This frugal economy - is it the new normal?

22 August 2013
When the GFC started in 2008 I remember writing that although many people would lose jobs and there would be a lot of heartache, it might also put a lid on consumer spending for a while.  It did that and there were job losses and suffering but now, five years later, even though we've been told the crisis is over, businesses are still closing and caution is in the air. There is no such things as unlimited economic growth and it looks like what we've got now might be the new normal. But I'm no economist, I have no idea what will happen in the future, I just don't want us to go back to indiscriminate spending and debt.

If we believe our politicians, Australia got through the crisis better than most other countries. However, we have problems with the car industry, food farming and retail at the moment and we are told the mining boom is coming to an end. I'm thankful that we were already well and truly into our simple lives for a few years before the GFC hit. We had already seen for ourselves that moderation and prudence brought its own rewards and it wasn't a big stretch for us to cut back even further, just in case.

When we first made our change we looked at what we could live without. We gave up a second car, pay TV and a few other things and I can honestly say I've never missed them, not for a minute. I think we give possessions and the services we get used to more importance than they should have. Doing without hasn't made me feel deprived. I feel strengthened by it; we needed to make changes and now I feel that we could do almost anything.

When we first started living as we do, I was surprised by how much we could save simply by making a few changes and adjustments. Now that I look back on it, I see the most difficult part was deciding to do it. After that, the biggest and best changes came after we cut back all the obvious excess, and then saved more by changing the way we shopped, stockpiling and making a lot of what we used to buy. Through all of this, we've never felt deprived, we've never missed what we gave up, we never wanted to go back. This frugal economy suits us.

When I see what is around me now, the life Hanno and I have built here, I'm proud that we made every change we thought was necessary. Shopping has been replaced by home production, stress has been replaced by contentment, waste has been replaced by sustainability, and anxiety about the future has been replaced by the certainty that we have all we need. We have enough.

I know now that when we made all these changes, it wasn't only physical changes we made, it was also a change of mindset. We have happily gone from being rampant spenders to being frugal stewards of our land and I can't see that changing. There are conflicting messages about the end of the GFC with many "experts" telling us that the good times won't return any time soon. As far as I can tell, the good times are here now. Hanno and I might not have the money (or the inclination) to spend like we did in the past, but we're happier. Even if the economy boomed, we wouldn't change how we live; we would never go back.  How have you faired over the past few years? Have you changed for good?

The cost of everyday luxuries
Australia facing new collapse


  1. I really think that i Norway the understanding of this is so behind. So here it is not "the new normal". It seems like the average Norwegian thinks that growth will go on forever. Oil spoils us, I guess.
    But for the upcoming election, the new and growing environmentalist party, that actually proclaims a more frugal life and reduced growth - is really increasing attention - and thus possibly votes and seats in the parliament. Exciting.

    1. I agree with 'underveis'. The average Norwegian is spoiled by our country's oil wealth and living in the belief that the 'good times' will go on and on. I have also noticed the environmentalist party and the interest they are getting, exciting, though l am a little concerned that people voting for the environment really only is a way of clearing their own conscience. Norwegians are big on appearances and saying the right things whereas poverty and environment long as they can still consume all they want and not cut back on anything. Pam

  2. Hi Rhonda,
    I love these posts about the idea of what is "wealth." My eldest child is sixteen and I have been fortunate enough to not work out of the home since she was born. I am often asked when I am going back to work. First of all, I do work! Secondly, I may not provide money but I provide wealth in many other ways. I enrich all of our lives with the food that I grow and cook, the well run household, the vacations I have time to prepare, the stress free environment I create at home, and the list goes on! If I go back to work we may have more money (not sure it would work out that way, but that's for another discussion)but our lives would be poorer. We have been debt free for several years now and live well below our means. I know a lot of this achievement is due to me being home and having the time to really think about how we spent and saved our money. I speak purely for myself and my family's experience and do not mean to judge other peoples choices or lives. We must all be true to who we are. Thanks!

