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Wednesday, October 5, 2022

Does It Harm the Economy to Be Frugal?

I found this little fella tucked in amongst the beets when getting
 veggies for Tuesday's dinner. I dug him up and gave him his own pot.
 I have no idea how he got into the veggie bed. My plant "saucer"
is the bottom of a 1-gallon milk jug.

Is it wrong to just not spend money, or not very much money? Am I harming the economy by not eating out, not going to the movies, not buying knick-knacks or things for the home from retail stores? Where does my responsibility for helping to sustain the local economy begin when I'm trying to be responsible for my personal economy? Right now, my husband and I are saving for a new roof, a new car, and a major deck repair. We need to squirrel away every last cent to meet these needs of our own.

On our last credit card statement there were a total of 14 entries, 3 of which were charitable donations, 5 were utility/service payments, 3 were for the hardware store, 1 was for a prescription. That means that we only had 2 entries that I'd consider variable expenses (things we could reduce or forgo, if necessary), one a grocery store and the other a vitamin store. I did use cash to buy a gift for a friend at the farmer's market and I used gift cards to buy myself a burger, a charging cord for my laptop, and a new-to-me shirt at the thrift store. (For Christmas and my birthday, I suggest gift cards to my family members who want ideas on what to get me. These gift cards are my spending money.)

Our family's entertainment is usually free to us, movies and books from the library, homemade pizza nights, sitting around the fire ring on the patio, playing games, listening to free music, etc. We cook at home every day of the week. Travel is rare for us. Shopping at the mall is not one of my "hobbies". (Although, when I have a coupon for a freebie at the mall, I'll get the freebie.) Most of our spending is on necessities, like utilities, insurance, taxes, food, gas for the car (when it's our turn), car repairs, and home repairs.

Am I harming my local economy by not spending in discretionary categories locally? I ask because for the last couple of years I've heard other people say they're doing their part to keep local businesses open. I do agree that we need to keep brick and mortar small businesses open. Many experts say that small businesses are the lifeblood of the economy and the heart of the middle class. I wouldn't want to live in a community where the only stores left are big box stores. And I certainly wouldn't want to see any of my neighbors lose their livelihoods. Where does my responsibility lie? Have you thought about this in regards to your own financial situation? What have been your conclusions?

23 comments:

  1. Like you, I do think about this question since the assumption is consumerism supports our economy. True it does, but it is the reverse that I have a problem with: our economy does not monetize/support every endeavor that is necessary or worthwhile for individual health and happiness. Nor is money an indicator or motivator of what is good for us or for society. In fact if we all consumed less we'd have more time and money for what is truly important in our individual lives and our collective evolution as a human species. Our "personal economy" should be what matters most in my opinion and the rest takes care of its self. What is "good for the economy" shouldn't dictate personal choices. I have a bias against consumerism for its own sake, it is not healthy or good. I also don't think our economy distributes resources fairly, based on meaningful work. So as you can see, I'm not affected because I choose to save and not spend. We need new drivers for a healthier economy that is not based on waste.

    Sorry for the scattered thoughts but it's a bunch I've thought through the years,
    Laura

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    Replies
    1. Yes, Laura, I so agree with you! I think when I do spend it is important to think about where I'm spending those dollars. But, not spend just to support a business if I don't need the purchase. Laura, you are much more articulate than me...so I'll just say ditto.

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    2. Thank you, Lili, for asking such a thought-provoking question. Small business prices can be beyond our budget/ means. For example, I love to buy ice cream from the local shop, but it can cost up to $15 for 2 people, and the boba tea is $6 each. Besides, I'm not sure if I want to support the millionaire "small business" owners. For big stores, I limit my purchases and look regularly for ethical alternatives or buy used ones. Besides, you really don't know who's doing it right these days with all the greenwashing! Is Madewell or Lands End better than Kohls or Macy's? I don't know! I'm not sure if Jeff Bezos is any worse than the other ultra-wealthy owners- Walmart, Target, Safeway, Ikea, Trader Joe's, etc. They're all more or less the same- looking out for their pockets and I'd like to do the same.

