I've just read Thomas Stanley's latest book, 'Stop acting rich, and start living like a real millionaire'. Although it contained some interesting information, I didn't enjoy it as much as his other work. My intepretation of his views is that unless you are a 'glitteringly rich' person, there are really two options in terms of how you live. You can either consume mindlessly, for status related reasons, or you can be frugal. What I didn't think rang true about this was that people have different priorities, and perhaps some of their consumption habits are about appreciation of real and lasting quality in certain areas of their life, for which they are prepared to pay more, while they may be frugal in other things.
I wondered how Dr Stanley would categorise me, as I think my lifestyle is, like many people's, a mixture.
-I always pay off my credit card. have no debts apart from mortgage, save money regularly, and have always contributed fully to a pension
-I spend most evenings eating home-cooked meals and watching programmes recorded from television, or reading books - many of them from the local library
-I usually take a packed lunch to work
-If eating out, I often use vouchers when going to a pizza or pasta restaurant; otherwise I may well eat at a noodle bar for around £5 for a main meal
- I have very rarely spent more than £10 on a bottle of wine; I have recently started buying wine in bulk from Majestic.
-I buy cheap cleaning materials, tinned tomatoes, tissues and kitchen towel.
On the other hand,
-I have recently bought a new coat - written about at length here - at great expense. I bought this not for status, and in fact it does not have a recognisable label, but because it is a beautiful thing which I intend to wear for many years.
-When not eating at a chain Italian or noodle bar, I sometimes go to lovely restaurants or gastro pubs, and eat steak or venison pie.
-My last holiday was in a rented cottage in the Lake District... but I have spent a weekend in New York.
-I like buying some food at Waitrose as a treat.
I could go on. My point is essentially that I am concerned by a mentality which promotes frugality in every area of life. I absolutely agree with the view that there should be more to life than spending money, and many of the things I enjoy are free, or cost very little. However, there are experiences and possessions which can enhance life, and I would query an approach which would deny all of these to someone with reasonable financial stability. (This does not apply to anything bought on expensive credit, especially credit cards; I think elimination of such debt should always be a top priority.)
My preferred approach is to eliminate debt, establish some savings, and a pattern of saving, and to allow some luxuries, prioritising those areas where you feel that spending money will enhance your enjoyment of life, and spending less on things that do not matter to you as much. It is of course possible to minimise spending in all areas, but unless you are doing this with a specific goal in mind, or as a short-term solution, is that really going to lead to a happy life?
Podcast 13O: Seven Myths of Happiness.
1 hour ago