Do you embrace frugality when you think about budgeting your money? Do you try to make more money?
Many months ago Ramit at I Will Teach You To Be Rich defended the Scrooge Strategy and made his opinion clear that “big wins” were his priority when it comes to saving money.
The following paragraph was the core of Ramit’s argument on frugality vs big wins:
“But by reducing the number of things to focus on — and picking major, important items — you don’t need to worry about that one-off latte or extra $20 you spent on shoes. If you’re handling your major goals, the minor details fall out of that. Whether it’s spending $21,000/year going out or going out to a nice restaurant, you can handle your goals and use your money without feeling guilty.”
Trent at The Simple Dollar responded to Ramit’s challenge with a well thought out discussion that concluded with:
As you can see, there is no single path that everyone follows to financial success, but there are some milestones that many of us share. The “challenge,” in my eyes, is simply figuring out that path for yourself. How far down the frugality path do you want to go? What are your dreams?
Baker at Man Vs Debt came 5 months later to the frugality vs big wins debate and came up with the following conclusion:
Let’s focus our time on those activities that radically help defeat our limiting beliefs. The empowering motivation of a ‘big win” is quickly lost if it doesn’t change behaviors. Let’s strive to leverage these “big” moments to create a series of small (yes, sometimes frugal) behavioral changes that will build a foundation for the rest of our lives.
Many in the personal finance blogging world rave about “big wins” and I do agree with them. However as a college student, it is also important that you do not get into the habit of turning saving money into a one time endeavor. Even worse you should not turn saving money into a process that involves cutting out every enjoyable activity from your life.
When introduced to the world of saving money, big wins are needed to spice up our financial lives. Saving a few dollars here and there will eliminate some guilt but you will not become immersed in the whole “saving money culture” until you see some major results. Saving $20 a week in order to go on vacation will show you the value of everyday frugality. Saving over $2,000 on your college education will help you become a major fan of the “big wins” team.
The biggest win of all wins for college students comes when you save money on your college tuition and possibly find ways to go to college for free (scholarship, bursary, etc.). After that you must find a way to save money on the small stuff to ensure you don’t graduate with debt that bothers you until you’re an old 30-something (just kidding guys!).
Big wins should be your main priority BUT solid money management basics should be sub-consciously built into your everyday financial decisions. It’s great that you aim for the big wins but it doesn’t mean that your daily financial system should be a wreck. What good is a supposed “big win” if you spend the savings frivolously on Affliction jeans every week? Sure spending money consciously is a core tenet of most financial beliefs but major savings can not be used as justification for uncontrollable purchases.
At the end of the day you should not neglect either spectrum of saving money. Don’t give up your morning latte and spend the rest of the day feeling like crap because some personal finance blogger online told you that it will save money. Also don’t feel liberated from the frugal living just because you make a major saving a few times a year.
I don’t believe in providing bottom line solutions for college students because nobody would listen. My goal is that this article will help you shape your own perspective on saving money going forward. If it does let me know. If it doesn’t then please let me know as well.
I just want to end my take on this discussion by asking: why do we have to choose between big wings or daily frugality?