Frugal people need to be thankful for big spenders

By Stew

Every family’s budget is a reflection of that family’s priorities, habits and tastes. Here at Gather Little by Little, we do not try to dictate exactly how persons budget should look. Mainly because that is a fool’s errand. But there are some basic principles which govern the advice that appears on this blog. One of them is: the outflow should be less than your inflow. Most of us try to stay under budget by spending less whenever possible. We are a frugal bunch.

My last post was about how it is possible for a Christian to be too frugal. A believer should not operate or be known as a skinflint any more than they should be known as a spendthrift. Admittedly, there is a fine line between being frugal and being a scrooge… but that is a different topic. Today, we need to examine the fact that those of us who pursue frugality as a way of life are dependent on people who spend a lot. The life of a spendthrift actually makes life easier for the coupon-cutter. Let me demonstrate by first listing a few habits of the frugal:

  • Frugal people only buy loss- leaders and then walk out of the store. A loss leader is an item that is priced at or below cost in order to entice customers to come into the store with the hope that those customers then spend more money on other items that carry a profit.
  • Frugal people rarely pay full-price for anything other than gasoline.
  • Frugal people focus on buying needs, not “wants” or luxuries.
  • Frugal people only eat out with a gift certificate, with a coupon, with a free birthday meal or on “kids eat free” nights. On top of that, a frugal person will generally only drink water and complain the whole time that “we could have made this meal at home for 1/4th of the price.”
  • Frugal people rarely pay interest and never pay late or overdraft fees.
  • Frugal people have high credit scores and thus pay the lowest interest rates on car loans and home mortgages.

So how do spendthrifts make life possible for the frugal? Well, if you look at the list above, you notice that if only frugal people shopped, ate out or banked, then stores, restaurants and banks would go out of business. There is no way that any of those businesses could make a profit if their customers were all “frugal.” The only way to survive would be to raise prices for everyone.

For example, my wife and I love shopping at Whole Foods . . . but we only buy items that are at ridiculously low prices. . . and we hit the samples hard. We love Whole Foods products, but that store makes no money on us. That business can only afford to offer great sales and good samples so long as people with more money to spend and people who spend too much money shop there. When it comes to clothing, we buy most of our clothes at second hand stores. Frequently, we find items that have been barely worn (if at all) and we are then able to acquire those items for a fraction of their original cost. Second hand stores would not exist if everyone shopped like us.

My point? Don’t hate people who spend a lot of money. We need them. There might be times in our lives when envy, jealousy or covetousness gets the best of us and we dismiss “the rich” or some other big spender with a sneer or a dismissive wave of the hand when the reality is that we should be thanking the person who is walking out of Whole Foods with two carts full of $6 a pound ground beef and organic tomatoes. Individuals who pay full price are the reason that there are deals to be had for those who are willing to hunt for them and wait for them. People who pay late fees and high interest rates are the reason that your banker can afford to dress well and keep your money safe.

So, you do not need to become a wild spender, but keep this idea in mind. Don’t  hate the guy walking out of the store with six new shirts. He just paid a little of the real cost for that pair of jeans that you are going to find on the clearance rack.

The Consumerist

7 Responses (including trackbacks) to “Frugal people need to be thankful for big spenders”

  1. Maggie Says:

    Thank you for this insightful article. It does put things into perspective, and makes it easier for us to be non-judgmental about others’ spending habits, as long as they aren’t spending our money.
    Your blog has a variety of interesting articles. Kudos!

  2. Maggie Says:

    Your comment about a frugal person eating at a restaurant, drinking only water, and complaining about how much cheaper the same food would be if made at home.

    I consider myself frugal, and I usually drink water (sometimes milk) when we eat out. But I don’t complain about how cheaply I could make the food at home. That would be bad manners, and would just put a damper on the day. Instead, I relax and enjoy the experience.

    There are many things which aren’t in my budget, but I do try to find joy in all of the things which I can afford.

    “If you can’t have the stuff you love, love the stuff you have.”

  3. Jonathan Says:

    I think that the truth is that we many of us are frugal AND generous in different areas. I find that the more I cut back in one area (for example not buying so many coffee’s on the way to work) I counter balance this by increasing spending in another area, i.e. I’ve recently rejoined the gym.

  4. PPI Says:

    You just made a very good point there. Also, we should not hate spenders for being what we chose not to be because that we’ll only lead to envy and discontent. Let and let live.

  5. Discount Code Guy Says:

    Yep agreed. Hate is such a strong word and yet we seem to use it frequently to communicate a dislike for something. Sometimes focusing on the plank in our own eye is more important than the splinter in other people’s is the primary thing!

  6. Brian E Says:

    I’m glad for big spenders because that means:
    1) I can get the samples of cheese at Whole Foods
    2) I pick up their slightly used items at the consignment store
    3) I get great stuff on Craigslist. I’ll never buy furniture again at a retailer.

  7. Matt Says:

    Some people choose to spend their dollars in different areas; you may ‘hit the samples hard’ at whole foods but drive a new car, while I might save money on the car and focus my spending on Whole Foods products. Different strokes for diff folks, you’re right to diffuse the (sometimes there ) attitude about being a better person because of tighter spending habits. Good post.