Frugal For a Season
We’ve posted extensively about our reasons for being “frugal,” or not maximizing our expenses. We want to live purposefully and generously. We want to invest time and money into our family, friends, and community now and as our financial flexibility increases. However, I use quotations around frugal and even hesitate to quote my own blog title anymore, because our thriftiest days are behind us.
I’ve already chronicled my fall from homemade-yogurt-making diva to grocery delivery slacker. Blame it on the third kid, middle age, or financial frivolity, but I simply don’t have time for my semi-crunchy lifestyle of yore. (I did recently make granola for the first time in years, but only because I was on one of my dreaded anti-sugar crusades.)
I’m not even sure what to call our former “frugality” because much of what is today deemed extreme frugality was standard fare a generation ago. My mom hung laundry, cloth diapered, composted, thrifted, and side-hustled without seeming to think twice about it. Not to mention Neil’s grandparents raising 5 kids in a small bungalow with a postage stamp yard, because that was normal.
And then there’s us. Third kid, we buy a minivan and a bigger house with a bigger yard. Spend $$$ on gymnastics, etc. (but so did my frugal mom for me; it comes full circle). I hung my once frugal head in shame while ordering extra Christmas gifts for the third kid so she won’t steal the middle child’s presents.
Looking back over 16 years of adulting (read: marriage), we were frugal for a season. And for a reason: we paid off student debt and our first home. We got the investment snowball rolling. Started college funds. Travelled. Gave to charities. All of which would have been much harder to do one income had we taken on car payments, consumer debt, or a huge mortgage.
Now I’m left searching for a new term to label our lifestyle. The phrase financially efficient comes to mind. This is, like our title, both subjective and tongue-in-cheek, since there’s absolutely nothing efficient about having three children, and in many ways, this choice was the end of all efficiency for us (See “We Hate Money, or We’re Having a Third Kid“). But our growing responsibilities and expenses led us to re-evaluate what is worth saving our pennies over, and what is not.
Now, as the stock market and time have been working their magic on investments, and as our income has grown, and as we’re pulled in more directions than ever, saving dollars in my old crunchy ways seems less worthwhile. A decade ago we were newly settled into our first home, had recently paid off our student loans, and were enjoying our first Christmas with an infant (hello, college fund). Now we’re discussing the details of Roth conversion ladders because a period of more flexibility is not so very far away.
A few thoughts come to mind as I look over our financial journey, and the many personal finance articles I’ve read over seven years of blogging. On the debate between growing income versus cutting spending: it’s more about your values and priorities than numbers. I.e., what do you want and need to focus on? How much did hanging laundry and cloth diapering speed our progress? Only slightly. But having chosen to stay home with the babes, I wanted to do what I could. And it’s better for the earth (says person who now buys the 300 pack of paper plates).
What did help was buying a home we could afford, putting 20% down, and paying it off early. Paying our student loans off early as well. Avoiding car payments and other consumer debt. And with the cushion provided by no debt except a smaller mortgage, we got those investments rolling, because the first $100,000 really is the hardest. Many smaller things like cooking at home, camping for some vacations, and buying secondhand didn’t hurt, either.
I’d also point out that the posts you see about extreme frugality or no-buy challenges usually reflect a very limited period–a season. Sure, many people could live on a limited income for a year or two. You defer home upgrades & large purchases, and use your stash of clothes and cosmetics for a couple years. There is a real value in breaking needless shopping habits, learning contentment, and rethinking how you consume. Considering how we’re inundated with ads and influencers suggesting we need to constantly “improve” ourselves and our lifestyle, these frugal challenges have their place. And funds directed toward bigger goals have a lasting impact. Just don’t feel bad if your average spending doesn’t match up to an catchy headline.
More important than the number you spend, save, or even give, is the why behind what you do. Do you have financial goals? Are you happy with how you’re spending? These are topics we like to revisit near the beginning of the year as we look at our budget and plan for the future.
How has your approach to personal finance changed over time? What are your goals this year?
Why You’re Failing at Frugality
Image and caption by Anne Taintor
“I’ve tried to be better with money but it just doesn’t work. I was shopping at ALDI, but then I bought some strawberries that were moldy. So I’ve started using coupons. We replaced our weekend night out with take-out so we don’t have to pay a tip. I had to get a car payment because I can’t break down on my way to work. But now I’m saving on gas because the car gets better mileage. Plus I get fuel discounts from my grocery card. And I can’t get out of debt because I don’t want to wipe out my savings. If only I made more money, then I could follow all the financial advice I hear.”
Sound familiar? We’ve probably all heard or made some of these statements. If to err is human, so is to make irrational excuses. Don’t worry, I’ve erred and excused with the best of them. We nursed our student loans for a couple years (and went to Europe, and bought a house) before deciding to decimate them. I withdrew funds from my retirement account after leaving my first real job at age 21. (Doh!) We all make mistakes, and we all have different priorities. But I hear a lot of people who are completely mystified about their financial frustrations because they genuinely believe they are pretty frugal.
