Ruthless Frugality

By Philip Brewer on 22 January 2010 (Updated 27 January 2011) 23 comments

There are many strategies for frugality: Don't buy stuff you don't need. Stock up when you get a good price. Make smart decisions about when to pay up for quality and when to get the cheap stuff. Then there's what I call ruthless frugality: Always getting the best price.

I'm not talking about stupid frugality — buying the cheapest shoes you can find even though they hurt your feet. Nor am I talking about shopping around, using coupons, and so on. Rather, I'm talking about getting the best price you can without regard for what's behind the great price.

At the extreme, of course, there's criminal frugality — buying stolen goods and pretending to believe that they fell off the back of a truck. But short of that, there are all sorts of things that enter the general stream of commerce at prices that embed lots of bad practices — stuff made in sweatshops by children or prisoners or slaves, stuff made in ways that poison the workers or trash the environment.

Most people delegate to the government the job of policing how things are produced. There are, for example, laws about how farm animals have to be treated, and most people hope that those laws are strict enough that the food produced is safe and the animals' suffering is minimized.

But it's worth thinking about the costs of ruthless frugality. One good reason to pay more than you need to is to be a good neighbor, such as by buying locally. Patronizing local shops often costs more, but part of the reason the big box stores are cheaper is because they've got competition. Let all the local stores die and you can expect to see prices rise at the chain stores. More important, money spent in local stores tends to stay in town — possibly getting spent on stuff that you make or services that you provide. Perhaps more important yet, local production is often more ethical and more sustainable.

I talk about voluntary simplicity as being an essentially hedonistic lifestyle, because a high overall level of frugality frees up resources that can go to those specific areas of your life where paying more makes a difference that matters to you. The upside of frugality is more of what you care about.

I think a little hedonism is great, when it is enabled by thoughtful choices about priorities. But I think a similar amount of thinking ought to go into where really cheap stuff comes from — and whether your values can support the ruthlessness built into the price.

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Brian

I usually love your posts, Phillip but this one smells of "high horse" mentality. You (and I) can afford to make these sort of decisions but there are many who can't. And the only people that will benefit from NOT buying products made in sweatshops or by child labor are the ones making the purchase because their conscience may be clearer. It would be simplistic to think that the lives of these laborers would be better if we just eliminated their jobs. And the last time I checked, most of the local stores sell the exact same stuff as the big box stores. Couldn't it be better to save a few bucks at Walmart and send the difference to provide schools and immunization for these children? Also, big-box retailers provide jobs in all our communities. Big-box stores also offer career opportunities for their employees that local stores may not.

I also don't believe prices are going to go up when the mom-and-pop shops are closed. The competitive pricing in the big-box stores is not due to the local stores, rather the other big-box retailers. There is not a single big-box retailer without a direct competitor (let alone the online competition).

Guest's picture

As someone raised in poverty who grew up to work in the non-profit sector to help other poor families, I must make an earnest request: Please, please, please stop painting low-income families as helpless victims. It is a damaging stereotype that disempowers and serves no one.

Also, labeling an article about socially-responsible spending as "high horse" is inaccurate. It's a knee-jerk response (usually motivated by guilt, from my experience). Not once did the author lay judgment at the feet of those who make different choices. He simply provided a context in which to view our spending patterns.

Can all of us make the "right" choices across the board at all times? Of course not. But all of us can make choices. I have worked with clients who stopped using toxic household cleaners in favor of using vinegar and water, stopped eating conveniece foods in favor of cooking, etc. who then used the money saved to purchase more socially-responsible items they could not previously afford. Shifts can be made in any budget to make sounder choices.

Big box stores may provide jobs, but those jobs are generally low-wage and ultimately depress wages throughout a region. My city has been deeply damaged by chain hotels, restaurants and big boxes that moved into the downtown area, promising ample employment and tourist dollars but whose wage structures, in addition to tourist dollars being funneled to their corporate executives instead of locally-owned businesses, resulted in depressing the wage structure and housing values of the *entire city.*

Additionally, big box stores keep their prices low primarily through exploitative labor practices, be it their own employees (e.g., Wal-Mart using state welfare programs to provide health benefits to their low-paid workforce) or suppliers at home and abroad (e.g., mega stores locking farmers into contracts where they must take a loss for major crops. Again, a Wal-Mart example).

