There’s been an interesting discussion going on lately in the personal finance community – debating what one poster on the Women in Finance Facebook group called “poverty tourism”. This is a debate that came about after the recent media tour for the Frugalwoods new book, Meet the Frugalwoods. There were a few specific media appearances that led to great debate, both in the comments of the articles and elsewhere in the personal finance world. I’ll give a summary of what’s been going on lately that’s caused this backlash, explore why people have a negative reaction to what seems to be the wealth playing at being frugal, and talk about whether frugality really is for the rich.
I’ve been a fan of the Frugalwoods site for a few years now – following their story from two urban ultra-savers living near Boston, to buying their homestead in the woods of Vermont, having their first baby girl (now their second!), and of course the adventures of their lovely adopted greyhound – RIP Frugal Hound. I even spotted Mrs. Frugalwoods at FinCon back in October, although it was from across the room.
Their media tour started out innocently enough, at least from what I as an outsider can see. All of a sudden Liz (great name, by the way!!!) was everywhere – on all my favorite podcasts like Choose FI, Stacking Benjamins, So Money, Mad FIentist, FIRE Drill, and Afford Anything – to name a few of many podcast appearances. I thought that was awesome, because although I’ve read the site for years, I’d never heard her on a podcast before. And, what great publicity! Whoever helped arrange that deserves a bonus.
I heard or read somewhere that Liz was going to be on NPR – awesome! – with a segment on extreme frugality. Now I’m always down for some extreme frugality, so I was excited for the segment. It was on while I was at work, so I asked my husband to listen for me.
He later told me the segment was “strange” – people calling in seemed to be annoyed. I looked it up later and saw 300+ comments, most of which were overwhelmingly negative. The summary of most of the negative comments were that the segment didn’t really come across as someone living frugally – more as an independently wealthy woman playing at frugality.
Now if you read her blog, you’d know that wasn’t really the case, but after listening to the segment I could see why people reacted so strongly. Liz and Nate have a great frugal story, but people heard “home in Boston that doubled in value”, “66 acre homestead”, “Montessori preschool”, and “burr grinder” and dismissed their story.
Something similar happened after being featured in The Guardian – you can read nearly 300 comments very similar to the ones in the NPR story. Most people talked about how the headlines don’t match the story they’re sharing – The Guardian’s story was called “Extreme frugality allowed me to retire at 32 – and regain control of my life” and the NPR one was titled “Extreme Frugality In The ‘Frugalwoods‘”.
Side note – this, along with other stories in the mainstream financial media, really have shown me how easy it is to get negative press, or negative reactions to your story. There certainly is a double edged sword of mainstream media features.
I’ve seen several other spinoffs from these stories debating their story. A large thread with 10 pages on the Mr. Money Mustache forums. An article in The Outline about how being frugal is for the rich. A large Reddit thread. Another, slightly smaller but still large, Reddit thread. Then there were articles inspired directly from these debates – Our Next Life’s blogging manifesto, for one, encouraging bloggers to tell the whole truth about their financial circumstances.
Why the backlash? Two reasons that I can see:
- Title vs. Story – The biggest backlashes were in mainstream media – targeted at ordinary, everyday people – where the headline of extreme frugality didn’t seem to match the story. Readers walked away thinking “rich couple plays with frugality” rather than “frugality can help me retire”
- Income – After all the publicity people started researching their careers, and discovered that Nate makes $225k per year. Combined with Liz’s former salary, income from the blog, rental income from their Cambridge house, people are estimating they made over $300k per year.
Now that you know the backstory, lets look deeper into why people have such a negative reaction to what they perceive as wealthy people “playing at” being frugal.
Poverty Tourism – Being Frugal When You Don’t “Need” To Be
As I mentioned at the start, it was someone in the Women in Finance group who brought up the concept of “poverty tourism”. I thought it was a perfect term to describe how people see wealthy or high income folks who practice frugality.
When you earn the real average American household income – $59k now, according to this Business Insider article – or less, frugal isn’t fun as much as it is a way of life. You don’t pay people to come to your house and mow your lawn for you, so “mow your own grass” is a useless money-saving tip. After paying for basic child care, mortgage, health care, food, gas, and so on – there’s little left for saving. Saving 50%, 70%, or 90% of their income both seems like and is near impossible, especially with kids.
The essence of “poverty tourism” is the sense that you’re just visiting a lower-income land. You’re taking a tour, dabbling in the local culture, sampling the food, but you can go back home to your high income whenever you want -or need-to.
The people who actually live there in lower-income land don’t have that choice. They can’t “go home” to a higher income if they don’t like their life circumstances, or if an emergency happens. They can’t decide they don’t feel like eating at home today, so lets all go to that nice fancy restaurant. They’re stuck there until they can move out permanently, which may not be for many years – if ever.