So how is it that some people cut coupons, shop sales, eat Meatless Mondays, even give up cable (!) , but just can’t seem to get ahead financially? Chances are, they’re only pretending to be frugal, which is a world apart from pretending to be poor. In a materialistic culture that masterfully markets the financial fallacy that we save money by spending money, it’s almost impossible to resist the pitfalls of faux frugality. The point here is not to feel guilty, but to wake up and get clarity about our financial decisions so we can take charge. I can’t sit back and let comrades Pretend to Be Frugal, when they should instead Pretend to Be Poor. Let’s explore the difference.
| Pretending to be Frugal | Pretending to be Poor |
| Finding less expensive ways to inflate lifestyle | Finding ways to deflate lifestyle |
| Views spending as a way to “save” | Views spending as something to minimize; actually puts “saved” money into savings |
| Seeking luxury, comfort, and convenience at a discount | Minimizing luxury while increasing usefulness |
| Views spending as a game to get “more for my money” via coupons, sales, “freebies,” tax write-offs, etc. | Challenges oneself to increase savings and generosity by reducing expenses |
| Focuses on small savings areas instead of big ones | Ruthlessly prioritizes savings on the big three (car, house, food); continually finds new small ways to save |
| Lacks consistency in frugal practices | Has a detailed plan and focuses on results |
| Lacks goals and purpose of frugality | Focused on financial goals & bigger purpose of frugality—understands why |
| Makes excuses for lack of savings, blames lack of income | Tracks own progress toward goals |
| Fights with spouse/SO over spending. Competes for resources with spouse | A frugal team, work together to find new ways of saving |
| Stuck in survival mode | Generous |
So are you frugal or just pretending? Are you simply finding cheaper ways to inflate your lifestyle, or taking concrete steps to deflate your lifestyle? In other words, are you looking for discounts on luxuries, or continually searching for the bottom boundary of how little you can be content with? You are either pushing the upper limits of your budget with excuses to spend, or challenging yourself to spend less and less.
Faux frugality views spending as a way to save. Do your “thrifty” habits belie spendthrift problems? We’ve all been tempted to spend extra to get a “free” gift, “free” shipping, or a tax write-off. But spending $50 to save $10 doesn’t mean you saved $10. It means you spent $50. On a larger scale, someone might upgrade a vehicle to “save” on fuel costs. But many times the cost of that upgrade can’t be recovered by the gas savings in a reasonable amount of time. People even buy houses because the mortgage payment looks cheaper than rent, and fail to consider the hidden costs of home ownership.
Those who Pretend to Be Frugal see spending as a game that consumers can win. If people who Pretend to Be Poor see spending as a game at all, it’s how little they can spend. Not how much crap can I accumulate while shelling out hard-earned cash. Instead, they want to spend in order to secure real needs and carefully chosen wants for as little as possible. I’m thrilled to optimize spending, but I’m not optimizing my money if I’m indulging in discounted luxuries that I don’t truly value. Materialism is a losing game, and I’m out.
Another big distinction between faux and true frugality is a willingness to tackle the big expense areas. The top three cost of living categories are housing, transportation, and food. If you can get these under control you are well on your way to financial progress. Often people stop at smaller areas like clothing or cell phone plans. I believe no budget line is safe from frugalizing. And people often need to start with something smaller and more manageable. But if you’re unwilling to delve into the deepest savings potential, you’re only playing at frugality, and it won’t get you anywhere. You can shop exclusively at ALDI and Goodwill, but if you’re unwilling to get rid of your car payment, slash your $300/month dining budget, pay off your student loans, or stop paying outrageous interest on credit card debt, you will not get ahead financially.
The Faux Frugals also lack consistency in key frugal practices. For example, they may shop at a discount grocery once in a while when it’s convenient, but mostly end up over-spending in unplanned trips to the Big Store. Until you are truly committed to the bigger picture of why you’d Pretend to Be Poor, you’ll lack the motivation to plan ahead and build frugal habits into your routine. Whether it’s hanging laundry to dry, packing a lunch, saving up for purchases, or paying off debt, consistency is key. You can’t practice frugality only when you feel like it; you’ll never see a difference. It’s those who give up too soon who say, “I tried being frugal, it didn’t really help.” The problem wasn’t the advice, but the lack of perseverance.
And this brings us to the issue of motivation. Pretending to Be Frugal has many possible motives. If you find yourself constantly comparing spending to friends, fighting with your spouse about money, or making financial decisions out of guilt, you probably haven’t latched onto lasting motivation. Understanding why you want tosave money is going to get you a lot further than just knowing how to save money.
Why the heck would I wash poopy cloth diapers or go camping for vacation with two tots in tow? What keeps us going is our purpose. Pretending to Be Poor is not about being a miser. There’s nothing actually impoverished about our lifestyle. But we are essentially pretending to have less money than we do, so we can have the flexibility to take opportunities that come our way (like my trip to India), prioritize people, and practice generousity . Authentic frugality increases your usefulness as you learn new skills, get creative, help others, strengthen your relationships, and enjoy it all as a fun adventure.
So stop playing at being frugal. Unless you make a ton of money, if you want to make progress financially, you have to go all-in. That doesn’t mean tackling your entire budget at once. But you have to be willing to challenge any area of spending, one at a time, big and small. You have to quit the materialistic game of spending to “save.” You’ll need to give up some preferences and be consistent. And you must get your reasons in order to secure lasting motivation.
Consider Proverbs 14:23: All hard work brings a profit, but mere talk leads only to poverty.
What other differences do you see between faux & real frugality? What motivates your frugality?
Extreme vs. Classic Frugality
Low-expense living is trending under the guise of “extreme frugality.” But I call BS on this terminology.
I have no desire to pass judgment on others’ spending since everyone’s situation and values are different. Not many conversations are less pleasant than the who’s-more-frugal pissing match. And the media is probably more to blame for this misnomer than the families it features, who are just trying to live reasonably.
But when did eating at home become classified as “extreme frugality?” Is a year-long clothes-buying ban, perhaps following ten years of over-shopping, actually extreme? Does hanging clothes to dry make you a frugal rockstar?
Again, I’m NOT saying people with a certain habits or possessions aren’t frugal enough. My beef isn’t with anyone’s lifestyle, but with attaching the term extreme to what is nothing more than simple, reasonable, classic thrift. Yes, resisting lifestyle inflation is counter-cultural. But as some of the richest people on earth, can we all agree that most of us are not leading extremely frugal lives?
