Is frugality about saving money or making you feel less guilty?

Ramit Sethi

In the fascinating article, “The Green Bubble: Why environmentalism keeps imploding,” Nordhaus and Shellenberger cite this provocative study that has close parallels to frugality:

“It’s easy enough to point out the insignificance of planting a garden, buying fewer clothes, or using fluorescent bulbs…But the ecological irrelevance of these practices was beside the point. What downscalers offered was not a better way to reduce emissions, but rather, a way to reduce guilt. In 2007, we asked environmentalists in focus groups about green consumption. None thought that consuming green would do much of anything to address a huge challenge like global warming. They did it anyway, they said, because it made them feel better.”

What is the point of saving money on obsessing about small expenses like lattes? Is it to truly save money, or is it to reduce guilt?

I’m curious to hear what you think, although iwillteachyoutoberich readers are self-selected against small frugality.

I’ve always believed that you can’t out-frugal your way to rich. And it’s not just about the math ($3/day doesn’t really add up to that much). More importantly, it’s about the psychology of big wins: Most of us are never going to completely stop spending money on the things we love — especially daily things like our morning coffee — so exhortations to “just stop buying those lattes” are invariably meaningless. Plus, there’s the Paradox of Choice: The more things we worry about, the less we do of anything at all.

And then there’s guilt.

If there is one thing I hate, it’s behavioral change based on guilt. Yes, guilt can cause you to change your eating habits or spending, but the attitudinal and behavioral change is usually short-lived and ineffective.

In Guilt and Our Choices, I wrote:

In college, I never understood the jackasses who would say they had “tons of work to do” and that they “should work” and would go to the library for 13 hours, where they would chat on AIM, read maybe a total of 25 pages, and come back telling everyone they’d been at the library “all day” (wipe brow). This smacks of stupidity and when I saw this, I thanked god that he made me a tall but frail man, because if I were Mike-Tyson-sized, there would be some trouble for everybody.

I’ve found that guilt is a hugely insidious influence for people, especially people our age. We’re making decisions about classes, careers, money, and life because of guilt in a hugely disproportionate way. How many people do you know that major in econ because they’re guilty about their parents paying $160,000 for them to attend college? Or they go to law school? Or choose some particular job because they “should”?

How much of “saving” money is about guilt? Do we feel guilty about splurging for dessert or buying those jeans…but then do it any way? How many friends do we know who say, “Yeah, I really should save more money…”

Or do we create a conscious spending plan, decide strategically what we love and what we don’t, and spend accordingly?

I’m curious to hear what you think about guilt and spending. What do you do? What do your friends do?

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  1. cheapskate

    I found the environmental quote very interesting. It seems Rush is right. As for the money, $3/day isn’t much… per day. Over the course of a year it’s eleven hundred dollars, give or take. I don’t know about you, but to me that’s more than pocket change. I don’t understand why people would feel guilty about spending money. It’s yours, you (hopefully) earned it – do whatever you want with it. Just be aware that you can only spend it once. A year’s worth of lattes or that new MacBook.

  2. Todd Helmkamp

    Cheapskate raises a good point about how small changes can add up to big results. However, I also agree with Ramit that those small changes don’t make sense unless you make them consciously, with a goal. Changing things because of guilt is silly.

  3. Lucia

    I often feel “buyers remorse” when I spend money I know I shouldn’t be spending. In the moment, I really want it, but afterward I feel the guilt. Its not necessarily when it comes to $3 lattes, but more so when its on the $50 jeans I bought, knowing I already have 5 good pairs at home.
    I think the key is being aware of your spending and conscious of it everyday. I check my bank accounts daily to keep myself in check. When I see the numbers, I’m less likely to want to spend.

  4. Ryan

    Two things in life are certain: Until the end of time, Ramit will keep valuing big wins over frugality, and commenters will keep missing the point and point out that not buying a 3 dollar latte adds up to hundreds of thousands of dollars if you wait 80 years.

  5. liv

    I go through buyer’s remorse sometimes, but I don’t really feel guilty about most things I buy. I try my best to be frugal with my purchases, but if I know I have the money to pay for it, then I don’t really feel that guilty at all.

  6. Dr. Liz

    We drive a Prius, recycle, and do everything else green that we can think of. It’s not about guilt, it’s about empowerment. Problems like global warming are so huge, they can cause us to despair, give up, or adopt a selfish, ‘who cares, I’ll just do whatever I want attitude,’ which if done by everyone, makes things even worse. It’s because so much is not under your control that you need to “just do a little.”

    It’s different with managing your money. There you have a great deal of control, and it makes sense to go for the big wins. If you want to save on lattes too, that’s fine, as long as you don’t become a bore to your friends. But you should definitely go for the low-hanging fruit first. That, by the way, is what our governments should do too, with respect to the environment. After you’ve gotten all of those, then you start to work on the harder things.

  7. JimE

    I would say in general I never feel guilt about the cost of things, but I will fill guilt about the purchase itself. For instance I am more likely to feel guilty about the unhealthyness of an Ultimate cheeseburger at Jack in the Box, but I really am not impacted by it’s monetary cost. That being said food and travel are probably my guilty pleasures but I never regret the monetary costs. Even gambling to me is not prevented by guilt. I do have friends and family however that don’t spend money because they “shouldn’t” and in most cases they are right. If they do spend the money associated guilt does effect their enjoyment of the purchase.
    The point of all this, guilt is not a constraint for me when it comes to money, I am bothered by waste if I purchase something I do not use. So frugality in my case is simply me exercising my spending philosophy.

