The Power of Thrift

"Thrift" comes from the verb "to thrive". To thrive means to flourish, grow vigorously, to gain in wealth or possessions, to progress towards or to realize a goal in spite of or because of circumstances … "(Mirriam-Webster dictionary) In other words, thrift is not so much as cutting down or not spending money. It's about being careful in your behavior so you can reach your goals, be happy, successful and prosperous and live your best life without unnecessary financial stress.

The three scarce resources

In life, there are three scarce resources which need thrift management to achieve your goals, objectives and dreams. And no, money is not one of these scarce resources, at least not directly.

Time, Health and Energy

These are the three resources that are finite in this life. You can only use them once. They are non-renewable. So be careful how you spend them!

The thing about time, health and energy is that you do not know how much of each of these scarce resources you have left to you. It's impossible to know how long you'll live, how healthy you'll be in your later years and how much energy you'll have. And all of these factors have a direct effect on how much money you're going to be able to generate during your lifetime.

Money is time

People often say that time is money, but, in reality, the reverse is true. You trade your time, your health and your energy to generate money that many people then squander unnecessarily on things they do not really need and often do not even bring them much enjoyment. Every time you make a spending decision, you're committing yourself to working more days, months and years in a job that sometimes you do not even like to get your bank balance back to where it was before or to move forward financially.

Selective spending

Given this, when you spend money on non-essentials, make sure that the enjoyment of those things bring you more than offsets that extra time that you'll have to dedicate giving away at that day job! When you spend money, you're really spending your finite resources of time, health, and energy which are in diminishing supply. Just because paycheck comes in at the end of every month does not mean it's going to last for ever. Jobs come and go, you get old, sick and tired. And there will be a time when you'll have to live only on what you have not spent and have saved up instead of just spending next month's paycheck. State pensions are unreliable at best and they're kicking in at an ever more advanced age – 65, 67 years old or even more by the time you get there.

Work ethic

Thrift is closely linked with work ethic. Some historians tell us that Protestants in Northern Europe in the sixteenth century developed an ethical of hard work as benefitting both yourself and society as a whole. The concept of thrift went hand-in-hand with this. After all, if you're working hard for your money, it makes no sense to squander it. There have been various counter-arguments as to where and when all this really started, but for our purposes it's unimportant. The concept is still just as valid, where it came from.


The mentality of entitlement is almost the exact opposite of thrift. Entitlement is where we absorb we deserve things but without having to work too hard to get them. In reality, just because we went to university or did well at school does not mean we're entitled to a comfortable way of life with all the luxuries and conveniences of the 21st century. You could even say there's no such thing as rights if you do not accept the responsibility to work hard to get them. Of course, I'm talking in the sense of material possessions, not clean affordable drinking water or free education to the age of 18 which I regard as basic human rights.

Bad habits

Every time you put a cigarette in your mouth, drink too much, even exercise too strenuously you're squandering your health. Every time you spend a whole evening watching rubbish on the television or even sleeping too much, you're wasting time that you could use in a better way. And every time you waste energy on things that do not bring you real enjoyment, you're throwing away the chance to use that energy on more important things.


Richard Quest in his financial program on CNN always finishes with the words, "And whatever you do, make sure it's profitable."

Enjoy yourself but be thrifty with your finite resources. Be selective in how you spend them, get the largest bang for your buck and make them last you as long as possible for the rainy day that's bound to come along at some time or another.

Source by Simon Hill

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