“Extreme” is Actually Classic
We prefer to view our lifestyle as nothing more than classic frugality–with plenty of luxuries in the mix. Let’s consult historical context to clarify terms. In recent history, we find the advent of modern personal finance/early retirement blogs beginning with Early Retirement Extreme and then Mr. Money Mustache. (For some reason, my 2008 “How to Be Cheap” blog series didn’t make it as big.) MMM has made it very clear that, while his family of three lives on only $25,000 per year, they are not claiming to practice extreme frugality. Their lifestyle is just “slightly less ridiculous than average,” to use his self-description. Laurie at the Frugal Farmer also wrote about this topic in her post When Frugality Was Normal.
Rewind a bit further, and we find ourselves practicing the same money-saving habits our grandparents did, while living in a larger home and owning more cars. For example, Neil’s grandparents grew old in the same small bungalow where they raised five children while owning one car. You’d better believe they hung clothes to dry, cooked from scratch, and bought only what they needed. They didn’t need to employ gimmicks to control their spending. Their whole 95 years on this planet have been a shopping ban.
If we want to talk about extremes, let’s talk about people like Mother Theresa or Gandhi. Do you think Gandhi was making cash envelopes for “Rice” and “Dhotis”? When he died he owned about ten possessions, including his iconic spectacles. Now that’s extreme.
I’m all for shopping bans or cash envelopes. I just can’t get on board with calling them extreme. To me, extreme frugality means something more like living out of a van, or one-bedroom apartment with multiple kids, dumpster diving for food, and keeping your heat at 50 degrees.
Classic frugality means something more like:
- Not having a car payment.
- Shopping at discount and thrift stores.
- Trash-picking when you find something good.
- Packing lunch and limiting restaurant spending.
- Skipping subscription services like cable.
- Camping for vacation.
I’m not trying to debate about who does which frugal practice. I’m just saying, this type of frugality is what we’re into, and we don’t view at as extreme. It’s simply reasonable. After all, owning a car or two, living in a multiple-room home, and eating three full meals a day makes us quite spendy by global measures.
“Classic” Is More Motivating
The only “extreme” we’re surrounded by is extreme over-consumption. So I suppose our thrift is a marked difference compared to the insanity of going out to lunch every day, building brand-new 4,000 sq. ft homes, and leasing cars for $500/month. But just because a sizable segment of our population has gone completely crazy with their spending, doesn’t mean we’re living an equally far-out alternative. We’re just enjoying a more lavish version of past generations’ simplicity, and keeping that in perspective is intriguing, contentment-building, and motivating, all at once.
Surely viewing a slightly deflated lifestyle as “extreme” suggests it’s formidable or unreasonable to maintain. If we could embrace simple living as just a thrifty throwback to normal, we may find it much more manageable. And I’m all for sensible views that will fuel our financial flexibility over the long haul.
If our site title seems to suggest we think we’re doing something extreme, allow me to clarify: it’s all relative. We see “pretending to be poor” not as literal, or meant to demean those who are truly struggling to get by. Rather, it’s the only viable alternative we see to be pretending to rich. Either you’ll live on more than you make, or less. And only living on less will allow us to invest both in our future, and in the lives of those in need. We are very much “Just Pretending“and that keeps us going way more than if we thought we were doing something difficult and extreme.
Do you agree with this distinction between classic and extreme frugality? Can you see any other drawbacks to using this misnomer?
Christmas Gifts That Keep on Saving
Still shopping? Me, too. And who wants to gift junk people don’t need? Forget about jelly of the month club. Give gifts that will keep your frugal friends and family members saving all year long.
- Rechargeable batteries. Keep powering toys, flashlights, and other gadgets with less cost to you and the environment.
- Glass storage containers. Packing lunch and storing home-cooked leftovers is so much easier with the proper containers, and glass ones are healthier and easier for re-heating food.
- Cloth napkins. I love cloth napkins, not only for their cost effectiveness, but because they work so much better than cheap paper napkins.
- College fund contributions. This is the gift that keeps growing with the child, and adds value throughout his or her life. While toys and clothes begin depreciates as soon as a kid touches them, compounding interest will grow your gift over the next decade or more. And it’s tax deductible if you contribute directly to the fund.
- Wool. Barring wool allergies, wool sweaters, socks, or scarves are a great way to help a frugal gift recipient stay warm throughout the winter, ‘cause you know they’re too cheap to turn up the heat. Wearing wool saves us hundreds of dollars a year in heating costs, and of course we buy it at thrift or outlet stores. (But you might not want to give thrift store socks for Christmas. Just sayin’.)
- Camping gear. Open the Door to a Lifetime of Vacation Savings by lowering the entry cost of camping. We save over $1000 a year on vacations by camping, but wouldn’t want to without our tent, camp stove, air mattress, and sleeping bags.
- DIY reference materials, such as books on gardening, DIY home repair, cookbooks, backyard chickens, honey bees (our next venture) or any other book supporting a money-saving hobby or endeavor. Here’s my favorite Indian cookbook. And my favorite bread-baking book: Artisan Bread in 5 Minutes a Day book. These are the types of books that I’d rather own than get from the library since we consult them so often.
- A bike. Biking for frugal transportation seems to have made a comeback via the illustrious Mr. Money Mustache. At least, this is what sold Neil, and since then he saw fit to gift me a bike (purchased on Craigslist). You can read about my embarrassingly ungrateful initial response on my personal blog. I’ve repented, and this year my other wish (besides cloth napkins) is a bike hitch so I can haul the kids around in our (also from Craigslist) bike trailer. Helmets are also a good gift for anyone whose brains or beauty you wish to preserve.
