A recent Facebook post by financial advisor, Suze Orman, talked about evaluating your spending habits to find out where you are carelessly spending money in order to reallocate that money to savings, investments, or to pay off debt. The main point of the post seemed to be that there are always little money leaks we can plug in order to put that money to better use. The post was well meaning and on point for most people, but as someone who has struggled to climb out of poverty, I wanted to get the point across that this wasn't a concept that applied to everyone. My first year as a single mom I couldn't risk any frivolous spending. Getting a hair cut, purchasing new clothes, stopping at Starbucks for a coffee were things I simply could not risk spending my money on because any purchases outside of necessities meant I wouldn't be able to keep the lights on or a roof over our head. Even now, I only stop at Starbucks if I have a gift card and I can't even understand how anyone would spend $50 on an item of clothing. For far too many people out there struggling, there truly isn't any way to cut spending, and this is what I wanted to get across in my post. Too many people can't comprehend what it truly is like to be at rock bottom financially.
I agree that even people who are poor can spend their money on bad choices, but for me and many others, we watch where every penny goes. We brew our own coffee, buy clothes from the thrift store, avoid eating out, go without cable. We have already narrowed our budget down as far as it can go. And there is still nothing left over for an emergency fund, let alone investing.
An interesting point came up in the conversation I started, however, that got me thinking. One woman posted how it seemed sad to her that some people on the thread were so caught up in saving money that they missed the joy of going on vacation or other ways of spending their money that might bring them greater happiness. Is there such thing as being too frugal, especially when your income falls below the poverty line?
I watched an interesting speech by Harvard Business School professor Micheal Norton called How to Make Choices That Bring You Sustainable Happiness. You can watch the entire video here. He makes the interesting claim that money can buy happiness if you spend it on the right things, such as experiences or helping others. Even if you are poor. From my experiences I can say he is right on target.
But, wait a minute. How do you balance keeping a roof over your family's heads and food in their stomachs with spending money on experiences or helping others, especially when you are just getting by? Here's the deal. You don't have to spend big. All it takes is a little extra gas money or bus fare to get downtown to enjoy the free night at the museum, or maybe a day at the park, or an unlimited number of other experiences that cost little other than your time and the transportation to get there.
Spending money on others can be as simple as buying a bag of apples to hand out to the homeless or putting a couple extra dimes in a strangers parking meter that's about to expire. Again, it doesn't have to be high dollar to have meaning.
It's scary, though. This spending money on things outside of basic living expenses. When you are scraping by and unsure of how you are even going to make rent, every dime counts. Let me tell you something amazing. Every time I stepped back and spent outside of my comfort level on an experience for myself and my children or helped someone out that needed it more than me, things would alway work out. Always. And because of my choices to find ways to give my children wonderful experiences camping at the beach or roaming one of the local art museums on their free family night, my boys have wonderful memories made in the middle of some dreadfully awful times. To others looking in, our trip to camp at the beach may have seemed extravagant at the time, and maybe even a little risky. But to us, it was worth far more than I spent on the trip. How can you put a price on happiness?
My advice boils down to this: be frugal in the everyday areas of your life. Make due with your 17 year old robe. Drive a used car. Disconnect your cable. Simplify your life as much as possible. But, every once in a while splurge on an experience with your family. Even if it's just going out for ice cream. When you are struggling to get by you get so focused on survival that you can forget to take time to find enjoyment, but if you want to do more than just survive, I argue that being a little irresponsible every now and then is actually the most responsible thing you can do.