The new frugality: maximizing life, not minimizing spending

"Is this really necessary?"

If you grew up in a middle-class Indian home, you have heard that question about everything, whether it was new shoes, a second pair of jeans, or eating out on a day that wasn't a birthday. The answer was almost always no, and the follow-up was almost always some version of "paise ped pe nahi ugte."

Now look at any group of people in their twenties. They carry phones that cost two months of salary, bought on no-cost EMI (which is rarely no-cost), book concert tickets the minute the sale opens, plan weekend trips on a Tuesday, and keep a café habit that would make a CA cry.

Both groups think the other one is bad with money. The answer I keep landing on is that both of them are frugal, even though they are careful about different things.

Frugality, the original version

The old rulebook was simple: save first, and spend what is left. Every purchase needed a reason, and "I want it" was not a reason. There was a list of goals (house, car, kids' education, retirement) and everything else waited until those were done.

And honestly, it worked. Through sheer discipline, that generation turned uncertain incomes into stable middle-class lives. A lot of our degrees, laptops and first apartments were paid for with money that was saved one "is this really necessary?" at a time.

But it had a cost too. A lot of people from that generation took their first real holiday after retirement, and some never did. The plan was always to enjoy it later, and later has a habit of not showing up on schedule.

Frugality, the remix

The new version sounds reckless until you hear the reasoning:

• Why save for a house when house prices grow faster than salaries?
• Why wait till 60 to travel when you can actually walk up a hill at 25?
• Why use a slow laptop when a better one saves an hour a day?

That is still frugality, only optimized for a different thing. Where the old version minimized spending, the new version tries to get the most out of life per rupee, whether that is experiences, skills, tools or people.

I am not writing this from some neutral observation deck, by the way. I was 19 in 2018, so I am squarely in the generation I am describing. Besides having been to 40-odd cities, I run a coffee page on Instagram, which means I have opinions about grind size that nobody asked for and equipment that did not exactly come from the "is this really necessary?" budget. The kid who heard that question every week would have a few questions of his own.

Where it actually goes wrong

Spending on experiences is fine. Where it goes wrong, as far as I can tell, is in the stories we tell ourselves to justify the spending.

The trip becomes "networking." The ₹15k mechanical keyboard becomes "an investment in my craft." The gym membership you used twice becomes "health infrastructure." Although every purchase gets its own ROI slide, nobody ever goes back to check whether the return showed up.

Credit makes this easier than it has ever been. Your parents had to save for ten months before they could buy the thing, which also gave them ten months to change their mind. You can have it delivered in ten minutes and pay for it in "easy installments" until next year. Even though that friction was doing useful work, we removed it.

And then 2020 happened. Incomes stopped, but the EMIs did not. The people who had savings were stuck at home but fine. The people who had skills and tools sometimes came out ahead, because they could take their work online. The people with neither had a really hard year. Neither philosophy turned out to be bulletproof, and both had people who did well and people who got hurt.

The per-use test

A while ago I wrote about the cost of getting dressed up, where I worked out what it costs me per outing just to look presentable. That per-use math is still the most useful money idea I have, since I think it settles this argument better than either side does.

While an expensive thing you use every day is cheap, a cheap thing you never use is infinitely expensive. That ₹1.5 lakh camera is a great purchase if you shoot every weekend, and a very expensive paperweight if you shoot twice. A trip you still talk about five years later costs almost nothing per memory, while a subscription you forgot about costs more every month you forget about it.

So before buying anything, run it through a few questions:

• How many times will I actually use this? Not how many times I imagine using it, but the real number.
• Is this for me or for my feed? Be honest, since nobody is watching.
• Would I still buy it if I had to pay for it in full today? If EMI is the only reason it is affordable, it is not affordable.
• What happens if my income stops for three months? If the answer is "panic," the experience can wait. A small emergency fund is boring, and boring is the point.

The point of these questions is simply to know why you are spending before you spend.

Who wins?

I do not think anyone does. Our parents had stable jobs and affordable homes, and for them saving was a reliable way to get the things that mattered. We have gig work, skills that go stale in a few years, and goalposts that move faster than any savings account. Each response makes sense for the world it was made in.

The middle ground I keep coming back to is this: save enough that a bad year doesn't break me, spend on the things I will still care about in ten years, and stop pretending that every impulse buy is an investment.

The old question was "is this really necessary?" The better one might be "will I actually use this?"

P.S. If you're reading this on a phone you're still paying off, no judgment. Just count how many times you pick it up today, because that is your per-use number.