Our Thoughts » On Conversation

We embarked on a conscious effort at frugality a decade ago. Since then, we have had many conversations with friends, family, colleagues, acquaintances, and strangers about our lifestyle. In the process, we’ve noticed patterns, learned some lessons, and run into a few barriers to adopting lower-consumption lifestyles.

In general, young people are most intrigued by what we are doing (“How did you pull off X?”). Older people are often indifferent (“Good for you” with a tone that suggests a change of subject). The middle-aged are more likely to be antagonistic (“Look, not everyone wants to live like you do.”). Those living in places with a high cost of living are often interested but oddly defeatist (“Sounds great. I wish we could do that.”).

Overall, these conversations are challenging. We get it. We aren’t discussing the weather. This is about living the one life you have, and people are understandably sensitive to even the implication that they may be in error, or the suspicion that we think they are “bad at life”. Discussion of consumption choices (“How important is a new car to your happiness?”) can easily be misconstrued as an accusation of materialism. That is never our intention. Imagine how you would feel watching a person ride a bike with flat tires up a steep hill. That’s how we feel in most cases – not pity, mainly concern, and maybe confusion. Our assumption is that the person simply doesn’t realize the tire is flat or that there is a way around the hill.

Most people really do want and aspire to have “nice things”, which more often than not translates to expensive things. We’ve noticed that people often say they want experiences (usually travel or more family time) rather than things. But judging by behavior, it appears that things and comparatively mundane experiences (e.g. eating out) actually get the dollars. We don’t observe much of our social circle embarking on grand adventures, but we do see lots of Amazon deliveries on porches.

Personal finance gurus often suggest temporarily eliminating some bit of spending (cable TV or the morning Starbucks run, for example). In our experience, this almost never works. Such efforts immediately activate loss aversion – the tendency for losses (giving something up, in this case) to have unduly high emotional salience. Loss aversion probably underpins a lot of the reticence we observe. Once people have adopted some act of consumption, it is surprisingly hard to eliminate, especially if there is no personal crisis to spur action. The lesson is to avoid engaging in “low-quality consumption” in the first place, but this isn’t too helpful in conversation. A better “Frugality 101” exercise is to comparison shop for home or auto insurance; a quick, motivating win is nearly always possible. Baby steps.

For some households, a significant share of spending is driven by work or stress, and the two are often related. This includes consumption that makes longer work hours tenable (childcare, housekeeping, take-out, and other conveniences) and consumption that acts as a short-term palliative for stress (clothes, gadgets, alcohol, vehicles, and all kinds of distraction). When people think of frugality, they often imagine cutting this feel-good “compensatory” consumption without also imagining how less spending might enable a new work-life balance with less stress in the first place. They imagine only one side of the equation, and the result is predictably negative.

One solution is to re-frame frugality as a downscaling of the overall lifestyle: less consumption and less work and less stress. This approach, however, faces two potential obstacles. First, the ability to scale back work hours depends on the nature of the job and employer. Sometimes, the only way is for one spouse to stop working altogether or to switch professions (both usually non-starters). Second, reduced hours often come with a loss of professional prestige, and the fear of losing status and identity can be a powerful barrier.

Indeed, the reluctance to re-imagine sources of status and identity – most pronounced among ambitious, well-educated professionals – has been a surprise to us. The affluent are most likely to face a Catch-22: Their jobs are driving high consumption and stress, but their self-worth is tied up in social networks that emphasize professional advancement. This may explain the popularity of the “financial independence, retire early” (FIRE) model among high-income professionals. One works full-time – reducing expenses as much as feasible – until sufficient wealth has accumulated to retire at an early age. Notably, this model does not require a sacrifice of professional status up front. It does, however, pose a potential problem for an early retiree whose sense of self remains dependent upon the workplace.

Our conversations over the past decade suggest to us that, in general, middle-income couples in their 20’s and 30’s are most amenable to the adoption of low-consumption lifestyles. That said, a shift to less consumption and greater wellbeing is possible at any point, regardless of circumstances. If you would like help getting started, just let us know. We love a good conversation.