  3. Quite recently Prime Minister Rudd of Aus was mistakenly identified in a news photograph as Prime Minister Harper of Canada. Now I know why. We Canadians have been told the same as you -- "If we believe our (Canadian) politicians, (Canada) Australia got through the crisis better than most other countries. However, we have problems with the car industry, food farming and retail at the moment and we are told the mining boom is coming to an end."

    And then in the next breath they are telling us that the gov has inflation under control but Canadians have never carried a higher personal debt and we need to pull up our socks and stop spending foolishly. However when the analysis was broken down it showed that the increase in debt was due to trying to meet inflation without any increases in income and lots of unemployed.

    If anyone thinks the world financial crisis is over I think that they are very mistaken. It is more important than ever to simplify and be self sustaining.

    I do have to say that this is not the first time the world is going through these hard economic woes even in just the past 30 years. I think a lot of it is more dramatic because it is affecting more countries at once and more people. We do have 7 billion people on the planet now which is an increase of 5 billion since WW2. I recently re-read the introduction to the classic simplification book "Laurel's Kitchen" and all the reasons people are looking to get back to a simpler life today are exactly what she wrote about 40 years ago. The more things change the more they stay the same. Let's hope that the simple life concept sticks better to this generation than it did to mine back in the 1970s. So many started out doing so much and so well but then slipped back.


  4. Speaking as an American who has never been outside of the states, it sadly seems to come and go in terms of cutting back. When times are bad, most folks cut back, but as soon as things start looking better, up goes the spending. Living a simpler life is, as you state a choice. I believe if it is forced upon a person, many will go back to spending when things are better. For the last 14 months we have lived without an extra $768, so that we could make two payments a month on our truck loan. Come October it will be paid off....13 months early..oh happy day. I have already contacted the bank to keep taking that money, but to place it into our savings. The plan is to not touch it for at least 14 months. I hope and pray we can do it.
    A simpler life was forced on us after we lost our home to the BofA foreclosure mess in 2011. To this day we do not know why they reversed 4 of our mortgage payments...all cleared our bank. The compensation we received did not come close to the amount we lost, including the $63,000 down payment. Our next home will be paid with cash. No bank will ever do that to us again!

    Although not losing our home would have been nice, our life today is far, far better than we could have thought. We were forced at the age of 49(now 51) to take a good hard look at our life. It was not all good. We now have a much clearer view of what we truly what and need. Although my husband will always have more stress than others due to his PTSD, the amount of contentment we both have surprises us the most.

    Thanks for all the encouragement you show so many daily Rhonda. Your blog is help and hope all at the same time.
    blessings, jill

  5. It's interesting Rhonda, I hear them talking finance and lack of consumer confidence on the ABC radio yet they never talk about the fact that maybe it's due to a considered choice by consumers. I find that strange because I think it reflects the fact that there are more and more of us changing our lifestyles.
    I would have thought those that lead would want to be aware of people's general feelings and act in accord but it' as though they can't acknowledge we are there!
    I think you're spot on. Our new frugal economy suits us just fine and maybe as we adjust to it on mass we could gain a better understanding as a whole country. I'd love to see food security addressed by everyone!! Thanks for this post. Now I'm off to make my frugal (and very yummy) bread! Have a nice day. xx

  6. I agree , Rhonda. Well said.

  7. I think the old saying rings true to me from reading this wonderful post, " money does not buy happiness" !!! A simple life , but a good life, whether chosen or thrust upon us is a journey in finding happiness without a price tag involved, you are a great inspiration!

  8. Hi Rhonda
    This post especially resonates with me as being someone who was made redundant a few weeks ago (while on parental leave, no less!)

    I couldn't say that I didn't see it coming though. Fortunately we’re going to be alright. When we bought our home just as the GFC hit in late 2007 I was concerned that in the fallout we’d start losing value on it and go into negative equity. That didn't quite happen, but the value certainly hasn't really improved – not like the 6 years before, where it would have doubled.

    So we took action, and started focusing on paying it down, living simply, growing vegetables, fruit trees and keeping chooks, keeping our personal transport to just a single, small car which I now service myself, investing in solar hot water and PV panels, insulating the house, ditching the TV for a wood stove and a hundred other things which all amount to now, just less than 6 years later, going from being terrifyingly exposed to comfortable and confident in weathering the “new normal”.

