Meet the Misers. The misers are an undeniably frugal couple whose story teaches us all a valuable lesson about managing our money.
The misers live a boring lifestyle, or at least that’s what everyone says. You see, the misers have experienced economic collapse first hand, and the hardship left a scar of frugality deeply ingrained in their approach towards money for the rest of their life.
Although these frugal misers are plenty happy, they remain the subject of ridicule from their big spending friends. Despite earning a fine income, these poor saps continue to live below their means, a decision that leaves a trail of confusion, chortles, and raised eyebrows in its wake.
The result is a level of spending (and a level of saving) that is almost incomprehensible for the average spender today.
The Miserly Lifestyle
Our frugal misers live in a modest house. It’s a well-kept home, but it can’t be any larger than about 900 square feet.
Sure, the house is a little small by today’s standards, but it’s a homey enough place. Family portraits line the hallways, and a few well-chosen conversation pieces round out the decorations.
The kitchen might be a little outdated and it’s design, or lack thereof, certainly won’t be featured in any magazines any time soon, but that doesn’t stop delicious meals from constantly pouring out of the space. After all, it’s filled with quality, reliable appliances which can refrigerate, cook, and bake a meal just as flawlessly today as the day they were purchased.
The Misers have three kids, but they decided not to splurge on excess bedrooms. The two youngest children actually share a bedroom – a decision which the kids don’t seem to mind, yet strangely seems to bother only the people judging from the outside.
Then there’s Mrs. Miser. She’s a lovely lady, although her tastes are admittedly rather plain.
She doesn’t have a walk in closet – her house is only 900 square feet after all – nor does she have the wardrobe to fill one. Instead, she has a small dresser filled with all the well-tailored wardrobe staples, and nothing more.
She may not be the trendiest dresser, but she certainly has the basics covered in order to look great in any situation.
Mrs. Miser has always enjoyed staying out of the limelight anyway. Nothing could be quite as symbolic of this as her understated wedding ring, and although it cost much less than the fake 3 month’s salary guideline and doesn’t even include a diamond, she still catches herself gazing at the ring and smiling as she reminisces about her wonderful husband and the life they’ve created.
Together, the Misers only own one car. Strangely, they have never even considered a car loan. Instead, they chose to purchase the car in cash. This helps them save a good portion of their income by today’s standards, which is just how they like it.
Some might think they’re a little nutty for not living it up, but after all, they’ve seen how bad the economy can get, and they’d prefer to have something set aside for a rainy day.
And they do. Their years of saving have left them with a comfortable nest egg, a stress free attitude towards money, and fully prepared for a great retirement.
Who Are Mr. and Mrs. Miser?
Ready for the plot twist?
Mr. and Mrs. Miser are your grandparents.
These are the facts:
- The average home in 1950 was 983 square feet.
- Take a tour through any historic home and count the complete lack of walk in closets.
- By 1930, the number of vehicles registered in major cities was about one per household, and half of families in smaller cities did not own a car.
- Automobile financing wasn’t invented until the 1920s.
- In 1940, only 10% of couples exchanged diamond rings as part of the engagement process.
- The scars of living through the great depression, a time when 20 percent of New York children were underweight and thousands of previously employed workers stood through soup and bread lines, ingrained a mindset of constant financial preparedness for an entire generation.
- The average savings rate in the 1950s was more than double today’s paltry sub 5%.
Live Like Your Grandparents if You Want to Be Rich
We don’t have to go back very far to put the excessive spending of our current culture in perspective.
As the relentless march of progress carried us to the 21st century, what is today considered extreme frugality was known by another name in the early 1900s – normal.
Even my relatively frugal lifestyle looks like a broken faucet of excess compared to how my grandparents lived, and certainly even more ridiculous compared to the lifestyles of my great-grandparents.
And yet despite this previous generation of frugal, money conscious savers, I still have yet to hear an elderly person, with more years of wisdom than my young mind can even comprehend, reflect on their life and say, “You know, I had a really good life, but I wish I would have spent more money.”
Did your grandparents seem happy?
I’ve written before about just how frugal my grandfather was, and yet my grandparents were also some of the happiest people I’ve ever met. Although they never made a ton of money, they always found a way to live within their means and have a great time doing it.
If your grandparents were anything like my grandparents, they were probably able to live an incredibly fulfilling life, without the ritz and glamour that we’ve since decided is necessary to be “normal.”
Turning back the clock just a couple years might help us all accept a more reasonable lifestyle. But since time travel isn’t exactly an option, I guess I’ll have to keep churning out blog articles highlighting just how amazing even today’s most frugal lifestyles have become.
haha, very much like it. Especially the surprise they are your grand parent
The Money Wizard says
Glad you enjoyed it Lars!
Great article. And I wanted to add an anecdote, in my own life, all of my grandparents (and my husband’s grandparents) have way more money than our parents. Its like the frugality skipped a generation. All of our parents are BROKE and will likely never retire. Is that because they didn’t get the crap scared out of them in a depression?
