5 Reasons the Frugal Fare Well in a Recession

5 Reasons the Frugal Fare Well in a Recession

Ever since the 2008 recession, I’ve heard rumblings of another economic downturn, coming soon. While experts pontificate on when and how it will happen, those of us who have lived a life of consistent frugality are preparing in a little different manner.

If you are concerned or just want to throw up your hands in confusion, then stick with me. I’m going to bring clarity and give you a solid game plan for dealing with the future.

(Note: Posts on Under the Median contain affiliate links. If you make a purchase through one of these links, I will receive a small commission at no additional charge to you. Thank you. You may read more about our affiliate policies here.)

I was actually inspired to write this post not only because it’s timely, but because I was reminded of a book which I read a few years ago, “The Cheapskate Next Door” by Jeff Yaeger. It’s a fantastically funny and well-written look at those of us who deliberately choose to live beneath our means.

In the book he says, that economic downturns don’t affect the frugal much because we just add another cup of water to the soup pot and keep right on going.

You see, frugal people have developed a specific set of skills, which will actually allow us to make changes more quickly than those who have never carefully counted their nickels and dimes.

Here’s a look at five of them.

1. The Frugal Know the Importance of Consciously Consuming Media

Image by Thomas Ulrich from Pixabay

Media includes a multitude of sources: radio, television, social media, advertisements, news stories, or commentaries.

The thrifty are great at ignoring the trends, lifestyle, and advice of the general public. That’s how we became frugal – by not following along with what advertisers and the media tell us to do. The media loves a great story and they carefully craft headlines that will get readers and viewers.  

You can learn this frugal skill.

  • When reading anything on social media, fact check it before you panic. Go back to the original source – be that a study, speech, book, or video. Read or watch it in context before you freak out. While you’re at it, carefully evaluate your sources of information and insure that they are reputable and sound.
  • Unplug from social media for a while. Even my grown sons periodically do this when they simply need a break from the daily pressure to keep up with all the messages, photos, and comments. Just a few days is enough to remind you that life is about more than checking your status. You’ll also become aware of how many advertisements are flashing in front of your eyes on a daily basis.
  • Unsubscribe from companies that are not adding value to your life, but instead just trying to sell you a product.
  • Keep a list of low (or no) cost ways that you can enjoy life without spending a dime. You’d be amazed at how much fun you can have, while spending very little money.

2. The Frugal Know the Importance of Counting Nickels and Dimes

Image by mnplatypus from Pixabay

While many people feel “stuck”, looking at their budget as a series of fixed amounts, we know that nickels and dimes add up to dollars. We are experts at seeing ways to cut monthly expenses in order to make headway on our financial goals or, perhaps in the case of a recession, make those scarce dollars go further.

We understand the vital importance looking at expenditures with a laser-sharp eye to discern the absolute best deal. We get the best value out of our resources. This comes down to asking ourselves a series of questions before making any purchase.

They are as elementary as:

  • Do I need 1 pencil or 5 pencils?
  • Is it less expensive per pencil to buy 5?
  • How soon am I going to need 5 pencils?
  • If I’m not going to need a second pencil anytime soon, then maybe it’s better not to buy one at all.

We’ve had a lot of experience in making the most of what we choose to own, carefully calculating our use of each dollar and not wasting dime.

We buy in bulk, cook from scratch, and know which ingredients will keep our family full, while providing the best nutrition.

You can learn this frugal skill.

  • Get a budget. You can’t make headway on financial goals until you know where your money is going each month. The first step in reaching financial freedom is creating and living on a written budget every month.
  • Get acquainted with your local thrift stores. Know how and when to shop. You can find name brand merchandise for pennies on the dollar. Sometimes you have to watch and wait, but if you will embrace delayed gratification, you can dress and decorate like a queen on a pauper’s budget.
  • Practice shopping grocery store sales and planning your weekly menu around those sales. This is seriously the the easiest way to cut your grocery expenses down to size – and you can do it in a hurry!

3. The Frugal Know the Importance of Calculating the Long-term Cost of Purchases

We know how to look at a purchase and immediately ask ourselves how spending that hard-earned cash will impact our future goals. More often than not, this alone will keep us from buying items that we simply don’t need.

Frugal people view the whole economy through the lens of our own, personal financial goals. The difference between a want and a need is vital to us. But, more importantly, we see every single purchase as an opportunity to either make headway or as something that will impede our progress toward hitting those targets.