    Best regards – Michael.

    1. You're an inspiration,Michael, and I just checked out the photos of baby Millie - soooo beautiful!


    2. I'm sorry to hear about your redundancy Michael. You and your partner are a good example of how preparing for good times and bad can make a huge difference. My warm regards to you and your family. xxx

  9. Our news reported similar rubbish yesterday here in the US. We have fared well ourselves because we are not spenders and have good savings but friends who have not had jobs for years and other friends who own small businesses will tell you that times are not good. On the other hand our area has had a ton of new jobs come in such as an Amazon distribution center but no one we knew who applied was hired so I don't know what is going on there. Life has changed forever and I agree it is good for everyone to have had to adjust. The insane spending could not go on!

  10. Hello Rhonda,
    A lovely post as usual. I'm thankful we didn't have debt then or indeed now. My heart goes out to those people who have been most hurt by all this. Yes living below ones means brings a calm feeling that having possessions could never bring.
    Love Angela (south England) UK

  11. We haven't changed our habits very much but we do feel good about the things we're doing, that we've always done, especially when we look around at people we know who choose to live like there's no tomorrow. We could never be comfortable with a lifestyle like that. We'd rather live simply and frugally and know that we have security in these troubled times.

  12. We were, thankfully, relatively unscathed by the GFC. However, it has brought about a change in our thinking and values. We no longer use shopping as a past time and would much rather have experiences than possessions. We practice thoughtful spending, and are passing these values on to our children. There is much satisfaction to be had from a frugal lifestyle.

  13. Hi Rhonda
    I agree with you wholeheartedly! We have made a few changes towards a simpler life but cutting our spending on 'stuff' has been a huge burden lifter. Once I used to enjoy mindless spending and now my days are so much happier when I don't need to go anywhere near a shop.
    Thank you for your continued inspiration!

  14. I live in the UK and we are still reeling from the meltdown. Our coalition government have implemented austerity measures since they came to power. It's been a rough ride and it's still not over.

    Luckily, we are not materialistic. The last major recession back in the early 90s saw us lose everything. Our business and our home and the friendship of people whom we thought of as friends. turns out they only liked us for our possessions and wealth. I think that was more hurtful than anything else.

    Since then, we have always led a frugal life. Living on a low income has meant that we have to be watchful of what we spend. We don't own a TV or a stereo or a car. We get around on the bus or we walk. We do have our own computers, which we run our home-based business from and they also double up as our entertainment centre.

    I don't miss not having the latest gizmos and gadgets. Things only get replaced when they are totally broken or are unable to perform tasks efficiently. Even then I'll get second hand where possible.

    Bringing up our children in this environment has made them more grounded and now as young adults starting their own independent lives,l it's good to see that they have learned some of the lessons.

    It would be nice to think that when the good times come around again that people will still live within their means but I don't think that will happen. History seems to have a habit of repeating itself.

  15. I really do feel that there is a lot of excess that comes with convenience - physical as well as emotional baggage. There is so much we could do without in the developed world. My husband's family is from Vietnam, where the people there have so little compared to Americans. Yet they are on the whole incredibly content. If they don't have utensils to mix with, they use their hands. No countertops? They cut food on a board on the floor. Bread is wrapped in newspaper instead of plastic, etc...Thinking about this "make do" attitude always inspires me!

  16. Not normal, it will get worse in the future because of all the government debt.

  17. Like you we changed to a more frugal way of living many years ago. We started just over ten years ago when we moved house and had to get rid of so much stuff. We haven't looked back and again like you we have thrived on the changes we have made and certainly have never felt deprived only more content. We gave a talk to a permie group just the other night on this very thing. It was very well received.

  18. We've been out of debt and living frugally for about ten years. I'm thankful that we have public transportation here. Taking the train or bus saves a lot of money.

