Our Frugality is a Sham

Our last companion had just left Budapest, and we were finally traveling solo again. “We need to be more frugal with our food and dining expenses,” Daniel and I agreed.

Rather than go out for another restaurant meal, we walked to a nearby grocery store and shopped for dinner. At the deli, I chose a colorful package filled with a variety of cured meats. We grabbed a piece of brie – that delicious soft cow’s milk cheese – imported from France. “This one looks interesting,” we said, also adding a Slovakian sheep’s milk cheese to the basket. Finally, we picked up a loaf of fresh-baked bread, large enough for dinner and several meals more.

Total price of this gourmet meal for two: 1,200 Hungarian forint. About $4 US.

“Frugal,” right? What’s that for a couple wealthy Americans like us – a few minutes’ wage?

"Roughing it"

“Roughing it”

Joe Veix’s humorous New Yorker article “Why I Quit My Job to Travel the World” caught my attention last month. “I couldn’t bear being chained to my desk in a stuffy office any longer,” Veix’s character writes, “so I decided to quit and travel the world, bringing only my passport, a small backpack, and my enormous trust fund.”

The short essay is full of comedic gold, from quips about minimalism (“You don’t need to own a lot of ‘stuff’ to be happy, especially when you can buy whatever you later realize that you need with your massive inheritance”) to the trappings of modern life (“All those bleary-eyed suckers packed into the subway… wasting their whole lives to afford useless things like ‘rent’ and ‘health insurance’ and ‘student-loan payments.’”)

Ha ha – oh, the privileged lives of the 1%.

But are we really that much different?

It’s easy for us to anchor on the lives of our peers and assume that we’re about average. If we happen to be saving more money than the people around us, it’s because of our rigorous frugality, right? After all, we’re still an order of magnitude away from the wealth of the elite one-percenters.


But when we look at the real distribution of wealth across the world, the picture is pretty different. By assets, $500k (a lot of money, but at the low end of most FIRE goals) would put us in the top 3% of the world. By income, a mere $32,500 annually makes us “the 1%”.


Would my own story sound any less ridiculous than the New Yorker write-up to someone earning less than $1,000 US per year?

“After growing up as a white male in a safe, affluent American suburb, I enjoyed a four-year vacation at a prestigious university without going into any debt. I took a high-income job that was occasionally stressful (woe is me!), but I couldn’t take it any longer. So I decided to quit and travel the world, bringing only my partner, a small backpack, and the safety net of my enormous investment account.”

Wow, what a daring and revolutionary adventure we’re on.

As freelance graphic designer Janelle Quibuyen reminded us in her recent blog post titled “Quitting Your Job to Pursue Your Passion is Bullshit,” we’re not doing anything more brave or courageous than “the migrant worker picking your strawberries to send remittances to family in their home country,” “the recently-graduated millennial who works in a cubicle 9 hours a day to pay off massive student loans,” or “the working class mother with three jobs who feeds her children.” On the world scale, we’re just rich people, doing what rich people do.

Here in the personal finance community, we often pat ourselves on the back for our supposed frugality. And it’s true that our minimal spending relative to our peers has been one of the major factors in allowing us to pursue this life of full-time travel and adventure. But in the context of the average human being in the world today, I have a hard time accepting that our lives are even remotely frugal. Did I have to make any real, consequential sacrifices to get here? Not really.

What did I do to reach financial independence in my twenties? I earned a sizable income. I rejected a handful of trivial splurges: expensive housing, new cars, cable TV, gym memberships, and the like. And thanks to a flexible job, some well-off friends, and a bit of travel hacking (enabled by my good credit), I was still able to travel and live like a multimillionaire.

When we start talking about cutting cable as a “sacrifice” or plentiful, tasty, nutritious food as a “struggle meal,” we’ve really lost touch with reality.

“Oh wow,” I could imagine someone from the bottom half of the world wealth spectrum telling us, “You’ve survived how many years without 400 channels of live video entertainment streamed directly into your home? Tell us more about your suffering.”

