January 21st, 2016

just me

The Privilege of Frugality

My parents were always frugal.

We were a solid middle-to-upper-middle class family. My father worked one job which paid him handsomely, on which he supported four kids and his stay-at-home wife. We lived in nice houses and had nice things, but not lavish ones. Family vacations were at campgrounds and not hotels. We rarely went to restaurants when I was little. I was aware of things as "too expensive" not in the sense of "more money than we had" but "not worth that price to us." There were a lot of things I wanted but my parents wouldn't get for me.

Money was something you saved: for expensive things you wanted, like the Pong console my brother bought, or things you needed: college,  a house, retirement, medical care, emergencies.

I hated the idea of debt. I remember talking to my father about credit cards: "I don't understand why I'd get one," I said. "Why would I want to spend money I didn't have?"

"You don't. You only spend money you have on it. There's a grace period, and you pay off the card in full before it's up, so there's no interest or fees. And your bank pays you interest on the money during the grace period, and it's convenient not to carry cash."

"But why would the credit cards do that?"

"Because they're hoping you won't pay it in full so they can collect interest from you. And the merchant pays them for each transaction."

"Why would the merchant do that?"

"So they don't lose out on a sale because you don't have cash, and because it's cheaper than the risks of taking checks."

So I got a credit card, and I paid it off in full each month. And if I forgot to pay a bill on time (it was always "forgot", because I always had the money for my bills) then I called the company up and made them take off the late charge. Because I knew they would. And then I'd pay everything on the card whether I'd been billed for it or not because I knew that once interest started it coontinued from the moment of future purchases. I hated paying interest.

In my adult life, I've lived for years below the poverty level, and received no support from anyone else. Sometimes that cost me extra, like it does to every poor person. I remember having to live on the nice-but-expensive on-campus housing when I was a TA at Wright University, because cheaper off-campus housing wouldn't lease to someone if the rent was more than 1/3rd of their income. At that point in my life, I had never lived anywhere where my rent wasn't 50%+ of my income, despite always sharing an apartment and often a room, because I just did not have that much income.

But I've never felt poor. When my total income was $6900 a year in 1995, I would carefully save money for the future and pay all my bills on time. The first time I went into debt was when I bought a house in 2003. That remains the only loan I've ever taken.

In some ways, my horror of debt is a disadvantage: it'd make financial sense to have refinanced my home loan at the ultra-low rates we've had for the last 6 years and invested the extra. Instead I will pay it off within the next 18 months. I hate owing money.

This is all besides the point.

My point is that being frugal is a huge advantage in this world full of Things we're supposed to Want and Need and don't. It is a privilege, in some ways, of wealth itself. You can be wealthy without being frugal, but it's much easier to become wealthy and stay that way if you are. And if you are poor and have always been poor, if you've never had a safety net, it's so much harder to be frugal. You are forced to make bad long-term choices because you don't want to starve in the short term, because you don't have the resources to even find out what resources are available to you.

I am thinking about this because I was linked to this article about the lesser-known disadvantages to overspending and debt with the hyperbolic claim that it would be the most important thing I'd ever read. But it's irrelevant to my life. I knew how to save when I was 10. When I was 16 and got my first part-time job, I saved something like 90% of my paycheck. "Be frugal" was in my blood for decades before I truly understood how dangerous it was not to be. It's a privilege I was born to. It's inextricably intertwined with other privileges: the relative wealth of my parents, having a stay-at-home parent, loving parents who stayed together, being white, the luxury of a good education, other things I can't even think of. But it's one of the most important to me, and it doesn't get spoken of as much as the others. And I wanted to say something about it.