  8. Johnny

    It’s about savings… Frugality is empowering, good for personal development and the planet.

    The truth is $3 a day on lattes does add up, and not in 80 years. In 5-6 years @ 6% appreciation that’s over $8,000. That’s over $10,500 in taxed income.

    And we all know it’s more than $3 dollars a day… Saving $10 a day over 10 years at 10% performance = $64,000.

    I’m frugal, crucify me… To me retiring at 30 is more important than having a damn coffee every day.

  9. Stephanie PTY

    The thing that most people mess up is not that they unnecessarily spend $3/day on lattes, it’s that they don’t have goals. Or they have wishy-washy dream goals that they haven’t fleshed out or planned for. This is why the stuff Ramit advocates, the “bigs wins” and the like, works. Because if you work out all of your goals and plan for them, you can then do whatever the hell you want with the rest of your money. Lattes for all! Designer jeans! Power to the people!

    You know, once your Roth IRA is funded and you’re setting aside money for that big-ass wedding you want.

  10. Georgie

    I get pre-buyer’s remose – I will stand in a store for an hour and debate about whether I should get the new shoes or whatever. However, I NEVER feel guilty afterwards.

    I am naturally pretty frugal, though, just because I don’t see the point of a bunch of stuff. The BF has an EXTENSIVE list of things he wants…I am hard pressed to come up with a Christmas list each year because I just don’t see the point.

  11. John

    Guilt, is something internal, that can be taken care of internal. It is a reaction, and as such should be cleaned up through psych/meditation/whatever means. Unless you don’t mind it.

    That you allow yourself to react to it, and that it causes your to suffer is a bummer, because basically it’s not you thats running things it’s your guilt.

    I don’t feel guilt at all when I pollute…

    The guilt, instilled in an early age or whatever is the tragedy.

  12. learning the ropes

    I think people above have mentioned everything except one point. In my definition frugality is not saying no to every pleasure in life, but carefully judging what really gives you the pleasure and choosing that instead of spending mindlessly over things you won’t even enjoy.
    If I had loved that latte I would spend on it. We love food, and our monthly grocery budget will shock even the big spenders. I never for a minute mind spending my money there.
    However, buying ill-fitting clothes, just because they are on sale. ( Trust me a lot of women do that) This just doesn’t make sense to me.
    When I go clothes shopping (which is rare), I don’t even bother to check the price tags. If I like it and it complements me, I buy it. Since I know that I am easily able to afford it and it is what I need, I will buy it whatever the price tag says.
    So frugality to me is not about saving money everywhere, it is about steering clear of spending money on things you don’t enjoy. Its just not about money, it is also about cluttering your space, life with stuff. Most of the spenders have closets full of things they don’t like, enjoy or use and still they hang on to them just because they don’t like to admit that they made a stupid decision which cost them money. Whenever I do make a purchase that I am not able to use for whatever reason, I make sure that I donate, sell or recycle it. I believe that all that clutter holds you back in life. So to me frugality is equivalent to consciousness about money, not about hoarding every penny.

  13. Nicolaï

    People value spending money on things more than they value time, or even doing things with those items purchased.

  14. Andrew Parkes

    It’s the age old question: what do you SAY you will/won’t spend on vs. what you actually do spend/not spend on. Talking is all about creating and preserving a certain image of ourselves (hard working, frugal, smart, resourceful.) However, if you look at the actual resource stewardship (especially time & $), we are all guilty of not being exactly aligned with our words.
    What’s the point of talking frugal if you aren’t actually being frugal?

  15. Shawanda

    I don’t feel guilty when I waste money. I feel angry for being an idiot and unconsciously buying something that doesn’t bring me much gratification.

    You shouldn’t feel guilty about buying what you a) can afford and b) love.

    Why buy coffee when it’s provided by the company I work for “free” of charge? Waiting in line at Starbucks is a waste of both my time and money. That time can be spent sipping the complimentary stuff, which is actually quite delicious, while reading the news online. Now that’s fun.

    After rent, my largest expense is eating/drinking out. I really enjoy it. I also like to buy nice shoes. Too many people buy things out of habit, boredom, etc. I used to be one of them.

    I’ve gotten to the point where I don’t even like shopping. I’d rather read a book, volunteer, go to happy hour. You know. Do something worthwhile.

    When it comes to being environmentally responsible, I try not to waste the earth’s resources. Freecycle has helped. I like the idea that I can give away stuff that I neither won’t or need to someone who can use it and do something good for the environment all at the same time. Win/win/win.

  16. Eugene Krabs

    An interesting question. I’m not sure that, for me anyway, it has anything to do with guilt.

    To me, frugality is a process of self-discovery in terms of what matters to you and what does not. For frugality to be meaningful then, we should only focus on spending on what matters to us, and make sure we do not spend on what does not.

    In that sense, the scale and size isn’t as important, because in another sense, they all matter, and all is examined.

    And then, if it’s done within the confines of a defined budget, then there will be no need to feel guilt to begin with.

    That said, I acknowledge that perhaps the article is referring something else.

  17. frugalscholar

    Neither of the above choices: I’m frugal because it gives me a sense of contril over my life and because it’s connected to conscious and conscientious living.