Let’s face it: we’re awfully spoiled by our modern, western standard of living.

I’m not condemning technology or the complex global economy. Our lives are immeasurably better than those of our pre-industrial ancestors. But we might appreciate what a ridiculously fortunate position we’re in – and that we should probably be speaking tongue-in-cheek any time we describe ourselves as frugal.

Even when we’re making cost-conscious choices, it’s our wealth that often enables those decisions in the first place. Life is more expensive when you’re poor.

I’ve never paid a bank fee for an overdraft or a low balance in my life; banks pay me for the privilege of keeping my money. I’ve never used a payday lender; in a pinch, I could always tap my emergency fund or a well-off friend or family member. I’m able to wait for good deals on the products and services I consume, and when things do come on sale, I have enough money to buy big quantities at a discount. I have enough in savings to pay for large purchases up-front, rather than financing things like phones and furniture with expensive monthly interest payments. And I have near-constant access to the internet and a smartphone, allowing me to do research and get the best price on everything I buy.

The better off we are financially, the easier it is for us to save.

On top of the flexibility we enjoy thanks to our wealth, let’s not forget that our legal and regulatory systems are rigged in our favor, too. From burdensome occupational licensing to regressive taxes, you’d be hard-pressed to argue that things aren’t set up in favor of the well-to-do and to the detriment of those in poverty.

I pay a lower percentage of my income to local governments. I have the financial flexibility and knowledge to reap the benefits of tax-advantaged investment accounts and tax-loss harvesting. My capital gains and dividends are taxed at a lower rate than ordinary income. I don’t have a mortgage, but if I did, I would sure be capitalizing on that sweet mortgage interest tax deduction.

In early retirement, even my healthcare will become more affordable. Next year, Daniel and I might both qualify for Medicaid, a state health insurance program originally intended for the least well-off financially. Even if we exceed the income threshold, we’ll surely enjoy a rich government subsidy on the exchange while working families pay inflated premiums for employer-sponsored plans. How’s that for a kick in the teeth?

When we consider how well-off we really are – and all the ways we’ve been set up for success – I have to wonder: are we really “frugal,” or are we just a little savvier than average at optimizing around all the advantages we enjoy?

I don’t intend to dismiss the frugality movement. We certainly live by many of its tenets.

I also don’t intend to mock the reasonably well-off for still finding it difficult to save money in the face of peer pressure and societal expectations.

But I do think it’s worth remembering that our circumstances – and even our so-called “frugal” practices – would look a lot like the New Yorker trust fund life to most other people in the world today. We owe ourselves that regular reminder of how fortunate we really are.

Frugally yours,


Photo credit: qasic via Flickr


  1. I have been wanting to write a post for a while about why we don’t want to use the word “frugal” anymore — but I think you just wrote it for me. 🙂 I agree with absolutely every word of this. Most people’s privilege is invisible to them, but when you see all the ways that people living in poverty overpay for the same things we can buy “frugally,” it’s easy to realize that we’re essentially just frugality tourists. It’s not the same when it’s by choice, not necessity. And yeah, literally nothing in our lives counts as an actual struggle, regardless of how many hours we work (that’s still a choice, ultimately, not a necessity). And so many of the things we get “deals” on are only available to us for all the reasons you listed — because we have cash available, because we can afford to buy in bulk, because we have the resources to plan ahead. So many thanks for writing this!

    • You’re right, the mindset is totally different when you know you have the ability to change your decision at any time. Seeing how long we can last into autumn without turning on the heater is a fun game, woo! Meanwhile, some people are just cold. If the discount tortilla chips we bought are terrible, oh well, we tried — toss them and get a better bag. Meanwhile, some people are just hungry.

  2. This is great. I think about this a lot. We’re in this weird place where we are SO WELL OFF. And we complain about crazy things. I think about how we have such skewed perspectives. Maybe Louis C.K. points it out well when he said: “‘I had to sit on the runway for 40 minutes.’ really? What happened then, did you fly through the air like a bird, incredibly? Did you soar into the clouds, impossibly? Did you partake in the miracle of human flight and then land softly on giant tires that you couldn’t even conceive how they put air in them?…You’re sitting in a chair in the sky. You’re like a Greek myth right now!”

