Actually, #CementTwitter Does Have A Point About Frugality
If you follow me on Twitter, you know that I love to make fun of a section of Twitter that is popularly called #CementTwitter. As you can see from the linked search results, many people do. But who is #CementTwitter? Well, these people have interesting take on our spending habits. They love to equate everything we buy to how many bags of cement we would buy instead. For example,
Why buy pizza, when you can use the same amount of money, to buy a bag of cement?
This attitude attracts certain questions:
What do I do with the bag of cement?
Do I carry it home then keep buying one every week and eventually use it to build a home?
What do I eat instead?
Does this mean I shouldn’t buy pizza until I have bought enough cement to buy my home? 😀
What about a phone? Surely, an iPhone is very many bags of cement.
What about buying clothes?
I think #CementTwitter has a point which is, delayed gratification and frugality. Delayed gratification is why few people get their personal finances in order. We want everything and we want it now. Where #CementTwitter gets it wrong is in the parallels they draw. They want us to give up all luxuries, which is not possible. Also, we should all want a house, which is not true. Rich looks different for all of us. What we all have in common is a desire for financial independence.
#CementTwitter is right that we should be careful what we pay a premium price for. In most items we use, there is differential pricing, and while sometimes a high price means high quality, often times, the high price actually means the “appearance of quality”.
Marketers get away with this because they know that, human beings love to impress others. Also, capitalism has taught us to measure value in terms of money spent. The more we pay for something, the more valuable we perceive it to be – as opposed to critically assessing the real value we derive from the things we have.
There are certain items I think we should not overspend on.
1. Functional items; By functional I mean day to day utility items. Things like washing detergent, toothpaste, bathing soap / shower gel, salt, sugar etc. There is a basic minimum quality below which we should not go of course. You do not want to brush your teeth with suspect quality toothpaste. However, I think going for premium brands for these items is not prudent use of money. Consider what the real benefit of a premium brand toothpaste is. If it claims to fix dental issues, it may be cheaper to see a dentist instead.
The difference in price for basic items adds up over time, so you are really spending a lot of money on items whose benefit is not apparent.
2. Things that bring us superficial joy; My definition of superficial joy is the kind of joy you only feel when you are measuring what you own against what others own – stuff you buy to either keep up or stay ahead of the crowd.
If you own something that is not bringing you joy by itself, or your joy diminishes when you realise that someone else has a newer/better/more expensive version of the item, then the joy is superficial. You are also wasting your money, because there always will be something newer to buy. You cannot keep up.
Try and derive your joy from other areas, where you do not have to spend money to keep up. Things that make your belly warm with happiness.
3. Upgrades that are unnecessary: Yes. I went there. We are constantly upgrading our possessions especially our cars, computers, phones etc. Most times, it is not because of real functional need that a new upgrade brings. The reason why is often connected with (2) above, or just the desire to own something a bit better than what we have.
Let us talk about phones especially. A few years back, each new version of a phone had significantly better functionality than the previous one. If I compare at my very old iPhone 4 to an iPhone 6 or 7, there are functional reasons why I would want an upgrade. However, between an iPhone 6 and a 7 there is very little functional improvement. Yes, one is faster, it probably has a better camera etc, but there is no new feature in the improved version. I feel we have hit a plateau, where phone technology is concerned. Your old(er) phone works as well as the new(er) version.
Is there a reason to upgrade your phone every year there is a new version?
Yes there is. If you are financially independent and the money is just lying there, why not? But most of us are not. I am not. We are trading off important personal finance investments, for the latest gadgets, which have little incremental functional benefit over what we currently have.
Until you are wealthy enough to live well without needing to work, frugality is a good principal to embrace. This does not mean never buying anything good. It means deciding on frugal strategies that have no real negative impact on your day to day life. Your life is not made worse by choosing a standard brand of soap or toothpaste, or by driving a fuel efficient car that is not showy for a couple of years until you hit your financial goals. Your life is not made worse by cancelling that gym subscription and opting for a home gym – it is the habit that counts. Your life is not made worse by cancelling that cable TV subscription and instead buying DVDs – waiting a few weeks for your favorite TV show will only hurt for the first week.