Being frugal, when you don’t need to be, can feel a bit like a game. How low can we get that grocery bill? Can the electric bill this month be lower than the last? What fun things can we find at tag sales or the thrift story this month? Side note – did you know there are folks who think the high income shouldn’t be able to shop at thrift stores?
But when you don’t feel like being frugal, want to splurge, or run into an emergency, you don’t worry about money the same way folks with no safety net do. You can decide to go on a great vacation – or three, pick up a new “something” when something in the house breaks down, fix your car when it has an issue, or pay for a hospital stay without causing damage to your long term financial situation.
Having started my adult life with a household income well under $50k per year, and having a child a few months after turning 23, I can say there’s a big difference between being frugal because you want to be rather than because you have to be. When it’s not a choice, saving 10% of your income doesn’t even equal $5k, and you need to do everything yourself, it’s stressful.
Feeling that stress can make you resentful of people who live off more than your annual income, and still save more than you make in a year. People who talk about their “frugality” for getting a good deal on paying cash for their new $50k car (yes, I have seen this, it’s a real thing) seem tone-deaf. Articles with tips to save money can also bring up privilege – making lattes at home isn’t a money-saving tip to people who don’t buy lattes in the first place.
This is how people end up feeling that being frugal is for the rich. They see “money saving tips” that wouldn’t actually save them money, because they don’t spend money on those things. They see stories of financial independence and early retirement about people who claim to live frugally. But those people still spend more than you make in a year, and you feel they can never achieve the same thing. Frugal things that take a lot of time – baking, home building, tag sales- can be impossible for a single parent holding down several jobs. There is a point of income, and life circumstance where you need to focus on making more money, rather than cutting down expenses. And making more money can be a long, difficult path for some, depending on where you’re starting.
Going back to school costs money and takes a lot of time – and if you’re a single parent, where are you going to find childcare to take night classes? Changing to a new career sounds good, but with no experience you’re caught in the catch 22 of needing experience to get the job, but needing a job to get that experience. It can be a long and difficult road filled with steps forward and backward.
Do I Think Being Frugal Is For The Rich?
In a word, no.
To expand on that – remember how I mentioned up there that my husband and I spent years making less than $50k combined, with a son, in my early to mid 20’s? It was frugality that enabled me to put money aside even back then. But it was a different kind of frugality. And there was definitely a big focus on growing my income, to enable me to one day be able to save much more.
Back then, frugality was cloth diapering – and not the cute, cozy, expensive kind. The basic cloth diapers from Target with plastic pants kind. It was making almost every meal at home, especially after my son was diagnosed with food allergies. And not because we wanted to – because we had to. Eating out was expensive, difficult to do with food allergies, and buying prepared food that was allergy free was cost prohibitive.
We spent Saturdays at tag sales, and bought kids clothes at the consignment shop. We were excited when we managed to get a good deal – like a “new” light fixture for five bucks! Or a set of nice dishes for a dollar! That wasn’t because it was saving us money, but more because we could get nicer things for the house. There’s no way we could have spent the money on a new fixture or set of dishes instead.
Frugal habits die hard, and many people who have been through a financial crisis as a child or young adult keep their frugality even when times are good. Just think of the impact that the Great Depression and the Great Recession had on spending. Children of the Great Depression often were extremely frugal even once the economy was in full swing.
Saying that frugality is for the rich dismisses the very valuable role frugality has for those not making a high income. It’s true that living frugally with kids at a $40k per year income looks very different than living frugally without kids at a $300k+ income. It’s an extremely valuable tool, though, and even at lower incomes can free up funds to be used towards your goals and dreams. I always turned to The Tightwad Gazette for tips and tricks on living a creative, frugal life at a low income. Amy Dacyzyn squeezed every penny until it cried, but it enabled her to stay at home with her many kids, buy new cars, and buy a lovely home in Maine – just as she dreamed.
There are plenty of lower income bloggers that have great money saving tips for those who are living at the lower end of the income scale. Not just The Tightwad Gazette, either. I can think of America’s Cheapest Family – they have a great general savings book and an awesome one on cutting your grocery costs in half. Crystal from Money Saving Mom has a great story – I like her book, and there’s some good info on her site. I’m sure there are other resources I’ve missed – let me know in the comments!
I firmly believe that feeling resentful and jealous of other people success is not the path to finding success yourself. Instead, we should respect the journey of others, even when it seems like someone else “has it easy” compared to us. We all have unique advantages and disadvantages in our journey through life, and the relative advantages and disadvantages of others shouldn’t keep us from seeking financial success for ourselves.
Living frugally isn’t just for the rich, but reaching financial freedom in your early 30’s is a direct result of a high income. The fact that frugality enables higher-income folks to save more and retire earlier doesn’t make it less valuable for those not making a high income.
What do you think about this debate? Do you think frugality is for the rich, or that it’s valuable for everyone? Let me know in the comments.
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