The Paradox of Frugality: How More Affordability Demands Greater Prudence

This blog is for all of us. Okay, okay. At least for most of us.

Many times, perhaps sometimes, we who are blessed with enough lead lives as if we are poor. There is a struggle in our lives, a struggle to decide if it is worth it: the struggle to cut costs, to save. This obsession with saving can cost us dearly. Not immediately, but sometime in the near or far future.

Let us journey through a logical, step-by-step unraveling of the cost of ‘frugality.’ But before we do that, let us touch on some basics.

Affordability Based on Income

Time is money. We know that.

Consider a few scenarios.

A person earning five thousand rupees a month has to choose a mode of travel in a city. For him, the calculation is simple. Waiting one or even two hours for a bus makes economic sense. That time, while precious, does not yet command a premium that demands a faster, paid alternative.

Now, consider someone earning fifty thousand. For her, waiting two hours represents a significant loss. She could be earning, creating, or investing. Her time’s higher value makes that wait a poor bargain.

Scale this up further. For someone earning ten lakhs a month, each minute is exponentially more precious. The key, then, is to know your worth before you decide your actions. It is about clear-eyed accounting.

But here is the crucial, often missed, twist. With greater affordability comes greater potential cost. This is the central paradox.

Imagine the simple act of catching a bus. A bus might be late, or worse, meet with an accident. A passenger might sprain an ankle getting off. Now, follow the financial ripple of that minor event for two different people.

A person with limited means will likely go home, apply a basic remedy, perhaps visit a local doctor for a small fee, and rest. The total cost of that accident is minimal. For someone higher up the financial ladder, like Smita, the same incident triggers a different protocol: perhaps an MRI scan, consultations with specialists, and expensive medication. Smita's accident could easily cost fifteen or twenty thousand rupees.

The first person’s accident is a minor financial event. Smita's accident is a major one. Therefore, Smita's calculation cannot just be about saving on an auto-rickshaw fare today. It must be about preventing the twenty-thousand-rupee outcome tomorrow. Her affordability dictates her potential expenditure if things go wrong.

So why would she not catch an auto-rickshaw? One that saves her trips up and down railway platforms, risky crossings to bus stops on the opposite side of the road, and walking with heavy luggage back to her house. Her answer might be: Why not? I saved 175 rupees.

Her logic as an elderly housewife: “My time has no value,” she might say. “I don’t earn. I am at home. What else do I have to do?” And while time might feel idle, the cost of treatment does not idle.

Ask her son, “How much would you spend if your mother had a serious problem?” The answer is immediate: “As much as it takes.” That is the latent cost. That is the potential bill lurking in the background of every seemingly small risk. If a shortcut or a money-saving measure today increases the risk of triggering that costly treatment tomorrow, does the saving still make sense?

This principle extends beyond travel. It applies to health and comfort directly. The ability to afford more necessitates greater caution, because in carelessness, you do not just risk an accident. You risk activating your entire, expensive safety net.

This brings us to the most profound point, one that flips conventional wisdom on its head.

We all know the saying that one hospitalization can wipe out your life’s savings. We think this is a threat only to the poor. It is not. It is a universal truth.

The amount you lose scales with what you have. A poor person might lose a crucial thousand rupees. A middle-class family might lose five lakhs. A wealthy family might lose crores. The mechanism is the same. When life is threatened, you will spend everything you can to preserve it. The value is not in the money spent. It is in the life you are trying to save. Therefore, everyone, from the poorest to the richest, is ever just one serious illness away from a form of bankruptcy. This could be financial or, ultimately, the loss of life itself.

This is where our modern mindset fails us. We think earning more and saving more is the shield. But if a man who has saved crores faces a health crisis in his family, he will spend those crores. Having more does not protect you from spending more. It ensures you will spend more.

In fact, in today’s commercialized healthcare landscape, greater affordability can sometimes lead to more interventions, more complications, and greater risk. We saw hints of this during the pandemic. Often, it was not those who went to intensive care who fared best, but those who managed effectively at home. The point is stark. Spending more does not always mean living more. The fear of bankruptcy is for everyone. For the poor and middle-class, it might be the fear of losing all they have earned. For the ultra-rich, the risk is the ultimate bankruptcy. They risk losing life after enduring every possible, grueling, and expensive treatment.

So, what is the answer?

It is not to live in fear, paralyzed by the thought that an asteroid could hit you if you walk outside. It is to practice a philosophy of intelligent prevention.

If you can afford an auto-rickshaw, take it. It is not because your time is so grand, but because you are protecting your investment. You are safeguarding your inherent capacity to afford future care. Do not wait for the crisis that will compel you to spend everything. Use your resources now to build a buffer of safety, comfort, and peace.

This is the true meaning of preventive care. It is the understanding that the money spent today on a safer ride, a better diet, or a moment of peace is not an expense. It is a strategic defense against the catastrophic costs you are uniquely vulnerable to, precisely because you can afford them.

Weigh your options carefully. Do the thing that optimizes your energy and minimizes the risks that can truly cost you dear. Your time’s value is not just what you earn in it, but what you protect by using it wisely.

Next time you are at a bus stand waiting for a bus, ask yourself: am I waiting for a fun experience, or am I trying to save? The answer should help you decide.