Is it smarter to support an unethical business in favor of saving a few dollars to give as charity? Not from my experience in the NPO field or the research I've done. Investment is more helpful than charitable giving. It's like Kathy Griffith's crazy clothing line--made my exploited child labor whose profits then go to help abused children. Stopping abuse at its source negates the need for charity.

It's important to note that when people speak of socially-responsible financial behaviors, it is not an attack on your lifestyle or choices. It is simply a matter of stating the true cost of a particular product or service. How you choose to respond to the facts, when you have adequately researched them, of course, is matter of personal preference. However, I find it hard to believe that most people would continue to consume in the same fashion that they currently do if they were fully aware of the impact of their choices. Yes, even poor folks with limited incomes. In fact, I've found that poor folks empathize most with those forced to work in slave labor conditions, resulting in dramatic changes in how they choose to spend.

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Zack

It might also be helpful to think of each purchase as a "vote" for what's behind the price. Spending is the only "activism" most people do.

Guest's picture
redsoxmaniac

There is a balance based on where you choose to spend your money, but as another poster commented that depends on your financial situation. Not all can base their decisions on whether it is good to shop at places that exploit their workers, because it could be the only place that they CAN afford to shop. Buying local often can be cheaper if you buy what is abundant.

But that aside, there are many decisions that you can make that are frugal and a little hedonistic...planting some interesting and more exotic vegetables in your backyard. I try and buy local when I can. If I am getting rid of something I use freecycle. If I want a good wine...I shop for a good deal and then bring it home and enjoy it with friends. I'd never order it out and spend 3 times retail for it. We all make good and stupid decisions when it comes to much of this.

I think the best thing is striving to be mindful of it. Years ago I thought nothing of logging on Amazon and spending 50 or 60 dollars to feed my reading habit. Now I log onto my public libraries website and reserve the books, and each time they send me an email to tell me my book is ready to pick up...I do a little happy dance. Simplicity is a beautiful thing but like any habit it takes awhile to make it a lifestyle change. Really enjoyed this Phillip, its not how much we need, it is more about the choices we make to fulfill them.

Guest's picture
CB

Agreed, we "vote" with our money whenever we make a transaction.

One big box store was widely criticized for paying their workers so little that communities had to subsidize their wages. I never saw its name supporting little leagues or community groups that the smaller businesses saw as their duty as part of a community. In fact, the old downtowns become ghost towns.

Most of the profits fly to headquarters/shareowners, as did the manufacturing jobs and even the transport jobs (suppliers are told to ship from China to Mexico because the big box can make more money). Bottom-line and then skimming to make more is the goal. I have been in this store twice (it is everywhere), but the mass amount of cheap goods, mostly for non-necessary stuff, was off-putting. I'd rather have one good item that would last, or do without.

Rather than shop at the local big box pet store, I found a local family-run one that is involved in the community (pet rescue groups/dog training classes), and nothing is sold there that the owners wouldn't use themselves. I prefer to pay cash to save them the bank fees. Shopping at the farmer's markets has added much to my life.

When there are just online bookstores, I won't be able to browse and pick up a book I'd never have come across otherwise.

Guest's picture
Rita

true, not everyone can afford to pay more to shop locally or take the time to research every purchase. But that doesn't mean that those of us who *can* pay a bit more and research a bit more aren't obligated to or shouldn't encourage others to.

The way stores like Walmart, to take just one example, run their company is morally atrocious. I believe people who have the financial resources and information resources to shop at more sustainable or ethical stores (and there are some big-box stores that have ethical business models as well) are morally obligated to. Our business keeps "better" stores alive, and shows that consumers are willing to support ethical business.

Walmart etc. aren't going any where - they'll still be around if/when I find myself in dire financial straits and am unable to pay a bit more or don't have access to other options. I don't think less of people who are on a very, very tight budget or don't have access to other stores - that was *my* family for quite some time. I do think less of people who know better, can pay more, and choose not to. That's lazy, ruthless, and cheap, in the worst sense of the word.

