By: Larry MacDonald

I’m in favor of people living within their means and creating wealth through saving and investing. I believe they will live better lives, and the country’s economy will be stronger for it. Kudos then for Kerry Taylor ….

She blogs on money-saving tips at squawkfox.com and has recently authored a book on being frugal. Entitled 397 Ways to Save Money, it’s already received a lot of coverage in the blogosphere at spots like the Wealthy Boomer blog and WhereDoesMyMoneyGo.com (who links to other reviews).

Frugality is normally associated with looking inward and seeing where expenses can be cut out of one’s personal life. But what about looking outward and seeing what can be changed in one’s environment to reduce costs?

Like the spending the government does on our behalf. It’s perhaps ironic but as frugality comes into vogue at the grassroots level these days, our governments are rushing to step up their spending, expanding their fiscal deficits at an alarming clip because they think it’s bad for citizens to reduce consumption in response to job uncertainties and lower asset values.

Taxes are our biggest and fastest growing expense (which huge deficits will surely make even more of a burden). As can be seen from the chart below (taken from a Fraser Institute study) the amount of money the average Canadian family pays in taxes has grown more rapidly on a percentage basis from 1961 to 2008 than family income, rate of inflation and basic necessities such as food, shelter and clothing. So much so that taxes are now a family’s single largest expense (nearly 43% of income for the average family).

Much of what we fork over to the government goes for good stuff but I’m willing to wager a very large chunk of it is wasted or is needless – as described in a previous post. Frugalites, in my opinion, should also look outward and get proactive about bringing some sanity to government spending and taxation, as well.

Just my two cents worth … after taxes, of course.