Champagne Taste on a Beer Budget

The consumer price index, which is the government’s preferred measure of inflation, rose 4.9% over the last 12 months. This is the fastest inflation has risen since 1983! I don’t pretend to understand all the economic reasons why stuff costs more than it did twelve months ago. I also don’t have any good suggestions on how to fix it.

But I do know how to respond with my personal finances! I consider myself frugal when it comes to personal finance. I would even go so far to assert that in order for an average person to build wealth, frugality is a financial truth. I think frugal folks will still feel the sting of inflation, but “weather the storm” much better.  

In my book, Millionaire on a Worker’s Budget: Five Financial Truths to Build Wealth, I share some of the tips I’ve applied over the years to remain frugal.  One of the most important is avoiding “champagne taste on a beer budget”. In these times of rampant inflation, this is going to be more important than ever!

I recall fondly as a twenty something Platoon Leader in the Army back in the mid-90s trying to build cohesion within my platoon by hosting the occasional get together. I’d usually provide some food items and of course, a keg of domestic beer.

Some of my fellow Soldiers would show up with a six pack of import beer in hand. They would politely refuse free beer for their own more expensive and agreeably tastier stash. I found this very interesting as just a few years earlier, during my college age years, turning down free beer was unheard of! Am I suggesting one should deprive themselves of the best things they can afford? Well, sort of.

Avoiding champagne taste really comes down to determining needs vs. wants then further “rightsizing” the needs. I’ll concede, a TV is a need, but do you need a 72” or will a 42” work fine? No reason not to enjoy a glass of wine with dinner, but do we need top shelf vintage every day?

Another great example where we can right size is in our vehicles. Reliable transportation is most definitely a need and one of our biggest recurring expenses. This is certainly an area where one can’t skimp on quality or safety.

Rightsizing a vehicle is not only about the model or options but also about the length of time owned. It will be very difficult to get ahead financially in these economic times purchasing or leasing a new car every two to three years. Pick a vehicle and drive it for as long as possible!  

Right sizing is really apparent in services. I am a chronic channel flipper and noted the few times we sprung for the deluxe cable package, I ended up flipping channels more than enjoying the shows. What a waste of cash every month!

We cut the cable a few years ago and went with a digital antenna augmented with streaming services. Haven’t looked back. Our family has all the entertainment we need. Similarly, what’s the difference between free music streaming and paid? Commercials. Develop the patience to listen to 60 seconds of commercials and save the $10 per month!

One of my favorite areas to right size is cell phones. How many folks do you see walking around with the latest phone that is costing them at least $30 per month for the next 36 months? Are there other needs they could use that money for? I still use a $250 phone! It makes phone calls, and I can check my email.

Avoiding champagne taste doesn’t mean being cheap. Buying junk doesn’t pay off. It does mean, when the TV craps out, take the time to research and purchase a quality TV with the features needed at a good price. Simply put, we must be able to recognize value.

These are just a few ways I’ve avoided champagne taste on a beer budget and “right sized” throughout the years. It will be interesting to see how our nation perseveres through this economic situation. Note I didn’t say “if”. Americans will figure out a way to make it work! But I think many of us may have to revisit our champagne tastes. After all, who can afford it nowadays?

The commentary provided in this blog and in my books are for informational purposes only and not intended to be a source of financial or investing advice.

Millionaire on a Worker’s Budget: Five Financial Truth’s to Build Wealth is on sale now at Amazon!

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