Guest's picture
Jordan

This post comments on two orthogonal ideas. Sure you can choose to be an activist by not spending money on bad things. But in this world, we are presented with decisions of the lesser of two evils variety. One item might not utilize sweat shop labor, but in turn destroys the planet.

If you are trying to be activist, decide which evil is most important. Then decide how much of a premium you are willing to pay to avoid it and pay that premium. On the other hand, if being frugal is the goal then the decision comes down to price vs. quality.

In the end, working with both of these requires optimizing on two axes. This optimization is difficult to impose on consumers.

Guest's picture

Philip, I agree with what you're saying in general, but paying more for products manufactured with greater integrity not only costs more money, but it also can cost a lot of time.

To buy in this manner means being aware of how, when, where and by whom everything is produced. Life is already too complicated, and to devote time to that research wouldn't be cost effective in itself.

Personally, I think most of us would be better served cutting down on bigger expenses, like housing, cars, etc, rather than focusing so much effort on saving on the little stuff so we can keep the big ones. We're often buying ultra cheap so we can "afford" an oversized house- or car-payment.

Philip Brewer's picture

Thanks, everyone, for the good comments so far.

I'm not categorically opposed to ruthless frugality. Paying the least you can for everything you get is actually a good starting point. But I think it's worth doing it consciously, being aware of what you give up when you do that.

If you still have a corner store, maybe you can buy the exact same cheap pan there that you can get at WalMart—and it's hard to see the win from paying more at the corner store. Certainly the sweatshop workers don't know or care where you buy it. And it's quite possible that there's no locally made alternative—there aren't many handcrafted pans made in the US any more.  But where there are locally made alternatives, there are some advantages to buying them when you can. You're usually getting better quality. Plus, the money that you spend stays in the community.

Guest's picture

Random thoughts:
I've always defined frugality as getting good value for your resources (money, time, etc), so with my definition, value and values can be part of the decision-making process.

I seldom go to Walmart or Sam's Club, but when I do, I am surprised to discover that their prices are not that great. The teeny grocery down the street has better prices on wine and ethnic and "gourmet" items. Similarly, we had an almost free membership to Sam's: $15 instead of $40. We got a renewal notice that proclaimed that we had saved $60.00! Not worth it!

Sadly, there are not too many little, locally owned shops any more. New Orleans is noted for its many quirky boutiques. My little town has a few clothing and furniture shops.

Guest's picture
Cheap_Yankee

I picked up a nice, warm, practical fleece hoodie for my 8-year-old at the local thrift shop a couple of weeks ago and was dismayed to hear her say, "It's from the GAP, X-fashionable-girlie-neighbor loves the Gap, thanks Mom."

I then launched a discussion that the reason our family buys 95% of everything we need used (even occasionally if it costs more) is because those big-box and chain stores ship our jobs overseas and then hire little children the same age as her to work in dirty factories 16 hours a day to make our cheap clothing. I explained to her that, instead of going to school, these children have to work in terrible conditions to make that chain-store clothing for her to wear.

Sometimes ... when you can't find it anywhere else (largely because they've outsourced so much of our economy that no place else carries it) you have to go to Walmart. I NEVER have to go to a chain store. If I can't find it used, then I'll make it myself from scratch (preferably using base materials recycled from something I found from a thrift store, such as unravelling a wool sweater). I try to avoid designer logos, but these days it's all you can often find, so I focus on quality.

The point of all this is that, even if you're dirt poor, you can still beat "the man" by shopping for things second-hand or learning to make them yourself using reclaimed materials. If Scarlett O'Hara can do it, so can mainstream America. Going to Walmart to spend money you don't have on crap you don't need isn't frugal ... or ethical ... or necessary. It's all just Rupert Murdoch big-business-media-industrial-complex brainwashing.

Guest's picture
Melanie

If you try to buy most of your items second hand, you are usually buying from local people because most thrift stores, consignment stores, or garage sales are locally owned or locally franchised. My family does try to buy made in the USA and more enviromentally friendly when possible and it has actually decreased our costs because we refuse to purchase random stuff from China.

Guest's picture
2ndhull

It doesn't always have the best prices, that's just propaganda. Many times local shops have better quality and better prices.

