I’ve exchanged a few emails with Rob in Madrid. He’s left some great comments on here, and he mentioned a question in one of his emails that struck a chord with me. He was gracious enough to allow me to share this question with all of you.
Why do we struggle when we are forced into frugality?
Think about it for a moment. If you are in debt, you got that way by spending more than you make. For the purpose of this argument, let’s say you were living on 125% of your income.
At some point, the debt payments become too much and you are forced to cut expenses to make ends meet and to start paying off your debt. You are essentially spending less than you make and as an example, you are now living on 80% of your income.
You have 20% of your income that you are now using towards your debt. But wait a minute. You could have been living on 80% of your income the entire time instead of the 125% and accumulating debt?
For me, it’s been eye opening as to how much we have been able to pay on our debt. Once our debt is paid off, that is all money that we technically could be saving if we continue living on 80% of our income. But will it happen?
It was definitely a struggle to get to that point of frugal living. Why did we fight it so much and why didn’t we live that way sooner and avoid debt? Why is there such a struggle?
I think it goes back to our cavemen days as hunters/gatherers. Our men have been trained to bring down the big mammoth (or in today’s vernacular, a big screen tv) and lay it before their families as proof they can provide, no matter what the cost. And for us women, the traditional gatherers, we at one time would go out with our woven baskets and pluck as many roots and leaves as we could, to get us through the long winter. Translate that to the present, and you can see that we think we “need” all those pretty, shiny, useless things to last us through our now not quite so dreary cold season.
And then there’s the whole status thing, too. Once we decorated ourselves and our caves with animal teeth and pretty stones to show our worth as potential mates. If we had the time to develop the skill to create these items of luxury as well as feed and nurture the family when the mammoth meet is low, then we must be very valuable indeed. How do you break 10,000 years of ingrained consumerism?
Faced with a choice, humans will make the easier one – nobody wants to deal with difficulty. It’s just easier in the short term to put it on the card!
The realization that the choice to rack up the credit card debt was really the harder way only comes on that day one realizes they are drowning in debt. We often have to learn the hard way.
Education helps somewhat, but some of us have harder heads than others 🙂
I think part of this is human nature and learning to delay gratification. Another aspect of this is that our culture is not one that instills a need to delay gratification. We are all about consuming in the moment as opposed to living in the moment based on what we can afford today.
As my husband and I have faced our debts and tried to tighten our belts it hasn’t been a pretty process. My tightening the belt makes me feel like an obnoxious teenager. My moodiness about this has made me realize that I have been pretty childish and that part of this grumpiness is about being forced to grow up and take responsibility. If I think of it as my choice it is empowering. However, when I think of it as being something I have to do it can make me tres grumpy.
I’ve been thinking something similar recently. In the last five years, my salary has roughly increased by 400%. Even five years ago, I was probably living on (as you suggested) about 125% of my income. If I’d only managed to maintain THAT level of expenditure as my salary increased, I’d be doing very well now!
I think because there is a lot of pressure from others, particularly the older generation, to have so much in order to be “ok”. We don’t want others to think we are “poor”, so we live in such a way that makes us appear wealthy, even if we can’t afford it…
I truly think alot of it boils down to laziness and fear of sacrifice.
Laziness…we live in a “drive-thru” culture! We don’t feel like making a healthy meal at home, so we drive-thru or pick up something. $200 extra to buy something pre-assembled, rather than spending some time to do it myself? Sure, no prob.
Fear of sacrifice…the “I don’t wanna” cries begin. I feel like sometimes we perceive that our culture demands that we look a certain way. By look a certain way, I mean…bigger, better, faster in all ways! Newer house, better car, bigger wardrobe, etc.
If achieving good financial status was that easy, we’d all be debt-free!!! Sacrifices now mean wonderful things later. Plus, hard word instills character in all of us.
For me, it was the fact that i wanted to do what i wanted to do. It was more emotional for me. If I had a bad day or something came up – i just wanted to spend the money. I felt that if i spent it now and lived in the moment i would be happy. I always thought, I could die tomorrow so why not be happy and travel and spend whatever i want.
Now i wish i did not think like that cause 4 years later, i am in 21k of debt.
I think it is natural for people to want more and with the diversity and historically cheap price for many things today plus the easy availability of credit it is easy to spend more than one earns.
So to be successful with frugality you need to reorient your mindset to view it as the path that will lead to more.
More security and flexibility for when you retire so you could for example travel or pursue a dream career that doesn’t pay well.
Or instead of giving more presents to the kids at Christmas you’ll be able to pay for the kids to go to college which in the long run is a much more worthwhile gift.
Feeling like your savings will lead to prosperity will make you approach them as an exciting exercise as opposed to a burden which inevitably makes anything more difficult to accomplish.
I don’t know if there is any single answer that fits everyone in this situation.
For some, it’s their inability to delay gratification as a previous commenter noted. For others it’s all about keeping up with the Joneses. I think for yet others it’s simply a matter of ignorance (not intended to be mean, just not truly understanding credit and finances). There are perhaps other reasonas as well…?
But your point is great. We could have in fact nearly ever case lived without any of the debt in the first place.
I mostly got into debt in college when I was making very little, if any, money. A lot of what got me through school was living on the credit cards. I used my cash on hand to pay the regular expenses and minimums on the plastic, and just assumed I could pay it off later.
