36 comments

Guest Post from The Military Guide – Frugality is Not Deprivation

Nords at work in Hawaii

Today’s guest post is brought to you by Nords of The-Military-Guide.com. This is a great blog about leveraging  both the training in Badassity and the career perks offered by the US military to earn yourself  some very early financial independence.

Some of you may already know him from Early-Retirement.org or his guest post at EarlyRetirementExtreme.com.
The book “The Military Guide to Financial Independence and Retirement” was written from the words of over 50 military contributors. All of the royalties are donated to military charities.

Frugality is not deprivation

I usually write for a niche audience of roughly four million people: U.S. military servicemembers, veterans, and their families. Of the 1.4 million servicemembers on active duty today, only about 15% of them will stick around for the typical 20-year military retirement. The reward for those few is an inflation-fighting pension with cheap healthcare.

Here’s an interesting point. MMM has been showing us all how to become financially independent and retire early with no pension at all, and while paying for our own healthcare. A military pension and Tricare must make financial independence easy for everyone who retires from the military!

Sadly, that’s not the case. Nearly 90% of military retirees pursue a bridge career. Yet they’ve already solved two huge early-retirement challenges: inflation and healthcare. So why aren’t there more financially-independent military retirees?!?

It turns out that most military retirees aren’t financially independent because… they aren’t saving enough money. (Ouch.) The military has trained us to be financially responsible (“Stay out of credit-card debt!”) but not to be financially independent. It just never occurred to most of us that we could retire from the service and stop working. We were putting in too many long hours in too many isolated places to find the time to read blogs about financial independence. Despite our low-cost lifestyles, most of us are blissfully ignorant about the retirement potential of high savings rates.

I’m trying to remedy that ignorance. Let’s start by distinguishing between the concepts of “frugality” and “deprivation”. If you’re not in the military, just pretend along with me for a few paragraphs.

Oddly enough, the military teaches everyone how to live an extraordinarily frugal lifestyle. No matter what reputation your service has, at some point you’ve lived in a very small room with a narrow bed and almost no storage. Maybe you even lived outdoors without a bathroom (let alone a bed) and all your possessions had to be carried on your back in one piece of “luggage”. Food was mass-produced or delivered in a pouch, and snacks were hard to come by. Entertainment was rudimentary at best– no satellite HDTV or Internet access, let alone clubbing downtown!

If we all know how to live as cheaply as Tibetan monks, then why don’t we practice that lifestyle and save 80% of our paychecks? We’d all set new records for early retirement! Servicemembers could eat all of their meals in the galley, spend their spare time reading library books or studying for advancement exams, and work out in the (free) base gym. No money would be wasted on gasoline, energy drinks, alcohol, tobacco, or video games. No one would even need to buy civilian clothes. Veterans would have no problem retiring, and they could even continue the lifestyle– the galley, the library, and the gym.

The irony of this example is that we all actually do know servicemembers who live like that. They’re perpetually hoarding their money, rarely socializing, and hardly ever going out. The problem with this single-minded focus on a Spartan lifestyle (and its extremely high savings rates) is that it’s very difficult to sustain. For the vast majority of us, that life seems boring and frustrating. These people seem to be pretty one-dimensional and not much fun. Maybe they have a very good reason for squeezing every nickel (or maybe they can’t stop themselves) but it doesn’t look like a way to enjoy a career or a life. They’ll make their short-term goals, but in the long term they’ll drive themselves (and everyone around them) nuts.

There’s a happy compromise to that cheerless existence. Frugality is just simple living: a lifestyle that avoids waste and matches your values. Extraordinary frugality, however, can be deprivation. Everyone can learn how to avoid waste, but everyone also has a standard of living they’re not willing to give up.

Financial independence benefits from frugality, but it does not require extremes. It’s your choice to balance lifestyle (and values) with the time it takes to achieve financial independence. It can be as little as five years, but most military could choose to do it in 20.