  18. Ken Siew

    I spend on what I can afford and love, just as Shawanda wrote. Sometimes though, guilty still crawls in, but I try to convert it into something empowering. Let’s say, I felt guilty about buying an expensive lunch, so I didn’t do it. But instead of feeling guilty the next time I think about buying a costly meal, I take it as saving a few dollars on non-necessities (I don’t need a $15 lunch) and contribute the money towards one of my money goals (investing, vacation, etc) or donate it to the charity. Transforming the negative force to positive energy certainly helps!

  19. Anju

    OK-I believe, this article is totally retarded. First most-did you even consider the possibility that saving cash and feeling less guilty are co-dependent variables? Plus-I noticed that you referenced to “The Green Bubble: Why environmentalism keeps imploding,” article-it’s a generalization to imply that “green consumption” is about “feeling better”-that maybe be true for some BUT it’s definitely NOT applicable to everyone. I also disagree that behavioral changes stemming from guilt are ineffective. That maybe the initial step to a big change-because learning the reasons behind the guilt are the major building blocks of an actual progress. Ramit-your psychology is little off-I believe you need to revisit those old college textbooks!

  20. grumpy

    When you’ve already made the ‘big wins’ (or avoided the big expenses), what’s left other than frugality?

    The mortgage is paid off, I use a credit card to avoid carrying cash (and to get loyalty points that convert to near-cash gift cards) and it’s paid in full each month (my annual fee has been waived for years), VoIP and a selectively-used pay-as-you-go mobile keeps phone expenses to a few dollars a month, and I check that insurance premiums are realistic before renewing (but good care when you do need to claim is worth paying extra for). You can’t negotiate down things you’re not paying for, and most these things are lifetime habits.

    Amit’s right about deciding what you can afford to spend, and then spending that on things on what you love. If that’s coffee, fine. But why spend $3.50 on a latte when the next cafe along the street only charges $2.75 and you prefer their coffee? You’re effectively turning down a freebie each week! It amazes me that anyone would make such an elementary mistake, but some people do.

  21. Elizabeth Gage

    A parallel: when I moved back to the US after living & working in Europe for most of the 80’s it seemed suddenly tv ads for food were referring to it as “guilt-free.” What??? One feels guilty about spending, or food, to the same degree you sense you are out of balance and out of control. Money diets don’t work any better than weight-loss diets; it has to be a change to a moderate life.

  22. Kristy @ Master Your Card

    What an interesting concept! I spent a lot of time feeling guilty about what I wanted to study in school because I felt I ought to do something else for my parents. I soon learned I couldn’t live that way, and I think that subconsciously transferred over to my finances because I’ve never made a frugal decision based on guilt. Anything I’ve chosen to spend less on is because that particular moment plays a role in my larger plan.

    As for my friends, I have those who say they should save more, but they don’t seem to feel guilty when they spend. I don’t see the aftermath for them, so I don’t know for sure, but I suspect that there could be guilty tendencies there.

  23. Umang Saini

    For me Frugality = No wastage and optimal usage.
    I don’t want to buy anything I would use one or two times a year. I’d much rather borrow /rent such items (books, car etc.)

    Overall smaller connection with guilt or saving money.

  24. J. Harper

    Loved the guilt association. For me, it’s that I know for a fact that my resources could be better allocated to help others. Ever done the rich list calculator?!? Total guilt trip right there. So yeah, being frugal does make you feel good, because if you give more than you receive why would you ever feel guilty?

    Gotta disagree with the frugal not getting you to rich thing though… I grew up poor… actually poor, and now I’m top 5% wealth for my age bracket. That’s only because I worked hard, and often, and spent very little money… although I was never afraid to spend money on the “right” things. To me it was about being economical. I paid thousands for professional designations, seminars, extra courses, and a stellar college degree… because those things paid me. I always held off on rapidly depreciating purchases, and avoided adding new bill obligations like the plague. Very simple formula in all… keep over-head low, always work towards a higher income, and pocket the difference. One day… much sooner than most of my friends, I’ll wake up and realize I can retire. So frugal really can get you there.

  25. Kuhle Kitchen

    I have to say that I’ve never really agreed with Ramit’s $3 coffee. If you really want your crappy $3 coffee, then go ahead and get it. But if you take just a moment of your day to put forth half an effort, you can have better quality coffee at a fraction of the price all while saving close to $1000 a year ($3 x 365 – cost of home coffee.)

    Is $1000 a year, with an actual gain in quality, not a big win? Really?

    Maybe I’m “too” frugal.

  26. Jeff Wong

    Guilt about the environment is warranted because we are stealing from the future. Consuming less is about being morally responsible.

    Being spendy is really about screwing yourself. Guilt is counter-productive. If you let guilt set in, you are ruining your experience of the indulgence. And if you are unable to enjoy the thing given the guilt, then you have made the worst decision since you have parted with your money and not experienced what you paid to experience.

    The key element is thinking ahead, to find a balance between the present and the future, as well as knowing that you will feel guilty and taking this into account. However, should you find yourself STILL spending on guilty trifles, just admit you have impulse control issues and it’s THAT not YOU.

    Guilt also comes out of an irrational belief in perfection or idealism. I constantly kick myself for buying a new car so many years ago. However, I don’t know what I would have suffered with a used car. OTOH, I don’t drive enough for it to matter and I accept that I made a bad decision.

    Oh, on the environment, don’t forget that our descendants may judge us harshly for our decadence if they find themselves in dire straits. So maybe we can add deterrance into the mix.

