“I moved to a country where I have to pay for healthcare and I’m too tightfisted to do so, so I haven’t been to the doctor or dentist since I came here.” – Redditor bragging about his frugality

There’s a stupid phenomenon where people discover that you can live overseas cheaply and they quit their jobs to fly to Thailand. I used to only see this online, but recently I’ve noticed it being documented in the mainstream media. While I was eating lunch the other day I turned on the television. There was some show about living abroad. The couple who were being featured were talking about how they had saved up $20,000, moved to Colombia, and were now planning to learn how to make artisan jewelry to sell at a local market.

This is one of the dumbest ideas ever.

First off, I’ll address the obvious. Everyone in the third world is an artisan jewelry maker. When I was on a bus in Central America there was at least one person at every stop who would board the bus and try selling necklaces and bracelets. To call the market over saturated would be an understatement.

Secondly, making your whole financial strategy revolve around not spending money is a very bad idea.

The case against saving money

While I’m all for the conservation of money, I think it’s stupid to cut your spending back to the point that it’s actually detrimental to you. Eating Ramen Noodles three times a day, living in a tent, or only showering twice a week aren’t going to help you in the long run. With the time that you spend trying to cut corners you could be making actual money.

If you make $50,000 a year and spend 100% of your free time trying to preserve it, you’ll still never have more than $50,000. Even after repurposing a potato sack into dress pants and riding your bike 90 minutes to work, you still won’t have made more than your $50,000. You’d be better off spending a reasonable amount of money while putting your energies into starting side hustles.

A man who makes $50,000, lives within his means, and puts his focus on generating more money can still attend happy hours, go on dates, and take vacations. If our figurative character earns $50,000 and saves 30%, he’ll end up with $15,000 in savings. If he invests a few hours a night on a side hustle he could easily make an extra $1,500 a month, that’s basically $50 a day. Saving all his side money will net him $18,000 a year. Combine with his $15,000 he’ll have saved up $33,000 in one year. He still got to buy clothes, live in a decent apartment, and go out.

A frugal man who’s obsessed with not spending will dedicate his time to studying charts, breaking down his budget, cutting coupons, and eliminating amenities. If he makes $50,000 and moves into an RV, rides a bicycle, refuses to go out, and eats peanut butter and jelly sandwiches three times a day he might be able to save 60% of his income. At the end of the year he will have saved $30,000. The guy who spent money on “unnecessary” expenses like a gym membership and occasional concert will have actually saved more money than him.

Where is my expertise

Around this time last year I was the frugal guy. While I wasn’t extreme about it, I did place too much focus on saving money. I’d put way more time into finding ways not to pay for things than I would figuring out how to earn money. At the end of the month I’d get depressed because of all the opportunities I’d missed out on. To add insult to injury my bank balance would never have even increased by much.

Once I changed my mindset and started focusing on making money, my quality of life and savings account both skyrocketed. In the month of October I rarely showed up for work, went on three vacations, and still managed to double the balance in my savings account.

Right now I’m reading a great book called Bachelor Pad Economics. In it the author brings up a very interesting point, time is the only resource that matters. The richest man in the world has the same life expectancy as a janitor. This means that how you spend your time is actually more important than money itself.

You can make back what you spend on your gym membership, or your night out, or your new video game. You can never get back the time that you spent being miserable sitting in a one room shack and eating baked beans because it would save you $1,000 a year.

P.S. I left taxes out of my calculation because they vary from location to location.

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