The difference between frugality and deprivation is derived from your values. Everyone has a dividing line between the two. Frugality feels good and makes you enthusiastic about reaching your goals. It’s a challenge, and when you’re doing well at it then you feel like a winner. You might not even miss the consumerism and the materialistic lifestyle. Frugality matches your values and frees up quite a bit of savings for financial independence. You’re living a life that you enjoy and you’re making progress toward your goals– it’s easy to feel good about it. Deprivation sacrifices your values for a higher priority. It feels more like slavery than volunteering. You may be making great progress but it’s definitely not easy and you will not feel good about it. Prolonged deprivation is extremely difficult to sustain and it usually leads to unhappiness.

The military teaches frugality, but that can put you at odds with a materialistic society. We even have expectations of the ranks– junior officers drive hot sports cars, senior enlisted have hefty pickup trucks, senior officers buy luxury SUVs and nice houses with lots of electronics and big yards. Even junior enlisted can stand out among their barracks peers with a nicer laptop or a new smartphone. If you’re one of the few who can’t flash an attention-getting possession, then you may be pitied. And everyone teases the junior officer driving a bicycle!

The more frugal you are, the more you may appear to be “left out”. Again the difference between frugality and deprivation is how you feel about it. If you relish the challenge, enjoy the achievements, and have fun while saving money, then you’re doing great. If you’re amused by the comments of your shipmates then your frugality reflects your values (and probably your net worth). If you’re feeling isolated or even unhappy about the lifestyle remarks, however, then you’ve probably crossed the line into deprivation. Unless you’re recovering from a short-term crisis, you need to re-think your values.

Frugality and deprivation can change your values, maybe even permanently. An extreme example of this is the Great Depression. In the 1920s much of society was living very materialistic, even luxurious lives. In the 1930s many suddenly found themselves struggling to find enough food and stay warm, let alone have a job or even luxuries. They didn’t volunteer for deprivation but they quickly became extraordinarily frugal and managed to cope with the trauma. Over the years their habits became ingrained and part of their value system. When the Depression and World War II rationing ended, these members of The Greatest Generation didn’t completely revert to their carefree spendthrift ways. We all know elders who can whip up a gourmet meal out of leftover cornflakes. They can fix anything in the home and think nothing of (*gasp*) walking to their destination. They even know how to do without! The other side of their frugality, though, is that many of these people will not spend money. They may still shun mortgages or credit cards, might not even invest in the stock market, and won’t buy newer technology. They may castigate others for waste and may even have difficulty treating themselves to a luxury without feeling guilty. Their values were significantly changed by earlier trauma and they may struggle with what they see as modern society’s degenerate lifestyle.

Many people see frugality as tedious, time-consuming labor. Once again, it depends on what you value. Cooking a meal from scratch is almost always more effort than dining out or picking up fast food. But you may feel that you get more value from preparing your own healthy, creative, high-quality meals. You might enjoy cooking as a hobby, not endure it as a chore. You may think that restaurant meals lack your talent for nutritious ingredients, proper seasoning, and creative presentation. The crowds, noise, and traffic might be discouraging. Or perhaps you prefer to save dining out for special occasions, and the experience would be less enjoyable if you did it every day.

But while you’re quite happy to eat at home, you may draw the line at rinsing and re-using plastic bags. It doesn’t matter to you that others see this labor as keeping waste out of landfills. You’re not willing to spend your time on the same goal.

Practice the frugality that brings value to your life, keep an open mind for new ideas, and stop short of the deprivation line.

Frugal zealots may be accused of taking advantage of others. For example, there’s nothing wrong with choosing to drink water during a restaurant meal (instead of sharing a pitcher of frosty beverage) or to order smaller, cheaper menu items. However if you’re sharing with others then buy the next round of drinks. Don’t help yourself to food that you’re not paying for, or to skimp on your portion of the tip. That’s not being frugal– that’s being cheap. Frugality means avoiding waste and spending money on the things you value, not tricking others into spending their money on you.

Frugality is a flexible lifestyle. Learn about as many techniques as you can and then choose the ones that you feel bring value to your routine. You may enjoy the daily challenge or you might decide to only be extra frugal if you had an emergency expense that month. Start with small steps (like bicycling for short trips) and then take bigger ones (bicycle commuting). Drying laundry on a clothesline is no problem when you’re single, but the labor might be a bit much with a large family of small children who are too young to do their own laundry. Monitor your spending, decide what’s worth your effort, and change your habits as necessary.

