The Rise of the Nouveau Frugalese Or, Why Those Cups of Coffee Won’t Amount to a Hill of Beans
My friend P. used to work at a local independent bookstore. She loved her work, but it didn’t really pay much and she eventually left for a better-paying job.*
This isn’t about the bookstore, or about her second job, but P.’s persistent lack of funds and the day she accidentally found herself at an Avon-run breast cancer seminar. You know the kind I mean: someone from Avon shows up with a video about donating to breast cancer research. P. hadn’t been expecting an Avon representative, since the event had been billed as an informal fundraiser at a colleague’s house. For about half an hour, the captive group watched as the video droned on about how donating to the pink ribbon campaign would contribute to breast cancer research. As far as P. could tell, it revealed little about any actual breast cancer research and was really more about feeling good about donating.
P. sipped the single cup of coffee she’d bought at Starbucks on the way and waited for the video to end. The lights came back on and the Avon representative talked about how to donate to the cause. She used Starbucks as an example, in a way we’re all familiar with: “Think about the Starbucks coffee all of you consume daily. Do the math! If every one of you gave up that daily second cup of Starbucks, why, that’s $200 a month! And that’s all we’re really asking you to give up for this cause: a cup of coffee a day!”
As P. put it to me afterwards, this bit of logic was the last straw: “I’d considered giving, maybe, $20 and here was this woman wanting $200? And, damn it, I didn’t have a lot to make myself happy with, so I was damned if I was going to give up my second cup of Starbucks!” P. turned the tables on Avon and the women around her by demanding to know why someone like her, already making very little, should be expected to give up the relatively large sum of $200 to a multi-million dollar corporation. I wasn’t there to hear her speak, but based on what I know of P., I know that her critique must have involved the hypocrisy of large corporations and a stinging analysis of the economic infrastructure that kept wages, especially those of female workers at independent bookstores, at an abysmally low level.
Her ire at being asked to give up a second cup of coffee reminds me of the all-pervasive discourse of frugality. It seems just a few short years ago when we were being encouraged to buy nothing but the best in Plasma television sets, regardless of whether we could get them to stay on our walls or of the quality of the image. Today, every morning show features a daily section on cutting corners, making meals for 6 under $10, and hunting for coupons. I actually don’t think that’s a bad thing, and the mainstream press’s discourse tends to ignore the fact that some of us, like, ahem, writers here at Queercents, have been writing about living frugally before it became fashionable everywhere else. And, of course, a lot of us have been frugal for a while – we just called it being poor. Or, to be more proper, since we deny the existence of the poor in the United States, we called it being part of the “struggling middle class.” **
But I’m intrigued by a new twist on frugality that’s been emerging recently. Today, frugality is not just a necessity for the poor but an accessory for the rich. The rich are different from you and me: They have more money.*** And now, the logic goes, you can, by eschewing that extra cup of coffee, become, if not like them, at least part of a new and separate category, the nouveau frugalese.
Take, for instance, this possibly apocryphal story about a millionaire named Anton in New York City, who borrowed $5000 for a trip from a bank and left his Ferrari as a security on the loan. The reason? On his return, he paid back the $5000 plus $15 interest. The former was obviously easy to repay, and the latter turned out to be the cheapest rate for parking his car while away on his trip. The web abounds with such tales of rich people’s frugality. Warren Buffett, we’re told, lives in the same house he bought decades ago and eschews toys (cars and planes, that is). That’s not in itself a bad thing, unless you sorta like having a lot of houses (given my inability to keep one place straight, I remain mystified by those who own many).
My issue here is with the way in which frugality vis-a-vis the rich becomes a way to pretend that frugality is all it takes to become rich. Think of the ubiquitous Suze Orman, wagging her finger and reminding us all of our foolish ways – she practically invented the a-coffee-a-day-keeps-the-wealth-away rationale. But Warren Buffet and the mysterious Anton didn’t make their money being frugal. They made it by doing stuff with stocks and shares and bonds that the rest of us mere mortals can only simulate as we play around with our 401-ks and worry about the market.
And besides, who says that saving $200 actually leads to much in the long term? In all this a-cup-a-day-adds-up-to-thousands-a-year talk, we’re ignoring the fact that, at least in the United States, saving in a bank doesn’t do you much good, given the piffling interest rates you earn. Unlike, say Japan, or much of Europe. When we’re told to be frugal, we’re also told to be the perfect neoliberals and invest in our future by buying up stocks and shares as part of the privatized model of economic sustenance that we’ve all bought into, no pun intended. In other words, the habit of frugality is not really about saving, and saving and frugality don’t guarantee us any comfort in our retirement if we haven’t spent a lot of money and time pondering about – or paying people to ponder about – our investments. All this frugality means nothing in a society where 50 million live without health care, and where a single stroke or accident could wipe out all your savings and investments — making your frugality amount to naught.