- For the new parent: temporal lobe thermometer: This thermometer is so quick & to use, my kids like getting their temperature taken. It also seems more sensitive than traditional ones.
miracle swaddler: This blanket gently helps keep those arms swaddled much longer than other styles.
white noise: A small, portable white noise machine is ideal for travel, even if it’s just to put your baby down to sleep at a friend or grandparent’s house. It’s also great for hotels and camping.
rechargeable batteries: Battery-operated toys are bound to enter your house. This set will save you loads in the long run.
12. For the handy man: (suggestions from Neil)
drive socket set: I’ve been preaching this to anyone who will listen lately, once you go 1/2″ for automotive work, you won’t go back. If you or a loved one will be doing any work on their car in the near future, I cannot recommend highly enough to get 1/2″ drive sockets. Most people use 3/8″ drive, and it’s nothing but frustration and busted knuckles.
wire strippers: These auto-stippers are a tool you didn’t know you needed until you use one. They perfectly strip wire of any common size without breaking the conductor. Much better and faster than using scissors or traditional strippers.
loupe – LED illuminated: These loupes are really fun. Easy to use and show the kids stuff close up. Bugs, carpet, newspaper, wood, all fun when viewed through a loupe.
wood-splitting ax: This Fiskars Axe is the only way I am able to split my own firewood. I am not a giant lumberjack; I cannot wield a 8-10# maul for a few hours at a time. This thing is light, swift, and well designed. It makes splitting wood fun.
drill bit set: Get these if you own a 1/4″ drive impact driver. Makes it into a small electric impact gun. Very useful and fast for backing out bolts/ nuts.
13. For the home chef:
pressure cooker: I never knew how amazing pressure cookers are until I received an electric one as a gift. It has saved dinner on more than one occasion when I forgot to thaw meat, or got home later than expected. It can cook bone-in frozen chicken pieces in less than half an hour. It also makes meat way more tender than other cooking methods.
instant pot: I don’t have one of these, but I’ve heard it’s the pot to end all pots. It’s a programmable pressure cooker, slow cooker, rice cooker, yogurt maker…you name it, it can do it. It’s priced very reasonably compared to purchasing one or two of these other devices. If I didn’t already own a pressure cooker and slow cooker, this would be on my wish list.
good knife: A good knife makes cooking sooo much more enjoyable–and safer.
14. For the kids:
K’nex, Legos, or Duplos: My son spends countless hours playing with these building toys.
Narnia book series, Little House book series: Classic children’s books make a great gift kids and parents will like.
Craft supplies or Play-doh: Replenish crafty consumables.
Zoo or children’s museum membership, sports class, Highlights magazine subscription: keep them entertained throughout the year with fun activities or subscriptions.
15. For the fit (or those aspiring to be): For those skipping the gym membership, my favorite workout videos are Zumba, Ballet Beautiful, & P90x.
16. For the whole family:
Whirlypop: We make all our popcorn in this stovepop popper. It makes excellent kettle corn as well.
Board games such as the Busytown Game (for younger kids): This game has the whole family work together to win.
Book sets such as Narnia book series, Little House book series
DVD sets such as Narnia, Harry Potter, or Star Wars
Museum or zoo memberships.
17. For the tea drinker: hot pot, Yorkshire English breakfast tea.
Happy shopping! I hope you find something for everyone on your list.
What other gifts keep on saving? What is the most useful gift you’ve ever received?
This post contains affiliate links.
Earn More vs. Spend Less Throwdown
What’s more important: increasing income or decreasing spending? The debate rages on, but unfortunately many answers miss the crux of the matter.
After a year and half of talking a lot of thrift, we recently broached the income side. To be honest, much of our financial progress has been supported by an above-average income. Yet we’re a one-income family living on less than half our take-home pay. We spend less than average and that makes an impact, too.
Many argue that you can increase your income by greater magnitudes than you can slash spending. But people often find their budget feeling tight even after their income grows. If you spend more than you make, it doesn’t matter how much you make. You never get ahead.
So what’s more important—your income side or your spending? Whichever one you need to work on. It depends on the person. I can’t tell you which that is for you, but I hope the case studies and questions below will help.
Consider two case studies of real-life families:
Family 1 was often running low on money despite having a very good income. They cited their house, having a baby, and medical expenses as some of the reasons for having cash flow problems. They were right that their spending was the problem, but were citing reasonable expenses instead of looking to the ones they could decrease.
Over time, resources from Dave Ramsey helped motivate them to reassess. They were eating out multiple times each week. They were paying for gym memberships they didn’t use. They were buying convenience items. One partner was smoking. They had a car payment and student loans. Once they started cutting back in these areas, they were able to pay off their car and student loans early. They built enough equity to stop paying PMI. The smoker quit. They started cooking at home. They identified that the problem was spending, acted accordingly, and have continued to make huge strides toward financial flexibility.
Family 2 was often close to broke, but one spouse’s father would cover what they couldn’t on a monthly basis. He even gifted them a down payment on a house. The only problem was that they couldn’t really afford the monthly mortgage payments. When they had their first child, the wife left her job to stay home. The husband worked in a field with limited earning potential. They still had student loans from his associate’s degree.
While their bills were paid, they had a serious income problem: part of their income was coming in the form of regular gifts. While this was very generous, it was ultimately unhelpful. It didn’t allow the family to attack their finances from the income side, which desperately needed attention. Both partners were capable of earning more but weren’t sure how to make it happen.
See how landing on just income or just spending doesn’t solve the problem for all situations?
Do You Need to Hustle?
If you’re underearning, dissatisfied with your job, or aren’t making enough to get by, you need to work more, harder, and/or smarter. You absolutely need to attack the income side so you can gain flexibility and not have money be the limiting factor in every life decision. You need a raise, a career move, a second job or other side hustle. Here’s how we stopped underearning by overstaying at the same company.
Know when it’s time to move on. Research your value in the market. Negotiate a raise if you’re underpaid. Assess what you’d be willing to do to make more money: would you work overtime, change companies, relocate, change careers, or start a side hustle or small business?