  19. H Rhonda I so agree. I said to my husband that the GFC will make people think and start living within their means if not save something. I was speaking to an energy co rep the other day he was saying to set central heating for an hour before you gtet up then turn off when you leave for work. I said I don't have central heating and wouldn't do that just while getting ready in morning such a waste see people still need to learn to use utilities wisely. Also I think building will change we don't need these large open plan home which cost a fortune to heat and cool. Di

  20. Hi Rhonda,
    Since I last commented here, my husband has finished employment and we both study, living off austudy and family tax and what we produce ourselves. I have never felt so content.
    We have no debt, no large outgoings, no frills in our lives but complete control and I'm ok with not being able to go out to dinner with friends or things like that. We have our own personal economy and it's looking just fine.
    The aim is to never return to fulltime work, but to not need the family tax, either, just in case. Your blog has taught me so much and I now feel that our future is in our hands so I know we will be just fine.

  21. We have faired pretty well since the GFC. Although the rising costs of electricity, water and phone are taking its toll. I am still undecided whether to continue with the garden. We have had wonderful rains this year and everything is nice and green including the winter veggies. We are putting more water saving ideas in place and will see how that goes once the weather is warmer.

    The good news is that our mortgage, our only debt, is getting paid for very quickly now that the children are all grown and we can throw more at it. It will hopefully be paid in full by April next year.

    Thank you for all your guidance and tips about living the simpler life. Because of your blog and the forum, we are where we are today. Happy times ahead :D


  22. hi.
    the krisis in 2008 hit sweden to,a lot of layoffs and redundancies.
    so we decided to pay interest compensation to the bank and pay off the housing loan completely,really did it for managing spending on unemployment benefits if it going that way... He got to keep his job.
    Today i have picked redcurrants.

  23. Hi Rhonda,
    Long time reader! Love this blog post.

    I think for myself and my husband, we are too young to have recollection of how the GFC affected us in any real way as we didn't have any bills and living costs at the time! Ignorant? Probably! We both live incredibly well within our means now though and will probably do this when I start working again next year. He is facing redundancies at work (they find out Monday) and while this is terrifying for us, it is less scary than for those who are in HUGE amounts of debt!!! We have no consumer debt whatsoever and while many say this is "bad" because we won't have a credit rating or some garbage, we always knew with the mining sector that this might be a reality so have forced ourselves to not keep up with the Jonses. People call me boring for gardening and growing my own food, reading and studying all the time. It was only my husband's grandmother who truly understood my desire to save and conserve for my family in case of tough times. Maybe because she went through the Great Depression? Either way, I miss her encouragement since she passed last year; taking solace watching her beans grow (the seeds she gifted to me) and believing she is somewhere in the universe whispering "Keep going!"

    Happy wishes for a lovely day!

  24. Hi Rhonda,

    we have fared really well over the last few years, but the second link you provided is rather sobering. It is easy when one is busy working etc... to become complacent about getting the best value for money, not overspending, and tracking where it all goes.

    You've reminded me that we need to 'save for a rainy day' no matter what the economic conditions, because you never know when that rainy day will come. From the inspiring words of Michael who has just been made redundant, it's clear they have prepared for the 'rainy day' and should weather it well - I think it may even turn out to be a blessing in disguise :)

    Thanks Rhonda, and I'm going back to your Reducing The Cost of Living posts tonight to reinvigorate myself!


    1. We too are facing possible redundancy (and many of our friends in the mining industry have already faced this). Thanks to you Rhonda we are well placed if this was to happen. We have savings and contingency in place, reduced debt, reduced and repurposed possessions and upskilled in the "frugal" arts of life that perhaps are so foreign now to my generation. (We are in our 30's). As Madeleine said it just might turn out to be our blessing in disguise. I think it is a wonderfully satisfying way for our family to live.

  25. I get confused by news reports in the U.S.A. One day all is on the upswing . then the next day .. stocks go down .. interest rates go up, etc. The same with the housing market. We paid off our mortgage 1.5 years ago and no other debt .. working hard and sacrificing paying double payments. Now hubby retires at the end of the year at age 62. The borrower is slave to the lender is so true.