Families can adopt frugality very easily and raise children with strong life skills. If you attempt to impose deprivation on your family, however, then you’ll be facing rebellion in the ranks. Start with small steps, be patient, and be ready to compromise.

When you cut your waste and reduce your consumption then it’s easy to raise your savings. And once you start that then you’re on the road to financial independence. The length of the journey and the route you take are up to you.

—-
Many thanks to Nords, (who I like to call Mr. Military Mustache) for sharing this perspective with us. You might also enjoy his blog (The-Military-Guide.com) and his article that appeared on Early Retirement Extreme last summer called “Join the Military to Get Rich?”

  • DollarDisciple February 6, 2012, 9:29 am

    Thanks, Nords for your perspective. This is something that the early retirement/financial independence movement has struggled with since the beginning: people think if you’re not spending money then you’re not enjoying your life!

    It’s completely a matter of perspective. Deprivation is in the eye of the beholder and personally, I think that if you can’t have fun without spending money then you’ve got a serious problem! :)

    Reply
  • jlcollinsnh February 6, 2012, 9:49 am

    great post. I’ve got a lot of retired military pals and the pension/health care is a sweet perk. But most do embrace the consumer lifestyle. I’ve often wondered if this was a counter reaction to the years of spartan living. a lot of them don’t much care for camping for many of the same reasons.

    Many years ago I was hitching from MA to IL and was picked up by a soldier on leave from Vietnam. He had been wounded and was driving his brand new bonus money 440 Dodge. We crossed NYS, PA and OH at 120 mph.

    He was headed back to the war in two weeks. He flew helicopters. with that risk profile he wasn’t much concerned about funding his retirement.

    I imagine many combat troops feel the same today….

    Reply
  • mike crosby February 6, 2012, 9:59 am

    I love this post. My dad, enlisted, retired at 47. Winters spent skiing in New England, summers found him golfing almost everyday at Andrews AFB. (Yearly membership for unlimited golf on 3 courses–around $200)

    I even used to laugh at him for taking the hot plate to make sandwiches in his hotel room on his way to New Hampshire with my mom. And he’d also bring his “hot wings” to share with others in the hotel room.

    My parents’ lives were full, and I’ve always thought a measure of your lives is by the friends you keep. They had wonderful friends, and after golf could spend hours watching the other golfers and eating the free popcorn.

    I’ve often thought, that millionaires many times over, dared not dream to live the lifestyle my frugal parents lived.

    Reply
  • James Petzke February 6, 2012, 10:04 am

    Great post. I’ve had thoughts of joining the military myself, and you really brought the concept of financial independence through them to light for me, thank you!

    Reply
  • rjack February 6, 2012, 10:10 am

    I really like your idea of a balanced approach to frugality. I look at frugality as a sort of a game with a single rule:

    How little can I spend and still be happy?

    Reply
    • Dancedancekj February 6, 2012, 6:29 pm

      Haha, I’m glad to know I’m not the only person that plays this game…

      Reply
  • The Money Monk February 6, 2012, 10:36 am

    nice Post. I have written on my blog before on the difference between frugality and cheapness, and came to many of the same conclusions you have.

    I always follow the “save on things that you don’t care about so you can spend on the things you do” philosophy. Trying to never spend money on anything ever is effective at building savings but it can be a miserable way to live.

    After all, we all want to retire early because we ENJOY life, right? So no need to make it miserable. The goal should be a goal-focused scientific frugality, not a miserly cheapness.

    Reply
  • Marcia @Frugal Healthy SImple February 6, 2012, 12:47 pm

    This was great!

    My dad was born in 1926, so he fell into the “Greatest Generation” category of being extraordinarily frugal. I learned from him.

    My husband and I were both in the Navy (it’s how we met). We both went to college on ROTC scholarships, which covered most (not all) expenses. And then I got my master’s degree on the Navy to boot. Even though we had kind of odd positions in the Navy (shore tour exclusively), we still managed to stay frugal. It’s easy to get into a frugal mindset when you are sharing a stateroom with bunkbeds with 4-8 other people. A bit harder when you are living in DC.