At some point, working more, harder, or sometimes even smarter becomes undesirable as it detracts your time and physical and mental energy from what you’d rather be doing. A common belief states if you could possibly make more money, you should. I disagree. There’s a lot more to life than pushing your earning potential to its outer limits, at any cost to other areas of your life. Always keep your real worth in the balance with your net worth.
Do You Need to Cut Back?
Do you have a good income and still find yourself broke? Do your expenses rise steadily alongside your income? Do you know how much you spend on average in a month? Are impulse purchases, going out, or recreational shopping frequent for you? Look to your spending for solutions.
I sense that people from relatively affluent homes are more likely to need to work on this side. People with the advantages of the middle and upper-middle class are more likely to earn good incomes. They’re also more likely to be acclimated to a “comfortable” lifestyle that may have taken decades for their parents to build, but they aim for as soon as they land their first job.
Whatever your background, don’t dismiss the expense side of the equation until you have a handle on how much you spend, and on what. It’s easy to say, if I only made as much as her, or if we could just catch a break from special expenses cropping up, then we could get ahead. But if you’re making decent money and not saving it or paying down debt, more money isn’t going to fix the problem.
In summary, my answer to the income vs. expenses debate is that you need to work on the area where you’re weaker until you gain traction. In some cases, you’ll need to work on both. But you simply can’t assess which one it is for you unless you have a good picture of your financial situation. We approach this by tracking our spending and creating an annual budget.
Review the last few months of your income and spending to catch a snapshot of both angles. If you cut, cut, cut, and there’s still not enough income, increase the input. If you earn, earn, earn and never find it to be enough, it’s time to decrease the output. Underearning and overspending are both a waste of precious resources.
A healthy financial situation looks like being happy with both your income and spending, while staying open to improving both sides. Once you reach this point you’re free to focus more on the angle that’s your strength.
What are your financial strengths? How have you improved your weaknesses? Any other takes on the income vs. expense debate?
The Power of Perpetuity
Photo by Neil Brooks
My son’s three favorite numbers are infinity, googleplex, and several. Lately, my favorite concept for considering numbers is perpetuity. The power of compound interest is a popular personal finance topic, but what may be even harder to get our finite minds around is the power of perpetuity. Its impact is significant both from the savings and income sides of a budget, yet we often write off opportunities for perpetuity when a sum sounds insubstantial in the present.
Let’s start by considering the savings side, because that’s a little easier to grapple with mentally. Take a relatively small expense like a cable bill. Let’s say you’re paying $60 per month. Sixty dollars is not a huge amount of money. It might not make a drastic difference in your finances. But when you think about the power of $60 per month in perpetuity, it looks a little different. That’s $720 per year. That’s $720 you can’t put toward debt, build into your emergency fund, invest for long-term goals, or share with people in need. That’s $720 more you need to bring in every year for the rest of your cable-watching life. That’s $720 per year that’s not earning interest. Sixty dollars per month is almost half a million dollars over 50 years at 8% growth ($479,932.83 to be exact).
I realize this example is a bit extreme in the time-frame. But at age 30, I’m facing an average of 50 more years on the planet. We need to start thinking more in perpetuity or we’ll miss out on its power. We think about what we want now and how it’ll affect today, this month, maybe this year if we’re relatively long-sighted. While we need to enjoy and appreciate living in the present, we also need to consider the real trade-offs we’re making with our money (and time). Would I rather watch cable TV, or leave my children or a charity half a million dollars? This is extreme and over-simplified for the sake of illustration, but I hope it brings home the point. (And just because I don’t happen to watch cable doesn’t mean there aren’t 100 other ways I could blow half a million dollars over the long haul.)
Now let’s think about the income side. Take, for example, investing in rental properties. The upfront cost of purchasing and fixing up a property may seem overwhelming. You might not start seeing a return on your investment for 5-10 years. But after that, you could bring in an extra $1k per month in perpetuity. Sure, you might have the property vacant for a few months here and there, and you’d have work and expenses to maintain the property, but an average of $1000 per month in perpetuity is nothing to dismiss, especially if you invest it in retirement or college funds.
Now let’s say you find a few ways to save money—on utilities, food, transportation, or whatever—and you’re saving $500 per month and (to be conservative) bringing in an extra $500 in perpetuity. That’s an extra $1000 per month to work with—in perpetuity. This is the power of frugality: if you live on less, you simultaneously can invest more and require less income in perpetuity. So while your investments grow, you freeze or even deflate your lifestyle, meaning you’ll need less of that stash when the time comes to start living off it.
Maybe you have no interest in cutting cable or owning a rental property. These are just examples. But if you can find something in your budget you’re willing to consider spending less on, and extrapolate the impact that could have over several decades, you may find yourself motivated to make a change you wouldn’t otherwise.
The same goes for the income side. Maybe you’re under-earning because you’re afraid to make a career change. You figure you’re making enough and feel safe where you are. I’m not at all in favor of revolving life around making as much money as possible. But you could be missing out on a more rewarding and lucrative career simply because it’s more convenient in the moment to stay put.
The power of perpetuity is why we’re willing to call our utility companies and negotiate lower rates. It’s why we shop at a discount grocery store and mostly cook at home. It’s why we buy second-hand (or even trash-pick) many items. It’s part of the reason Neil changed industries in his career, to increase his marketability and earning potential. In isolation, none of these moves might change the course of our financial lives; taken together in perpetuity, it’s the difference between financial slavery and flexibility.
Again, my point is not to work away your life and spend every spare moment scouring your budget for ways to save a dime. Rather, as you’re faced with day-to-day financial decisions, try to consider the power of perpetuity as well as the needs or whims of the present. It’s the latte effect on steroids. And it lets you dream bigger than you ever will just living for today.
