I recently had lunch with a few coworkers (all of whom are new parents), and we were talking about the cost of daycare and the cost of raising kids generally speaking. I shared my opinion that children don't have to be net worth killers which seemed to be initially well received, but was later rebuffed in a round about sort of fashion (typical Minnesotans).
At the core of my argument, I assert that some kid costs that are mostly out your control (health costs, food, etc.), but your lifestyle will dictate the majority of your kid related spending (daycare, house, cars, activities, etc.). Which seems all well and good and even logical until you start talking with folks whose household income tops $200K per year. When this group becomes your core audience, you suddenly have to ask the question, "Is frugality universally helpful, or do my friends earn enough money to live their desired lifestyle without concern for money management?"
After much deliberation, this is where I've landed on the issue.
If you have any money stress, then frugality is for you!
Typically, talking about the high cost of X indicates money stress. X is something you need, and you are having a hard time coming up with the funds to pay for it.
It may be your opinion that it should not be difficult for a couple who earns $200K+ per year to come up with $1600/month to pay for daycare, but if that couple was living anywhere close to the edge financially, then that amount of money (Probably 20% of your take home pay) is going to put a real dent in their financial situation. In the Minneapolis market daycare easily costs more than rent or a mortgage on a reasonably sized home. For new parents undergoing the transition to paying for daycare, I highly recommend looking into the frugal mindset. In fact, I recommend it for anyone who is experiencing money stress of any kind.
Frugality means reviewing your spending and reducing any form of spending that is not strictly speaking necessary or extremely valuable to you. It could mean trading down cars, skipping meals out, cutting cable, eliminate window shopping or mindless online shopping. Sometimes it means all of those. Sometimes you even go to extreme measures like selling your house to downsize.
Frugality is not sexy, but it makes an immediate impact on your bottom line, and it can help you feel in control of your money. I'm not recommending that people earning $200K per year should start clipping coupons or skipping takeout coffee, but I am saying to stop all mindless spending for one month. Get in control of your cashflow, and become an adult and direct your money.
If you're feeling money stress, then frugality is a necessary first step in eliminating it.
Frugality as preventative medicine
I've just described frugality as an antidote. Something to be taken when you're stressed, like Pepto Bismol after a particularly egregious dinnertime binge. I think it's fair to think of frugality that way, but I think you can also think of frugality like you think of healthy eating as preventative medicine.
Of course healthy eating alone isn't going to fend off every cancer, or alzheimers (sorry mom, its true), or protect you if you get hit by a Semi, but it can lead you towards a healthier life. You will definitely feel better day in and day out, and you may be able to avoid a few diseases, and put off a few more simply by eating better.
The same goes for frugality. If you choose a frugal lifestyle, then you're preventing some future financial stress. Of course you or your spouse might lose your job, or you might have sky high medical bills, or an unusually bad string of luck with your home and cars, but being frugal ahead of time means that you can better cope with those problems, and even see a few as mere annoyances. This is especially true if you're practicing frugality in the presence of a $200K annual income.
Preventative medicine and frugality looks different for everyone. My dad is a large, athletic man. He eats healthfully at close to 3000 calories a day. My mom is a small, fit (but not athletic), woman. She eats healthfully, but probably close to 1500 calories a day. Just like healthy eating looks different for people of different sizes, ages, and fitness levels, frugality looks different for people with different incomes, lifestyles, and aspirations. People who earn $200K a year can have a latte every day of the week and twice on Sunday and still be frugal. They can own cars or homes that you think are too big or fancy and still be in great financial shape.
Goals, mindfulness and enough are for everyone
At the end of the day, I know that some of my coworkers are spending beyond their impressive means, and I know some who are spending a lot more than the frugal rockstars, but are still in control of their money. I spoke with one coworker who gave up coffee and eating out due to allergies. She said, the cost savings are completely not worth it to her. She would rather spend $5K a year and have her daily splurges than avoid going out (she would also rather be alive than dead though, so that's whats keeping her on board). That I think is the key.
If you are spending mindfully, even if you're spending a lot of money, I think you'll be just fine (financially speaking). As long as you have goals and are working towards them, then you are working towards financial fitness. If you have some living and active concept of "enough" or being satisfied, then, even if you're spending is high you've made the discovery that money is a terrible master.
This is my bias, but I have a hard time believing that it is possible to spend mindfully, to develop financial goals, and to have living concept of "enough" without practicing simplicity or frugality for an extended period of time. I think it's stupid to tell people who are earning $200K a year to skip their morning latte, but I think completely neglecting frugality is a detriment even to the highest earners.
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.