How frugal should you be?

Amal Chatterjee
8 min readJan 16, 2018


Source : Google photo

Synopsis: The value of frugality is discussed here that has shaped many nations after the last war but the concept of borrowing money to spend and not saving to meet the needs is sweeping the world with devastating impact on the lives of people who default.

In the daily struggle of life, one thing that everybody has to deal with is the mounting cost of living everywhere. People with fixed income worry more than those with unlimited resources so the 97% of the humanity has this pressing problem of how to deal with the limited income and still meet all the needs that the life demands.

The moment a child is born, the spending meter starts running and chalks up enormous bills before the child even leaves the hospital. One fellow smugly answered that it costs an average of USD 30000. 00 to have a child born in a hospital in the United States but the meter keeps running at full speed and chalks up over 250000 dollars to raise a child and put him through college. This figure is multiplied by the number of children a couple has or plans to have.

I have heard of horrible stories where a pregnant woman was denied hospital care because she did not have the medical insurance so she had to give birth in a parking lot in front of the hospital. This happens in a so called developed country like the United States of America. This is not an isolated case.

In other countries they offer better and wider health care coverage to everyone irrespective of income like in Cuba and some Scandinavian countries that the capitalistic countries denigrate as socialism and welfare state that goes against their money making and dehumanizing monetary system.

The average fixed income earner therefore has to contend with the enormous cost of living in most countries and figure out ways to make both ends meet at the end of the month. Most people in this world do not have reserves to fall back on in case of an emergency like accident or serious illness that require tremendous expenses so they are forced to buy insurance to cover those needs.

But what if you do not have the means to pay for the insurance because you live from hand to mouth and barely manage to pay for the most basic needs somehow by eating very poor quality food and living in slums? What if you live a precarious life only one step away from disaster and do not or cannot plan for your future?

The one country I admire most is Japan that was devastated by the last world war and where they had to rebuild their country from the ground up with very limited resources. One can only see the photos of Nagasaki and Hiroshima after the atom bomb but the whole country was devastated by the war that brought the country to its knees.

The same thing happened to Germany that was once a proud nation of art, culture and technology that the Germans were proud of. The carpet bombing of Berlin, Dresden and Cologne laid the whole cities waste that had to be rebuilt from scratch but both Japan and Germany did a splendid job of rebuilding their country. There is hardly any trace left of the destruction they suffered and the high price they paid in lives lost except in some cemeteries that very few visit and remember.

So what does it take a nation to rebuild itself after the war? Is sheer determination and moral strength enough or do they require something more? Is this a coincidence that people of China, Japan, Germany and Korea are noted for their frugality and sound money management skills? This frugality was born out of sheer necessity and a tremendous pride in their self-preservation. Borrowing money was considered shameful and degrading so they saved every penny they could to pay for the rainy days.

The Japanese government often borrows money from the private savings of common people to pay for the development of the country; such is the size of their private savings that is the envy of the world. We will not go into the reasons for the war that nations fight but rather focus on the reconstruction of the country after the war.

Filipinos also suffered a great deal during the war and were very hard pressed to find ways to survive when everything especially food was in short supply. The older generations that fought the war and survived are still very reluctant to speak about their sufferings and what they had to do to find food daily so they keep the next generation in ignorance the same way the Japanese, the Germans and the Koreans do not like to talk about their sufferings.

India is another country where people are proud and try very hard to live within their means and where almost everybody saves a part of what they earn. People save for the dowry they have to pay someday for their daughter’s weddings and pay for the education of their children. They save for the house they would one day like to build and they save for the retirement when the income goes down and the costs go up.

In our family the rule was that our parents paid for everything needed by cash because credit was a dirty word and something very shameful so they did not buy anything they could not pay for. We did not have fancy toys or new bicycles or gadgets because that was not the priority. The priority was to learn to live within our limited means and live with dignity. Believe it or not, this is still the practice in most families although the plastic credit cards and debit cards have started to be used by some.

