Tuesday, August 29, 2006

When Frugal Living is a bad thing...

Everybody likes to save money. We all get excited about bargains.. its the way we are made.

Sometimes though.. being frugal is such terrible economy that it needs to be redefined from a way of saving money.. to an expensive hobby.

Here are a few things that defy true frugality.... many are the epitome of False Economy.

1. Gardening:
Unless you already have all the equipment, supplies, and skills... you WILL lose money by gardening. If you further compound your False Economy and decide to "put up" the fruits of your exhaustive labor by canning (requires a canner, jars, lids and usually extra ingredients).. you'll lose even more. Gardening is a wonderful hobby, but it's a hard sell at Frugal living unless you don't value your time at all. Even without counting your time... it's very easy to spend more in garden prep, seeds, tranplants, fertilizer, insecticide, mulch, and tools than you could possibly recoup in grocery savings. Factor in your time to prepare the soil, plant, tend, harvest and preserve.... and it stops feeling very frugal. Gardening IS however.. a lovely hobby.

2. Displacing water in your toilet tank:
Unless you live alone (in which case your savings will be even less), this can be a very dangerous practice in terms of frugality. That tank is designed to use a certain amount of water to flush... without enough water.. you get clogged pipes, which at the very least will require you to plunge it.. and usually requires a serious bout of cleaning. Worst case... you need a plumber or to buy a "snake". Your time is valuable, cleaning supplies cost something.. doing laundry is expensive (you know somebody will toss some towels down to "soak it up". AND.. the pennies you'll save a month on your water bill doesn't justify the risk and inevitability of clogged drains. For households with grownups only.. you might get away with it.. watch out for this False Economy if you live with children!

3. Most House Renovations:
Most household renovations, with the small exception of some paint jobs.. are true False Economies. If you will be living in your home longer than ten years, and want to redo the kitchen, bathroom, den, add a room etc.. you might recoup your investment. Otherwise.. it's very difficult to recoup any money you spend on a house. That especially means things that don't show.. like replacing wiring, plumbing, garbage disposals, a/c units, gutters, and so forth. Frugal means not wasting your money/time/resources. I do believe that most renovations are very poor investments. Don't fool yourself into thinking you are saving money by replacing those old windows with new efficient windows. You'll spend thousands of dollars for the new windows.. and will save maybe $200 a year. Same goes for new insulation, installing solar panels, or anytime you replace something that doesn't actually NEED to be replaced.

4. Saving stuff:
Whether it's a collection of mayonaise jars, rubber bands, newspapers, or spare parts... You pay for storing it. Most of the time... that junk goes in the garage, or displaces stuff to the garage.. so you can't park vehicles in the garage. In addition to paying for storing it.. your car will use more gas warming up and cooling down if parked outside.. the paint and interior will fade, and you face higher depreciation and risk of damage/loss if you leave it outside. Most stuff people save has negligable value and is easily and inexpensively replaced if needed. Declutter your life, and you'll find yourself a happier person.. and that's priceless.

5. Doing your own taxes.
In general.. if you are single, living in an apartment, don't trade stocks and don't give to charities.. you can do your own taxes and save money. Anybody else is probably better off getting them professionally done, because a professional will find you deductions you'd have never thought of... and you're less likely to be audited if you use a reputable firm too. Our tax savings (from using a professional) more than pays for the somewhat high fees we pay for the service.

6. Discount Clubs/Buying Network Memberships:
Very few people save money.. most spend MORE than they otherwise would. The savings per item is minimal, and the temptation to buy in bulk (waste, storage) is great.. and the temptation to buy stuff you'd never have thought of buying is great too.

7. Multi-level marketing "distributerships"
You won't make or save enough money to justify the time, stress, and aggravation. At least half the people I know who'ved tried these have gone into debt on the road to "get rich quick" multilevel junk. Not to mention alienating people because whatever else mult-level marketing programs do.. they alienate friends and family.

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