    But we both managed to stay frugal. I rented a room in a basement and bought a small used car. My husband had an even older smaller used car. We drove his until it died, and sold mine when we moved to Cali to become a one car and 2-bike family. Going from the military to grad student life (for him), was just a continuation of the frugal mindset – even moreso (income from $50k to $12k per year).

    That means that as our incomes have gone up, our expenses have not gone up as much as they would for many. Our cars are small, paid for (with cash), and we drive them until they die. We like to bike commute (or we did, until I got pregnant, whoops). The house is our biggest expense so far, and in that, we were victims of just very bad timing.

    I think of frugality like a muscle. You have to continue to exercise it. It’s why I like to read MMM a lot. In fact, it’s about time for me to go back and re-read how to have a child on a budget. Don’t think I was pregnant yet when that one came out. We were “one and done” on the 1st one and got rid of everything, so now we are starting over. Luckily, I know a lot more now about what we DON’T need, and I am better at ferreting out the used items that we DO need.

    I have a good friend still in the Navy who is a Captain (sub captain right now). His wife has always been frugal (her parents retired in their 40’s). They still drive their 1994 cars, and haven’t bought into the idea that they need to have certain “status” at his level in the military. That’s the key.

    Reply
  • Bakari February 6, 2012, 12:55 pm

    I think the forced deprivation, combined with having a huge chunk of money when coming back from a tour, is part of what drives the splurging on expensive toys.

    I remember in ‘A’ school, even our personal finance instructor, who had no debt, 2 houses, and a complex excel financial spreadsheet, had no savings because all excess money was spent on ATVs, dirtbikes, an RV toyhauler trailer and premium remote control cars.
    The teachers advice was not to forgo buying a 52″ flat screen with surround sound on our E-4 salary, but just to save up for it rather than buying it all on a credit card.

    I was actually that guy who never went out and spent free time at the gym or doing online training – not so much to save money, but just because going and getting drunk was never my idea of a fun time. And then after 3 months, I suddenly had a big old chunk of cash for the first time in my life, so I opened a couple IRAs and a couple investment accounts and once I actually got started, I found that I get the same rush from investing as I used to from buying stuff.

    Reply
    • ice February 8, 2012, 10:06 am

      I like your Gravatar.

      Reply
  • Poor Student February 6, 2012, 1:31 pm

    Saving money makes me happy. Not only because I have more for something else now if I want, but I am good at keeping my eye on the prize.

    But I always know that if I am ever unhappy because of how little money I am spending then I need to evaluate what I am doing and why.

    Money is just a tool I need in order to be happy and do the things I want. If my quest to hoard money away is causing me stress or I put off things I may enjoy, that is a bad way to look at money.

    I really liked the article and never knew this side of the military. Thanks for the inside perspective.

    Reply
  • Jaclyn February 6, 2012, 3:30 pm

    My little brother just got home yesterday from a year long deployment and the first thing he did was go SHOPPING. I have been trying to convince him for a while now to at least open a savings account. I can’t wait to share this post with him!

    Reply
  • Dividend Mantra February 6, 2012, 7:47 pm

    Balance is key. I’ve found that it’s a bit of a tightrope to walk as you’re trying to balance quality of life and frugality. This is where the “personal” in personal finance comes into view. Only you know what you’re comfortable with and you just have to test the waters and see how far out you’re willing to swim.

    I’ve done this myself and come up with a pretty comfortable balance, and I’m able to save 60% of my net income or so. Spending money is fun, and I’d really LOVE to be driving a brand new Corvette instead of my $1,900 shitbox I recently purchased…but you have to have perspective and priorities. Besides, I actually love buying stocks as much as some people love buying televisions..and that’s not me blowing smoke up anyone’s ass.

    Good stuff!

    Reply
  • Chris February 6, 2012, 8:41 pm

    Great post Nords. I like the point you make of not forsaking a “quality” life in pursuit of frugality. There is a unique balance for us all when it comes to frugality and still enjoying life. I was just thinking the other day that I need to read your book! I think most military folks fall into the same trap as the rest of the world when they find themselves with chunks of money from deployments, bonuses, etc. Lifestyle creep inevitably strikes as well and Officer’s/Enlisted think they have to drive certain cars and live in certain houses. I’m recovering from this mindset myself. I have 7 years to go for a 20 yr retirement myself-can’t wait!

