Monday, May 18, 2009

Saving money to spend more later?

Lately I've been wondering if the frugal lifestyle is really frugal at all.  We (frugal living folks) are saving as much money as we can, in part, by not spending money.  This saved money is hopefully earning interest or some rate of return.  This means, we all hope, that at some point in the future we will have more money.  Well, what do we do with money at some point?  We spend it or give it away.  So in the end are we not spending more money by being "Frugal"?  

For example,  let's say I have 100 bucks.  If I spend it today I will have 100 bucks to spend.  However, lets say I do what the so called experts suggest and put it in an saving account earning 3%.  After just three years I would have 109.27.  If I spend it in three years am I not spending 9.27 bucks more?  That hardly seems frugal or like saving money.

Thus, it seems like it's best to spend what you have now so in the end you spend less overall because that is what being frugal is all about.

what do you all think?