The Money Wizard says
Very interesting observation. It does seem like the frugality skipped the boomer generation. Wonder why that is?
I listened to a podcast recently with some high spending baby boomers. They said their parents were always focused on saving money, so they promised themselves they’d make enough money to “never have to worry about saving.” Trouble is… owning a home and contributing less than 5% to your retirement doesn’t exactly give you a free pass to ignore saving entirely, which seems to be the mindset for most boomers.
I’m sure there’s a lesson about money and raising kids somewhere in there, but I’ll leave that up for the parents in the audience to decipher.
Financial Panther says
Really good perspective here. A lot of us get so caught up in what is normal around us that we don’t really take a step back and look at things with some perspective. People lived fine in normal sized houses before. All the stuff that we think are necessities now (his and her sinks, 5 piece bathroom, guest room, etc) aren’t things that are really necessities. They’re choices that we make. I think if more people realized that, there’d be a lot more conscious decisions with their money.
The Money Wizard says
Want vs. need… the trickiest trick up our mind’s sleeve. And like you said, it’s even trickier when what’s “normal” around us is actually completely nuts.
J. Money says
BOOM! You got me on that plot twist too!
The Money Wizard says
Got em! 😉
Thank you Sean for this great post. Honestly this is the biggest lesson for all who want to master personal finance and maximize happiness. The focus should be on the mindset. Also I had a revelation that here in the center of Europe we are still living in this era. Except car loans, those becoming more and more popular here too. Still around 1000 sqft houses (without walk in closets, 3+ bedrooms and 2+ bathrooms), one car (or no car) families, no-diamond wedding rings, modest saving rates are pretty much normal things here. Also we have seen some strange situations in our lifetimes. The only thing we miss here is growing economy and good salaries. Other than that I am glad we are living in our grandparents age (with internet of course) 🙂
Manoj Mathew says
Pleasantly surprised at the climax..Great way to drive home the point that being rich is possible…by just be being miserly and not trying to impress people.
This is excellent and highlights that, in many cases (certainly not all!) a failure to save enough is mostly about lifestyle inflation and keeping up with the Joneses. In other words, CHOICES. Thanks for writing!
Physician on FIRE says
I thought for a minute you might be the miser. Good plot twist, M. Night MoneyWizard!
My grandparents lived through the depression and it showed. One grandmother (a teacher married to a physician) had a kitchen drawer full of plastic bags to reuse. It’s a respectable move until she packs you a lunch and the rice krispie bar tastes like the pickles that previously occupied the bag.
I’ve been reading your blog posts for a while now and i must really say I am a big fan of yours ! This is my first comment tough because I have a question about the purchase of the car in cash. Doesn’t it make sense to buy it on credit since:
– you can invest the cash in an ETF and get a higher return than the interest rate on the loan
– the car loses value as soon as it leaves the dealers parking lot
– generally speaking a dollar now is worth more than a dollar in the future, thus paying with future dollars malke sense
Looking forward to your answer !
The Money Wizard says
In general yes, it does make sense to finance the car if you can earn higher returns somewhere else. The hangup about financing, and the gray area, is that higher stock market returns aren’t always guaranteed. Especially in times of high market valuations, paying down debt/avoiding debt becomes more attractive.
Add the fact that I got an extra $1,000 off the price by financing through the dealership at a ridiculously high interest rate of 4%, and the scales are tipped further towards paying the loan off immediately. Had I been able to get the same deal on price and secure 0-2% financing, I would have probably carried the loan. All of this is of course assuming that the availability of financing doesn’t encourage you to buy more car than you otherwise would have.
My dad’s parents raised 5 boys, and had one of my dad’s grandmas living with them for a while. All 5 boys went to college too!
My grandparents also had 55 as their retirement age. Plenty of time to be happy to hang out with us grandkids. 🙂
Mr. RIP says
Wow, excellent article! I was expecting “I am Mr Miser” sort of happy ending, but yes, that’s totally true, grandparents are to be taken as examples!
That’s a good explanation of why we are luckier than them and that it’s not true that “we used to live better in the good old days…” We are way better off now. e can live like or grandparents and be free at 40something instead of having to work till 65 like them.
My wife and I are happily early retired and today marks our 39th anniversary. We both still wear our original weddings rings, plain gold bands that cost less than $100 each. We still live in the house we bought 38 years ago for $32,000 although we have modified it several times with cash improvements . We buy cars with cash. We usually split entrees at restaurants or bring home doggie bags for leftovers. I guess my granddad probably did all that the same way except for the early retirement part!
Master Duke says
Love this post!!!
My favorite line was the “was known as normal”
I always find it so interesting those who are known to be tight or frugal with their money are the ones who end up helping those in the family that are not.
I want to become rich