It is nearly impossible to get a bank loan to build a house or buy a car or do anything because the banks ask for a collateral that protects their loan so they sit with trillions in cash and very few people to loan it to because people still shy away from credit because of its social stigma. It was the same in war devastated countries like Japan and still they managed to rebuild their country to make it a world economic power. They did it with their savings and still do.

Then came the credit cards. You can get anything by using your credit card. You want a house, a car, a TV, a wardrobe full of dresses, a vacation or anything else? It is easy. Just get a credit card and pay for it later with a high interest rate. If you default in your payment then the car, the house and anything else is taken away and you end up paying for the legal fees plus all other charges or go to jail. In some countries they insist that you have a credit card before you can rent a car or buy a house. The gas station attendant will not accept cash for the gasoline he sells after 5 pm so you must have a credit card.

They say that more people use credit , the more the economy grows but the economists will also tell you that such economies also tend to collapse like sand castles that have no solid foundation. You can live an artificial life on credit and pretend that you have a good standard of living but the bills keep piling up and soon you find yourself painted into a corner with no easy way out.

So what is the solution? Some people equate frugality with cheapskates but this is very misleading. A frugal person is wise and a very determined person who values his self-respect. He is also a proud person who is not under any obligation to anyone because no one bothers him with unpaid bills. He lives simply and makes sure that a part of his earning is saved every month. He knows how to manage his money and live within his means. He teaches his children also to be frugal and always save for the rainy days.

As a country grows and develops, people tend to get to earn more and get the benefit of employment and more disposable income so the younger generation forgets or ignores the frugality of their parents that made it possible for them to get the education and jobs later on. With more income, a reverse psychology kicks in and makes people say that we were poor and did not have the things we wanted but now we have more money so we will not be deprived and will not deprive our children.

I think the word deprivation comes at the cost of misunderstanding that living within your means and keeping your dignity is a difficult task that your parents performed admirably that collectively helped the country grow like Japan and China.

So frugality is not deprivation but a way to cope with the expenses that the older generation practiced and survived. A friend of mine noted that our parents enjoyed a better and higher quality of life because they lived in their house they built with cash and ate from metal utensils a better quality of fresh food than the present generation that worries about how to pay for the mortgages. They also have little savings because all they earn goes to pay for the car they can’t afford and 60 inch HDTV they can’t pay for in cash. People have gone from using high quality metal plates to stainless steel to china to plastic cups and plates to Styrofoam in just one generation not to mention the poor quality of food so how the quality of life has increased? You tell me.

In some countries the employer pays the salary to an employee every two weeks instead of the end of the month because people are such poor managers of their money. We avoid going to Malls here in the Philippines at the start or the middle of the month when people get paid and rush to the Malls to splurge on things they can’t afford. You will never see so many pawnshops in any country like here. Every street corner has them where you can see people lining up to pawn their things so that they can get some money because they find themselves in dire needs and can’t manage their income so they borrow or pawn.

Once I saw a row of almost new cars parked in front of a bank here so I asked what these cars are for. The manager said that these cars are repossessed and are available for sale at a less than new price because they are slightly used. Why would any person get a car on credit that he knows he can’t pay for and one day will be taken away and his deposit money forfeited? It is because of false sense of ego and the tendency to show off that they are better off than they actually are.

But a sound money management in any family depends on a sound agreement between the spouses who jointly manage their income and do it wisely. Such couples are honest, hardworking and do not believe in self-aggrandizing ego because they are humble people. They also do not have bad habits like smoking, drinking, gambling and taking risks with the well-being of the family at the cost of jeopardizing the safety and welfare of the children. They also are good planners and save for the future of the children so that someday they can be sent to good universities to get quality education that may later lead to good jobs.

They save for the marriages of their daughters and save for their own medical care in the old age because they do not want to become dependent on their children to take care of them when they are old and sick. Such people have tremendous self-respect and go to their graves with their head high because they lived a frugal life that made them take care of their family the best way they knew how. To call them cheapskates is a gross misunderstanding of the word frugal.

So ask yourself how frugal should you be.



Amal Chatterjee

I am the village bard who loves to share his stories.