Frugality Can Be Acquired, but It Can’t Be Bought

Richard Andrews, 62, a former financial journalist living in Springfield, Vt., says he learned the most useful lessons about handling money from his family.

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rugality Can Be Acquired, but It Can’t Be Bought Matt Born for The New York Times Ralph and Mildred Pasucci in their home in Hampstead, N.C., where they moved to lower their cost of living. TWITTER LINKEDIN SIGN IN TO E-MAIL OR SAVE THIS New York Times By CAITLIN KELLY Published: March 1, 2008 Consumers, long held up as the saviors of the American economy as it rose, are taking some of the blame for its fall. Consumers, their critics now say, were too eager to buy big, expensive houses and to fill them with the latest electronic gadgets. Consumers used their houses as piggy banks, these critics go on, to pay for their profligate ways. The question is, How do consumers learn how to deal with their finances? How do they learn how to save, invest and manage their money? While some life skills, like learning to drive or how to roast a chicken, seem pretty straightforward, a lot of people remain in the dark when it comes to managing their personal finances. “Money remains the elephant in the room,” says Manisha Thakor, a financial adviser and co-author with Sharon Kedar of “On My Own Two Feet: A Modern Girl’s Guide to Personal Finance” (Adams Business, 2007). “Personal finance, like parenting, is something we all are expected to just pick up as we go along.” This is true, she said, across the economic spectrum, with even the best-educated high-earning adults often financially illiterate. Those eager to learn often face a tidal wave of information, Ms. Thakor said. “It’s too much and they give up.” Lena West, founder and chief executive of xynoMedia, a company in Hastings, N.Y., that builds blogs and online communities, acknowledged that she learned about finances the hard way. “When you’re in serious debt in your 20s you have to learn pretty quickly,” she said in a recent interview. “Sink or swim. I won’t go into the specifics about my debt, but it was hefty — enough for it to still be affecting my life 10 years later. I dug out by educating myself, doing loads of work on my self-esteem and, most importantly, changing my relationship with money.” Richard Andrews, 62, a former financial journalist living in Springfield, Vt., said he learned the most useful lessons about handling money from his family. “My parents weren’t particularly sophisticated about finances, but all of us had small allowances beginning when we started school,” he said. His father made him and his sister “compute how much money we would need for a year, using the Sears, Roebuck catalog to price clothing, and adding in items like school lunches and bus fare.” “What I learned from the clothing allowance was that if you want to save money, you can,” he said. Mr. Andrews said he applied that lesson later in life. By choosing to live in rural Vermont, and without the costs of raising children, Mr. Andrews and his wife, Stephanie, a former schoolteacher, lived below their means, thereby saving enough for early retirement and lifelong world travel. Neither of them ever earned large incomes, he said. “I have always thought of money as freedom,” he said. “It seems to me that other people think of it as something else: power, status. The freedom for me is from having to work or to take the job you really want.” In a culture constantly bombarding consumers with advertising coupled with peer pressure to buy the biggest, best and latest version of everything, resisting these messages is crucial, Mr. Andrews added. “Be Jones instead of trying to keep up with him.”