    Reply
    • Nords February 7, 2012, 7:13 am

      A shameless (frugal) plug:
      1. Check WorldCat.org for the book at a library near you. Dozens of readers have been donating. I’ve handed out copies to Oahu public libraries and Oahu’s military base libraries are getting their copies this week.
      2. The blog’s first six months of posts (Sep 2010-March 2011) follow the book’s table of contents… with a few diversions for important surfing updates. However the contributor’s stories and the checklists are only in the book.
      3. A donor asked me to distribute a dozen copies of the book. I have two left. Chris, if you send me a mailing address then I’ll send you a book. Whoever else e-mails me can have the other copy, but please share a little info about yourself so that I can let the donor know where their copies are going.
      4. If you’re trying to share the love, the 4″x5″ 64-page pocket guide is only $2.95. If you buy in bulk then the unit price quickly drops to $1.50. See if you can persuade your command or your family-support activity to use a tiny fraction of their financial-training funds to support your education… and more military charities.
      5. If you’re on Oahu this month, I’ll be hosting a seminar at Kailua Library on 23 Feb with more giveaways. E-mail me for more info.

      And take your next seven years one day at a time!

      Reply
      • Chris February 7, 2012, 8:47 pm

        Thanks Nords! I sent you my address on your website. Much appreciated.

        Reply
        • Nords February 8, 2012, 6:11 pm

          Got it, your book will be in the mail on Thursday!

          One left for someone else– if you’re in the military or in a military family, you’re welcome to send me your address for the last free copy.

          Reply
          • AllChoptUp July 5, 2012, 12:51 pm

            Did the last one go?

            Reply
            • Nords July 7, 2012, 8:37 pm

              It did, six weeks ago, sorry!

              Reply
              • AllChoptUp August 19, 2012, 3:05 pm

                Darn it, thanks for the reply tho!

  • Nords February 7, 2012, 6:58 am

    Thanks for all the comments, everyone!

    You’re absolutely right about the “Why save, I could die tomorrow” mentality and pent-up consumer demand. Another part is just blissful financial ignorance. We’re trying to raise everyone’s awareness.

    I’m collecting stories for the book’s second edition (and the blog). If you send me yours then you can pay forward your own highly-developed skills of frugality & financial independence. As a contributor, you get to help choose the military charities where we donate the royalties.

    Reply
  • Heidi February 7, 2012, 8:42 am

    This is a great post. Its fun to be frugal when you keep perspective. There are only a few things we like spending money on that actually make us happier–like a trip to visit family. We get to look forward to it all year, enjoy it, and then remember it.

    My brother was active duty for 1 yr and saved it all. Shopping was never a part of our lives growing up so that may have influenced him. He also never minded the physical part of the military.

    Reply
  • JaneMD February 7, 2012, 10:33 am

    Medical residency has some similarities – crappy hours, shared sleeping space, command structure, feeling of isolation. Unfortunately, many cope by using their paychecks to buy things to make themselves feel better.

    We’ve decided not to change our spending habits at all despite getting way better jobs than the low level of spending as a resident. The only expense that we couldn’t avoid was daycare and bigger space for the new babies. We didn’t buy a new car, an iPhone, flat screen, or a house.

    Reply
  • kris February 7, 2012, 10:49 pm

    Did you change your website layout or is this some leftover bugs from the hack?

    Reply
    • Mrs. Money Mustache February 8, 2012, 6:34 am

      Kris – we didn’t change it… it’s probably something that happened due to trying to fix the hack… *sigh*

      Thanks for the heads up.

      Reply
      • Mrs. Money Mustache February 8, 2012, 6:38 am

        It’s fixed. Sorry about that everyone. I got some bad advice about setting permissions, I guess… on the up side, I think the pharma hack is gone. :)

        Reply
        • kris February 8, 2012, 7:29 am

          Ok cool. Yeah I like this layout, it is nice, clean, and easy to read.