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    3. Hi Laura,
      you make some really good points. I agree, to consume simply to consume isn't meaningful for the individual. You conveyed your thoughts very clearly, Laura.

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    4. Hi Farhana,
      I think you're right that we need to prioritize our needs, as well as be thoughtful in choosing purchases. Thank you for sharing your thoughts.

      Delete
  2. Laura, you worded that so much better than I could! I agree wholeheartedly!

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  3. Laura, you said exactly what I feel in my heart. I won't go out to eat to stimulate the economy, then develop medical issues from all the fast food I've eaten only to stimulate the medical and hospital bills needed to bring me back to health. No offense to anyone who works in these places but then I'd rather stay at home, grow what I can, prepare my own foods and save a ton of money. We did however go to Mackinac Island but ate out very little. We often ate food we brought along with us. We rode bikes and walked a lot on our short weekend away. A little economy stimulus but not a lot.
    Alice

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    Replies
    1. Ooh, Mackinac Island is so fun. I haven't been there in years but I'd like to go again. Did you get fudge? After all that biking, you need to boost your energy. :)

      My son is going to college in the Soo so we pass that area multiple times a year, but we aren't in "vacation" mode when we go by.

      Delete
    2. They say it's beautiful in the fall. The leaves were not yet turning color and it was chilly when we were there but it was refreshing. Yes, we bought fudge and gave most of it away. There still is a couple pieces left. You should go before the lake freezes so now is a good time yet before the ferry's close down for the season.

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    3. Hi Alice,
      Excellent point -- making choices that are beneficial to us and not harmful. No point stimulating the medical industry.
      Your trip to Mackinac Island sounds lovely.

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    4. Alice, we are heading that way the last weekend of the month. It always sounds like a good idea to visit my son more often, but then the reality of our schedule sets in. However, he is hoping to do an internship up there next summer, so maybe we can go then. I'm so glad that you were able to take a fun trip--you've had a lot on your plate recently and I think a mini vacation is a good antidote to stress. :)

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  4. I fully agree that the state of the economy shouldn't dictate our spending habits and that we shouldn't spend more just for the sake of it. We do try to spend locally according to our values, though: when we do get coffee out, most often choosing the small local place that knows me by name (and saves their coffee grounds for my compost), patronizing the small regional chain restaurant over the big chain for dates out, and buying local meat raised by someone with similar food values to us.

    In your example of saving for the roof, car, and deck repair, though, to me, you're just transferring that local spending to bigger purchases. It will still benefit the economy, but also your personal finances in that those purchases will hopefully save you money in the future as well, especially that new roof!

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    Replies
    1. Hi Cat,
      I agree -- I was thinking that when we do have the roof and deck redone, that money will go into the pockets of local contractors, feeding the economy in that way. And I agree, a new roof, especially, will save or make money in the long run (no leaks to damage interior or cause a mold issue or resale of house, should we choose that).

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  5. I'm not sure why Laura thinks her comments are scattered--they seem pretty organized to me! I also agree with Cat's comments about transferring your local spending to bigger purchases.

    I wonder if the business slowdowns from Covid pushed the trend to "support the economy"? During that time period, I saw a lot of news articles/blog posts dedicated to the idea of getting take-out meals regularly from a restaurant as a means of keeping the restaurants operating.

    Personally, I don't lose any sleep over someone else's perception of whether or not I am supporting the economy. Today I am taking my cat to the vet and am having my septic tank pumped. Both of these activities are supporting businesses in my community (and small ones, at that!). We tend to support smaller local businesses when, say, shopping for Christmas gifts or on the rare times that we eat out, but if the easiest and most logical thing to do is to use a big box store, then we do that, as well. For instance, I recently purchased a dress for my daughter's upcoming homecoming dance at Penney's. Clothing shopping in my area has become extremely limited as more and more stores have gone out of business and I am happy to support Penney's in the hopes that we won't lose that store, too. All to say .... it makes more sense to me to manage your own finances responsibly, and by doing that, you ARE supporting the economy. Also, I try to keep in mind that big box stores employ locals to work there (I know 2 young men working at our Lowes), and that's important, too.

