Neal Gabler’s confession in the May Atlantic about his inability to gather $400 in an emergency is riveting reading. The article details the wreckage of one bad decision after another. The freelance existence—with brief moments of feast interspersed with long periods of famine—is not for the fainthearted. But it can be done without facing financial ruin of oneself or one’s parents.
While he brings the reader into his current situation, he doesn’t talk about his youth and childhood or his experiences as a young adult. He refrains from public consideration whether his background shaped his expectations about what money could and could not do. The reader has no choice but to imagine that his was a solidly middle-class upbringing, and that he had no knowledge of how to be poor and no experience with frugality. For the middle class, frugality is a frightful word that conjures up watered-down soup and patched clothing and certainly is something to be avoided. For the poor, frugality is a forced fact of life.
Middle-class people who have never been poor are generally very bad at having no money. This was brought to the surface in the wake of the 2008 financial crisis. Many middle-manager couples, earnest and hardworking, each with better-than-average earnings, often with children, faced doom when one or both of them were found without steady employment. Like Mr. Gabler, by appearances, they were doing well, but in reality they were living paycheck to paycheck because they could not restrain their desires. Nobody forced them to buy that mini-mansion, but there they were, with a mortgage and a BMW in the driveway. How does that happen without deliberate agency?
The comfortably middle class are used to shopping at particular retailers for food and clothing and vacationing at resorts where they can mingle with other members of the middle class. Their little bundles of joy, conceived with fertility treatments, cost a packet before they were born, and are hustled off to private schools and expensive extra-curricular activities.
Middle-class people are also very into “deserving” things. They can think of endless little trinkets and nights out and delicious things to eat that they should have because they “deserve” it. Poor people also work hard, but their reward scale is much more modest, say, an occasional can of cold beer.
The ability to be poor and to live within one’s means is learned by doing. If you are currently comfortable, and are facing a situation where you might not have much disposable income as you once did, here are some tips to help you familiarize you with the basic tenets of frugality:
- Write it down. Force yourself to record every purchase in a notebook. It is a nuisance to have to write it down, and you will find yourself not buying things because you don’t want to take the trouble to record your purchases.
- Pay attention to food prices. Food is for sale not only in grocery stores, but drug stores, ethnic grocers, and dollar stores. Just by paying attention, you can tell when you are getting a good deal on eggs, butter, or oatmeal (as in the real deal, not the sweetened packets). Some internet retailers offer excellent prices on flour, legumes, canned goods, and paper and household products. Pro tip: the big grocery stores are the most expensive place to buy branded herbs and spices; smaller specialty shops sometimes have private-label herbs and spices that are better priced.
- Ditch cable. Cable is expensive. If you need to be entertained, there are cheaper alternatives.
- Rethink clothing purchases. Most Americans have closets and dressers that are bulging with clothing. It is more than likely that you don’t need what you think you do. Don’t overlook second-hand stores. Shop sales, if you must.
- Cook. Cooking at home is cheaper than dining out. If you slavishly follow some recipes, you are going to need to talk to a loan officer. Freely switch out or omit expensive ingredients. Use dry rosemary for fresh, white vinegar for lemon juice, sunflower seed for pine nuts, and skip the parsley if it isn’t essential. For everyday cooking, improvisation is fine.
- Make coffee at home. There is no need to pay $5 for a cup of coffee from the high-priced coffee chain store on workdays. Let’s see, $5 a day, that’s $25 a week, which comes to $100 a month. Think of it, you could be spending $1200 a year on take-out coffee. If your co-mortgagee has the same habit, you are taking in on the chin to the tune of $2400 a year. If you must have it, make it an occasional treat, not an everyday staple. If that is not possible, wean yourself from the expensive stuff and stick to the cheaper house coffee ($40 a month/$480 a year).
- Take a walk, read a book, do some housework. No need to fritter away money at the bar, at the movies, or at a restaurant. Trade in the time that you use spending money for time where you spend nothing.
- Go to the dollar store. Many middle-class people are only vaguely aware of dollar stores, discount retailers, and flea markets. While they have heard of and possibly shopped at Walmart, they are largely ignorant of the existence of the plethora of bargain havens that the poor depend on.
- Don’t go on vacation. Unless you can afford it.
- Don;t use the credit card. Be careful with your debit card.
- Monitor your Amazon wishlist. If there is a book you would like to purchase, but you aren’t going to read right away, keep it on your list and order when you can get a used copy for a penny. Even by factoring in postage, you’ve saved at least three-quarters of the cover price.
- Teach your kids to be realistic. The kids are going to want to have things that you can’t afford, and you’re going to have to say no. You can say no and still love your kids and want what’s best for them. If they are teenagers, you can suggest that they get a job and pay for what they want themselves. Some parents scoff at the availability of such jobs, but kids can be pretty enterprising when they have to be.
While it is nice to have money, there are no guarantees that it will always be there when you need it. Be grateful and humble for what you do have, and when you can, like your grandparents admonished, save for the proverbial rainy day. One or two simple changes can help you salt away the magic $400 for the emergency fund; and a few more months of economy will bear even more rewards.