I had a unique New Year’s resolution this year for a frugal financial blogger. While many people vow to get their spending under control, create budgets, or start investing (all very noble goals), I thought I could try something new. After living extremely frugally for years, I wanted to try something totally different: spending more.
My goal this year was to fight my natural frugal instincts and embrace the urge to splurge. In fact, I wrote an entire post about this in February that I apparently forgot to finish and publish. Oops! However, it’s never too late to reflect on the goals you made and how you did, so after a year practicing anti-frugality, I thought I’d give an update to how it’s been going this year.
The Original Anti-Frugality Experiment: Treat Yourself
Here was the original goal I wrote in the post I forgot to share:
In terms of my possessions, I’ve always been a step behind. My phone is 5 years old. My MacBook Air is from 2012. I buy used, refurbished, or not at all. I haven’t minded this at all. I’m proud of making conscious decisions about spending, but I’ve always struggled to spend money on myself.
This year I want to try and change that.
Here’s the deal: 2020 was a rough year. Yes, it was a rough year for everybody with a rampaging pandemic. Add cross-country moves and a relationship rupture, and I’m feeling displaced and off-kilter. I’ve never been someone who spends to soothe, but I’m determined to treat myself well this year. And sometimes ‘treat yoself’ entails spending money.
I then created three categories of spending I wanted to improve: making my home cozy and comfortable, giving generously, and taking care of myself.
Goal 1: Build a Nest and Live Alone
My first goal was all about improving my overall living situation by living alone. Here’s what I wrote at the beginning of the year:
I love all (okay, most) of my past roommates. My best friendships have blossomed after living with some amazing people over the years. However, there’s something to be said for living in your very own space. The longest I’ve ever lived alone was for 6 months in the UK, and it was glorious. I didn’t have to contend with others’ dirty dishes left in the sink, or worrying about my own mess I distractedly left behind. I’m now on the hunt for a new apartment, and even though the sticker shock of living alone is high, I think the value of having my own space will be worth it.
Then, once I have my own space, I plan on filling it with plants, cosy blankets, and bright lamps. It will likely be small, so I’m planning on wiring it up via the Internet of Things to be a completely smart home. All of this will mean squinting at price tags a little less and filling up my home with things that make me happy.
The rent may be double the price, but a conflict-free nest is priceless.
So how did I do?
When I moved to Amsterdam in April, I only looked at solo apartments, despite being able to live with roommates for less. I found one with all of my requirements met: a view of the canal and canal houses across the way, a nice walking route nearby, and conveniently located. There were some extra perks as well– the place was completely furnished (quite tastefully!), with a nice blue suede couch and art on the walls.
The landlord let me keep his plants, so ivy grows along the wall and happy trees bloom throughout the apartment. The amenities are great too: a rain shower, fully equipped kitchen with a large refrigerator (relatively rare here) and a dishwasher as well. Yes, I pay a premium, but that was part of the deal. (I didn’t end up making it smart home friendly because the lightbulbs in the apartment weren’t compatible but that’s okay).
Did I meet my goal of building a nest and living alone? A resounding yes!
Goal 2: Giving Generously
My second goal wanted to shift the goal of spending from myself to other people. Here’s what I wrote when I set this goal:
One huge flaw of being overly conscious about my spending is that I don’t feel particularly generous. I’ve been working to combat this tendency by allocating a certain amount to go to charities every month, but my giving percentage still isn’t where I’d like it to be.
Also, aside from being generous via donations, I’d like to be a more generous friend. I want to be the type of person who doesn’t blink to pick up my friend’s coffee, secretly pay the tab at dinner, or send impromptu care packages or housewarming gifts. Over the years I’ve benefitted greatly from the kindness of others, and it’s high time to pass along that generosity to friends and family.
You don’t have to be stingy when being frugal, but I know I often toed this line. This year I really tried to be more generous.
I picked up drink and dinner tabs while out with friends a few times this year. I sent my sister a few random gifts throughout the year like a weighted blanket and a Lonely Planet guide for the new city she lives in. I sent another friend a housewarming cookbook. This goal made it much easier to not worry about who was picking up the bill on dates or what to order when I went out.
I definitely felt more generous in general, but I did fail the portion of the goal to raise my monthly giving target this year. Though I made an effort to be more generous to old and new friends, I was not particularly generous in giving to charities this year. I blame this on intentionality and scheduling. Last year, writing my monthly expense reports often reminded me that I had a goal of giving every month. This year I stopped being diligent about writing my expense reports, and thus I also forgot about monthly giving targets. I did endeavor to support friends, artists, and local businesses by shopping local and ordering books from new authors.
Did I meet my goal of giving generously? I give it a so-so result.
Goal 3: Self-Care
My third goal focused on spending more on myself. Here’s what I had to say about that at the beginning of the year:
The final category for Embracing the Urge to Splurge challenge focuses on self-care. If you’ve been following along my last few posts, you will have seen this theme pop up in the last few months. I’ve been paying for therapy, picking up small things that catch my eye in a store, and looking for more ways to care for myself. This act doesn’t have to cost money– there are tons of frugal ways to treat yourself and practice gratitude and mindfulness. However, I also want to loosen up a little and go ahead and do things that will improve my life without worrying. Whether that means signing up for a rock climbing gym membership, funding a weekend trip to a nearby city, or even simply paying for a haircut instead of doing it myself.
