How being a skinflint became ‘sexy’

Welcome to MarketWatch’s new weekly Friday series, “Adventures in Frugality.” Our team of personal-finance writers will examine how you can save more money and spend wisely in order to lead a happier and more meaningful life. In the first instalment, we ask why frugality is no longer a dirty word.

The word “frugal” makes Seattle-based writer Paulette Perhach think of her grandmother, who told her while she was growing up not to use so much shampoo. It’s also close to the word “fungal,” Perhach says, which makes people think of a toe infection.

That’s why she didn’t use it when she wrote an essay about the importance of saving that more than one million people have read since it was published on a website called “The Billfold” in January 2016.

Instead, Perhach called her piece, “A Story of a F*** Off Fund,” as in, a tale of building up enough emergency savings that one can tell life’s obstacles — whether an abusive boss or a bad relationship — to get lost. Of course, Perhach’s story didn’t only resonate with readers because of its title. But she said the words we use when talking about money and saving do matter.

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Many people find it difficult to save, especially in the U.S., which has one of the lowest savings rates in the developed world, even among people who make sizable incomes. Americans say they don’t like talking about money: About 70% say talking about personal money matters in a social setting is rude or inappropriate, according to a 2015 survey from Ally Bank

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And about two-thirds of adults don’t write out a budget at all.

Do frugal people really hold you back? Clearly, frugality needs a makeover. And there are a host of blogs that are connecting “fun” with “frugal,” including “My Frugal Adventures,” “The Frugal Girl,” and “Suddenly Frugal.”

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But there are also new money-saving movements shy away from traditional words like “frugal,” “budgeting” and “cheap,” and opt for fresher terms like “financial freedom,” “early retirement” and “minimalism,” that make saving money sound cool and attracting cult-like followings in the process.

It’s a similar shift to one in the weight-loss industry in recent years: Weight Watchers

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 ditched the word “diet” from its program in 2015, in favor of a “holistic” program called “Beyond the Scale.” Gyms and fitness centers have also switched from promising weight loss to promoting health and emotional benefits. Blink Fitness, a division of Equinox Fitness for example, uses the motto: “We put mood above muscle.”

Mr. Money Mustache.

Making ‘frugal’ sexy

Perhach isn’t the only one who has found a word would-be savers actually like. A personal-finance guru who goes by the name Mr. Money Mustache has amassed thousands of followers with his “FIRE” philosophy, an acronym for “financial independence, retiring early.”

“Minimalism” has also taken hold in recent years. Minimalists buy few physical items and opt for a sparse lifestyle; there are many “minimalists” who have become popular on social media, and they recently inspired a documentary that’s available for viewing on Netflix

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They’re definitely onto something, said Tom Meyvis, a marketing professor at New York University’s Stern School of Business who studies consumer behavior. “It’s an age-old marketing technique,” he said. “If you can frame things positively rather than negatively, people will like it more.” Perhach thinks “frugal” and “cheap” sound miserly, she said. She prefers the word “selective.”

“When I see the $9 beer, I want to think, ‘It’s not that I can’t have that, it’s that I choose to be a writer,’” she said. “I could choose to do a job at a tech company in Seattle and be able to choose those things. The key is to find something that focuses on what you get, instead of what you’re not getting.”

‘Cheap’ and ‘budgeting’ don’t cut it

Trent Hamm, the founder of personal-finance website The Simple Dollar, said “cheap” is indeed a worse term than “frugal.” “Cheap is when you make yourself or others uncomfortable in daily life for the purpose of saving money,” he said. “Frugal is when you’re not affecting comfort level much at all.” But he also sees why movements promoting “financial freedom” and “independence” have taken off, he said. “I think ‘frugality’ sounds old-fashioned to some people.”

A blogger who goes by the name J. Money took a similar approach when he named his blog “Budgets Are Sexy” about 10 years ago. He has another website now called “Rockstar Finance,” and those websites combined attract more than 500,000 page views a month, he said. J. Money has personally made more than $1 million blogging, he said.

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J. Money tries to use an informal tone on his blog, he said; any frank talk related to sex draws readers in, he said, and cursing on the blog “turns heads one way or another.” As successful as his sites have been, if he could do it over today, he said, he’d ditch the word “budget.” “I would call it, “Lifestyle Is Sexy,’ or something that,” he said. “People hate budgeting way more than frugality.”

Attracting readers don’t necessarily mean avoiding the word “frugal” entirely, said Alexis Grant, the executive editor of The Penny Hoarder, a personal-finance blog that has more than 16 million readers per month. “We don’t necessarily see frugal as a bad term,” she said. The Penny Hoarder also writes about minimalism, she said, because even if readers don’t want to commit completely to that type of lifestyle, they can at least incorporate some of those principles.

What it means to be a saver in 2017

There’s some evidence that the new language is leading to new attitudes. More millennial adults than any other generation reported saving 6% to 10% of their incomes, according to Bankrate.com. As the economy has improved, more workers have also contributed to their retirement funds, with slightly more millennials making contributions than people in older generations, studies from Fidelity Investments and Bank of America Merrill Lynch found.

One theory: They saw their parents endure tough economic times during the Great Recession, said Ryan Hamilton, a professor of marketing at Emory University’s Goizueta Business School. “There’s a strong hypothesis that growing up in your formative years while this massive economic turmoil is going on certainly has to affect you,” Hamilton said.

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Today’s young savers, unlike their older cohorts at their age, have online support at their fingertips. Many personal-finance gurus, including Mr. Money Mustache, The Penny Hoarder and Perhach create groups on Facebook

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 to share money-saving tips and bond over their anti-spending lifestyles, whatever they choose to call them.

The Penny Hoarder’s Grant said its made being a penny-pincher socially acceptable. “The truth is, there’s lots of ways to be frugal without having a low-quality lifestyle,” she said.