  26. Rhonda I just love the phrases you used,"shopping replaced by home production, stress replaced by contentment, waste replaced by sustainability, and anxiety about the future replaced by....." That says it all.....wonderful outcomes that can never have a dollar value placed on them. The outcomes are immeasurable! Also the spin offs that cannot be measured in money, such as home production replaced additives and preservatives, and good health!Such a great win!!Well done.

  27. I have always been frugal, so nothing much changed when bad times hit. I think one of the most important things a couple can do is have long term plans, for holidays, paying off your house, etc. If you have an idea in your mind as to why you are saving it puts everything into perspective. I loved your analogy a while back when you said that a dollar saved is a dollar whereas a dollar earned is a dollar minus the tax you pay on it!

  28. I have been frugal for the last 21 years. Being a single Mum made me that way. I think we (Australia) is being spilt into two. Those who embrace frugal living, and those who still have to have the latest ad the greatest of everything.

  29. We have always been quite good at living within our means but our lives changed for the better, from a simpler life point of view, when my hubby took early retirement and I, 2 months later became too ill to work. Living on 'war rations' was the only way we could feed ourselves AND pay all our bills back then. People often comment on how nice it must be for both of us to be 'retired'. Yet when they talk about how hard they are working, running themselves into the ground to live their 'spending' lives, you fully appreciate that what they really don't get, is the mind set of needing, not just wanting to live like we do. We live on his 2 pensions, both of which combined are around the minimum amount our governments think, someone should be able to live on. Bring it on I say!

  30. When you have to rent you are subject to the cost involved. Rents have gone up so much here on the Central Coast! We will be moving soon and will be paying and extra $60 per fortnight - not easy when you're on a pension! However, where we are moving to we are allowed to have all the gardens we want so will be growing more than we have been able to until now! I have never been a spender because I've never had very much to spend - Ha. For me, it's all about trying to live more simply. I am passionate about knitting and learning to spin my own wool and I am trying to get a nice little wardrobe of clothes for my husband and myself. I hope to grow more in our new house and to be able to preserve more of our home grown goods. I guess you could say I'm still trying to save money. I hope that, perhaps the year after next, I will have all our basic needs for clothes knitted and can look forward to needing less and knitting purely for the joy of it with not much pressure for fulfilling needs as much. It's still a joy to see all my projects coming together and looking good, though.

  31. Sorry to be dense, but what is the GFC?

    We have always lived frugally, but my husband has been out of work for 4 years now. He's an architect and that field has been badly damaged by the recession. One of the reasons I don't read the news much is because the media reports gains one day and losses the next. I trust my gut that says things are still going to get worse, but I'm not too worried because our family is doing the best we can to live simply, keep a good community around us, and love each other.

    1. I'm thinking/guessing it stands for Global Financial Crisis, but I haven't seen it abbreviated as such before (in the UK).
      Correct me if I'm wrong, Rhonda!

    2. Hello Margo and Karen!

      Yes, as Karen said, the Global Financial Crisis. Gee Margo, four years with no work! I don't watch the TV new now, it's contradictory, biased and depressing.

  32. Hi Rhonda

    I found your blog by accident last week and have been glued to it ever since. In many ways I'm already one of the converted but flights of fancy do take over (I'm currently eyeing up an expensive sofa bed - gorgeous but pricey and am in a tussle with myself over whether I should have it as a reward for having hand me down and skip dived furniture up to now, or stick with being super frugal.) so reading this help to keep me more grounded and less carried away.

    I'm working full time at the moment so my husband and I can buy a small, inexpensive house by the sea, but will go to part time or have no work after next March, so thanks for reminding me what is most important in life.

    I'd rather have less and be content than carry on at the frazzled pace I'm going at the moment.

    Leah, England

  33. Like you, I've been on this voluntary simplicity journey for quite a while. Each additional step is so empowering to me - I never feel deprived. Acquisition of "things" has been replaced with peace & stillness, more meaning in life, more satisfaction. I am in such a better place than I've ever been and it gets better all the time! We're growing (or hunting) most of our own food, composting, capturing rainwater and living softly on the land as possible. Love it!