How could you harness the power of perpetuity in your finances?
What’s the Ugly Xmas Sweater in Your Budget?
Neil’s authentic Ugly Sweater.
The Advent of the Ugly Christmas Sweater
When did you attend your first Ugly Christmas Sweater party? And how much did you spend on that embroidered, bedazzled beauty (or beast)?
Back in 2004, one of my hipper college roommates (they were all hipper than me) suggested we throw an Ugly Sweater party. It’s been so long I don’t remember how much my ugly sweater cost, but it was definitely less than $5. Neil also snagged one for a few bucks and still proudly sports it through the holiday season and beyond.
During a recent visit to the thrift store, I noticed that the Ugly Sweaters were displayed prominently, and over-priced compared to their Regular Sweater counterparts. There was no shortage of discounted jolly jumpers cast off by retired elementary school teachers when my roommates and I shopped for such treasures. Twelve years later, Ugly Sweaters are sold by just about all major clothing retailers, and you can even buy “designer” ones for $40-65 in horrifying prints such as:
Please do not buy this.
Perhaps my fashion sense is a bit outdated, but I’m fairly certain that NO MAN SHOULD EVER LET THAT MONSTROSITY TOUCH HIS BODY! Or woman, for that matter. Neil’s opinion of Santa Centaur sweater: “It’s funny, but not $40 funny.”
But I suppose tastes will vary, so I’ll get to my actual points:
- Trends are stupid.
- Marketers can get people to spend money on anything.
- Fashion is futile.
- Value is relative, but sometimes it shouldn’t be.
The Ugly Sweater In Your Budget
I don’t think I even need to elaborate on those. So let’s end with some application: There is probably an Ugly Sweater in your spending. I’m talking about that line of your budget that owes its existence to a marketing ploy, a cultural myth, or an old habit that’s gone too long unchallenged. Maybe the line item itself is legitimate, but the amount is just nutty, and you can’t see it because Ugly Sweaters have become the norm. You’ve become inoculated against their ugliness and re-conditioned to view them as hip, or at least passable.
I have no idea what your Ugly Sweater is, but I urge you to find and unravel it. One likely culprit is consumer debt. By which I mean anything outside of student loans or a mortgage. Especially a car payment. A lifestyle of continuous consumer debt has only become an acceptable norm recently. Borrowing money all the time used to be as tacky as a Santa Centaur shirt. Living on less you than you make is precisely what we meant by pretending to be poor, and it’s a reasonable but often overlooked financial option with loads of benefits like financial flexibility.
Here are some Ugly Sweaters we’ve discovered in our budget:
- Haircuts for Neil. He’s growing his hair to his knees instead. Just kidding, I learned how to cut it.
- Haircuts for our boy. Neil’s job.
- $50 dates. Since we don’t get out often, we would budget (and spend) $50 every time. While we’re willing to splurge sometimes, we’re trying to get out more and spend less when we do with options like splitting entrees, going to our favorite less expensive restaurants, and buying ice cream at the grocery store. (Also, we visit places like parks, thrift stores, libraries, and coffee shops.) More on why you can’t afford not to date your spouse soon.
- Buying wine by the bottle. Unless there’s an amazing rebate, we’ve found less expensive ways to imbibe the occasion adult beverage. We are not ashamed of buying box wine.
- Christmas Lights. We’ve gone all out on outdoor lighting in the past, and probably will again, but we’ve reigned it in the last two years in order to focus on some big short-term financial goals.
Maybe we’ll do this again next year when we actually own this castle.
- Buying all-new Christmas gifts. Last year my wonderful mother suggested Goodwill was a perfectly legitimate place to buy thoughtful, useful Christmas presents, and we heartily agreed. We only buy for a select few people this way, but we save a lot buying our kids and each other certain pre-owned gifts. For example, the two-year-old’s Christmas tricycle is totally coming from Craiglist.
- Hang-drying laundry. We started saving about $25 per month in electricity when we stopped using our dryer so much.
- Wearing jeans with holes. I used to throw out jeans as soon as they wore holes in the knees, because that was “not my style.” Then I realized I could keep wearing them for some time before they actually qualified for scrap bag status.
- Cloth diapering. Though we are currently using disposables until (hopefully) potty-training soon, we saved thousands by using cloth diapers. More on this in an upcoming post I wrote for another site.
- Buying boneless, skinless chicken breast. Now I buy whole or bone-in chicken pieces and it saves a ton.
What do you think of the Ugly Sweater phenomenon (literally and figuratively)? Any idea what your Ugly Sweater spending might be?
Why I’ve Banned Shopping Bans
Many news stories are featuring families that follow shopping bans for a year or more. I applaud anyone who makes a major change to improve their finances, and the sentiment has strengthened my resolve to resist needless spending. I’ve encouraged those looking to break a recreational or therapeutic shopping habit to try this tool. That said, I’ve refused to jump on the shopping ban bandwagon. Shopping bans are banned from the Pretend to Be Poor household. Here’s why they aren’t for me:
- Rules are made to be broken. The very nature of the human heart rebels against rules, and imposing extra, unnecessary rules might not be the best way to stimulate financial self-improvement. As soon as I’m not allowed to have lattes, what am I thinking about? LATTE LATTE LATTE LATTE! But if you need to, ban lattes till the cows come home.
- Goals are more motivating than rules. Finding a positive motivation, like focusing on specific financial goals like debt payoff, saving for a major purchase, investing more aggressively, or giving to a charity can be a lot more effective than a big fat NO that ultimately incites rebellion.