You can learn this frugal skill.

  • Create a list of short, medium, and long-term goals. You can’t hit a target if you don’t know what you are aiming at. Think into the future (retirement is probably closer than you think in terms of when and how you should be investing). If you have a partner, be sure you discuss the list with them and include them in the decision-making.
  • Get accustomed to questioning every purchase. Before you push that “order” button, you need to carefully consider whether it is a “want” or a “need”. We find wisdom in the book of Proverbs, which tells us, “The little foxes spoil the vines”. It’s not the large purchases which create chaos, it’s a combination of every single small expense.
  • Flex your frugal muscles. Tell yourself “no” a few times. After a while, it won’t seem so strange – in fact, it will feel downright good. You need to exchange that “high” you get from spending money for the new “high” of saving money. Yes, saving money can be downright fun!

4. The Frugal Know the Importance of Pursuing Goals

My husband and I have tackled a lot of goals in over three decades of marriage. The largest two were paying off our first mortgage in five years and saving to pay cash for our current home.

In order to make these dreams a reality, we had to keep our eyes (and our wallets) firmly fixed on the prize. We had to take up delayed gratification again and again, carefully count the cost of every penny we spent, and employ teamwork on a daily basis.

To this day, we live on a written budget and (unapologetically) refuse to jump on the newest bandwagon of “gotta have it”. We have a list of goals, which we revise and update regularly.

Every January, we plan our financial blueprint for the upcoming twelve months. When you know what you are aiming at, it’s easier to stay on track.

We still track every penny and know exactly where we are in regard to meeting our goals. We create charts, graphs, spread sheets, and incentives to encourage us to keep moving forward.

You can learn this frugal skill.

  • Plan your BBB (Bare Bones Budget) now. This budget covers your “4 walls” – food, clothing, shelter, and transportation). In fact, if you are in debt, try sticking to your bare bones budget. You’ll soon find that you actually can live on less and that there are areas of your budget that can be cut or trimmed.
  • Keep a your goals in front of your face. Every year, my husband and I create a portfolio of vital documents: a budget, our net worth statement, our list of short, medium, and long-term goals, and more.
  • Get an accountability partner. We function better when we know that others are counting on us, watching over us, and rooting for us. If you are married, you and your spouse are on the same team. If you are single, the find someone you can trust and allow them to walk alongside you.

5. The Frugal Know the Importance of Continuing to Create Wealth

Recessions don’t last forever – They only seem like it at the time.

The frugal have devised a plan of action, which includes the assumption that hard times will come – and go. We understand that investments are best approached from a “slow and steady” perspective.

The frugal often have several streams of income. We respect the importance of not “putting our eggs in 1 basket” – mainly because we respect and intimately know the size of our basket.

You can learn this frugal skill.

  • Don’t panic. This includes not going out and buying case lots of toilet paper and hand sanitizer (unless there’s some reason you already need to do this on a regular basis.) The panic button is the first one that people reach for in a time of crisis. There is wisdom to the proverb, “cooler heads will prevail”.
  • If you have been working with a financial planner, continue on the course that you have set for yourself. If you have placed trust in this man or woman as a partner in preparing for the future, now is not the time to cut them out of the equation. Have their number on speed dial, if you must. But, don’t leave them in the dust as you set a new world land record for fleeing from the market.
  • Update your resume. You may not lose your job. However, the hard truth is, there is a greater chance that you will do so during a recession. So, go ahead, grab that resume, dust it off, type it up, and have it ready.
  • Network with colleagues. If you are laid off, your best chance of finding a new position quickly is networking. Be sure you maintain a healthy attitude, good work ethic, and a sterling reputation at your current position.
  • Hone skills associated with your hobbies. That thing you love doing on weekends could provide you valuable income. You could even use those skills now to create a side-business.
  • Know who you can rely on for help. When you trade fixing someone’s fence in return for them unclogging that pesky kitchen sink drain, you are engaging in the age-old system known as bartering. This whole concept becomes hugely popular when times are tough. Before you pay to get a task done, consider asking for help from your relatives, friends, neighbors, or fellow parishioners.

Your turn!

What skills do you think the thrifty possess? Leave your thoughts in the comments.

Don’t miss anything! Subscribe and Like Under the Median.

Leave a Comment