Let’s get one thing straight: I’ve always been a super-saver. I found creative ways to meet my needs without spending much. I found a way to get therapy for free through work programs, I avoided gyms by exercising outdoors, and I travelled by funding trips through credit card rewards programs. These are all perfectly valid, relatively easy ways to save money. However, the anti-frugality experiment was about spending above and beyond for exactly what I want, not getting an approximate version of what I want for less money.
This year I found a therapist who specializes in the area I needed help in. I signed up for a gym membership for the first time in my life. And I actually paid for a real live professional to cut and dye my hair for once. I went even further into the territory of “who even am I” when I started buying groceries based on what I actually wanted and not based on the price per oz. In an unprecedented move I went from meal prepping for the week to ordering in at least twice a week. Some other areas where I increased spending: a housecleaner coming every month, weekly flower bouquets on the table, and frequent “self-dates” to brunch or dinner.
Did I meet my goal of self-care? YES!
For many people, and I know for me, money is a stressor. Especially if it is scarce early on, we adapt to feeling like there will never be enough. We avoid spending it even when it makes sense to do so. Taking the time to recognize that I have enough and practicing letting go of worry over price tags gave me a new peace of mind I’ve never had before.
Is An Anti-Frugality Experiment Even A Good Idea?
It’s much more common to read about how to spend less and save more. In the beginning I wondered: is this anti-frugality experiment of 2021 even a good idea?
Like with any journey, there are ages and stages. There is a time to save more and a time to spend more. I started saving aggressively very early on in my career, which gave me the financial security to spend more later. However, it’s not easy to make the switch into spending more. Eventually, most early retirees have to start drawing down on their portfolio, an uncomfortable exercise when you’re used to contributing, not subtracting.
I Am “CoastFI”
Although I don’t consider myself fully financially independent, I have reached a milestone called “CoastFI.” CoastFI is the number at which you can ‘coast’ by letting your investments grow and only concern yourself with covering your expenses. No savings necessary! When you have enough money invested in the market, it will grow over time as long as you don’t touch it.
Let’s say I decide to ‘coast’ for 10 years before fully retiring. I can calculate the amount of money I would need to keep in my retirement accounts, which would mean I could stop saving completely and be on track for a normal retirement. Assuming a 5% expected growth rate for the stock market and a target of $1M for retirement, my CoastFI number can be calculated like so:
Coast FI # = 1,000,000 / (1+0.05)^10
My CoastFI number is ~$614,000. That’s if I want to fully retire by the age of 37. However, if I push out my retirement to age 38, my CoastFI number would be ~$584,000, which was approximately my net worth at the beginning of the year.
How Anti-Frugality Affected My Net Worth
This means I have options, which is what financial independence is all about. If I wanted to, I could spend my entire salary for the foreseeable future and still be on track to retire early. Even though that is what I have been working towards for years, the concept still blows my mind. The anti-frugality experiment allowed me to practice being even more intentional about my money. I could decide what to spend it on, rather than defaulting to saving.
Even with expenses ramped up, I am ending the year with a net worth of ~$780,000. That’s right, in a year where I intentionally tried to spend more money, I ended up with an increased net worth of nearly $200,000, thanks to the stock market.
I do think shifting gears to spend a little more money can be helpful. I’ve pendulated from spending very little to spending a lot (in fact, in June I didn’t save any money at all) and hope to land somewhere in between. This experiment let me live a richer life literally and figuratively for a year, and I would do it again!
Next Year’s Goals
In the coming year, I want to be sure not to accumulate stuff and be intentional about what I buy. When I moved to Amsterdam with only a couple of suitcases, I started buying new things for the apartment and for myself. However, given my future goal of living more nomadically, it would be smart to quit accumulating any more things. I’ll have to pare down my belongings again someday so better not to add anything new. I plan on continuing to spend on good food, going out with friends, activities around the city and travel– those types of things won’t take up space in a future suitcase.
Eventually I hope to have few possessions, but treasure every possession that I have. Opening up to spending more allowed me to invest in higher quality things and worry less. One thing I’ve learned is that frugality doesn’t just disappear when you hit a higher net worth. The habits you build will stick around unless you are intentional about changing them to fit the stage of life you’re in.
Ultimately this experiment reinforced that financial independence provides the freedom to live how you like. It doesn’t mean you have to pinch every penny for the rest of your life. In fact, if you start early enough, it could mean many years of financial security and abundance. Though anti-frugality might just sound like “throw money around,” it could actually be an experiment in generosity, aligning spending with values, and perhaps practicing wallet activism, which I’m considering as a goal for next year!
What about you?
What would your life look like with an anti-frugality experiment?
If your salary doubled, how would you spend the extra income if you couldn’t save it?
Are you more of a natural spender or saver?
Share in the comments below!