- I want purpose and principles to order my life. I’m not interested in reducing spontaneity or socializing because I’m so controlled by an artificial constraint. For example, one of the principles that separates effective from faux frugality is counter-intuitive: instead of budgeting how much we should spend, we strive to see how little we can spend. We don’t follow this to a tight-wad extreme, but make sure we meet our family’s needs, practice generosity, and prioritize relationships. To be ordered by purpose and principles means I’m not going to spend $4 a day on coffee because I know what that $4 a day could do in the stock market, or for an impoverished kid in a developing nation.
- The personality factor. I firmly believe there is an element of personality that affects our finances profoundly. I’m a saver, married a saver, and if anything, my tendency is to resist buying things when I should. For example, Neil has been threatening to throw out my beat-up shoes for six months now, and tries to find excuses, like the fact that I wore them when the toilet overflowed, as reasons to do so. (I sanitized them.) Small children and pets all seem drawn to my jeans’ growing knee holes, and Neil suggested I might be taking the PTBP thing a little too far. (I’m just protecting my nicer jeans from the harsh effects of motherhood.) I realize shopping bans allow for purchasing needs, but I’d rather decide what I need as I go than trying to make an all-inclusive list ahead of time. That’s just my personality though. For other temperaments, if the shoe fits, have a shoe-shopping ban.
- Having children inflicted an involuntary shopping ban on me. I remember rushing to the store to secure a “mom” bathing suit the day of a family pool party, since the (hand-me-down) string bikini top seemed downright dangerous with a nursing babe in arms. Bathing suit shopping with kids is a very relaxing experience. My son detached all the bikini straps and threw them in the aisle while yelling made-up words. Then he sneaked behind a mirror into a forbidden nook, and returned only to push said babe around in the stroller at breakneck speed.
- I’ve automated my spending to a large extent. People often imagine being frugal is super hard work. Sometimes it is (ask my husband who’s been fixing our cars), but mostly it’s easier to simply not go to stores and not buy things.
- Like certain forms of minimalism, shopping rules can be as materialistically focused as over-spending. For example, if I spend too much time thinking, talking, or writing about why I’m going to keep wearing my holey jeans till they rip right off my body, I might be just as focused on material goods or money as if I went out and shopped for new—even (gasp!) brand name—ones. I’m not saying all shopping bans are ill-focused; I’m just recognizing the extreme I’d be tempted toward.
To wrap up, I wouldn’t inflict my shopping-ban ban on anyone who needs a habit-breaking hiatus. Here are some questions to help you determine if this tool would help you:
- Do you know where your money goes each month? (I.e. do you follow a budget?)
- Do you shop or drive-thru when you’re emotional or bored? Is shopping or stopping for food/drink a hobby or habit for you?
- Have you tried to break the habit before, without much success?
- Are you saving and giving away money on a regular basis?
- Are you able to window shop or go to stores without buying anything?
- Are you able to enter a store and buy only what’s on your list?
- Do you have way more things than you need in a particular area (clothes, shoes, accessories, electronics, movies, books, tools, etc.)?
- Is your entertainment or restaurant spending significantly more than you want it to be?
If you answered yes to some of these questions, you might consider a shopping ban. If you’re not ready to go all in, here are some other ideas to try first:
- Automate errands with Amazon Subscribe & Save.
- Limit frequency of shopping trips.
- Use cash envelopes for problem budget categories.
- Budget a small amount of fun money for splurges.
- Develop a Healthy Aversion to Spending.
- Try pre-gaming restaurant dining.
- Write down your financial goals and why you want to reach them.
My next post will reveal one of my best hacks for spending less when I do shop.
Have you tried a shopping ban? How did it help? Have you banned shopping bans? Why?
Say Good-bye to Meatless Mondays
A typical PTBP dinner (salad not pictured).
Happy meatless Monday! Today I have some good news for the carnivores: meat can be one of the cheapest protein sources, if you do it right. Protein is an expensive grocery category, it’s an important part of our diet that we’re not willing to cut back on, yet we eat like kings on about $75/week for a family of four. We are hungry, skinny people, and hummus simply doesn’t cut it for dinner in the Pretend to Be Poor household. But before you quit rice & beans, you’d better learn how to do meat frugally.
Of course, people choose meatless for dietary, environmental, or animal-rights reasons. Whatever your protein persuasion, I hope this comparison chart gives you something to chew on. It’s by no means all-inclusive, but I’ve included a variety of popular and relatively thrifty stand-bys. But if you’re trying to rein in the grocery bill and have already started shopping at discount stores, meal planning, shopping with a list, cooking from scratch, and trying my 20 Frugal Food Hacks, your proteins are a great next area to tackle.
My calculations reflect the everyday prices at my local ALDI and highlight some of the most cost-effective and popular options. I’ve chosen the least expensive versions of each for comparison. Below I’ll share how we purchase discounted meat & raise our own, plus easy, inexpensive recipes and tips for working with bone-in chicken. And my recipes for homemade beans, and yogurt.
| 20 g Protein Source | Price per 20g Protein Serving in dollars |
| Salmon, 3 oz | $0.80 |
| Pork chops, 3 oz | 0.75 |
| Ground beef (85% lean) or ground turkey (93% lean), 2.5 oz | 0.47 |
| Chicken, whole, 3.5 oz | 0.26 |
| Chicken, bone-in pieces, 3.5 oz | 0.35 |
| Chicken, boneless, skinless breast, 3.5 oz | 0.51 |
| Beans/lentils, dry, 1.5 cup | 0.42 |
| Beans, canned, 1.5 c. | 0.59 |
| Peanuts, 3 oz, or Peanut Butter, 6 TB | 0.30 |
| Almonds, 3 oz. | 1.01 |
| Eggs, 3 whole | 0.66 |
| Pasta or rice, 3 oz | 0.38 |
| Cheese, 2.5 oz | 0.63 |
| Greek yogurt, 1 c. | 1.00 |
| Yogurt, 2 c. | 1.00 |
| Yogurt, homemade, or milk, 2.5 c | 0.39 |
Qualifiers and assumptions
I’ve assumed a whole cooked chicken will yield about 75% of weight as meat. I haven’t accounted for the fact that we also put the skin & bones to good use, too, as our grandparents most likely did. I make homemade chicken broth and we consider chicken skin cooked to crispness a delicacy. Neil calls it “chicken bacon.” Good thing fat is in.