    • Totally. I guess that’s just human nature to always find the downside in things. I *love* Louis C.K.’s observations on how spoiled we are. He’s this generation’s Carlin.

  3. This has become one of the blogs I follow regularly and the reason is I always end up reading things I need to hear. When you live in a little consumerism Petri dish like the U.S. It’s easy to feel frugal. I loved the line about you lived without tv for how many years? Oh how you have suffered.

    I’m sure your world travels thus far have helped put wealth into perspective for you. Also, I totally agree with the fact that things are more expensive when you’re poor. I’ve never had to pay a bank fee either, and the only interest I ever worry about is the interest rates others are paying me. We are rich indeed, let that be a lesson that more money won’t fix everything. Money is a tool but not a solution. Great stuff as always Matt!

    • That’s awfully kind of you to say, Elsie! Thank you! We’re traveling in places that are still relatively well-off, but it is still crazy how much a US dollar buys in many parts of the world. We sat down at a restaurant in Istanbul intending to get just a simple doner kebap, but they just started bringing us the full menu with soup, salad, main course, dessert, and tea (not sure if it was bad communication on our part or what, but we just went with it). What might have been a really expensive mistake at home ended up being just ten dollars each.

  4. Awesome reminder. Perspective is so important to staying grounded in reality. I’ve posted about things like The Great Depression and even a zombie apocalypse, because so few people realize that they’re actually relatively wealthy. We’re even doing pretty well, despite our debt.To me, frugality is about focusing on essentials when it comes to spending – although sometimes your definition of what is essential can become skewed.

    • That’s a great point about how many of us are well-off or “wealthy,” even if our net worths are negative or we’re paying back loads of debt. Our ability to earn money and pull ourselves out of it is still insanely strong. I find that to be pretty empowering.

  5. This is exactly how I feel about the tiny house movement. Y’all realize that right now in other parts of the world, people are living in tiny houses not because it’s a fad but because it’s a necessity?

    Or when people “discover” ways to reuse things and name them lifehacks. That’s less innovation and more realizing that we don’t have to buy into the Everything Is Disposable culture that has been marketed at us day and night to increase sales.

    Likewise, I never forget my roots when I write about cutting costs because at the same time, I have the privilege of choosing when not to cut costs. Fifteen years ago, that was not at all the case for my parents, or their parents. They cut costs to the bone because that’s how you make it from one year to the next, there was definitely no early retirement at the end of that rainbow!

    • Oops, hit submit too soon!

      Last thought: It’s a wonderful thing to be able to choose frugality, and to practice it. It’s even better to understand how much you have as a result, and that not everyone gets to choose it, that this is a requirement to make it through life. It sure beats down the desire for lifestyle inflation when you realize that you can choose this now, or be forced to it later.

    • Haha, yes, a lot of those “lifehacks” are things that probably would have been obvious to generations before us who needed them to get by. I totally agree with your point about lifestyle inflation; when we’re intentional with our money, we can appreciate and assess the cost of that inflation before we make any changes to how we live.

  6. Well put Matt. I’m by no means frugal, but try to be at times. I definitely am aware that I’m lucky to have the ability to be “frugal” or not.

    • Thanks, Fervent. We’re definitely sparing and economical on a variety of expenses. On the other hand, we’re also spending on what I’d consider to be the ultimate luxury, time away from work.

  7. This is hard to remember sometimes, because our annual income is so much higher than the average US household, and we’re still struggling. However – “struggling” doesn’t mean that we live in an unsafe neighborhood. “Struggling” doesn’t mean my kids are ever hungry. “Struggling” doesn’t mean that we can’t afford daycare, so I can’t go to work. It’s important to remember that.

    • Great points, Pia. Just because we’re relatively well off on the world scale doesn’t mean we don’t face plenty of financial challenges and trade-offs and just plain bad days.

