Does living frugally mean you should settle for a smaller salary?

Something that people who follow YMoYL note from time to time is that if you don’t spend much, you don’t need to make as much to become financially independent.  You can choose to do jobs that don’t pay as well, to follow your muse, save the world, that sort of thing.

One thing that is noted is that you can make a big sacrifice by choosing a career that helps people and makes you feel warm and fuzzy rather than one that rakes in the big bucks… teaching in an inner-city school instead of in a highly paid suburban district, for example.

Of course, if you make a super big salary, you can do a lot more charitable giving, enough that could actually make a real difference on its own.

Should you settle for a smaller salary just because you can?  That depends on what your trade-offs are. If you’re really into something that a lot of other people are into and doesn’t pay well… like art, then yes, settling for feeding your muse may be worth it.  (Though note:  Scalzi doesn’t think a person should get paid less than 20cents/word for freelance, but he’s also not beneath taking technical writing assignments!).  If a smaller salary means you get something tangible like a more flexible schedule or the ability to work fewer hours per week, sure.

However, if living frugally means you’re allowing yourself to be exploited… no, we don’t think that’s a good idea.  Obviously, you do have agency, and you are allowed to make that decision to be exploited if you’re conflict-averse, if you don’t mind the negative spillovers being a doormat has on other people who don’t want to be doormats and so on (we’re ambivalent about choice feminism here at Grumpy Rumblings)… But we’d like to remind you that money buys goods and services.  Living frugally means that you can use your extra money that you deserve by being a productive person to help make the world a better place.  You don’t just have to spend it on yourself.  There are better ways to make sacrifices than by accepting a lower salary just because you can.

17 Responses to “Does living frugally mean you should settle for a smaller salary?”

  1. bogart Says:

    My short answer is: probably not. Moar money is better.

    The “get something tangible like a more flexible schedule or the ability to work fewer hours per week, sure.” part sounds logical and reasonable but the step-function nature of the remuneration provided for US workers (work 39.9 hours/week or fewer? No benefits. Work 40.0 + hours/week? Benefits! I oversimplify, obviously) complicates that issue dramatically, usually in ways for which IBTP. Plus, there are cumulative effects (on salary, benefits, net worth) that even a few years “out” can cost.

    Yet we do all have to live our lives, and I am no more a fan of cutting off my nose to spite my face than I am a fan of less money. So. Make your choices within the constraints you face, seek to reduce, minimize, of evade those, and yes, remember that money is itself you know, useful — and not just to you, but to those people and causes you care about.

  2. Linda Says:

    Living frugally is a choice for some and a requirement for many. I’m glad that I have a very well paying job and that I can save for things that are important to me and give to causes that I want to support. I realize that people who make less money than me aren’t necessarily less driven or less intelligent. They either made different choices than me, or were in situations where their choices had been limited for them. That’s the part that we all have to work on as a society: helping people out of situations where they have limited choices (because of discrimination, etc.)

  3. Pamela Says:

    Actually, as long as the job is one you enjoy and the hours are hours you don’t mind working, I say have at it with a high-paying job. And while you’re trying to become financially independent, it’s good to make as much money as you can and sock as much of it away as possible.

  4. BigLittleWolf Says:

    This is such a complex issue, for women especially. And for women as they get a little older, even more so.

    It sounds great to say “fund your retirement when your young for more freedom when you’re older,” but many of us did exactly that. All it takes is any one of the following and you’re screwed: a nasty divorce, a major health crisis, a child with a health crisis, a layoff and extended period of unemployment, any combination of the above.

    Add a few other twists like a nasty economy, changes in your industry, few or no child care options, and being over 45 or 50, and whatever you may once have had is long gone. Beyond long gone, along with the employment relationship that provided health benefits, disability benefits, unemployment (however brief and insufficient), the employer portion of Social Security, life insurance, a structure and routine you could count on.

    Once you are “cast out,” all bets are off, and you disappear from the radar screen of statistics. As a contractor, you can be let go in a matter of a few minutes, for no reason. You have no benefits. You have zero pretense of security. You are constantly looking for the next paying gig as well as working whatever jobs / projects / tasks you have currently.

