The truth is somewhere in the middle . . .
Yes, unless you are Warren Buffet or Michael Jordan and have more money than you and your children could ever spend in two lifetimes, frugality WILL HELP you get ahead. Whether your personal goals include retiring early, putting your kids through college, or whatever . . . being conscious of your spending and putting money away each and every month WILL HELP. To say otherwise is to see yourself as a victim.
However, the Billfold guy's not entirely wrong when he says that people can make all the right decisions and still find themselves in trouble. I'm a teacher, and let me tell you what's happened to every teacher in my state over the last few years:
- We used to automatically get 2% more each year (that was the deal for which we signed on: You'll never make a big paycheck, but it'll be secure and you'll have a moderate pension at retirement), but for four years our pay was frozen. That's 8% I anticipated -- 8% I'll never get back. This affects my paycheck every month, and it will eventually affect my pension.
- While our pay was frozen, our health insurance increased -- every year. So every year for the last four years, I made progressively less money.
- The county /state removed some nice bonuses we used to get for meeting state testing scores. No, I don't teach well when a bonus is on the line and say, "Screw it" when there's nothing extra for me, but the state never once intimated that bonuses were based upon whether they had pots of money lying about.
- This year we were given a 1.2% increase . . . coupled with the biggest health insurance increase yet.
- Alhough it wasn't the fault of the school board, the Social Security "re-set" was another kick in the teeth.
So, the bottom line is that I am bringing home fewer dollars than I did five years ago: In fact, I am roughly 15% behind the salary I anticipated making at this age, AND my pension will be smaller than anticipated. AND because they've laid off some of the younger teachers, I am making less money to teach larger classes!
At the same time, my personal expenses have increased:
- My oldest child is now in college, and although I'm very happy to provide this opportunity for her, it is money out of our pocket.
- We have taken in an elderly relative who could no longer live on her own. This is the kind of decision one makes without regard to cost -- it's about family -- but our living expenses have increased.
You see why I say I do understand Billfold's point? As a teacher, I am middle-middle America . . . and these things genuinely are out of my control. I'm not saying this to be whiney -- I'm pointing out how these things happen, and they are genuinely beyond my control.
At the same time, I'm not saying, "Oh, no, what shall I do? Shall I buy groceries, or pay the electrical bill?" Because I have lived frugally all my adult life, and I have reserves upon which I can rely. We won't be sitting in the dark, eating nothing but beans any time soon. BUT I've had years of adult life and earning to prepare for this (meaning both I've had time to save, AND I've had time to learn how to live frugally -- you don't pick that up overnight). The person for whom I really feel sorry is the teacher across the hall from me -- she's a fifth year teacher, but she's still making first-year teacher salary. She works at the mall 3-4 evenings a week to make ends meet.
So, yeah, wastefulness IS part of the problem . . . but it isn't the whole kit and caboodle.