WalMart is a scourge on communities and our country. The stores are ugly and the clerks are dregs.

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Kristina

Something no one is willing to admit is that people in developing countries are happy to have the jobs that make this cheap stuff. We may get on our high horses and complain about how these poor people are being abused, but in reality, these jobs are frequently a boon to the communities they are in. I'm not talking about truly abusive situations, which do exist, but ones where the conditions, while not what we are used to, are acceptable to the local populace -- even child labor, though I know that makes a lot of people uncomfortable. It's just an economic fact that in some societies, children's economic contributions to the family finances remain vital. In the short term, all taking away their jobs would accomplish would be to further impoverish their families. It wasn't so different here not so long ago.

Frankly, I'm more concerned with what big box stores and diminishing manufacturing jobs in the States are doing to the fabric of our own communities.

Guest's picture
Guest

I don't think you can categorically say that it's better to have a job in some factory than it is to live in a less modern society. Generally, when people move to cities and work in factories, it's because technological and economic forces are eroding an agrarian society.

In a less advanced economy, people don't have "jobs" per-se. They don't participate heavily in a money economy. They use barter, and a large fraction of the population is involved in producing food. So, while on paper, they appear to have low incomes, that's only because thousands of dollars of their "income" and "wages" are not in currency.

Here's an example. Suppose 50% of people are farmers. The other 50% do other things, like make furniture. Suppose I grow wheat, and trade it for a table and chairs. That transaction is off the books. It's not counted in the GDP, despite the fact that both things are valuable.

Now imagine that a shoe factory opens up, and I start working there. Now I get paid in money. I can buy the table for cash plus some wheat. The cash part eventually shows up, somewhere, as a transaction. Maybe not during the trade for a table, but later on someone will record it.

The shoe factory will cause the value of currency to rise. The government will introduce more currency to devalue it (otherwise, it suffers inflation). There will be more money circulating in the economy. So the numbers appear to be getting better... but what's really happening is that more currency is circulating, and less of the economy will be involved in barter.

The unstated, but true goal of development is to increase the amount of currency being used, because that opens up the country for more import and export of goods.

Whether this is good or bad is really a value judgment. I'm just relating this story to disabuse us of the idea that reported low incomes in developing countries (aka emerging markets) represents dire poverty. It just represents the absence of modern currency.

Guest's picture

I am not uncomfortable at child labour, I am sickened by it. These children are not sent out to supplement their families incomes they are the family's ONLY source of income in many, many countries as the local factories WILL NOT hire adults. This is all done so North Americans can buy a chunk of crap for 50 cents less at WalMart that probably will be broken or discarded with in a year. For any one that is interested you might enjoy watching www.storyofstuff.com to give you further insight.

Guest's picture
Pat Yoe

Sold it on eBay for nearly what I paid for it. Goodbye AT&T!

I go Straight Talk on the Verizon network. Bought it at Walmart and it's an amazing deal. The Samsung Finesse is a very cool smartphone and paying only $45 a month for unlimited everything is the best deal going!

Who needs an iPhone? LOL!

Guest's picture
Cheap Yankee

Asia isn't the only place with cheap child labor competing with adults for manufacturing jobs. Up until WWII, big business ignored weak child labor laws and the pro-business courts wouldn't enforce them. FDR started to enforce them during the Great Depression, but it wasn't until 1941 that the republican-stuffed Supreme Court softened it's rampant pro-business/anti-reform policies finally began to recognize child labor laws as legitimate. The only REAL reason the laws were finally enforced was the government didn't want WWII soldiers coming home (as they had done after WWI) to find nobody wanted to hire them and cause a reversion to the Great Depression the nation had just climbed out of. They used the exact same argument to justify it then, too, that "the families WANT their kids to work these jobs."

So ... instead now big business has skipped the country to do the exact same unethical thing someplace else and we stupid American's let our government (under the guise of "free trade") allow our entire economy to be outsourced. My grandma had a saying, "don't pee on my leg and tell me it's raining." Well, folks, it's been "raining" buckets for 2.5 decades!