My friend J. may have put it best when she said: ” I don’t need frugality; I need a job, and health care, and rent money.”
And then, of course, there is the sheer pleasure of indulgence, denied by frugality. There are the dark thoughts that come at night, as I write this article, thoughts that put my status as a possible, someday member of the nouveau frugalese in jeopardy. It’s late, and I crave ice cream. Given my fondness for only the best kind, with no additives and only the finest ingredients (ah, the sad fate of the poor with good taste), I’m torn. Should I spend $6 of the $80 I have in the bank (nearly 5%) on ice cream, justifying it with a late-night walk to the grocery store? Or should I chomp on a lesser and, I suppose, healthier, Fuji apple, $2.99 for a bag of 8, and turn to bed smug in the knowledge that I’ve saved money and an artery or two?
You tell me.
*Parts of the anecdote in this piece may be fictionalised/composites of different events and conversations. Readers, especially those who might know the identity of P., are cautioned not to believe, for instance, that she actually said, ” I was damned…”
**See The Growing Clout of the Nouveau Poor, by Barbara Ehrenreich
***This is a condensed version of a possibly apocryphal conversation between Scott Fitzgerald and Ernest Hemingway that’s cited quite often as such. See, for instance, the opening chapter of Walter Benn Michaels’s The Trouble with Diversity: How We Learned to Love Identity and Ignore Inequality.
Yasmin: Awhile back, I wrote a post about how men and women think differently about money. One writer I quoted touched on the differences between male and female personal finance bloggers:
Learning how to make money will have a greater impact on our wealth than the latte factor.
Yasmin,
Great post! The puritanical zeal for a kind of superficial ‘frugality’ is really troubling.
As is the concurrent lack of a rise in REAL WAGES over the past 25 years (thanks, Reagan/Bush (we’ll see about Obama)!). And a lack of critical thinking about what infrastructural changes need to be made to create a sustainable system. Cutting the extra cup of joe won’t cut it.
I vote for the ice cream…the apple can be vice president.
Yasmin, you always manage to stir up the pot of controversy around here. I’m sure many readers will be asking you what’s wrong with wanting to make money?
Nina,
“The latte factor” – love it! I agree with you on the issue of female responses to money – we’re not even encouraged/conditioned to be aggressive about the simplest things like asking for good rates for our work, or asking for raises. It’s something I struggle with constantly as a freelancer, so I like the idea of financial aggression.
Jennifer,
Glad you pointed out the connection between the lack of a rise in real wages and the call for frugality. And I’m SO glad you voted for the ice cream – I’m off now to get some!
omg kathie b. was just talking about that new häagen dazs “five” ice cream, the one that only has 5 ingreds in it, and how the ginger kind is AMAZING. i cannot stop daydreaming of how it must taste. (this is an ice cream forum, right?)
Serena,
Ha, you’re right:-). And, actually, nothing at all. In fact, I WANT to make money, lots of it, seriously. But I also think that making money has to do with being aggressive about what you’re worth (speaking as a freelancer!), about being in jobs that pay you what you’re worth, and about being able to pursue your work unencumbered by worries about the basics like health care. So many people are stuck in jobs they dislike because they’re terrified of losing health care. And, increasingly, people are putting up with bad work conditions for the same reason.
I think, ideally, we could all make a lot more money (and that might include investments and such) if we were more secure about the basics. And I also think we need to be able to make money – and keep it – without depending solely on the kind of privatised investment schemes that powers that be want us to pursue. But, instead, we’ve instead a steady devaluation of work in favour of an overvaluation of privatised finances.
For instance, teachers ought to be able to make a minimum of $60,000 or more, given the amount of work they do. And excellent benefits and vacation time. Instead, they’re seeing their salaries cut and they’re praised only when they reach into their pockets to buy basics like writing supplies for their students.
My big concern about the notion of frugality making you rich is it won’t get you anywhere if your turn could turn upside down with a single stroke of bad luck.
Pam,
Yes it is (delicious) and it can definitely be an ice cream forum 🙂
Yasmin,
I agree and I disagree.
I agree that frugality is something the rich are putting on to seem with the times, just as “economizing” was a game to the wealthy in the 30s. (And not just rich individuals – have you seen the ads that luxury automobile companies are putting out trying to brand their cars as a good investment?)
I agree that unless you can make rent, have health insurance and buy groceries — that is, unless you’re already over the poverty line — frugality doesn’t matter. Frugality can’t help being _totally broke_.
But I don’t agree that Warren Buffett is doing something extraordinary. His advice has always been boring and practical: buy index funds and hold them forever; buy stocks of companies who are doing something useful and needed; don’t buy gold because gold _doesn’t do anything_. And Warren Buffett is frugal, too — he lives in the same small house he’s lived in for decades, drives the same crappy car. We can all do what he does.