          Reply
  • Neil Gussman October 16, 2012, 5:13 pm

    Great post. Wish I read it 40 years ago when I first enlisted. Or when I got out after 11 years. Oh well. I re-enlisted in the National Guard after 25 years as a civilian and lived that lifestyle in Iraq. It was a 70% pay cut from my civilian job, but with no taxers and no spending, we made out OK

    Reply
  • Fawn November 14, 2012, 5:47 pm

    Thanks for this perspective! I have seen my hubby face more social pressures from his brothers in the Corp than anywhere or anyone else. You “have” to participate in retirement parties, promotion parties, baby showers, forced fun events, family events, etc- none of which are free. You also have to attend the birthday ball and have cash available for unit gifts- not allowed to say no to anything because they will question how you handle your finances. What if you handle your finances by saying no to frivolous spending?

    Reply
    • Nords November 14, 2012, 10:46 pm

      Spouse and I referred to it as “high-stress socializing”.

      Having said that, I’d pick a Marine party over a submariner’s party any day…

      Reply
      • Tammy April 16, 2013, 8:47 pm

        We always called it “Mandatory Fun.” (My husband and I are both retired Air Force.)

        Reply
        • Nords (The-Military-Guide.com) April 17, 2013, 9:02 am

          When I was on sea tours, I used to juggle the watchbill to give myself the duty during “mandatory fun”. It was over a year at one command before the CO noticed the coincidence…

          Reply
  • Skart May 20, 2013, 3:20 pm

    Wonderful post. Thank you very much!

    I would add that it’s a pity how few of us take advantage of the Thrift Savings Plan! It offers nothing but efficient, low-cost funds that will continue to grow my “Military Stache” long after I’ve hung up the uniform.

    Reply
    • Nords (The-Military-Guide.com) May 20, 2013, 9:20 pm

      Thanks!

      The federal civil service system uses default/mandatory enrollment in the TSP, and I think that military servicemembers would benefit from the same system…

      Reply
  • Mrs. Moneyseed October 4, 2013, 9:00 am

    I happened upon this post (most fortunately) through the Random Article link. I’ve never read such a succint and true depiction of the spectrum of military lifestyles. My husband and I are both active duty (6 and 7 years respectively), and are in the throes of reaching our FI/early retirement goals. I truly think that we have reached that happy medium between frugality and depravation, mostly because of our positive attitudes about our financial habits. However, I do not feel that this is the norm in our profession.

    It is almost a daily occurance for us to sit down at work and overhear conversations surrounding a fellow service member’s financial woes. These “downtrodden” tales range from the government not paying us enough money to their respective services screwing them out of “deserved” bonuses, both of which (of course) would be the magical solution to their money problems. Unfortunately, I feel like it is a common trap that many military members fall in to, where they assume everyone else is to blame for their money mismanagement.

    I think the way that Nords (or Mr. Military Mustache) and The-Military-Guide.com are trying to reach out to service members, to show them that there is another way, is starting to fill a void that has plagued the military for too long. Kudos for what you are doing and I look forward to passing your stuff along to my fellow service members!

    On a side note, my favorite line from this post:

    “Practice the frugality that brings value to your life, keep an open mind for new ideas, and stop short of the deprivation line.”

    I want to make posters and put them everywhere!

    Thanks Nords and MMM!!!

    Reply
    • Nords (The-Military-Guide.com) October 5, 2013, 9:07 pm

      Thanks, and I enjoy your blog!

      I think the same percentage of servicemembers fall into that “downtrodden” trap as the rest of society. The difference is that we know how to deal with prolonged deprivation, and we have the skills & discipline to avoid those financial woes in the first place.

      My spouse and I also did active-duty dual-military careers. Hang in there. It gets better.

      Reply

Leave a Reply

To keep things non-promotional, please use a real name or nickname
(not Blogger @ My Blog Name)

The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!

connect

welcome new readers

Take a look around. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article.

For more casual sampling, have a look at this complete list of all posts since the beginning of time. Go ahead and click on any titles that intrigue you, and I hope to see you around here more often.

Love, Mr. Money Mustache

Ads

$25 Unlimited Smartphone
The Lending Club Experiment
A $500 Signing Bonus... WTF?
How to Start a Blog

latest tweets