For Rich, or For Poor

Growing up, my mom subscribed to The Tightwad Gazette, three-hole-punched each issue and put it in a blue binder after pouring over it and taking notes. I still have this image of her sitting on her king size bed in our Reno house with that blue binder, late at night with the bedside reading light on. This money-saving newsletter was a regular in our house.
Amy Dacyczyn (you say it like the word "decision") started by just writing about her and her family's habits of good frugality and over the years grew to have a crew of writers and experts to help balance out her newsletter.
Her newsletter was written in the nineties, so the prices are outdated but the comparisons of prices are still pretty legit. When I moved out my mom gave me the complete Tightwad Gazette, and I use it regularly. Some of the articles don't apply to me, some are a little too extreme, but most are good solid advice on how to pinch every last penny.
I am going to paraphrase one of my favorite articles she wrote and I hope ya'll enjoy it.

WEALTH, POVERTY, AND FRUGALITY
I was 11 years old when I began to understand wealth.
Our family had just moved into our third home in my brief memory. It was a large, Cape-style house with outbildings on 74 acres. The homes I had known before were also large. Our family had a garden, drank either powdered milk or farm milk, took box lunches to school, ate oatmeal for breakfast, and wore secondhand clothes. For a brief time, I felt some discomfort about not having white go-go boots like some of my classmates. But then I noticed that kids who always had the latest, new clothes frequently lived in small houses. I conlcuded that people who lived in small houses had new clothes, and people who lived in big houses had secondhand clothes.
My simplistic view of the world had plenty of exceptions... But the general idea is true. People who put their suprlus money into short-term extravagances rarely build the same wealth as those who put their money in things with lasting value. 
Although I figured this out at 11 years of age, the majority of American adults don't understand this basic idea. We still think that frugality has to do with being "poor," and that wealth and frugality are mutually exclusive terms. Overcoming this misconception is crucial to achieving a successful frugal life. 
Amy goes on to describe a letter she received from a mother who couldn't bare the thought of sending her kids to school without their brand name "comfort food" and compared it to an article entitled "Why You're Not as Wealthy as You Should Be" by Thomas J. Stanley, Ph.D.
People who live an affluent lifestyle are seldom wealthy. Affluent-style people spend all of their money on extravagances and have nothing left over.
Wealth, on the other hand, is not how much you earn, it's how much you accumulate. Stanley discovered that the typical wealthy person lives in a middle-class house, marries once and stays married, owns a small factory, chain of stores, a service company, and lives his entire life in one town. His money is seldom inherited. Dr. Stanley estimated that 80 percent of American millionaires are first-generation rich. Instead, the wealthy person typically acquires money through hard work and self-discipline. And he is a compulsive saver and investor. It simply isn't his nature to spend money frivolously because it wouldn't be a good investment. 
...Referring to her wealthiest clients, she says, "You couldn't pick most of them out of a crowd."
This makes it clear how the confusion between affluence and wealth arises. We see the behaviors of affluent people, and this becomes our only clue as to how the "rich" behave. We don't see the behaviors of the truly wealthy. A goose-egg diamond ring stands out. A ten-year-old suit and a healthy bank balance don't.  
I am cutting a large amount of the article out here, mainly because I have to get to yoga sometime tonight...
The point isn't that big houses are better than little ones (actually, little ones are usually more frugal), or that used clothing is always better than new, or that no one should ever buy Twinkies. Neither do I mean to imply that we should all strive to be wealthy. And certainly, many poor people are frugal and many wealthy people aren't. 
What I do see is that many people are ashamed of being frugal. When we're  pressured to spend on gifts at the office, we have a hard time saying no. When our relatives snicker at our thoughtful homemade gifts, we feel bad. When our up-to-the-eyeballs-in-hock obnoxious neighbor picks on us for owning an ancient car, we cower in embarrassment.
Likewise, when dealing with coworkers, neighbors, and relatives, I've found that if you explain your financial goals and the choices you must make to reach them, people seem more understanding. Who could object to your desire to save mony to send you kid to college? 
To be successful and happy in the frugal lifestyle, we have to be proud and confident in our choices. We must have a clear view of our goals, and we must understand the trade-offs we're making. If we do this, we'll feel no shame about being frugal. Instead, we'll understand that we have a wealthy attitude.

The reason I love this article is because it expresses that penny-pinching shouldn't be just a temporary thing we try to do when we're "poor." It is a lifestyle that will pay for itself in tenfold. Michael and I are not rich by any means, and so our penny-pinching is a little less of a choice. But when Michael gets a "real" job someday (you know, the boring kind without all the manual labor) and we have "real" money to spend, I still plan on cutting coupons , mending clothes, and heaven forbid I give up yard sales. This is a lifestyle I have lived my whole life (thank you, mom), and it would be a shame if I didn't continue to live this way.