The value of frugality

Stella lives in a penthouse, drives a Mercedes Benz and dresses in designer attires. Polly lives in an ordinary house in a remote area, drives a ’96 Honda Accord and dresses in clothes from Walmart. Now, you may be led to think that Stella is richer than Polly. That’s not the case. Stella is actually in deep debt while Polly has a lot of hard cash in her bank. If you know some rich people, you will probably find them to be a frugal lot. The media likes to portray the successful as glamorous people but in real life, it’s probably the opposite.

Stella purchased her Mercedes Benz on a loan from her bank. She has to make monthly installments to keep her car. While Stella is the legal owner of the car, effectively, the Mercedes Benz is not fully hers until the full sum of the loan is paid off with interest. If Stella fails to make a car payment, the bank has the right to take possession of her car. A part of Stella’s income goes to the bank. This is unnecessary. Polly paid for her Honda in full. She’s the rightful owner of her car. She understands a simple truth. The function of a car is to get from point A to point B.

As with the case of the car, Stella also bought her penthouse in the city on loan. Once again, she has to make monthly payments for her house. If she defaults, the bank confiscates her penthouse and she may well end up a bankrupt. Polly bought her property for the cheap in a new residential area and paid for it in full. She does not have to worry about monthly payments and save a lot on interest paid to the bank if she bought it on credit. Now, the property has appreciated in value so she has made a wise investment.

Stella is a picture of glamour. Her wardrobe consists of Pradas, Armanis, Versaces and the works. She is a prime example of the media’s portrayal of the rich and wealthy. She spends a big chunk of her income to maintain this high style existence. However, she’s almost always in debt. Polly buys clothes from Walmart at a fraction of what Stella pays for her designer wear. To Polly, clothes are basic necessities. If somebody tells her to spend $1000 on a gown, she will think the person is crazy. She is rich and cares not about what others think of her dressing.

Studying Stella and Polly, you see two very different individuals living very different lifestyles. Stella lives in a pseudo world of style and glamour. The cost of maintaining her high livelihood gives her a lot of stress. Polly is a down to earth old school hard fisted woman who knows the importance of frugality. She is not glamorous but she’s happier because her life is relatively less stressful. Who do you want to be?

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