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Sacrifice, or self-determination?

Do without a few frills now and you'll achieve your goals faster. Taking charge means taking control of your life.

By Donna_Freedman Aug 3, 2012 7:45PM
Image: Man Taking Money Out of Wallet © NULL/CorbisA recent post by personal-finance blogger "Elle" caught my eye because it dealt with an old-fashioned virtue: sacrifice. She and her husband have always chosen less expensive apartments, for example, and drive their old cars while friends upgrade to newer wheels.

Not that she's claiming frugal sainthood. Elle, who blogs at Couple Money, notes that they took "nice vacations" while they still had a car payment. In a post called "Sacrifice now or sacrifice later," she wonders whether those dollars should have gone into the debt snowball.

Balance is important. A vacation, or even a "staycation," helps us recharge the batteries. Yet Elle believes that "making some sacrifices is vital if you want to achieve your goals."

That notion may seem downright quaint to those who grew up in a culture of buy now, pay eventually. Why save up for a new gadget when you can just finance it?

Because you pay for many months or even for years, and it's not only the interest charges that hurt -- it's that being in debt limits your options.

That's why I propose re-framing Elle's premise: "Make choices now or be forced to choose later."

Needs versus wants

Like Elle and her husband, you can choose to rent cheaper digs and drive your cars until the wheels fall off. You might carry your lunch three or four days a week and buy classic clothing (some of it from consignment shops or thrift stores) instead of following each season's couture trends.

If you're young, you might choose not to take on too many student loans, which entails another choice: selecting a school based on affordability as well as suitability. If you're a parent, you might choose not to raid your retirement to send a kid to college. (Post continues after video.)
Apply this needs-versus-wants filter to personal finance now, and in the future you might not be forced to make choices like: 
  • Which of your belongings to put on Craigslist because of an unexpected expense.
  • Which of the family vehicles you will allow to be repossessed because the payments are breaking you.
  • Which family member's basement you move into because your finances are in shambles.
Making your money work for you
Think that sounds defeatist? On the contrary: It's the framework on which you can build a winning life.

A new car when your 5-year-old wheels are still spinning just fine? Think what three or more years' worth of monthly payments could do for a house fund or your retirement savings.

An apartment in a spiffy new complex? If the place you're living is safe and reasonably comfortable, are the amenities worth the extra cash when that money could be working for you in other ways?

Get in the habit of interrogating all major expenditures, before you make them. If what you already have works, why is it so important to have the latest and hottest whatever-it-is? Are you upgrading because you truly want it and can afford it or because you're afraid what friends or family think?

Deferred gratification doesn't have to hurt. That new smartphone might be exponentially cooler because you anticipated its purchase for four month, then paid cash. Sticking with an affordable apartment means more dollars going toward long-term choices (or, heaven forbid, for short-term emergencies like a job loss).

Incidentally: Frugal people do go on vacation, or buy new cars. What they don't do is get those things by going into massive debt with no clear plan to pay it off. That's like sticking your head in a lion's mouth because after all, maybe it isn't hungry today. It probably is -- but you won't know until you feel the jaws clamp down.

More on MSN Money:

Aug 4, 2012 9:50PM

Well said!  You would think this is common sense, but when I look at how people I know manage their finances, I just inwardly roll my eyes.  I am not really sure who most folks think is going to finance their retirement while they are living paycheck-to-paycheck because of bad decisions.


Aug 5, 2012 10:05AM
Many middle class and former middle class people are now hanging by a financial thread BECAUSE they:
lost their job,
have a lower paying job(s),
lost a percentage of their household income,
or fear they may lose their job.
It all comes back to JOBS.

People aren't going to be able to spend normally again until they have secure, normal living wage JOBS.
Aug 5, 2012 10:15AM
Donna wrote:
"(or, heaven forbid, for short-term emergencies like a job loss).' - end quote.
Losing a JOB these days is not exactly a "short term" emergency. It can mean that your income is changed for worse for a LONG time.

Being in survival mode means you don't buy anything you don't NEED for survival. It's beyond frugal.

Aug 8, 2012 11:49AM

I think its also important to note that you should save even when in good times or better times.


Make proper familial choices. I think we all learned from the wall street folks that making 250K in annual salary today doesnt gaurantee a life time income of 250K a year. Watch enough CNN specials and you'll see that the big time banker and his wife and 3 kids are living with the grandparents while he is delivering pizza to make some form of money. Just an example.


No situation is perfect  and not everyone makes good decisions 100% of the time..but everyone should atleast try to be financially responsible. Save as much as you can.


I make 100K and before purchasing my apartment I lived in a low income neighborhood. Made sure not to have children and lived well within my means. Making  "a lot" of money doesnt mean you dont have a responsibility to be responsible and plan for tighter assured if you are not part of the 1% you WILL experience "down time" in your life. Brace for impact!

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Donna Freedman's Frugal Nation blog is for readers who want to live cheaply -- whether due to necessity or a lifestyle choice. It explores living sustainably and making life more meaningful at the same time.


Donna Freedman

Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.