  27. Jules

    First of all, going green is not about guilt or the environment, but about saving money. If you could shave hundreds of dollars by switching every last bulb in your house to CFLs, wouldn’t you? And let’s not get into the cost of heating hot water…

    But the point of saving on small things like lattes is that it’s something that can be easily done, and it adds up to a significant savings every month. It means $60 a month in your pocket–an extra $60 to put into your savings account, or pay a vet bill so you don’t have to dip into your savings account to pay for. That’s why I try to eliminate little expenses (for me, it’s sandwiches). It’s not to make me rich. It’s so that my savings account can stay intact in case I have to make extra purchases that month (things like Frontline, printer cartidges, birthday presents). These are not things that I budget for, since they’re not purchased regularly. Don’t get me wrong–I can well afford these things from my savings account. But I’d really rather not, since I’m still building up my emergency fund.

  28. Hilary

    Guilt, savings, frugality and that darn $3 latte again.

    I think for some people the small things are a step towards regaining control of their spending and living within their means. Making a conscious choice about spending that $3 on a latte is different than simply just spending because it’s habit.

    The latte’s are a small step – something obtainable by most people. Trying to explain that making a conscious choice about buying the latte isn’t a simplistic black or white soundbite for financial gurus. There however is a psychology to small wins as well.

    Dave Ramsey for example is aware that there is emotional aspect to money so despite logic he tells people to pay off their smallest debt instead of their highest interest rate debt. It’s a small win but it gives people hope.

    Saving money by not buying latte’s can be a small win for some people even if they aren’t in debt. It can be empowering. It can be that real world mathematical example of how much they could have in savings and again give people hope.

    I do think some guilt can be society driven. There’s a problem in this culture where people get upset if someone makes “too much money” or seems to enjoy life. Many people’s conversations are focused on the negatives or struggles in life instead of the positive. Guilt is not a simple topic.

    Aiming for the big win can produce some great results but sometimes little things like being frugal can snowball into bigger and bigger wins. Is not buying the $3 latte the only way to get out of debt or put money aside for savings? No.

    Everything is relative. Relative to your current income, relative to your debt (or hopefully lack thereof), relative to your savings, relative to how happy or unhappy it makes you, relative to your personality and life’s experiences. It’s individual. One person’s $3 latte can be the equivalent of someone else’s clothing purchases or even car or house purchase. It goes back to conscious purchasing and living within your means.

    If you go to the definition of Frugality:

    “Frugality is the practice of:
    1. acquiring goods and services in a restrained manner, and
    2. resourcefully using already owned economic goods and services, to
    3. achieve a longer term goal.”

    If you’re achieving your goals, what is wrong with frugality if it helps you get there? There is one fairly universal goal: the pursuit of happiness.

    “Frugal: characterized by or reflecting economy in the use of resources” Money isn’t your only resource. If “common strategies of frugality include … seeking efficiency…” then frugality doesn’t have to just be about money, you can also be frugal with time. GTD & 4HWW anyone? Or even Ramit’s automating money flows is a strategy for frugality. 🙂

    Frugality can be about saving money OR about guilt depending on the individual.

    And no, I don’t feel guilty for buying $3 lattes. 🙂

  29. Caron Margarete

    Perhaps I am fortunate in my stark dislike for shopping because it’s developed a really useful skill in my goal to live a location independent lifestyle of working while travelling.

    For me, it’s not about frugality but addressing what my specific wants and needs are. Every time I am in a situation where I may spend money I ask myself:

    Do I need it?
    Need = survival (clothing/ food/ shelter)

    Do I want it?
    Want = desirable and acknowledged as a short term pleasure with no long term gain- which often includes food but never clothing (because I have to fit clothing in my pack).

    More often than not I don’t need it and I don’t make the purchase. I’m not guilty when I make a purchase because I’ve been successfully able to justify the purchase.

    Ramit asks us: “What is the point of saving money on obsessing about small expenses like lattes? Is it to truly save money, or is it to reduce guilt?”

    I’d like to know if saving money really does reduce guilt?

    I tend to think the conditions we place upon ourselves to save money increases guilt because when we spend outside our means we end up producing guilt for having done so.

    I make a very clear separation between money I’ve earned that is for my savings and money for spending. Money that is saved isn’t touched, it sits there for what I call, ‘the next chapter’ but money I have allocated for spending is spent on expenses and any ‘wants’ I may have. I cannot possibly feel guilt for spending money I’ve allocated to spend now can I?

  30. Jim

    I think people only feel guilty when they don’t feel in control. If someone has all of their finances in control they won’t feel guilty over big or little purchases.

    When someone doesn’t fully understand what’s going on with finances or the environment or their weight/health and they’re confused then (it appears) they’ll be more prone to feeling guilty.

    In my unqualified opinion its more about a lack of general understanding or education or control that leads to the guilt.

  31. Nate

    I may be a contrarian on at least one of these points. I think people feel LESS guilty when they aren’t in control of their finances….at least initially.

    It’s sort of the ‘ignorance is bliss’ mentality. People who are not in control of their finances generally are not worried or concerned during the actual moment of purchase when the shiny, magic credit card is swiped to pay for a new pair of jeans, video game, expensive dinner, drinks, etc…..

    It’s only when the credit card statement comes or someone looks at their ATM balance that the guilt comes in because then that person is facing the reality of their situation, which usually is not good.