When my wife and I got out of college, she did an internship which paid her nothing but I got a job with a nice salary to cover our bills and have fun. We still had a bunch of debt under our belts but being in school so long, freedom to do anything is what we did. Most of the time we lived on 90% of the income because I am a natural saver, but come holidays we would live on 150% for a month and plastic would always get us through the holidays.
This year we’re saving for Christmas because I’m tired of paying for the past few years of it sitting on credit cards. I think it is easy to spend money and hard to save. It is easy to just have something done for you than doing it yourself. We live in a have now and pay later society where whether or not you can afford it isn’t asked, but rather can you afford the payment? I’m sick of paying for yesterday to get to tomorrow.
Deby – interesting point. Back then, they were mostly risking life and limb. Nowadays we are risking bankruptcy or a mountain of debt. Technology sure has a way of changing things.
Lots of great points everyone!
hmmm i think for me, it just seems like it would take “forever” to save up the money for what i wanted.
That’s so simple: because we want stuff that we think will make us happier!
I seriously hope you were joking. That’s an absurd analysis. There is nothing “natural”, hereditary or genetic about debt. Debt is a relatively new phenomena, especially in terms of the amount and nature that Americans face today. Debt is literally a product — the most marketed product in America. Credit cards did not exist as widely available debt tools until a couple of decades ago. Debt was not the norm in my grandparent’s generation. Debt has risen over time as we become more consumerist and materialist. At no time in history has consumer debt been as high as it is today.
You see most people when they get their first credit card do not look at it as if they are spending more than they earn. It takes a few years for that to really set in. I mean think about when you got your first card and saw that you had a 2,000 credit limit. Now you can go out and get that big screen you have been wanting for so long but have not been able to save up for. Credit is an allusion, it makes you think you are worth more than you are (financially speaking ofcourse). Then like the post said you get stuck having to change your ways that you got so used to just to pay off your debt.
to kristina – you must be kidding if you think that debt is a relatively new phenomena, especially considering our grandparent’s era. if they owned a farm, they had a mortgage. debt has changed shape, certainly, but it has always existed in one form or another, whether people were paying to feudal lords or some other lender.
now we owe the majority of our debt to big corporations (credit & banks) instead of owing to people or wealthy families. wake up! at least now we have the means to be independent if we chose to be.
We dug out of a sixty-seven thousand personal debt hole in just under four years about twenty years ago. You’ll find that the longer you stick with it, it will get much easier. It started to get much much easier as more time passed.
Debt is NOT new – however decades ago the merchants issuing the debt when we bought things knew us. There was a human being in on the decision of issuing credit.
Today we are left to our own demise and a computer that doesn’t say to stop issuing more credit until the borrower is way in debt up to their eyeballs.
Keep plugging away at it. I can tell you that life is so much more FUN after the debt is gone.
The post above talks about our grandparents and the debt on the farm. The point it skips is Grandma and Grandpa were told NO by the lender if they felt it was too risky. Today there is no one saying NO to the many vulnerable among us struggling with this issue in their lives.
YOU CAN DO IT !!!
We Did it —
No Balance Due:Tired of being in Debt Up to Your Eyeballs
Haven’t been here for some time..;D Glad to be back.
My credit card debts was more than $60,000 in April 07.The latest is $56,836 ..:D A bit decrease but at least I am working hard on paying off my credit card debts.
Self-control,persistence,living below our means really help my hubby and me pay off the debts little by little.
I can live below my means nowadays,that is,going less shopping and buying less unwanted items …;D
I cut off my credit cards in April. I had 7 credit cards then. Now, only 2 cards. I have not swiped my credit cards for more than 2 months now. Cutting off my credit cards does help stop bleeding….;D
Besides saving and paying off debts, I am now making money online by writing paid posts that can increase my income and help pay off some of my debts.
I’ve been in that situation (spending more than my salary) a few years ago and that’s why I’d accumulated huge debt. Debts, really, are borrowing from our future, thus, putting us in a situation where we have to be frugal in the present. And you’re right that as soon as I paid off those debts, then I have this extra money that I can now use towards my other financial goals.
My question came about when I realized that the debt payments we’re taking up almost half our disposable income. That’s money that could go into savings, or even be spent but instead it goes to debt payments.
I have to earn an extra 1000â‚¬ a month just to break even. Yet we’ve always managed to find money for holidays, spending, buying things etc. I realized what usually happens is we’d go through cycles we we’d ignore the budget and then run into a cash flow crisis which would force us to tighten our belts for bit and then as we gained breathing space we’d slip back into old habits again only to run into the same problem. What I’m trying to do this time is to change our way of thinking to make being frugal a way of life rather than something we’re forced into by circumstances.
Consumerism and overspending is completely cultural. The American government is corporate government (protects corporate interests, not human ones), and from the time we start school, we are trained to be loyal consumers. Note that we are not taught any economic life skills in K-12. Note that we have one semester of Econ our senior year of high school. Note that we then are bombarded with credit card offers on college campuses (colleges have contracts with these vendors) and that college does not teach us about what we might realistically earn when we graduate, nor does it teach us economic life skills (see a trend?). The PR way of touting insane student loans is that “the US guarantees every person can go to college.” But if you look at similar countries of wealth and industry, we are the ONLY ones who make young pay pay for college, and incur massive debt that is tantamount to servitude. What other culture would burden young people just starting out in life? (FYI, I’ve already accumulated $17,000 in interest alone on my student loans.) Bottom line: Our consumerism is all corporate strategy. That’s the issue we need to wake up to. The way to empower ourselves is to pay off the debt, stay out of debt, and build savings.