving across town saving $3, or focusing most of their attention on clipping coupons.
Notice I said, ‘focusing most of their attention’.
That doesn’t mean that if I get a discount coupon mailed with my credit card, that I won’t use it if I’m going to be buying that product in the future!
It doesn’t mean that we throw away gift cards or discount cards because we don’t need to use them!
My point was that if we were to focus MOST of our attention on trying to scrimp, and save, and sacrifice, then we would attract more of that scarcity into our lives.
As long as you remain focused on your lack of resources, that’s exactly what you’re going to attract into your life.
To some that may sound a little ‘woo woo’ but it’s true. And this is why I suggested to focus on growth and creation, not on limitation and contraction.
So don’t misunderstand what I’m saying — I’m not suggesting you should just waste resources or not being mindful of being efficient, but that’s a different thought that being focused on trying to tightly grasp every dollar you have in your palm, afraid to use it or give it away.
And that’s another issue when people go into this mindset of protection and frugality of their money — one of the first things they stop doing is GIVING.
And as long as you fail to give to those who need it, and giving a portion of your income away to a cause, you’re short-cicuiting the adundance process.
I’m not suggesting it’s always easy.. but these are the times when you absolutely MUST be giving to others as much as you can .. not only because this is when it’s needed, but also because it will help fuel your abundance as we move forward!
This is one reason I’m spending a LOT of my time on this event with the Dalai Lama and Richard Branson — because the theme of the event is contribution, and figuring out as an entrepreneur or investor, how you can use your resources and create positive change in the world.
I think this is where a lot of people are missing the boat right now — they’re holding onto their resources instead of trying to figure out how leverage it and creating the positive change that the world so desperately needs right now.
Keeping it simple is the secret. That’s one of the key lessons I learned from Branson.
(for anyone who doesn’t know about the 2009 Engage Today Conference, go check it out here ..
http://wwww.EngageToday2009.com. Speakers include His Holiness the Dalai Lama, Richard Branson, Dr. Stephen Covey, Lisa Nichols, Bill Phillips, Paula Abdul.. and about 20 others..)
If you’re struggling with the difference between scarcity and abundance, you won’t want to miss this event.
Greg, I completely agree with you that both our individual and collective focus needs to be on creating more instead of making do with less.
However, to me, the word “frugal” does not necessarily mean concentrating on lack or scarcity.
On the contrary.
Frugal implies decisions made wisely and carefully. In being frugal with time, resources or money, we are balancing short term desires with long range plans.
Those long range plans are able to bring increased growth and expansion because by being frugal, we are reminding ourselves to not waste.
My personal belief is that we are experiencing society’s current contraction of wealth in direct proportion to our wastefulness. The Universe gives abundantly, but it abhors waste and will cease to reward those who perpetuate wastefulness.
Frugality is a gentle reminder to honor and respect abundance by using the resources available to us in a wise and balanced manner. Once we appreciate and are grateful for what we have, we are shown how to have more. We can always have “more”, as long as we are not wasteful.
As I said, I am not advocating that anyone be wasteful. I don’t really agree that the Universe abhors waste, but I also don’t believe that being wasteful is appropriate.
The whole point is that people fall in love with the idea of being ‘frugal’ or ‘thrifty’ and that causes them to begin thinking from a scarcity mentality, which they never break out of.
Your message points out the exact point I was trying to make in the post – you said ‘frugal doesn’t necessarily mean concentrating on lack or scarcity’.
That may be true for you, but it’s not for most people, because I can assure you, most people who are working to be frugal are doing so from a scarcity mindset.
Hi Greg,
Thanks for reminding me of this. In january, I visited my sister in Switzerland, buying the ticket on a gut feeling, was in the plane 3 hours later.
I stayed with her for 3 weeks and as I was considering either moving to a great inspiring place in the Beaches in Toronto or getting an rv to tour my schools with and live in it full time, she said: you’re going to have both! Now go out there, get this great place and in the fall get the rv.
Well, I got an amazing place, 5 min. walk from the beach and as I was considering letting it go and getting an rv, I get your mail!
I shall use your line and figure out how to afford both! Thanks!
Hélène Nicole
P.S. I am still available to volunteer on your conference. Let me know if you need help.
Hi Helene:
Your progress and growth has been amazing over the years!
Get in touch with my office if you’re interested the conference. service (at) simplewealth.com.
Hi Greg,
I totally agree with your logic. I personally feel that people who earned a good living during the great recent economic times are starting to look at the scarcity aspect of things. I believe that you shouldn’t live above your mean, but there are plenty of people who i’ve come across who i know have plenty of money and are totally uneffected by the economic turbulance, but are living as if they were effected. I choose to live with out the scarcity mentality especially due to the excess paper money the u.s. goverment has printed in the last year, i think we have an excess of funds!!!
Giovanni, great point – the problem isn’t lack of MONEY .. the problem is lack of VALUE.
As you know, we have too much money in the system, yet most people are focused on not having enough money. That’s not the problem!
The problem is a lack of value .. the key is to and create more value for the world. If you’re struggling right now, the main reason is likely that you are failing to bring enough value to the world, based on the value you’re looking to receive.
Up your value, up your lifestyle!