    When someone does start to manage their finances and track their money there is still initial guilt when they look at all the stuff that they purchased, but gradually that person is empowered by managing their money.

    Once their finances are in control, who cares if you go out for coffee every day if that’s what you want to spend your money on. Who cares if you spend your money on five pair of new shoes a week. You’re the one that’s in control of your life and if you’ve managed your finances and that’s what you want to spend your money on and you know where you’re money is going…then you’re all good!

  32. MC

    I would note that those people who stuck themselves in the library actually did not change their behavior. They were guilty, but they didn’t change. It was more just to make themselves feel better – I’ve met too many such people to count. Changing yourself based on guilt isn’t actually that bad, if what you are guilty about is something that actually bothers you.

    I actually like the example of lattes, not because cutting back on lattes is in itself useful, but the attitude it brings with it – a lot of things we actually spend on is completely useless.

    Looking for larger savings, according to a spending plan, is much more effective though.

    I’m a grad student, on a grad salary (I work during the summers, so I make more money then), but

    1 – over the past several years I’ve saved more money than friends in industry
    2 – I live a pretty good life. I don’t have a porsche ;), but I drink coffee daily, go out at night several times a week, eat out several times, travel twice a year, dress well, invest, donate to charity, etc.

    and still have money left over to put into a savings account and into my brokerage account.

    Graham said that the best way to financial success is to live within your means. If it takes a 3$ latte per day to start people on that track, then so be it. As long as that isn’t all they do, in an attempt to assuage their guilt.

  33. dave

    I’ll go green once it makes since financially. The green light bulbs make sense. They pay themselves off in a year or so.

    Hybrids, on the other hand…

  34. J

    I can’t stand frugality for the sake of frugality, or it’s die-hard advocates. Stories about darning socks, economizing toilet paper use, saving $10/year on something and so on are so missing the point.

    What matters most are priorities and values, and these should be central to each person (and by extension, their family). If they desire to lead a frugal existance (or a “green” one, or a “religious” one, or a “localvore” one, or a “buy USA” one, or “Open Source” one, or “attachment parenting”, or “no kids”), then that is their business. Which should largely be kept to them. But, of course, people can’t seem to keep it to themselves and must inevitably judge everyone else for using too much toilet paper, destroying the planet, being a heathen, buying food from Chile, buying a Honda, having Windows, letting your kid sleep in a crib or have children.

    It’s about time it stopped. If someone ASKS you about your lifestyle, then by all means, give them an earful. But realize that for every choice YOU make, you are likely doing something that’s pissing someone else off, or “unacceptable” to the more “orthodox” of whatever creed you follow.

    So I do what I can to be a good person, offer kindly advice when asked for, and try to not get guilted into living like everyone “should”. Because trying to keep up with all the stuff you are “supposed to do” will, quite honestly, drive you absolutely insane.

  35. Chris

    I think the paradox of choice is what defines me living frugally. Simplicity in life with less to worry about. I have been debt free since 2001, including my student loans. I worry less about things, enjoy experimenting with business that I probably couldn’t do if I had a lot of debt to live with, and don’t have clutter all around the house. Simplicity, not saving money or guilt that guides me.

  36. A-ron

    Guilt is short lived. That’s why changing behavior based on guilt is never permanent.

    I think people believe that saving money is a good thing, but they’re not sure why. Especially us young uns. Old people tell us we need to save for retirement, living below our means so we can enjoy our fortune when we’re 70. That’s why we feel guilty when we don’t save as much as we think we should or spend money on frivolities like lattes, even though we’re not quite sure what we’re saving for.

    On a deeper level, banks want our money. The more of our money they have stashed away, the more money they make on loans. Conspiracy?

    Live your life now, don’t worry about the environment or saving mountains of money, which will be worthless by the time you’re nearing death at the rate the government keeps printing money. You may delay the destruction of earth by a few days or years by recycling, buying hemp shoes, and not consuming as much, but you’re not going to be around to see it die.

    So fuck it, might as well enjoy it while you can!

  37. Danny Garant

    Green, Frugality! Bah!
    My mottos about those things are : Don’t do it cause it’s green/frugal.

    I don’t drive over the limits cause it’s green or cost less, but cause it’s less stressful.
    I don’t buy lattes cause it’s frugal, but cause the taste doesn’t worth the hassle.
    I don’t buy books cause it’s frugal, but cause it’s a pain when you move a lot.
    I don’t change incandescent bulbs for eco bulbs cause it’s green, but cause it’s a hassle less cause it last longer.
    I don’t reduce my buying cause it’s frugal or green, but cause I always forget to bring my recycle bin to be collectes and it’s a hassle.
    I don’t grow a garden cause it’s frugal or green, but cause I like that.
    I didn’t stop buying video games or MMORPG cause it’s frugal, but cause don’t enjoy it anymore.
    I didn’t stop eating out cause it’s frugal, but cause I get bored with the taste.
    I don’t eat vegan occasionnaly cause it’s green or frugal, but cause I like to discover new taste.
    I didn’t requested bills online or by emails cause it’s green, but cause it’s convenient and papers create clutters, wich is hassle.

    And on, and on.

    Those who do everything for the sake of being green or frugal put themselves in a mindset of sacrifice and are doomed to failed. You have to enjoy your choices.

  38. Todd

    For me, it’s all about choices and what you want to spend your money on.

