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The frugal life really baffles some people. How can anyone be satisfied, or even be happy, living with less? Recently we received the following e-mail, which posed a significant question that bears pondering:

On your web site you say, “America’s Cheapest Family and The HomeEconomiser Newsletter are dedicated to encouraging you to find creative ways to live within your means, avoid debt with a smile, and achieve goals you never dreamed possible.”

Aren’t dreams and goals things that are supposed to move you higher in life? So how can you get stuck on a budget that is tighter every year? Twenty-six years ago, $46,000 was a lot of money, but now it is nothing. It means that you are not moving forward; instead you are going backwards. I based my comment on all that I have read from you on the Internet. If I’m wrong, accept my apologies. Ruben

While Ruben poses a good question, he has numerous facts incorrect. Let’s get the facts right first, then we’ll delve into his question.

1) Just the facts   “I based my comment on all that I have read from you on the Internet.”

Basing any assumption or decision solely on what you’ve read from third parties talking about “other people” on either the Internet or any media outlet without checking with the original source is dangerous. You wouldn’t believe the number of times we’ve been misquoted by people who have interviewed us, watched an interview or read our book. According to various sources, we: have seven kids; have four kids; spend $350 each WEEK on groceries; have a row of four freezers lining our garage; are making gobs of money from our book; are taking advantage of frugal people by charging for our newsletter; and the list goes on and on. All of the previous statements are available on the Internet, and NONE of them is true.

2) The whole truth   “So how can you get stuck on a budget that is tighter every year? Twenty-six years ago $46,000 was a lot of money, but now it is nothing.”

The truth about our income is that in 1982, when we were first married, Steve was earning $6.50 per hour working as a paste-up artist at a printing company. Over the years, our income has changed. Some years it increased a little, other years it increased by leaps and bounds, still other years it dropped precipitously — that’s the nature of living on a base salary and commission in the graphics business. Since we started our own business, there have been years of fair income and years with less income. If we hadn’t learned to manage our expenses through the use of a budget and kept our overhead low by avoiding debt, we’d never be able to make it now. So Ruben is off base if he assumes that we were earning $46,000 in 1982 and our income has never changed.

To be honest, lots of producers and reporters want us to tell people how much we earn. If it were you, would you tell them? No! We don’t tell them for a couple of reasons. First, it’s really none of their business. Second, we may earn more than some people and less than others. If we earn more than you, then you might throw out our advice because of our “decadent” lifestyle. If you earn more than us, then our advice, once again, might be disregarded because you couldn’t possible live on what we do. So we’ve chosen to reveal only our average income over the past 26 years, which is about $44,000. By the way, according the U.S. Census Bureau, the median household income in the U.S. in 2008 was $50,233.

Reuben’s contention that $46,000 today is “nothing” all depends on what you do with the money. During our first radio interview in 2003, a woman called in and said that she earned $175,000 annually and spent every penny of it. Other people we know have lived on less than $30,000 and were able to save some of it. Who is better off? In our minds, it’s the person who doesn’t spend all he earns. What do you think? Is $30,000 with no debt and money in the bank “nothing,” or is it really “something”?

3) Going Backwards?   “It means that you are not moving forward, instead you are going backwards.”

Reuben asserts that earning more money means making progress, which is better. Ask the family in which one spouse works 70 hours or more each week and makes lots of money — but is seldom home. Ask the family in which both parents are gone most of the time because of demanding jobs and have no time with their kids — is the extra income worth it? When Steve left the graphics sales business working 20 miles from home, and took a job as a marketing director for a small electronics company 2 miles from home, we took a pay cut, but got an increase in family time. Did we go backwards or forwards? We were still able to put money into savings, and pay extra on our house — there just wasn’t a lot of extra. But we had more time together as a family, and Steve was able to lighten Annette’s load at home — and to us that was worth it.

The simplicity movement has encouraged many people to “chuck” the super-demanding, high-stress, 60-plus hours-per-week jobs, and downsize their lives. They move to smaller homes, eliminate unnecessary expenses and don’t need to work as many hours or earn as much. They choose to work at jobs that pay less but feed their passion. Or they volunteer their time to help others, learn new hobbies or just take life at a slower pace. Are they going “backwards”?

According to a 2007 report from the National Association of Home Builders, in 1970, the average new single-family home was 1,500 square feet; in 2005, that average home had grown to 2,434 square feet. This is an especially interesting comparison when you consider that the average household size has shrunk from 3.14 people in 1970 to 2.56 in 2007. Do we really need more space? Is having a larger house with a larger payment “progress”?

Maybe this “biggering and biggering” of our lifestyle isn’t really as rewarding as Madison Avenue and our representatives in Washington, D.C., want us to think. Is it worth our health, our families, and all of our time to continually work harder to maintain more and more stuff.?

No one on his deathbed has been heard to say, “I wish I’d spent more time at the office.” What is the benefit of earning more money just to buy more stuff? We once heard Dr. James Dobson say, “We buy stuff we don’t need with money we don’t have, to impress people we don’t even know.” Real life does not consist of stuff.

So, Ruben, maybe in your way of looking at things, we are going backwards. But if progress means earning more and buying more, and “biggering and biggering” our lives until we end up like most Americans — struggling with an increased debt burden and barely able to make ends meet — we’re in favor of being backwards.

Caption:
The average home square footage (left) versus average household size (right)