How not using coupons can be frugal

Perhaps many people are reluctant to be more frugal because they have the misplaced idea that “frugal” means “spending less money”?

I was having a drink with my friend Buster, and he mentioned in an offhand way that he doesn’t use Groupons (here, I use the term to mean any of the online coupons). His rationale is interesting:

He wouldn’t buy a Groupon for a business he doesn’t already visit. In other words, he doesn’t let Groupon change his spending habits.

Also, he wouldn’t buy a Groupon from a business he already visits and likes to support, since as a fellow small-businessman he knows it can be difficult to make ends meet.

Those of you who took a logic class in college will realize that means he’ll never buy any Groupons.

If you learn one thing from reading Foundry in the Forest, I hope it’s that “frugality” doesn’t mean “spending less money”. Instead, it means enjoying the virtue of getting good value for every minute of your life and every dollar you spend. If using a coupon to save a few bucks at a mom-and-pop store doesn’t seem virtuous to you, then not using coupons is very frugal. It’s a personal choice.

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Your Money or Your Life, Step 4: The Three Questions

[This is part 4 of a 9 part series on the book Your Money or Your Life. See my original post about the book.]

In the last step, we started a Monthly Tabulation, where you figure out how much you spend in various categories.

Now we’re going to add three more columns to the tabulation. Each column represents the answer to one of the following three questions you’ll ask yourself about money/time spent in that category:

  1. Did I receive fulfillment, satisfaction and value in proportion to life energy spent?
  2. Is this expenditure of life energy in alignment with my values and life purpose?
  3. How might this expenditure change if I didn’t have to work for a living?

For shorthand you can use a +/- system. The + sign means spending more in this category would increase fulfillment, would demonstrate greater personal alignment, or would increase after Financial Independence, respectively. Conversely, use the – sign if you didn’t receive fulfillment proportional to the hours of life energy you spent in that category, or if that expenditure was not in alignment with your values and purpose, or if you could see expenses in that category decreasing after Financial Independence, respectively. Leave the box blank if that category is just fine where it is.

For example, every month when I see how much we’re spending on car-related expenses (fuel, parking, insurance, maintenance), I put a – sign in “alignment with my values” since I value exercise and public transit over driving, and another – sign in “change if I didn’t have to work” since if I didn’t have to work I’d have more free time to get places slower. It took a while, but these costs have started to go down, like magic. I’m choosing to walk and/or ride the bus more often when we go on family outings. We’re saving money and also enjoying the ride.

Finally, this is the core of the 9 steps (and not only because we’re half way through). Taking a look at whether or not you’re spending what you want on the items/services you want to spend it on is the single best way to change your spending. Budgets don’t work, they’re like diets. Being honest with yourself about your values and the sense of fulfillment that your dollar buys is the only way to make changes.

This step takes about an hour a month. It also helps you figure out what is enough for you, which we’ll talk more about in a later step.