    ~Taylor-Made Ranch~
    Wolfe City, Texas

  34. Hi Rhonda

    Earlier this week on the ABC's "The Business" I watched an interview with Paul O'Malley of Bluescope Steel. During the interview he stated that Australia has been in recession for the last three years. I think the following is the correct URL(I am not very technical)to view the interview.

    Kind Regards

    1. Hello Sherra. Yes, I agree with him although I doubt you'd get a politician agreeing now, especially since the election is almost upon us.

  35. I call it "the sane economy", not the "frugal economy" :o) Just got back online and beginning to catch up with everyone... so glad to stop by!

  36. A timely post Rhonda, and I am sure this is on many peoples minds right now. We recently changed electricity suppliers for a discount and we are trying to cut out wasteful spending. I have found that the less times a week I go out the less I spend, so I only usually go to town about once a week. In our smallish country town work seems to be slowing down and there is a lot of talk of harder times to come. I feel we need to keep working to"budget proof" ourselves a little more.

  37. Another great post....I have to laugh sometimes at the way the news and politicians can spin things....all we (USA) hear is how the housing market it on the upswing...My mom's neighbor just sold their house...they paid $200,000 for it in 2007....they just sold it for $105,000 and they were glad to get that much for it!!! If that is an upswing I hate to hear what a down swing would be...

  38. Like Tania I find the more we go out the more we are tempted to spend. I am looking forward to moving and being able to spend more time (and have more space) in the garden cultivating our vegetables! It's much more fun to cook and preserve than to always go out somewhere!

  39. Such a wonderful post no matter where you live.. I agree we need to be frugal whether in Australia or Canada ...
    May I ask for your bread recipe in the pic above.. It looks wonderful..

  40. Thank you Rhonda for this most interesting post (on my 52nd birthday)!! Is the first picture showing fresh spinach? It does look a lot like some seedlings I recently bought for 21c each that were half dead but are now thriving. If that is what it is, I would not have thought of growing it inside though! xx debbie

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  42. I just found your blog and I'm really loving reading how life is in Australia. I didn't realize that other parts of the world were experiencing the same things that we here in America are and to about the same extent. It is disheartening, but I know, as our parents and grandparents "found a way" to make due, we will/are as well.

    Enjoy your weekend. My husband and I will be installing a new "gutter" garden to help me extend our lettuce growing season.

  43. "If we believe our politicians, Australia got through the crisis better than most other countries. However, we have problems with the car industry, food farming and retail at the moment and we are told the mining boom is coming to an end. "

    As someone who was living in the USA when the meltdown hit, has lived in the UK and USA since then, and visited a bunch of other countries... we Aussies did get off really easy. There are problems with the car industry and agriculture all over the world (due mostly to globalisation and cheap labour elsewhere) and Australia's retail problems are mostly due to Woolworths and Coles Myer (or whatever the parent company is called these days) finally having to face some competition, after years of milking Aussies for every cent they could get.

    In the US, when I went walking around the mid-sized college town where I was staying, each time I turned the corner into a patch of woodland which couldn't be seen by the road... there would be a mini tent city there. There was an 'official' tent city in town too, but there were so many homeless people that there were smaller tent settlements basically everywhere one could be built. Among the homeless are many military veterans, lots of formerly middle-class people who lost their homes in the banking crash, etc.

    In all the places I've been in Australia since the crash, I haven't seen anything like that.

    In the UK, one of my friends was formerly employed at a school as a teacher's aide, but when the crash hit, they fired anyone 'non-essential'... making her an unemployed single mother with two children trying to live off benefits, which staying with her for a few days, I saw is really not easy. We Aussies have been lucky that the government hasn't made mass sackings yet, because even in good times, there's only so many people the labour market can swallow all at once, meaning many of the fired government employees end up unemployed for an extended period.

    I could add a bunch of other stories of things I saw in the USA, UK, Portugal etc., where the financial crisis really has made a dent. Aussies have it really good, and I get sick of hearing people complaining about how 'tough' it is here, when really, we've forgotten (as a whole nation) what 'tough' is.



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