  8. I love this essay…bravo!

  9. What a great post. We are so fortune to live in the country we do, where many of us have the privilege of never really knowing what hardship is. We’ve collectively lost perspective because of this.

    I always joke to my friends that I live like a queen: In what other country could a single woman in her 30s own and live in a 3 bedroom house all by herself?

    My annual spending of $18k seems high to me compared to what I truly need, although my friends probably think I’m a miser for not spending more. And yet I can still buy whatever just about anything I want and eat out as often as I’d like and still not spend more than that in a year’s time.

    I totally agree that money allows us to save more easily than those without the same means. My hope is that technology will continue to evolve and become more of an equalizer going forward. Wish I had a better solution to that problem, though.

    • I’m in a very similar housing/spending situation. I joke about my “bachelor pad” that I built when I was 24. It’s nearly 2,500 sq.ft. and absolutely ridiculous for one person. I didn’t really plan to live here for more than a couple years — original plan was to build in six months, live in the house for two years, then move somewhere new — but one thing led to another and I’m still here 10 years later. I really need to sell…

    • I love your house example, Kate! Wow, you must be royalty. You make a really great point about technology. The internet alone is such a wealth of free resources and knowledge, and hopefully that brings more opportunity to people around the world over time.

  10. I agree that you guys aren’t being “frugal” with your funds. You’re being intentional, or careful, or budget-minded.

    I’ve been writing about frugality/careful use of funds/smart money practices since 2007. Some of the folks I’ve interviewed chose that lifestyle for any number of reasons, such as “want to stay home with my kids,” “want to live on less to reduce carbon footprint” or “want to climb mountains/travel the world.”

    A whole lot of others are frugal because they MUST be. The books won’t balance otherwise. While some are the struggling middle class, plenty are those who are always just about making it or even a little bit behind no matter how hard they work. I used to be one of those people and I can tell you that it stinks on ice.

    These days I’m frugal because time is more important to me than money. By being careful with funds I can continue to freelance rather than work a 9-to-5. It’s been my experience that folks equate “frugality” with “a one-way ticket to the Land of No Fun At All.” Not necessarily true! My frugal partner and I are the happiest people we know, because we’ve decided what’s important to us — and, just as important, what ISN’T important.

    Thus we don’t have a television or smartphones or game systems or fancy furniture. What we do have is priceless: each other, shared financial values and deep love. Oh, and a greenhouse that he built mostly from discarded windows and scrap lumber.

    Very glad you’re having a fulfilling life doing what you love to do. Gladder still that you’re calling yourself out on spurious use of the word “frugal.” Bookmarking your site.

    • That’s a perfect way to put it, Donna: “intentional,” rather than just “frugal.” I think I’m going to try to use that term from now on. There are many expenses on which we spend very little because we don’t value them, but we are far from economical on the things that matter most to us, like time (choosing not to work) and travel. Thanks for visiting and for your thoughtful comment.

  11. There is so much privilege in the Western world. There is so much privilege in the first world. And I think if we don’t acknowledge our privilege, we’re really doing a disservice to ourselves and to others. As an educated middle class white woman, I’ve been thinking about this A LOT lately. Very much appreciated!

  12. This. This is some serious freaking perspective that we’d all be wise to keep in mind. And it’s true, in the greater world around us, not very many of us are truly suffering. None of us had to fight for our freedom or independence. Not many of us fight for every meal we eat. We “get frugal” on the completely frivolous aspects of life that would stand as the mark of wealth in many areas of the country. We feel proud of ourselves because we canceled our gym membership to save $30/month, but lose sight that $30 is damn near a monthly wage in some locales around the world.

    How “frugal” are we really being? Perspective rocks.

  13. This is a great perspective to remind us, when we’re griping and moaning about how we suffer, that we’re actually very privileged.

    I’ve discovered a new blog to add to my rotation. Thank you! And enjoy your time globe-trotting. 🙂

  14. First world problems, right? I’m currently on a standing room only bus, surrounded by well-educated, white collar business professionals who are, like me, commuting home from their high paying jobs that are sometimes stressful, but most of the time are really pretty chill.