Furthermore, I disagree with your idea that saving $200 or a couple thousand in the bank doesn’t matter. Having an emergency fund has saved my ass many times, and kept me from digging myself into huge debt, and I’m grateful I put it together. Sure, the main bulk of our nest eggs shouldn’t be in a bank account, but having a thousand or so there in liquid cash is a good idea.
I also disagree that saving $200 a month won’t make you rich! It just needs to go into index funds, not a savings account.
Lastly, by the way, Suze Orman agrees with you about the coffee thing. In her book, “The Money Book For The Young, Fabulous, and Broke”, she is explicit and vocal about having that latte, goddamnit, if that’s something that gives you pleasure. The person who came up with the “don’t buy the coffee and bank the money” idea — the person who trademarked the phrase “the latte factor” — is David Bach, not Suze. And even he wasn’t trying to penalize anyone — his point was that we should spend consciously.
As far as I’m concerned, that’s the whole point of being frugal in the first place — making sure your money goes to things that matter to you and bring you happiness, not things you buy because it’s habit or you ran out of time.
But yes, a living wage has to come first.
Rachel,
Thanks for your points. As for Orman herself, I’m going by what I’ve seen of her philosophy on Oprah and the simulation of such talk elsewhere, so I’ll be sure to check out all her work for more. And I don’t actually know David Bach’s work, so I’ll check him out as well.
But my criticism of Orman and others like her for the “latte factor” and other points stands on another ground: they don’t emphasise the problem with a system that won’t give most people a living wage to start with and keep encouraging people to turn into investors by emphasizing the privatized model of investment, and that’s where my critique emerges from.
You’re right about Warren Buffett’s living habits, from everything I’ve gleaned. My citing of him doesn’t dispute that he might well be as frugal as is claimed, but is pointing out that it’s not all he does. And this latest swirl of “frugality will make you rich” discourse tends to ignore the nitty-gritty of the investment work that goes on behind the scenes.
We shouldn’t have to worry about index funds but should, instead, if we’d like to be comfortably off, be able to live well on our salaries and pensions. If someone would like to make a lot of money and be super-rich by investing, that’s another matter altogether.
The problem today is that just being comfortable in the basics means having to invest and then watch your investments. As we’ve seen in the past couple of years, that’s been disastrous for millions of us. I, for one, have no problem demanding that the government take responsibility for ensuring that those who would like to live comfortably without turning into mini-Warren Buffetts should be able to do so.
I completely agree with you about needing a nest egg and don’t discourage anyone from creating that. But I was also speaking from my own experience, where living from tiny check to tiny check makes it nigh impossible to create one in the first place.
This is so important, and so true. As someone who works the ups and downs of service industries–my job where I make 6.50 an hour recently cut my hours in half–mentioning the quote from your friend J really rang true to me: “I don’t need frugality; I need a job, and health care, and rent money.”
I don’t need frugality. That won’t make me rich. I can’t save enough to open a 401k because I only have enough money to pay my rent, my bus pass, and my food, period. My cup of coffee (that I make at work, or at home) gets me through the day.
What I need is the assurance that if I break my leg riding my bike to work, I won’t go into massive amounts of debt. Or a job that is full-time and even marginally more salaried than the one I have, but with reliable hours.
What we need is a living wage, most of all. All of us, everywhere, deserve the right to have a good financial standing. This is particularly true to folks in the queer community who are often shut out of better paying jobs, or face the challenge of hiding their identity or possibly being punished fiscally for it.
Hmmm… an “economic infrastructure that kept wages, especially those of female workers at independent bookstores, at an abysmally low level.” Especially female workers at hipster independent bookstores? Somehow I think our economy has bigger problems, and better examples of want and suffering, than that. Pulling out this anecdote makes your whole argument feel a little insular, like what matters most here is not economic justice, but the indignation of your personal friends. Let’s make this about more than your friend P, irritated at the Pink Ribbon campaign. And if you want a great takedown of THAT issue, check out Barbara Ehrenreich’s “Welcome to Cancerland”: Here it is: http://bcaction.org/index.php?page=welcome-to-cancerland-2.
Jessica,
You’re not clear on what your issue with people like P. might be, but you seem to assume that the issues facing female workers at independent bookstores simply don’t count. I’m not sure why you assume that this was a “hipster” store, or why it being a “hipster” store makes worker’s rights less relevant, but those are your issues, not mine.
And my sentence: “Her ire at being asked to give up a second cup of coffee reminds me of the all-pervasive discourse of frugality.” is key. This wasn’t meant to be an analysis of issues facing all workers, just in case you missed that. Anyone who goes beyond the first couple of paragraphs can see that it’s a critique of the discourse of frugality, not an analysis of the conditions facing workers everywhere.
I’m sure readers are grateful for your link to the Ehrenreich’s piece.