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Recently, I had a conversation with a friend of mine about some of the things I write about here on The Simple Dollar. Even though she’s struggling with some serious debt issues, she told me flatly that she didn’t want to take most of the advice given on The Simple Dollar. When I asked her why, she breathed in deep and told me the following (paraphrased):

I don’t want to be a “frugal” person. I don’t want to be the person who is no fun because I’m always chasing every dime and I’m always vetoing the fun things to do. I don’t want to be the person that leaves out cheap toilet paper for guests. I don’t want to just sit at home every night cackling as I count my pennies. I want to have a life.

First of all, it’s clear from these statements that my friend puts a great deal of value on how she appears to others. She desires an active and vibrant social life, to the point where it would seem that it’s one of the central values in her life. She wants to spend a lot of time with her friends and family – the people she cares the most about.

Hand in hand with that central desire is a desire to not alienate them through penny pinching. She aims to keep the people in her social circle happy and she wants to be involved in whatever things come along.

Both of those things are completely fine – in fact, they’re a healthy part of an extroverted personality (in moderation, of course). The problem here is that having a social life and being frugal are far from contradictory, as my friend likes to believe.

Let’s look at each of the comments.

I don’t want to be the person who is no fun because I’m always chasing every dime.
The statement here implies that she thinks she won’t be enjoyable for others to hang out around if she chases every dime. In response to that, I would simply say that most of the benefits of frugality come from choices made when no one else is around. Buying light bulbs isn’t a social event, nor is setting up an emergency fund. Grocery and household supply shopping isn’t a social event, either. Yet those are the times when many of the money-saving choices are made.

If your social experience is a key value for you, don’t cut back on it. Instead, focus on the multitude of things going on in your life that aren’t subject to social constraints.

I don’t want to be the person who is no fun because I’m always vetoing the fun things to do.
Simple. Don’t veto the fun things to do.

In fact, why not be the one who suggests fun things to do? In your spare time, think of some things that would be genuinely fun for the people in your social circle and then do some research on how to do them inexpensively. Then, when it comes time to plan a social event, pipe up with your idea. Not only will it be cheaper than throwing yourself into something without any forethought, but if you put your mind to it at other times, you’re likely to come up with some brilliant ideas to boot. You actually won’t be the downer – instead, you’ll be the person who comes up with the good ideas.

I don’t want to be the person that leaves out cheap toilet paper for guests.
Then don’t leave out cheap toilet paper for guests.

If you have multiple bathrooms in your home, designate one as the bathroom that guests use and stock it with the finest toiletries. Then, use the other bathroom yourself and use generics in there. It’s a room that’s just yours – no one else will ever use it. Since the guest bathroom will likely be used less than the one you regularly use, you’ll buy a lot more of the inexpensive stuff than the expensive stuff, trimming your budget quite easily.

Again, it’s all about what’s a personal value to you, and being a good hostess is an important value to her.

I don’t want to just sit at home every night cackling as I count my pennies.
Then don’t sit at home every night cackling as you count your pennies.

There are countless things to do all over the place that don’t require a major outlay of money. Take a serious look around your community. Look at the community calendar. Find out about the many things your city’s parks and recreation department has to offer.

Frugality is not about sitting at home and counting your pennies. It’s all about figuring out what exactly you want out of life, then doing exactly that while minimizing the cost of it. The pieces of your life that aren’t part of that picture of exactly what you want out of life are the parts you can trim.

If you value your social life, then focus on your social life. The rest of your life are the areas where you can cut. If you have a calendar that’s full of social activities every night, do you really need cable or a land telephone line? If you thrive on your friends and family, why not think ahead and come up with things that are a blast and save all of you a few bucks over the regular price of admission? And on those rare occasions when you are home, you don’t really need a flat panel television and thousands of dollars’ worth of decorations when the core value of your life is outside the home. Decorate tastefully and take your time with it to find bargains on things you actually want.

Being social is not the opposite of being frugal. They often go hand in hand.

Microsoft Corp. (NASDAQ: MSFT) reported Thursday that its second-quarter profit jumped 60 percent from the year-earlier period, a sign that IT spending increases are leading the recovery of the broader economy.

Research firm Gartner estimates that global IT spending will total $3.4 trillion this year, 4.6 percent more than was spent in 2009. Forrester Research has an even more optimistic forecast: It says that global IT expenditures will jump 8.9 percent from last year’s figures.

Rapidly rising IT outlays boosted gross domestic product growth in the fourth quarter of 2009, the Commerce Department said on Friday. Annualized GDP growth was 5.7 percent, but business investments in equipment and software rose a scorching 13.3 percent from the preceding quarter. The equipment and software spending growth rate was just 1.5 percent in the third quarter.

Microsoft cited Windows 7 demand as the driver of its better-than-expected second-quarter profit results. Read more…

I’ve been trying out another online budgeting tool that has some interesting features and most importantly to readers here, works for Canadian bank accounts!

The reason PocketSmith works with Canadian banks is because, like Wesabe and BudgetPulse, PocketSmith requires you to load your transaction data that you can download from your bank’s website. This can also provide a great increase in security since the site does not store all your bank passwords.

What sets PocketSmith apart from other applications is that it focuses more on forecasting your finances up to 12 months ahead and less on reporting what has already happened. While both views are important to being in control of your finances, it’s understandable that these web sites do not try to do everything for everyone or they would become bloated and no longer have simple interfaces. That said, I personally like PocketSmith’s focus on forecasting as it gives you a better picture of where you’re going.

PocketSmith has a great calendar interface. It shows when all your bills are due and when you get paid. Even more

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Try this experiment.

For the next month, keep a time diary for yourself. Keep a pocket notebook and, throughout the day, take notes on how you’ve been spending your time. Don’t try to be “perfect” about how you spend your time – just be normal about it. You’re recording this information for your own purposes.

Once you have a month or so worth of data, come up with some sensible groups for how you spend your time. Hygiene might be one. Cooking might be another. You might have a handful of categories for your hobbies and interests, like watching television. Spending time with friends or family might be another such category, as might surfing the web.

Once you have these groups, add up all of the time you spent during that month doing something within that group. For example, during the month I did this, I found that I spent forty seven hours reading for personal pleasure and enrichment.

Once you have that, compare it to your actual spending throughout a given month. Are there any areas where you’re spending a lot of money but not spending much time?

Quite often, those areas where you’re spending a lot of money but not spending much time are the very areas that most need trimming.

For me, those areas have included technology items and sports equipment. I don’t play en

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Mariusz Skonieczny asks a question that many pondered in late 2008: why are we so clueless about the stock market? Written during at the height of the great recession, Skonieczny dissects the fundamental problem with most unsuccessful investors: they fail to understand the difference between stocks and businesses. Stocks are evidence of ownership but such ownership is only worth something if the underlying business is healthy and growing.

Taking this difference as a starting point, Skonieczny walks the reader through the basics of financial statements and the characteristics of a what makes a good business, quoting Pat Dorsey’s 4 factors that economic moats consist of intangible assets, switching costs, networking effects and cost advantages.

Every good investing book has one $10.00 moment. This book’s is found in advice on when to buy. Observing that most money managers are inherently short-sighted, the author notes that many institutional investors will pass up good long term deals if the short-term price movement does not play to their advantage. Money managers measure success in financial quarters whereas the retail investor should measure success in years. The

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