    I’m mildly annoyed that I have to stand for the next 15 minutes of my commute. But I turned on my nearly $1,000 superphone to read this post and am replying through a lightning fast 4G LTE connection, steaming music the whole time to keep myself entertained.

    I was starting to think that I’ve had enough of the bus life – I’ll just go get me a new car at the dealership I just bussed by that was advertising 0% interest for up to 72 months. I was even starting to think that I might *deserve* a new car because, shit, I’ve been bus commuting for the past year. That shows some serious frugal chops, right?

    So thanks for bursting my bubble – now I’ll probably keep riding this ******* bus for the next several months till my resolve wears off and I cave in and buy a new car.

    The whole experience will probably result in a blog post chronicling my 18 months on the bus and how I’m Mr. Frugal Bad-A for enduring the hardship, but mostly I hope to keep in mind from now on just how truly fortunate I really am already. I really don’t want to turn into the New Yorker trust fund guy.

    • Haha, I’m sorry to wreck your car ownership dreams for a while, Ty! Hey, there’s nothing wrong with wanting or pursuing that. I don’t mean to condemn our modern luxuries at all. I’m sitting in a fancy hotel room writing this on a thousand dollar laptop while on perpetual holiday in a foreign country; I’m hardly one to judge. But you’re right, it’s all about perspective on the good things we have.

  15. Maybe we need a new word rather than frugal. ‘Trying to be a little better’ doesn’t have quite the same ring to it, but it’s closer. There will always be people better off and worse off than us, but it is great to see so many people trying to think rather than blindly follow the herd. Frugality and minimilasim are better for us and better for the environment. We could all do even better, but it’s a start.

    • Totally agreed, Julie. I liked Donna’s suggestion above of “spending intentionally.” Rather than spending sparingly on everything because we have to, we cut costs on things we don’t value (for us, that’s most things we would call “stuff”) in order to spend on things we value most (for us, mostly time and experiences).

  16. Thias @It Pays Dividends

    July 12, 2016 at 4:03 am

    This is a fantastic post Matt! I personally use frugal as a way to be as resourceful with my money as possible and I know that I am able to do that because I have resources that not everyone has. At the same point, it is hard to compare our lives to third-world countries just because we live in a different environments with different opportunities. Am I more privileged money and opportunity wise than other people in the world? Absolutely. At the same point, I don’t have as many resources or opportunities as other people in the US. There is nothing wrong with considering yourself average in the country that you live – as long as you remember than we are still incredibly lucky with the opportunities and freedoms that we have here.

    • Agreed, and I hesitate to push the “look how rich we are compared to the poorest people in the world” point too much. A dollar buys a lot less in Wisconsin than it does in Kiev, so it’s hard to compare perfectly on that metric alone. I might slightly challenge your point about considering yourself average in your own country; that’s fine if it’s accurate, but plenty of people making five times the median household income still think of themselves as average, middle-class Americans.

  17. Thankfully, I’m surrounded by friends who have student loan debt and/or low paying jobs. Just listening to them talk about their life keeps me grounded and aware of the privileges I’ve been given. Great article!

    • That’s definitely good for a healthy dose of perspective, Gwen! A lot of us get insulated by surrounding ourselves with other people in our own financial situations, and we start forgetting what “average” looks like.

  18. Matt,

    Fantastic insight! Many of us really don’t know how easy we have it sometimes. My parents grew up in the Middle East and they were the ones who had to truly suffer and make it here in the US on their own. I visited many times growing up and let me say spending a few weeks in a 3rd-world country truly puts things in perspective just as your post did for me here.

    • I’m so often awed and humbled reading about the experiences of immigrants and the painful sacrifices they’ve made for themselves and their families — real sacrifices, not no-satellite-TV sacrifices. Thanks for your kind comment.

  19. YES! Thank you for writing this.

    It is not a sacrifice to not want the luxuries easily afforded in our society. Not wanting them helps you to safe wealth and make different choices, but it is not a sacrifice to not be interested in cable.

