The Privacy vs Frugality Debate: Saving Money Costs You

Privacy vs Frugality

How do you save money yet keep your personal information private?

This is an article by Sam Lustgarten, a doctoral student at a midwestern university.

We're living in a surveillance society. Recent news and leaks from whistleblower, Edward Snowden, show that the American government has an intricate network — both foreign and domestic. The Washington Post recently reported that 56 percent of Americans approve of these surveillance tactics. The issues of privacy and security have overtaken the blogosphere and many media outlets.

Despite all this, I'm just a lowly graduate student trying to save a buck or two on groceries. By giving up a bit of my privacy, I can save a lot each time I go to the store. In exchange, I hand over (with or without my knowledge) treasure troves of data that are eventually sold to the highest bidder.

Each time I print a coupon from a coupon site, it's tracked, measured, and my location and behavior is logged. The Target debit card saves me 5% every time, but it can also predict if I’m about to have children, move to another state, or just received a salary bump (read more about this in the book Brandwashed by Martin Lindstrom).

My loyalty cards show my spending habits and can be used to predict what I'll buy next — or sell me something I may not need. I realize this. I'm conscious of the tracking; yet, I'm allowing it.

As these NSA leaks and greater talks about privacy bubble up, I'm wondering whether giving up my privacy to be frugal is worth it anymore. Companies are trading my data without my explicit permission. Maybe it's time to reassess the “benefits”? The following is my debate on the key points of privacy vs frugality.

Privacy Camp

1. Personal Info Equals Money To Marketers
Legal data mining is a growing industry. Google, Yahoo, Facebook, etc. — they all mine data that is shared on their servers and make money from it. Facebook's asset is your profile information. They know a massive amount about your personality, location, likes/dislikes, interests, hobbies, friends, and more. All of that power gives the company a near $60 billion valuation.

Advertisers want to target specific audiences to reduce costs and increase sales. If they know everything about you, that makes their job far easier. Most discounted transactions or free offerings necessitate some data collection.

Just because you willingly hand over data to one company doesn't mean it stays there. Many companies' terms of service allow them to exchange this information to the highest bidder. Using a Chase credit card means all your transactions are curated and tracked, and some of your data is sold to third-parties.

In a lawsuit or government raid, this data could also be subpoenaed and collected. It suddenly makes voluntarily sharing this information seem a bit more dangerous.

2. Tracking Is Psychologically Invasive
There's a disconcerting feeling when you're tracked. In a way, it invokes the same feelings associated with being stalked. We don't like it. Psychologically, tracking can take a toll on our mental state.

Whether it's a relatively harmless cookie (not the food) on our browser or a government investigation, these can leave people feeling uncomfortable. Most of the time, it's not an active choice to be tracked digitally. We grab a loyalty card or browse our favorite sites — not realizing that a site like has about 10 trackers at any one time.

3. Targeted Advertisements Encourage Greater Spending
Just the other day, I was using my backup browser, Safari. As I began to research an email application for Macs, I noticed that the same client was being advertised on other sites. All of a sudden, Google had learned what I was looking for and began advertising options.

This new targeting of advertisements is ingeniously designed and part of me marvels at the accuracy of Google's ad platform algorithm. It can effectively predict what I want next by culling through my searching patterns. Therein lies the problem: If I'm being targeted, I may be more susceptible to purchasing or following that ad.

Frugality Camp

1. I'm Not Doing Anything Illegal
I’m not doing anything illegal, and the NSA — or any government agency — doesn’t care about me. My loyalty cards, coupons, and cookies across websites don’t mean much to me. How could they mean anything to marketers?

Secondarily, I prefer ads that are tailored to me. Instead of strange dating site offers and spammy iPhone apps, I’m offered running shoes and coupons — exactly what I’m looking for! In general, it makes the web feel like it’s made for me.

2. Loyalty Programs & Coupons Save Me Money
Maybe if I was wealthy I could argue this point differently, but as a struggling graduate student with $40,000 in debt, I need all the help I can get. Loyalty cards, coupons, and surveys offer me savings that really help keep more in my pocket.

Without these programs, I’d be missing out on 5% discounts at Target and coupons for products I already love. Nobody aspiring to be more frugal should give up these benefits.

3. The Exchange Is Fair
I realize that a transaction is always occurring, even when products are advertised as free. From advertising and marketing companies to federal governments, the exchange seems fair. I feel comforted in knowing that I’m safe from terrorism. I feel comfortable giving companies a little peek into my life to reap serious rewards in the end.

The Debate Doesn't End Here

I could eschew all forms of identification, opting for a cash-only lifestyle, but I'm not ready to lose all conveniences and discounts. Privacy vs frugality will be a developing issue for those aiming to save money and have their identities respected.

Technological advances are increasingly encroaching into our homes and minds. In the coming years, privacy could be an impossibility in a Google Glass-filled world.

My perspective? The future must be one of moderation and compromise in either direction. As of now, exchanging personal information for a discount makes a certain level of sense. But, this immediate discount may lead to long-term increased spending, as they will be better capable of selling products to you.

If you choose different nicknames for loyalty cards, refuse to hand over your zip code, and use credit cards less, perhaps privacy can be achieved while keeping some modicum of frugality. By removing ads from your browser, installing programs like Ghostery, and opting out of targeted advertising, you can slowly combat these data concerns.

Where do you stand in the debate? What privacy do you sacrifice to be frugal?

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