Frugality and Consumerism Are Not Opposites

If I have any readers with any actual knowledge of economics, please feel free to correct me on anything here.

There are *certain people* in my extended family who love to give financial advice. It basically is to live as cheaply as possible, save every penny, and invest it. Eventually, you will be rich, if you are still alive, and then you’ll be happy. Because buying things doesn’t make you happy. Only having a lot of money that you don’t spend makes you happy.

They like to tell me that most Americans are unable to do this. They like to buy new cars, and fancy clothes, and big houses. They buy all these things on credit, trying to keep up with the Joneses. If only they would scrimp and save, and invest, they could find true wealth.

What’s very funny about this is that investing in the stock market and decrying American consumerism cannot peacefully coexist. What do you think makes that stock market keep ticking up? Yes, other people investing in it, but any meaningful gain is predicated on businesses making money, (or else it is nothing but a Ponzi scheme). For that to happen, people have to buy things. Things they don’t need. On credit.

Right? If I refuse to buy a new car because I am super cheap, then invest that saved money in Ford, how can I criticize people buying cars? Without them, my investments would go down. If everyone would just buckle down and save money, then no one would be able to make any money because businesses would not turn a profit. And for many businesses, their most profitable branches are the ones that finance things in house. So the best thing that can happen to the stock market is for people to buy buy buy, and finance finance finance.

The choice to live frugally and invest your money does not make you exempt from consumerism. It makes you someone who profits off of it, rather than pays for it.

It still may be the smarter choice, but there is no moral high ground here. You don’t get to roll your eyes at people buying junk from Walmart and then go buy stock in Walmart.

So if you are financially comfortable, and are concerned about things like this, what should you do? Is there a way to ethically invest in the stock market? Should you buy more stuff, but do so consciously, and support small businesses? Should you just give it away? Luckily for me, debating what to do with all my extra money is not a problem I have. Or do you think the actions of any one person are just too small to make a difference, and it doesn’t really matter?

Does this mean I can get a new couch?

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11 thoughts on “Frugality and Consumerism Are Not Opposites

  1. TheFashionedWoman

    Good article. It is sad that you have family that believes paper money will make them happy. There is no moral higher ground to that of consumerism.
    However, I believe the big problem is over consumption and the anti consumer. The over consumer spends all of his money on buying with credit or all of his cash on things that lose value and he is now poor. Then there is the anti consumer that scrimps every penny to save but doesn’t invest, both are poor because one individual pays interest while the other guy’s money decreases in value.

    Now, when you research and invest in companies and the stock market for shares, yes you make money off the people that finance but you also make money off the people that buy in cash and when the company expands. Compound interest is a way to get wealthy for the frugal person but if a person is frugal and does not have money to invest then it is an income problem neither party has the right to claim stakes at the higher moral ground. Both ways ,it is business. If you believe that green paper or numbers will make you happy then the person will be poor all the days of their life for true wealth isn’t bought it’s created without money.

    However, we cannot rant against the investor because without them most companies would not exist or have bargain prices for the frugal consumer.

    • Very true. It all works because some people buy, some invest. It really becomes an idol for some. Both the acquisition of things and the compounding of numbers. Money is money, things are things. You are right that happiness is a totally different question. ❤️

      • TheFashionedWoman

        Sadly, anything can become an idol and people can get offended if one is dogmatic in their approach to money.
        In my experience, I have been very excited about finances, whether about a company, budgets, investing, paying off debt etc.. and may have been misunderstood as being forceful since in America it is still taboo to discuss politics, money and religion. I am a bit different than most and this article has enlightened me that maybe I should still follow the rules and be quiet on the matter at gatherings. I have my blog to vent my theories. haha

  2. With the exception of things we need immediately because of an accident or some such thing, credit is used because people need immediate gratification. Most people have to buy a house or car with credit, but other times they just want it NOW. I work hard for my money and spend it, what I hope is wisely for me. Yes, I invest and I try to be aware of the companies that I invest in. Our economy is driven by the consumer so there is little you can do without affecting the ebb and flow of money.

    • I agree with everything you said. Ive definitely gotten myself stuck in want it now syndrome and gotten myself into real trouble. Interesting that you take into consideration the ethics of your investments… I bet such thoughtfulness is rare.

  3. Economics is just another manifestation of the flow of energy, The balance is different for everybody. I have friends that want all the latest gadgets, others who invest constantly, and others who store their money and refuse to spend.

    The problem I think arises when you have someone who, as you said “claims moral high-ground” based on their choices of spending, saving, investing, etc. When somebody spends all their money on televisions, electronics, or what-have-you, I don’t feel bad for them when they complain about not having enough money for other things. You CHOSE to spend your money in that fashion, so don’t b*tch about it (pardon the language.)

    For my wife and I, we put value in quality items, small business, and the practice of frugality BUT occasionally we will go and spend some money and spoil ourselves. Therefore we don’t see a need to complain about not having brand new cars, and those things we do voice displeasure over are things we are working actively to resolve(e.g. debts and the mortgage).

    My problem with credit is simply this:it violates the basic laws of nature and is at its core a gamble with potential high-risk. Like most we’ve participated in the gamble here and there and have paid the price but have now chosen to remove ourselves from the casino entirely.

    • I love this comment.

      I think you are right that credit in general is a problem… and yet, it seems impossible to get away from. Almost everyone has a mortgage, and even if you just save money in a savings account, it’s invested by the bank. It’s like if you participate in money at all, you are a part of the credit machine.

      I guess this is why people buy gold, and do things like barter goods.

  4. Your home is super cute!
    You make some very good points! I don’t know about investing, but I sure wish I would have religiously saved a certain amount of money every week, starting 30-some years ago. Anxious to hear more thoughts on this. 🙂

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