    As far as my friends, so many of my 35-40 year old friends still get handouts from their parents. It makes it impossible to take anything they say about frugality or spending habits seriously. One friend just got a new car from her parents for her 40th birthday. WTF? I’d like to see some research on that — How many people still get handouts from Daddy, and then rave about their lavish lifestyle on their Facebook page?

  39. Killah Priest


    You’re completely right

    Two things in life are certain: Until the end of time, Ramit will keep valuing big wins over frugality, and commenters will keep missing the point and point out that not buying a 3 dollar latte adds up to hundreds of thousands of dollars if you wait 80 years.

  40. Mike

    I agree with both Ramit and Trent. For starters, focus on the big wins and start automating your finances. Then you can start focusing on smaller money-saving tips that Trent recommends. I am part-time frugal and part-time “normal” spender. I can go a month being frugal to save money, only to lose my mind and start spending normally again the next month. I think even this up-and-down cycle can be beneficial because every dollar saved is still a dollar saved. It doesn’t matter if you’re only frugal every other month of the year — it’s still better than not watching the small expenses all year round.

  41. Susan


    Lots of fun questions/points from this post.

    First, how much do people use guilt to avoid action?

    With environmental stuff, does recycling one stupid coke can mean that you get to keep driving your SUV one (very comfortable) mile down the road to the coffee shop?

    With money, does guiltily proclaiming “I’m going to start saving money now!” mean that you can look the other way – just this once, again – and buy a new pair of Nikes that you don’t need?

    Second, it’s not necessarily an all-out war between big wins and small gains, but more of a priorities list. If you’re going to choose something, better to choose the big wins first. But, if you’ve still got time/energy/zeal, why not go for the small wins after that?

    With environmentalism, the small wins DO add up mostly because there are so frickin many of us:

    [not taking a plastic or paper bag a few times a week] x [a billion people] = a few billion bags that don’t get used = approx. 700 tons of co2 emissions saved (if the bags aren’t produced).

    Just a fraction of the impact of creating a lighter jet plane, but most of us don’t really have the savoir faire to engineer jets or lobby for the subsidies that could fund that work.

    With pf, like with dieting, the small wins aren’t the MOST important, but they do add up – as you’ve pointed out in the Save $1,000 strategy. Lots of those aren’t gigantic changes, but are pretty painless and, taken in aggregate, still make a big difference.

    Finally, I think that sometimes we spend as a REACTION to the guilt we feel about spending. Maybe you weren’t going to get dessert, and then you tortured yourself with guilt about it, and then you decided to say “F this! I’m going to have dessert!” in rebellion against that annoying, perpetual frugality voice in your head.


  42. Marco

    Guilt-driven change is not “ineffective”: it’s inefficient.
    It helps getting you there, although at a higher cost.

  43. Brian

    Amen Suzan! But Cheapskate’s point is well taken. $1100 is a lot of money to me too! But, what Cheapskate and the other posters crucifying the $3 coffee idea are missing is the Ramit’s point BEHIND the example.

    What he is saying (in my opinion) is that the $3 latte IS a $1100 macbook OR 7 pairs of designer jeans…he is telling us to make a choice about what matters to YOU, based on what is important to YOU alone. If you love those latte’s, by all means buy them. If you crave that macbook, Buy it now. If you can’t live without looking great in designer jeans-by all means, get’em two-at-a-time (different colors of course!).

    BUT, don’t unconsciously buy (or attempt to buy) all of them. the question is, “what is important to you?” and certainly don’t feel guilty if it is $200 jeans, or 365 lattes a year, or ________________.


  44. JT

    But if that $3 latte is a thoughtless habitual spending habit, than shouldn’t you consider changing it? Isn’t that what this site recommends, spend thoughtfully on stuff you love, and cut back on what you don’t?

    I think its a mistake and a little contrary to the philosophy on this site to say “its only $3, its too small an expense to make a meaningful impact so its irrelevant”. If its $3 on something you don’t care about, than don’t spend it. If you do love that morning latte, and it fits within your financial goals, than go for it and don’t feel guilty about it. Its the mindset that should matter, not the dollar amount.

  45. Kelly

    For me the green movement is about adding value.

    I love the idea of an electric car because I would never have to stop at the gas station! Unfortunately, a 100k Tesla Roadster is not going to work for me because I want a useful car (not a toy) and 100k seriously compromises my money goals.

    Things like gardening work for me. I love growing things and the tastes of fresh veggies, plus the automatic watering system makes all the difference. …and veggies make you thin!

    Green cleaning is another area that I’m on board with. I really dislike the smell of conventional cleaners and you have to worry about noxious fumes if you mix the wrong ones (ammonia + bleach = doom). I use homemade glass cleaner (vinegar + water), but most others cleaners I buy and end up being a bit more pricey. For laundry I tried the detergent from Seventh Generation and a rash that I had accepted as part of life suddenly disappeared, yay!

    Then there is the issue of buying stuff. Not buying things in the first place is win-win-win… less money spent, less crap around the house, and less environmental impact. All of those lead to less stress and we could all use more of that. If it is something you’ll actually use thats no issue, but it’s those impulse buys that you end up never using.

    I like using the reusable shopping bags more than the plastic ones. Less trips inside because they hold more and they don’t pinch your fingers. Also, I use them to bring my lunch to work, take stuff to the beach, or whatever needs carrying around. On the other hand if I forget my bags or make an unexpected purchase I don’t stress about it. Life happens. Going green and being frugal take more planning.

