But so many other things really are choices. I see lots of my colleagues replacing their new cars every 3 years; mine is five years old, having replaced the car I previously owned for 12 (and they were a Hyundai and Subaru, respectively, even if I could afford a Mercedes). Having cable TV with all the movie and sports channels is very much a decision that anyone can pass by. How often and where you eat out makes a big difference in expenses. Clothes, shoes, jewelry, furniture, matching stainless steel appliances with wifi, ... the list goes on and on.
I am all for frugality but in many places it hasn’t worked out in the last 10 years because you haven’t had the same access to growth. Unless you already had assets in the first place.
Bringing vs buying could be an opportunity cost. I've worked in places that provided food perhaps a job change could help pay fof the lunch.
Being economical will save you money. At some point being too economical will mean you have to accept lower quality/value. There is a tradeoff.
If your parents were being economical they might not have purchased a computer in the 80s.. It was seen as an expensive toy and not purchasing one would have saved them thousands. Long term the opportunity cost would outweigh the purchase cost.
Buying a cheap kettle it might last 6 months paying a little more and you don't need to replace it for 5 years.
There is an old British saying. Penny wise / pound foolish.
It’s silly to say that not going to Hawaii for a week or not buying a $1000 handbag is going to cost you more money down the road...
Where is the opportunity cost in bringing your own lunch to work? Would he increase his chances of getting a better job if he stopped doing that in his current job?
The bringing a lunch eating alone vs eating with the group does matter. A lot of company information gets shared during lunches, friendships are made and sometimes you get to interact with people from other parts of the company. This does give you a leg up when promotions come and or layoffs.
Not going on vacation ever or not buying a purse doesn't seem like it would matter. It could if you are looking to join a social group where everyone goes and shares vacation photos or if the group goes purse hunting together.
The point is any path could save/cost you as long as it fits with your goals and your situation. Saving that college money instead of spending it and going could allow you to buy a home sooner but it also could limit your career growth. Everything is a tradeoff.
> Everything is a tradeoff.
Absolutely. You trade work against money and money against stuff. You could have more money and less stuff. Which means having less stuff now and more stuff (or less need to work) in the future. Because money and debt are tools to move consumption between the present and the future. That's the point. It's a choice and nobody is limiting your capacity to consume in the future by forcing you to consume today.
I think this is key. If you make $200K/yr, saving 1/10th that means you drive a lexus and not a benz. The Lexus is not worse than the Benz in any objective way; you paid less and got a car that is going to be more reliable and cost less when it does break. I mean, don't get me wrong, I like how the german cars drive, but you've gotta be really dedicated to own one out of warranty.
The problem is that sure, at a high income, you can usually save a lot of money by making sacrifices that are merely aesthetic, by buying goods that are objectively no worse (and sometimes objectively better) - but below a certain point, buying a cheaper good is going to get you something objectively worse; often something that will end up costing more in the long term. Downgrading from a 15 year old Toyota to a 25 year old ford is going to get you something that probably costs you more, in total, to operate, even though the initial purchase price will be lower.
I mean, I think the disagreement here is mostly at what level this happens.
Eating chicken today and saving so you can eat chicken in the future may be a better idea that eating prime rib and starving if you lose your income.
I'm assuming, from context, that the figure of merit for this discussion is having money in the future. Obviously, in the context of getting a reality tv show, a mansion in the Hamptons is "objectively" better than having a bunch of cash and a modest place to live, but we're talking about having money in the future here. Buying and living in a mansion is... usually not a great way to go about furthering that goal; I'd argue that living in a mansion, in the context of the goals we're talking about here, is objectively worse than living somewhere modest and putting the rest of the money you would have spent on the mansion in a low-cost index fund or something.
>Eating chicken today and saving so you can eat chicken in the future may be a better idea that eating prime rib and starving if you lose your income.
That's kinda my point? I mean, that if you can downgrade from beef to chicken (something that doesn't interfere with your current ability to earn money and does not incur future costs... something that will in fact lower future costs, as chicken is healthier than beef, and if you are poor, you are paying a lot more of your healthcare out of pocket than I am) sure, that's great. If your figure of merit is money in the future, eating chicken could be said to be objectively superior to eating beef.
When you aren't buying the absolute cheapest good available, you can usually find substitutes that are cheaper and impose fewer future costs, and sure, seeking those things out is great, and important to think about all up and down the income spectrum.
But there is nearly always a point at the bottom of the spectrum where there are no cheaper options that are actually cheaper long term - that don't impinge on your current ability to make money or impose big future costs.
If you don't have any place to cook, that dollar menu burger looks pretty good. If you can't get a regular loan and need a car for work, paying way too much for a low quality car at a 'buy here pay here' lot looks pretty good. Of course, both those things will cost you down the line, but what are you gonna do? you've gotta make it through today or there won't be a tomorrow to worry about at all.