Yes Frugality Matters, Stop The Nonsense

I’ve seen a lot of chatter and complaints in the blogosphere recently about frugality.  “Everyone writes about spending less” and “spending less isn’t really the most important factor, it’s about earning more”.  Or “Frugality is oversold in regards to financial independence”.

Oh really?

Here’s the area I live in.  The five wealthiest counties by median income in America are all D.C. suburbs and in my immediate area.

 

They’re not the ones surrounding New York, or San Francisco, they’re the ones surrounding Washington D.C.  And if you look at the census data and expand it to the top twenty wealthiest counties, then there are 4 more from the Washington DC area included.  The counties in red boxes are all D.C. suburbs.

 

So of the top twenty wealthiest counties in the America, a full NINE are in the Washington D.C. area, including the top five.  And remember, the median income for a family in the United States is $59,000.  Conveniently, the top 5 counties earn almost double that number or more.

In short, I live in what is by far the wealthiest area of the country.  I’m surrounded by people who earn damn good money.  It’s routine for a married couple to both be making six figure incomes, that’s just plain normal.

But here’s the thing – most of these couples and most people in my area are not financially independent, nor are they likely going to reach it.

Why?

They spend all their money!  

Not only do they spend the good money they make, they spend what they don’t even have.  They’re in debt, including consumer debt. 

Loudon County, VA – the wealthiest county in all of America – is also in one of the highest DTI categories, meaning they have a very high debt-to-income ratio!

 

Look at those wealthy counties around the D.C. region on that map.  They have generally higher DTI’s.  They’re in the brown categories, not the blue. 

But they have some of the highest incomes in America.

So some of the frugal-complainers have been chanting “It’s all about earning more money” 

Do these people need to earn more money?  Are you going to keep flogging that dead horse? 

Are you telling me that for the people in the wealthiest counties in America, where median incomes are about double the American median income or even higher, that they’re not earning enough?

Yes, the DC area is very expensive but it’s not that expensive.  I know.  I live here.

The people in my area will likely not reach financial independence because they spend too much, plain and simple.  This isn’t hard to understand.

Don’t tell me frugality doesn’t matter.

And it goes the same for folks earning similar, well-above median incomes in other parts of the country.  There’s millions of them out there, and they really should all be on the road to financial independence, or at least not in consumer credit card debt.

This my friends is why I write a lot about spending less.  And this is why I’ll continue to do so.

Do a lot of personal finance bloggers do the same?  Yes.  One writer who’s blog I enjoy, actually poked fun at those who write about frugality.  I get it, everyone has a niche. 

But obviously the message of frugality isn’t resonating with the masses.

Earning more AND spending less are both important to get to financial independence.  For many in America, they have the former but haven’t gotten the memo on the latter.

And before anyone gets triggered by this, yes I realize that I’m talking about a high income area.  But for a family making $50,000 a year (below the median), frugality still matters. 

Does it matter as much?  Well of course that family should focus on both earning more AND spending less.  Probably more of the former in that case.

Everyone has things they can stop spending on. Don’t make me go through the wants vs needs rundown again, you’ve been warned.

 

I’m So Sick Of Frugality

Maybe we should just toss out the word “frugal” all together.  It’s a loaded word at this point, and subjective after all.  How about just “spend less”.

When does “spend less” become “smart spending” become “frugal” become “cheapskate”?

Those are all subjective descriptions.  I’m not saying there are no cheapskates, there is a point when frugality gets to that level.  But a better way to move forward on this topic would be to stop trying to categorize or label people and realize the simple facts.

Spending less matters.

Spending less is indeed a huge factor in becoming financially independent.

If you don’t agree, I’ll invite you to come visit me and we’ll drive around the Washington D.C. suburbs, the richest area in the country (yes I keep repeating it for effect).  We have a big shopping mall called Tyson’s Corner, it’s one of most famous malls in the country, there’s a reason it’s here.  There’s a ton of high income people willing to feed the beast. 

If you go (I won’t set foot in it), you’ll see tons of very well-to-do people who are mostly still in debt, shopping for ridiculously expensive crap they don’t need.  They make GREAT money, they’ve got that part down.

They’re not, however, on the road to financial independence.  Many are going in the opposite direction.

So don’t tell me frugality and spending less don’t matter.  They do.