Sunday, 6 August 2017

Frugality Is Not THE Answer



My new wallet - it has many zippered compartments for cash enveloping
and oodles of card space too. It also holds my iphone too and is not bulky.



Hi folks

So, as you all know I have been studying up copiously on the Jewish 'take' on life due to the fact that Mrs HM is of Jewish extraction - the learnings thus far have been astounding and as yet I am only scratching the surface. The fabulous thing about all-things-Jewish is that there is more opinions and perspectives than there are Jewish voices! Ha ha - it keeps it interesting to say the least.

Frugality and Simple Living have been a big paradigm shift for Mrs HM and I over the last few years and have made a vast positive change in our financial lives. This change has also manifested so many knock-on positives in other parts of our life too. However, I have recently learnt that it is not enough, nor is frugality the single 'answer' to a financially meaningful life - far from it in fact.


Home made dessert


As it turns out, frugality practiced by itself can be rather damaging and regressive. Frugality practiced in isolation can actually create long-term financial stress.  Frugality can be all-consuming .... and therein lies the problem. Nevertheless, frugality IS a vital ingredient of a larger triangle of disciplines required for a good life - a bountiful life - a meaningful life - a memorable life.....but again, not in isolation.

Frugality needs to exist in equal proportion to two other vital financial disciplines. The three disciplines that create a strong basis for a financially meaningful, bountiful, memorable and good life are:

Frugality - Earnings - Investments

Each of these three disciplines must be given EQUAL time and attention.

Spending all our effort on single-mindedly earning more money is a well known ugly life pathway. Allotting all our life efforts to sniffing out the needle-in-the-haystack of lucrative investments is also pretty dodgy. In the same way, being obsessed with frugality just turns us into an unlovely Scrooge.


A special night out and a special dessert.  Frugality
makes the occasional treat 100% affordable.


However, a wise balance of all three will create a firm financial foundation on which to build  and grow our lives, meaningfully contribute to our neighbourhoods and society and be free of the clutches of consumerism.

I have had this balance VERY wrong over the last few years and it is now being addressed.  This triangle of financial strength gives us three anchor points on which to move forward and grow.


Do you have a coin jar too? Ours is a recycled coffee jar.


I am going to elaborate much more on these three disciplines in future posts and how they are so powerful as a symbiotic union and yet how destructive they are by themselves.  Basically, doing frugality all by itself will not improve our long-term financial situations. Likewise, just focusing on earning more money will not curb wastefulness or addictive consumerism. Similarly, being obsessed with investing is pointless if there is nothing to invest!

A vital key to long-term financial empowerment is a balanced and wise attention and commitment to prudent frugality, continued increase of personal income and dedicated life-long investment habits.  There is no grey area here. Remove a single one of these three disciplines from the equation and our finances will stall pretty fast - conversely, ensuring all three disciplines are attended to will see exponential and continuing financial improvement that will live on generationally.


So much more on this and heaps of other topics in the future folks.

Take care and stay nice!

Mr HM  (Phil)



22 comments:

  1. Dear Phil,

    a timely post, I have lately reached similar conclusions myself and in the process of adjusting my life accordingly.

    If you have not already checked it out, have a read of The Barefoot Investor by Scott Pape. It is a great read and the steps are very do-able. In the past I have concentrated heavily on paying the mortgage down and living frugally, but neglected to have my money working for me and my future.


    My plan was to have my house and garden set up to be largely self-sufficient and to therefore not need too much money in my later years. Whilst I am still completely enthusiastic about self-sufficiency, I feel much more secure knowing I have some money working for me and growing.

    After reading your last post I looked up Jewish money wisdom and learnt about the jar system they teach their kids. Lightbulb moment - the 'investing' jar. I have always saved for things I needed and wanted, and have trained my kids to do the same. But now I see the wisdom of the 'invest' jar - it keeps growing even when you have spent your saved dollars on something needed. The Barefoot system is not too dis-similar to the Jewish money jars. The stories in the book really inspired me ( plenty of ordinary folk and even struggling folk who turned their financial lives around radically) and I'm finally getting my financial house in order - being frugal and debt-free really isn't the whole answer.

    Madeleine

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    1. Totally love Scott's book - it is a fabulous shove in the right direction. I will be doing a post on the 'Jewish Jars' in some more detail soon too - it is a perfect place to start.

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  2. What a unique post. Love anything Jewish or related.

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  3. Yes we have coin jars here. They really come in handy at times.

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  4. I wondered where this post was going when I read the title, but I totally get you, really looking forward to more posts.

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  5. Remarkable that you have come to the same conclusions that I have. Frugality, earnings and investment form a triangle (strongest shape in nature) that is vital to a family's lifelong well-being.
    I too have practiced each part of this trinity in isolation and I often felt dissatisfied and aimless. Good luck with your family's new focus. I've never been more exited about the future now that I no longer lable my self as this, that or the other. Here's to Jewish jars or the equivalent.

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    1. Luckily nobody needs to be Jewish to copy the disciplines and adopt the learnings. Anyone can practice them irrespective of religion, race or creed.

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  6. I am intrigued, cant wait to read more.

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  7. Just letting you know that I enjoyed this post, and looking forward to reading more about it. Agree that all three things are important but need to be balanced.

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  8. Does giving come in to the new equation? I see that as one aspect of investing. :-)
    Looking forward to more of your thoughts!

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    Replies
    1. Actually yes! In fact once I do a post on 'Jewish Jars' (how income is divided) you might be astounded at just how much giving happens. it is far more confronting than even tithing.

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    2. I think it was more like 30% wasn't it? I shall await with anticipation your post! :-)

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  9. investing is my downfall...going to find a copy of The Barefoot Investor now...

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    Replies
    1. Scott's book is a good start - but there is more to investing than just 'Super' of course.

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  10. Always interesting to learn new ways of living our lives better.

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  11. My coin jar holds gold coins. It's out of site so out of mind. I use this at Christmas to purchase items that I would not normally have the budget to buy. I craft all year so most gifts are already put together. Love how this saving of coins over a year can yells so much.

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    Replies
    1. I remember our first Christmas without using credit cards....it was euphoric.

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  12. I am really looking forward to reading more on this.

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    1. My challenge will be to restrict myself to only write about what I have adopted personally - I am fairly bubbling over with new concepts to start outworking in my life based on what I am learning.

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    2. PHil I think your readers will also be interested in your insights regarding what you have been reading so there may not be such a need to restrict yourself to writing about only what you have adopted personally.

      BTW I have never thought that frugality or simple living is the whole answer to life the universe and everything. Good stewardship is important but so are such universal laws such as 'giving and receiving' etc.

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  13. Very excited to read more!!

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