Tuesday, January 21, 2014

The economical impact of frugal living

Joluise writes:

"Unfortunately the economy of any country hinges on the residents of that country spending money. If everyone were as frugal as you, the economy would almost grind to a halt and unemployment would increase."

That is an interesting point and one I never seriously thought about - mostly because we frugal, re-using-repairing-recycling, make-it-do-or-do-without folks are a very marginal part of the population and, though many people would like to save money, a lot less people are truly willing to make the change and live more simply and slowly. A walk through the average shopping mall is enough to convince one of that. People keep buying, and will keep buying unless something truly drastic happens.

Please note that I never said we should stop spending money altogether. I merely questioned what we should spend our money on. We buy food, clothes, household supplies, chicken and dog feed, and more. Even the most down-to-earth, self-sufficient homesteaders who grow most of their own food, sew their own clothes, etc, have to rely on money to buy tools, seeds, livestock, fabric, and much more. The money economy is here to stay. 

Also, I didn't imply that everyone should be as frugal as we are now. I don't consider frugality so much an ideal to be upheld, as a tool to be used. I certainly wouldn't say no to a new stove and a clothes dryer for those rainy spells, if we could easily afford them. Nor would I object to eating out once in a while, or going on a vacation. Our priorities right now, however, are different. We are a family living on a single income that has not always been stable, and if we want to survive and thrive on what we have, and put something into savings so we might one day own our home, we must do without some things. It is much more than just "doing without", though. It really is empowering when you learn to do more on less. It is empowering to know you are not helpless; if you know how, you can trim away a lot and still live happily and comfortably. 

In my opinion, the true danger to economy lies not in people who spend less, but rather in those who spend more than they can afford. Do people who live extravagantly and go into debt boost the economy? Are people who eventually have to apply for government assistance, and can't make an example of responsible finances for their kids, an asset to the economy?

I'm not saying everyone's guideline should be to spend as little as they possibly can. That is a personal decision. I do, however, believe that healthier family budgets in individual families would lead to a healthier society and, by the by, to healthier economy as well, though there might be a temporary slow-down. I believe our current economical situation is unsustainable and we will need to undergo some forcible changes anyway. We rely too heavily on imported food and cheap Chinese manpower (read: slave labor). Will there be a crisis? Perhaps, but it's not going to happen because of people who are taking responsibility for their personal finances. 


Anonymous said...

You nailed it, Anna. My old highschool economics teacher should have had a lesson like this in his course.


Winkel's Crazy Ideas said...

If everyone goes on spending like mad we will use up all the planets resources!! Pam

living from glory to glory said...

Hello Anna, I agree with this article! But it is true from both points. I always like to give my business to a smaller scale business.One thing in this country that has always seemed ridiculous is renting storage units to store more stuff in them,
Blessings, Roxy

Harper said...

I've thought about this, myself. A national shift to frugal living--or even purposeful spending--would lead to economic turmoil. But that turmoil would give way eventually to a different economy that is not easily swayed by changes in policy or market, because it doesn't have as much that is vulnerable to a "market correction."


Joluise said...

At Christmas time the news is full of stories about "buy, buy buy" and help the economy (its like we should all do our duty) - partly because in Australia people had started to save (as they were nervous about the economy, jobs and government) and not spend and as a result the retail trade figures were on the decline and less people were being employed full-time. Unfortunately much of what people spend at Christmas is on credit as they don't have the money required. Whilst this isn't good for the families who then have to struggle all year to repay their credit cards - it is good for retail trade.

I am all for savings and I don't rush out and buy the latest gadget and I often buy second-hand - none of these things help the economy but they help us personally . I also delay buying a big item, whilst others might be much keener to upgrade more frequently.

I also agree we should be eating healthier foods as it will have an impact on overall health of the nation. But as our country gets older (more elderly) higher the costs to health care which is our current and future problem.

Miriam said...

Couldn't agree more!

maria smith said...

Living within one's means is absolutely imperative. At least start with that. We have to be fairly frugal because that's what we can afford. It keeps us on budget. Things like trips to the mall, dining out or a cleaning service are extremely rare. But, we're happy and thriving.

Anonymous said...

By not working, you have freed up a job for someone else! Frugal people tend not to buy worthless things when they do buy.