How should we balance frugality with social/environmental responsibility?

I could go to Amazon.com or Sam’s Club and buy all my dry goods there very inexpensively, or I could go make my purchases at a locally owned grocery, where I’ll pay more, but my purchase power makes a positive contribution to the local economy. I could buy a product that is cheap, but that has a more significant impact on the environment or personal health (things like laundry detergent or household cleaners). I could buy blue jeans made by someone who gets a living wage in a good working environment, or I could by cheap jeans made in a sweatshop in Eastern Asia with child labor.

Also, should one’s circumstances have an impact on this balance? Heavy debt vs. no debt, age, family demographics, etc.

Part of the question, I think, relies on the definition of frugality, something I talked about a while back. Wikipedia defines frugality as follows (with my own emphasis added):

Frugality (also known as thrift or thriftiness), often confused with cheapness or miserliness, is a traditional value, life style, or belief system, in which individuals practice both restraint in the acquiring of and resourceful use of economic goods and services in order to achieve lasting and more fulfilling goals. In a money-based economy, frugality emphasizes economical use of money in meeting long term personal, familial, and communal desires.

Quite often, frugality is considered mostly in the personal or familial sense of the word. What choices can we make that will maximize the economical use of my money, or the money for our family?

But our dollars go further than that. Our spending choices have a communal effect as well. Choosing to spend in the most economical way for our family might lead us to shop at Wal-Mart, but that might cause the local corner grocery to close and thus have a negative effect on our community. It might be more economical for our family to buy jeans made by someone in a sweatshop, but communally, you’re not only encouraging sweatshop labor, you’re also reducing opportunities for those working in more welcoming but less brutally efficient environments.

It all depends on your focus and personal perspectives. One family might decide that the cheapest prices are always the best and thus put their personal and familial aspects above the communal. Others might be socially-minded and thus look for opportunities to put the communal aspect first.

Here’s an example: fair trade coffee. It’s more expensive than regular coffee at the store. A person who focuses on personal and familial aspects of their frugality would probably ignore it and buy the cheapest coffee available. A person who focuses on communal frugality would have to make a different judgment call - perhaps that person feels that an extra dollar spent on the fair trade coffee is the best way to efficiently express their communal desires.

Frugality isn’t about what’s cheap. It’s about finding the best value for your dollar. The catch is that the word “value” has different meanings for different people in different situations.

The equation changes, though, in times of economic hardship. For almost everyone, if there are financial difficulties, familial and personal aspects become more valuable and communal aspects become less so. If a person is having difficulty putting food on the table, by all means they should choose to buy the least expensive clothing.

For me, personally, the best frugal tips are the ones that hit all three of these areas. For example, I’m a huge proponent of energy independence - cutting energy use where you can. This is a personal and familial savings in the form of a lower electric bill, but there’s also a communal savings - I’m responsible for less CO2 and mercury emission. That’s why I find value in experimenting with things like LED bulbs - they’re very expensive up front, but they don’t produce much waste in their manufacture, they last almost forever, and they use less than a watt to produce a ton of light. To me, there’s a value there, especially if the light output is decent at all.

Similarly, I dream of living in the country and installing my own wind turbine. We live in Iowa where there is almost constantly enough wind to keep a turbine going, and two turbines could fully power a home and usually result in an excess that could be sold back to the electric company. Is it frugal in the personal or familial sense? Possibly, but probably not. Is it frugal in the communal sense? Almost assuredly - my carbon footprint would almost vanish.

In the end, what does value mean to you? Do you put importance on the communal value of something, or does familial and personal value trump all? There is no right or wrong answer, just a different sense of what frugality means to you and a realization that someone else’s values might tell them that a different choice is the most frugal one.


The Simple Dollar chronicles a man's road to recovery from "total financial meltdown." As author Trent Hamm puts it, "The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two." We'll post a couple of entries a week, but you can check out his writing daily at www.thesimpledollar.com