    Many people don’t have a long term goal that they are working towards. It makes your choices harder when you’re just meandering about. I go green when it saves me money or adds value. The green mentality is looming in the back of my mind ready to jump to the forefront when I have to make a decision. If you have goals they color your decisions.

  46. Nate

    Brian (Post 43)

    You’re right on my man!

    Exactly….the coffee thing is JUST AN EXAMPLE. Man, David Bach must be loving this!!

    What the Latte Factor tells you is that little things add up and people do a lot of ‘unconscious’ spending. Once David Bach pointed that out, people started to say ‘holy crap, &*S, (enter curse word here)…I’m spending A LOT of money on coffee.’

    So, boom, in an instant you are suddenly conscious and aware of this spending habit. This is what causes some initial guilt. Once you become conscious of your spending habits and take actionable steps toward managing you’re money, then you’re free! You are your master, so what you do with your money is up to you.

    Who cares if David Bach is telling you not to spend money on some $5 whipped goodness, cream, caramel, etc. that’s called ‘coffee.’ His point is that the average person doesn’t pay attention to what they spend their money on. Once you became aware, then by all means buy that coffee every day if you want to. If someone tells you you’re stupid for doing that or it’s a waste of money, just say ‘hey, I know where my money is going and I make the choice to slurp down this big ol’ coffee every day, so there!’

  47. Weakonomics Links: Fruguilty | Weakonomi¢s

    […] Sethi wrote this week about frugality.  He cites an article that talks about the greening of our society.  The argument is that things like CFL bulbs or building your own garden don’t really exist to save the world.  They exist because you feel guilty about how you impact the environment.  As such, focusing on feeling less guilty distracts you from the actual goal of saving the planet.  Sethi associates this to the whole frugality movement.  Like a CFL, making your own soap will actually give you the desired outcome, reduced pollution and money saved on soap.  However it isn’t going to get to the desired long-term goal of sustainable energy or early retirement.  I’m not big on quoting people unless it’s funny, but Sethi expresses my feelings perfectly: “you can’t out-frugal your way to rich” […]

  48. Jagadish K. Guttikonda

    I think it is to feel less guilty. You want to be frugal because you want to save money but then you will get that realization only when you feel the Guilt about spending money unnecessarily.

  49. Internet Marketing News for Week of June 14, 2009 | Bruce's Money Rants

    […] Is frugality about saving money or making you feel less guilty? The blog I Will Teach You To Be Rich posted a very interesting argument about saving money. I Will Teach You To Be Rich bases their question on a study of environmentalists. The study found that a large number of environmentalists stated that helping the environment made them feel less guilty. I Will Teach You To Be Rich applies this outcome to saving money. Very interesting article, certainly worth the time you will spend reading it. <Read More> […]

  50. zach even - esh

    Ramit – I dig this post brother. I remember a few years ago they were trying to tell people this stuff on BIG shows like Oprah and Dr. Phil.

    First thing they said was to cut out your daily Latte.

    I felt it was completely going against the mindset necessary to become rich, so you can truly buy what you want, when you want w/your money.

    I have found the best way to go is to create businesses to allow you to life on your own terms.

    Nothing better then getting to that point, and if I bought / did not buy small, frugal items b/c of guilt I would feel even worsed, b/c of the fact that I was letting something I wanted slip away all for ameasley 3 – 5 $ a day.

    Looking forward to more posts – REALLY liked your stuff w/Tim!



  51. Kristen Sullivan

    Thanks Ramit – nice post.

    For me, the guilt comes into effect when I buy something that’s not aligned with my saving or my living goals but stems from a passing desire.

    Practicing frugality is a nice way to keep these desires in check.

  52. Jessie

    “…formation of ideas as well as their execution depends upon habit. If we could form a correct idea without a correct habit, then possibly we could carry it out irrespective of habit. But a wish gets definite form only in connection with an idea, and an idea gets shape and consistency only when it has a habit back of it” -Excerpt from John Dewey’s Human Nature & Conduct.

    Guilt from spending habits only happens when a person is aware that their desire to buy something is not connected to who they would like to be as a person. As Dewey says over and over again (I am a huge Dewey nerd) we ARE our habits.

    So, if the question is: “How much of “saving” money is about guilt?” I would say none. Unless, that is, you are the type of person who habitually makes decisions based on guilt.

  53. katie

    I pick up change, its just what I do, and I know that $3/day might not seem like a lot, but I’ve been saving my coins and I’m already up to $411 in rolled money. There are a lot of things I can do/buy with that money, but I’m saving up–I want a beach house when I get older, and the only way to do that is with money, so my frugality has never been higher. I can’t guarantee that I will ever have enough money to even dream about a house, but I still can’t bring myself to buy anything that is unnecessary–where do I draw the line?

  54. Eugene Krabs

    Katie: Budget. Set aside a percentage, stay within your budget, and spend guilt-free!

  55. David

    People who don’t get spending money on coffee must never have been to a really great coffee place. Sure, I could spend several hundred dollars on a decent espresso machine and burr grinder, then a great deal of time learning to pull a shot. Then I could buy beans at the local roaster, grind them, and make my own lattes, toddies, mochas, etc. Or, I could spend the $2.00-$3.50 to have someone make it for me. I also doubt that many people literally buy a $3 coffee every single day. I love coffee from the local shop, but even I don’t go more than 3 days a week. Figure about $3 average, that’s about $470 per year. Not even enough to buy an espresso machine and burr grinder, and then you have to add in the cost of the beans, which is ongoing, plus things like the fact that you’d be using more milk than normal. Beyond that, there’s the fact I’m not a skilled barista.