    Taking a sum of money that is both below market and below your worth? At times, there is little choice, and yes, it’s exploitation. And it happens over and over again, will continue to happen over and over again, and until we approach a decent education and access to health / medical / dental care as basic rights (as have some countries), the women will always find themselves on a downward spiral – or with a greater potential for that to occur.

    I will quote from an article on women and retirement in the NYT last week, by Tara Seigel Bernard (I think that’s it): Median income for women over the age of 65 was about 25 percent lower than men’s over the last decade, and the poverty rate for women in this age group was nearly two times higher than men’s in 2010…

    She also points out “Women’s household income fell by 41 percent, on average, when they divorced, which was almost twice the size of the drop that men experienced.”

    I am hoping to write about this subject in more detail (as I write about the effects of divorce on women and children).

    Back to your most helpful discussion – we MUST keep talking about these issues, and bringing to light the problems of women and self confidence, women and unequal compensation, but also the very real social issues that involve age, marital status, and lack of infrastructure that does us in – because we carry the babies, and we care for the elders.

    • nicoleandmaggie Says:

      Having a bigger cushion does help when there are negative shocks, as does having a “good” job that pays well. You’re screwed worse if you don’t have that savings or education or work experience than if you have it. (Something I was thinking about while watching The Good Wife today.) Part of the reason women are doing so much worse is because they relied on their husband’s income and savings and didn’t build up their own human capital or take an interest in the family savings and insurance situations, even though women live longer. In one sense, having a husband’s income is like being frugal– it shouldn’t be used as in excuse to be paid less than you’re worth.

      • Leigh Says:

        The Good Wife is pretty much my favorite TV show!

      • BigLittleWolf Says:

        I was older, educated, a professional, and had that cushion. If those negative shocks hit? It’s gone in no time, believe me.

        That said, I believe in living within one’s means, but when you no longer have means and mouths to feed, you do whatever you have to – to feed them.

        And I couldn’t agree more that there is no excuse for a woman to be paid less than she’s worth. That’s a different issue from “taking less” because you’re at the end of your rope. Especially difficult if there are children or elders depending on you.

        You might find this interesting. Would love to hear your thoughts.

  5. oilandgarlic Says:

    My vote is NO! I have some personal experience where I followed my muse and hated my toxic co-workers (and struggled with lower pay). Now I work for a profit company that doesn’t do anything for bettering the world but my boss and co-workers are much nicer and I get better compensation overall. I would also trade doing good/following your muse for flexible hours.

  6. First Gen American Says:

    I’d rather work for a for-profit company and then volunteer for non-profits in my spare time. Without calling any one organization out, I hate the inefficiency, bureaucracy and politics of how some places operate. I would hate to do that 8 or more hours a day while getting paid less to boot. I feel like I can have a bigger impact outside of the system.

    Like Bogart’s not a simple answer. In my field going part time not only makes you lose benefits, but it’s also career suicide. It’s not so easy as to just go to your manager and ask to work part-time for lower pay. I can afford the lower pay, but I can’t afford the loss of intellectual capital that I’ve spent the last 16 years building. There is not a downshifting option. There’s 4th gear or 1st and not a whole lot in between. I’d go insane in first gear.

  7. Laura Vanderkam (@lvanderkam) Says:

    One related issue I’m thinking about now is the excitement over jobs that are work-from-home and flexible. There are job matching companies that charge applicants (rather than companies) because there is such demand for legitimate work-from-home jobs primarily among women. Call a job work-from-home and people look at that first instead of such things as type of work and pay. I worry that this results in people earning less than they could.

    • nicoleandmaggie Says:

      The incidence of the fee goes to the party with inelastic demand no matter who it is actually levied on. (In this case, the workers probably have more inelastic demand than the employers. But if it were the other way around, matching companies could still charge workers and the workers would be repaid with higher wages.)

  8. Link love (Powered by onion dip and cold winds) | Musings of an Abstract Aucklander Says:

    […] Nicole and Maggie ask if living frugally should equal settling for a smaller salary […]

  9. Link love (Powered by onion dip and cold winds) | NZ MuseNZ Muse Says:

    […] Nicole and Maggie ask if living frugally should equal settling for a smaller salary […]

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