    I used to do immigration work and the clients all wanted safety over anything else. They had hard lives and just want to live in a way that they can keep their head down and not be killed for existing. That’s it. They did not desire craft food or beer. They just want to exist.

    • That’s great perspective on your immigrant clients, ZJ, and a good reminder of what’s really important for happiness and what’s not. Thanks for sharing.

  20. I so appreciate this message. We consider ourselves frugal but recognize it is a very relative term. I mean, how crazy is it that I’m sitting here reading articles on the Internet on my laptop, and not worrying where my next meal is coming from, or whether I’m going to get eaten by a bear today! (Sorry, I watched the wrong 5 minutes of The Revanant recently). We have so many privileges and advantages and there is a momentum. For example, many high-paying jobs also pay for employee’s cell phone plans and have lower healthcare premiums.

    • That’s a great example, Kalie. For years, I never paid a dime for my phone, laptop, or healthcare, all thanks to having a job with nice perks. Thanks for your comment!

  21. Thanks for posting this. I have definitely called myself frugal in the past, but, honestly, when I’m traveling I enjoy spending money on good food, good beer, and good coffee. There are a lot of things I choose to spend money on, because it’s part of the travel experience for me.

    Even though I came out of school with debt, and still work full-time to make travel work for me, I do recognize a certain privilege has allowed me to live the life of my choosing. This piece reminded me to take a moment to put a perspective on this whole “long-term travel” thing.

    Looking forward to reading more in the future.

    • Thanks, Heather. We’re totally with you on the good coffee, beer, and food, especially while traveling. That’s a huge part of cultural experience for us. Glad you enjoyed the post.

  22. Yes! Well said! Early retirement is not only a luxury; it is also a product of the good fortune of being born in the western world. Excellent post.

    • I’d say it’s the best luxury money can buy! We’re thankful to have had the opportunities to get here. Thanks for reading!

  23. Excellent post. It’s a good reminder that we should be grateful for the many privileges that we have.

  24. Remember that having a mortgage does not give you a tax advantage.

    It’s a terrible reason to buy a house.

    You only get a portion back of what you paid in interest.

    If you paid a bank $10,000 in interest, you get roughly your tax bracket back ($2,500 aapx)

    The bank still wins in that case.

    • Sure, the tax deduction doesn’t reimburse 100% of mortgage interest paid, like you said, but it’s still a meaningful financial kick-back for people who are well-off enough to afford to buy a house. No such tax breaks for those who are barely making rent payments on time.

  25. Kudos for this insightful analysis of not only your situation but also mine and many others…!

  26. So so good! We have had a few folks ask when we are moving to a bigger house. I kindly remind them that even 50 years ago, our house was the norm for a family of 7. And most places in the world 7 people sharing 1600 sf would be luxury. One day we might build a bigger place, but this “sacrifice” is how we are “work optional”, just got home from a 6 week road trip, ski on every perfect snow day, play at the lake all summer and are taking a year off.

    Our being frugal is really just refusing to buying stupid crap we don’t care about, so we have more cash for our freedom, crap we actually like, and to give generously. I prefer the term value optimization. Mr. Mt worked in social services also, and we still keep in touch with a lot of folks who live in real poverty. All our little frugal choices really just buy us more of what we value. Some people might think our old Honda is a hardship. But that’s crazy. We are crazy rich when we count what matters.

    • I love the “value optimization” concept; that’s always on our minds, too. It’s funny when other people are eager for us to upgrade our material possessions. I had a co-worker who would always nag me about my beat-up 13-year-old sedan. When am I going to upgrade? Uh, I guess when I start valuing fancy cars more than time with my friends and family, travel, and giving generously. i.e., probably never!

  27. Everything is relative! The billionaires probably feel down to earth and frugal when they fly business class instead of in a private jet 😛

    • Absolutely! I worked with a near-billionaire who would occasionally take a Southwest flight instead of the company jet. That was his version of frugal — and it probably was radical compared to his peers!

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