    The point here (other than that I love coffee) is exactly what Ramit always says: that it’s okay to spend money on things I really love. It’s difficult to reproduce great coffee at home, so it’s worth it to me to spend money on. On the other hand, I don’t really need to eat lunch at the same 15 places around the office for $10-20 every day, so I almost always bring my lunch. I’m surprised by the inability of the commenter’s here to understand this point.

  56. Shaun Worldwide

    Most of my friends are paid on a 1099MISC, are a number of years behind on their Taxes, earn between $100K to $200K per year. They go with out lattes and little luxuries to then blow it all on the engagement ring “upgrade”, the latest large screen plasma or lcd tv. then they do nothing but complain about how their “situation” is the fault of the company that they work for, because their taxes are not withheld at source. Having of course made no extra payments that month!!!! Out of approximately 25 co-workers in similar work to myself, I can think of only one who has more than a months wages in reserve. I am a little different, I live very simply, put away around 50% of what I earn, the remainder goes 25% on bills and living, including a little for my mother, the other 25% I blow on traveling. BUT, it has taken me years of learning to get to this. (I am 40 years old). And yes if I want that latte or bottle of wine, I will have it 😀

  57. Anthony

    I agree with a lot of the comments about finding ways to live with your current life style, however I do feel that there is a small part frugality has to play.

    I can think of many people who could benefit by being a little “frugal” or maybe a better word would be “analytical” and look at things like their monthly expenses and seeing where costs can be cut. For example do you often rent movies, if so is NetFlix a cost savings. Another example is individuals who have ridiculously fast internet plans, are you really using the speed or is it more being able to claim the speed.

  58. Ken

    Wow…so much misinformation!

    1. Little changes DO make an impact. Not buying that $5 latte daily saves upwards of $150/month (7 days a week). $150 a month invested at 10% yields nearly $950,000 in 40 years. Be conservative and half that and you still gain a tremendous amount over time.

    2. Being frugal on small things isn’t about getting a physchological boost…it’s about learning and following steps to ensure what you make is more than what you spend. The same habits you learn by limiting latte purchases are the same skills you use to buy a smaller home than you need, drive a less expensive car, etc.

    3. The comparrison to environmentalism is equally confusing. The same principal applies…small steps over time (or over many, many people) create HUGE change/impact. There are numerous sources to calculcate personal carbon footprints…now multiply that by millions and you can see that personal change applied many times equals great results. The same holds true for building wealth…see number 2!

    If this nonsense is consistent with the rest of his work, I think I may be Ramit’s worst nightmare on this blog.

  59. FlyingAfrican

    I disagree.

    I come from a modest background, and have always been frugal. I’ve never believed in the spend now worry later philosophy. I believe in sustainability in all its forms, be it financial or environmental.

    Frugality is NOT about ‘guilt’ to me. I’ve always tried to save and be green, not just buy buying ‘green’ products but by turning the lights off, unplugging cellphone chargers, switching my computer off at the wall socket, recycling everything that i can, reusing plastic bags etc.

    I agree with your premise that change should not be initiated based off guilt but I disagree with you surmising that everyone is being frugal or green to save their ‘guilt’. I do it with the ‘bigger picture’ in mind… although economists will always tell you about the fundamental theorem of rational self interest. On an individual basis, ‘rational’ self-interest can become self-defeating and irrational as the current financial crises has proven.

  60. Willie

    I have always said, it is not how much you make, it is how much you save that will make you a rich person. I believe in the end, everyone wants to be rich, just like everyone wants to have the perfect body with a nice six pack. The process is as equally simple for both cases becoming rich and having the perfect body. The problem lies that the “prize” always seems unattainable and people will settle for the quick comforts of the quick buys and fattening desserts. The concept of being frugal is a concept of personal control and determination to become wealthy, I do not believe it has anything to do with guilt…..that is unless you feel guilty about knowing you will be poor forever.

    p.s. anything more than $0.50 for a cup of coffee is a waste of your money, don’t give it away.

  61. Personal Finance Hour: Episode 16 – Trent From The Simple Dollar Joins JD and Jim to Discuss Frugality and Blogging | Personal Finance Hour

    […] frugal and sacrificing their quality of life. JD shifted the topic slightly to discuss a post by Ramit Sethi and how people act frugal out of guilt. While the hosts and Trent don’t agree that they act frugal out of guilt, Trent did say that he […]

  62. Foraging for Mushrooms in the Woods: More on Frugality, Time, and Money

    […] (in which he contends a gentlemanly race to see whose readers can save money the quickest) or his post from June in which he implies that frugality, in practice, is often derived from […]

  63. Sofort Kredit

    I go through buyer’s remorse sometimes, but I don’t really feel guilty about most things I buy. I try my best to be frugal with my purchases, but if I know I have the money to pay for it, then I don’t really feel that guilty at all.

  64. Personal Finance Adivce: 73 Must Read Personal Finance Posts of 2009

    […] Is Frugality About Saving Money or Making You Fell Less Guilty? […]

  65. george m.

    I am usually on the frugality side just because i am conscious about my spending, but i often realize that is better to get more money than save more and more from the same amount. both tactics have their uses.