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    Replies
    1. Hi Kris,
      Great point, that spending in a big box store also puts money into the local economy, through the paychecks for its employees. Thanks for the reminder.

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  6. I have thought about this from time to time. I’m guilty of usually shopping where I get the best value for my money, and let’s face it, small mom and pop stores typically don’t win. My town is nothing but small businesses, which means shopping local isn’t always easy. I do try to support them when it makes sense. We bought a couple new windows this spring and we bought them locally-didn’t even price them at a big box store. I agree with whoever said that even if you are shopping at the chain stores, those stores employee local people, so even shopping at Walmart is helping the local economy.
    As for saving vs spending, well our first responsibility is to ourselves. We are on a mission to just squirrel away as much cash as we can right now. My Dh will be retiring in the next 5 or 6 years and we want cash in the bank when he does that. When we got the first couple stimulus checks I did feel like it was important to put some of that into our local economy, so we spent some, donated some, and saved some. We aren’t saving for anything in particular, but it’s there if we need it. At some point we will be buying a new car for me with some of that money. That will make me sad. I haven’t taken money out of savings since my Dh bought his truck a year and a half ago lol.

    Diane

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    Replies
    1. Hi Diane,
      I, too, will shop at Dollar Tree, Walmart, or wherever to find a good deal. It's a balancing act. What I try to do is get great deals at some stores so I can afford to spend a bit more in other budget areas, like gifts (when I will sometimes/often shop at a small store or farmer's market). For some areas of spending, we automatically patronize a small business, such as car repairs.
      Another way to look at this is something Kris alluded to -- by being financially responsible, we aren't defaulting on credit/loans/payments and consequently costing everyone else more.

      Delete
  7. Here is where I am at:
    1. My finances come first.
    2. I try to use local service people and stores whenever possible. The local farmers market, hardware store and some independently owned stores in a neighboring town are shopped at often (even though they don’t always have the best prices but are convenient.)
    3. I shop at thrift stores a lot for various reasons.
    4. I choose larger businesses that practice fairly and employ locals. I also have friends and family that work for WM and live locally. So, by shopping there, they have a job and can use funds from that job to put into the economy.
    5. I don’t think it is really anyone else’s business what you are doing. Because until we get the Covid benefits under control I don’t think we can tackle the inflation. And at that point the economy should correct itself.
    Amy

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    Replies
    1. Hi Amy,
      Thank you for your thoughts. I see we're in agreement in many ways. And yes, I think we do need to take care of our own finances first.
      Thank you!

      Delete
  8. Do not worry, I am helping the economy.😂. My husband is retired and we usually go to lunch after food shopping on a Friday. We don't smoke or drink, go to the movies or any expensive restaurants. We did go to Myrtle beach for my nephews wedding in April and took a couple of days vacation coming home. We are not saving for any of those things you are and are ok money wise.

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    Replies
    1. Hi Cheryl,
      You made me laugh! Thank you for helping the economy on my behalf. I think there are times in life when we have more so we can spend more, and other times when we need to be more mindful of our spending. None of your spending sounds excessive to me at all. It sounds like you've found a balance in being careful with your money and enjoying what money can do for you.

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  9. Wow, I didn't think I conveyed myself adequately because I rambled some old beliefs that have been stuck in my head marinating for the last 50 years, since high school. Henry David Thoreau and Vance Packard were my heroes and influencers. My son told me that I should just be a hippie lol

    Laura

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    Replies
    1. Just channeling your inner-hippie, are you, Laura? Too funny!

      Delete

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