Guest's picture
pam munro

More than likely the best price is going to be for the same items "second hand"!! I think Walmart is expensive for the quality of the goods it offers, and almost NEVER shop there! I can get better deals on good used items, and by shopping at dollar stores with some discretion! (not to mention yard sales and the like.)And I supplement my toiletries (bought on sale or generic) with the many samples I get on the net! There are loads of shampoo, toothpaste, deodorant and lotion out there as freebies. And since I live in S. Calif., I can take advantage of our local produce almost all year round.

Guest's picture

Kristina, this is a bit of propoganda utilized frequently by unethical businesses: "Something no one is willing to admit is that people in developing countries are happy to have the jobs that make this cheap stuff. We may get on our high horses and complain about how these poor people are being abused, but in reality, these jobs are frequently a boon to the communities they are in."

Like any other low-wage structure, exploitative business practices are a boon to the sociopaths at the upper ranks (yes, I just used an ad hominem attack), not those using ashes to brush their teeth because they can't afford basic hygiene care.

It is a fallacy that exploitative practices are a boon to those forced to work in heinous conditions. Again, "high horses" is not the issue here (what is it with Americans and that knee-jerk response? This isn't an attack on your right to shop), human rights is the issue at hand.

Boons are frequently attributed to an increase in consumptive practices without regard to the health of communities or quality of life. Being able to buy televisions and more plastic toys isn't an indicator of financial, personal or community health. This is why so many economists are asking to use the GPI over the GDP to determine a more accurate financial picture.

Guest's picture
Cheap_yankee

I frequently hear the "foreigners will work jobs Americans won't" argument. However, as someone who works with the very people who are often forced to make choices between going on public assistance versus taking a job washing dishes, cleaning toilets, or shoveling manure, the issue is almost never one of "this job is beneath me" and ALWAYS an issue of "after I pay my taxes, a tank of gas to drive to work, and child care for my X number of kids, it's going to COST me $80 per week to go to work, and I'll lose my public health insurance to boot."

Big corporations depress wages by outsourcing jobs, bringing in cheap foreign temporary "guest workers" to undercut wages, then playing games such as keeping their workers just under the number of hours it would take to be obligated to pay them health insurance, undercut and shut down small businesses, and then to compete the small businesses have to play the same low-wage game. When are we going to wake up as a nation, reclaim Congress, and just say NO to these practices?

Or is it going to take China invading us with all their newfound military might, funded by Americans buying cheap goods at Walmart and interest on those $700B TARP wall street bailouts, to get us as a country to WAKE UP and recognize the crap coming at us down the pipeline?

Guest's picture
Guest

A lot of good comments. What is surprising is that no one has mentioned Fair Trade. Beyond buying local, one buy products from Africa, Asia, and other countries without putting people out of jobs. Buying Fair Trade is supporting a fair wage for people who would be paid sweatshop wages. Also, bringing up their standard of living brings up the value of their competition and if there was enough support for Fair Trade it would make it more difficult for companies to outsource their labor. Rather than paying pennies on the dollar, they would be forced to pay an ethical amount. Also, if people are paid more, they can afford more.
If you can't afford something-don't buy it. If you can, consider that maybe you should. You're purchases of coffee, chocolate, and sugar are supporting companies that employ children, sometimes enslave workers, and make people work long hours in horrible conditions. If you can't afford to do otherwise-no shame right? If you can, don't deny what you're doing because it cost a few more bucks to support people being treated fairly.
Your purchase, your influence.

Guest's picture
Zbigniew

When I go to Costco's I get disgusted with myself and the others who shop there. I survey the parking lot and see a lot of high end cars and SUVs. These are people who don't need the savings they get at Costco's. I distinguish a place like Costco's and a place like Wal-Mart. Wal-Mart is open to all whereas Costco's has a barrier to entry -- the membership fee. When I was in my Costco's I counted people to see how many were blacks or Hispanics. Out of 200 I counted, only one was black. The others were either white or Asian. Something strikes me as out of kilter here. In the inner cities, the food and other necessities are overpriced. However, these are the people who need the lower prices. In the affluent suburbs, the residents can go to places to buy things more cheaply. What I think is happening is that the system is regressive, taking from the poor to subsidize the rich.