Dark meat only yield from a whole cooked chicken.
Yes, it costs money to cook and season meat. So the price per serving goes up—but not much if you have go-to thrifty, easy recipes. It costs only about 10 to 15 cents to cook a whole chicken in a slow cooker, and around 40 cents to roast in the oven. Considering a 5-lb chicken will yield about fifteen 20-gram servings of protein, cooking itself only adds 1 to 3 cents per serving. Adding inexpensive or homemade seasonings will raise the cost, but not necessarily enough to even compete with canned beans, for example. If you eat only organic meat, many meatless options are indeed cheaper. Buying organic only makes it all the more economical to work with whole birds instead of pricey pieces.
It also takes more work to cook raw meat, especially whole chickens, compared with easier options like cheese, yogurt, nuts, or eggs. That’s part of the reasons we mix it up and why I almost always eat peanut butter for lunch. I strive to balance an economy of effort with cost. We also eat meatless dinners several nights a week, for variety, health benefits, and ease of preparation.
Why the 20-g protein serving? Obviously protein doesn’t have to be consumed in these portions. We don’t eat peanut butter in 6-TB servings or beans by the whole can. Different items can be paired to form larger servings of protein, such as rice & beans with cheese. Too often we look at the price per item or unit without considering the price per nutrient, such as grams of protein. But isn’t the nutritional value the main reason we need food? Shopping with the lens of price per nutrient can really optimize your grocery budget.
A whole chicken for $1.88.
How I regularly pay around 50 cents/lb for chicken
I should add that, though I’ve assumed $1/per pound for bone-in chicken, I rarely pay that much for our chicken or even pork chops. While grocery shopping I’ve always got my eyes peeled for meat marked down for quick sale. This happens surprisingly often at our local ALDI, and when it does, I buy it ALL. Over the summer I purchased over 80 pounds of chicken thighs at just 33 cents per pound, making a 20g protein serving less than 10 cents! You simply cannot beat that price per nutrient.
That’s a lot of protein for about $10!
Pretending to Love Chicken
So bone-in chicken is actually competitive with ultra-frugal options like pasta and peanut butter, and more efficient (and healthy) as it takes only one small serving versus a triple portion that can run up your fat or carbs too much. We are hungry, naturally on the slim side, and don’t have the time to cook all the wonderful protein-rich dishes that comprise many international vegetarian diets (Indian!). We eat chicken because it’s efficient. Oh yeah, and we raise some of our own which is super thrifty, all-natural, and humane.
The kids love helping feed the chickens.
We don’t eat chicken because it’s our favorite. Frugality accepts that life is not about our preferences, and everything doesn’t have to be our favorite. We have learned to prefer dark meat, even though when we first got married I’d hardly ever eaten bone-in meat and didn’t like it. Frugality also updates its approaches with seasonal costs or market fluctuations. Before beef prices went up, we purchased a quarter cow that our friend raised. We also eat marked-down pork chops when I get them for $1 or less per pound.
Pork chops for 24 cents a piece.
Pretending to know how to cook whole chickens
Now for my tips & tricks on working with whole or bone-in chicken. You can learn & get good at it! Within a few tries, I could cut up a whole chicken in less than 10 minutes. Give yourself about 2 days for it to thaw in the fridge or 1 day in cold water in the sink and use a good, sharp knife. Our digital meat thermometer also comes in handy when working with bone-in chicken.
My favorite whole chicken recipes: Juicy Roast Chicken or Garam Masala Roast Chicken (get your GM at an Indian grocery).
How to cut up a whole chicken: http://allrecipes.com/video/2/how-to-cut-up-a-whole-chicken/
A good whole chicken soup recipe: http://allrecipes.com/recipe/220416/chef-johns-homemade-chicken-noodle-soup/ (I add 1-2 TB cumin near the end)
How to make chicken broth from the bones: http://allrecipes.com/recipe/13075/chicken-stock/
Good uses for chicken cooked in a crockpot: Lime Chicken Soft Tacos, BBQ chicken sandwiches, White Chicken Chili (we use garden peppers, not canned), or any recipe calling for cooked chicken.
Good chicken pieces recipes: Thai Grilled Chicken Drumsticks, Fall-of-the-bone Roast Chicken Thighs (use whatever fresh or dried herbs you have on hand), or your favorite honey-mustard, BBQ, teriyaki or other sauce.
Homemade dry beans:
- I cook 2 lbs with 10-12 cups of water for 6-8 hours on high.
- Cheaper and healthier than canned beans.
- Make your own hummus, refried beans, or baked beans. Add to soup, chili, salads, etc.
Homemade yogurt:
- Heat a gallon of milk (anything but skim) to scald it (not quite boiling).
- Transfer to a large bowl (I use my crockpot stoneware) & cool to 110 degrees, or when you can stand to put both pinkie fingers in for 10 seconds.
- Stir in 1 Tablespoon of plain yogurt (the starter), from the store or your last batch.
- Cover & place in the oven with the light on, or in a cooler with hot water bottles for 8-16 hours, until set. Strain if you want it thicker (I don’t). Then refrigerate.
I have lots of good, low-cost meatless main dish recipes but I’ll have to save those for another day. Enjoy your Double Meat Monday!
How do you save on proteins? What is your favorite thrifty recipe?
Fuel Your Way to FIRE with Free Firewood
A small sample of Neil’s wood pile.
This post was written by Neil, whose free firewood acquisition skills saved us hundreds this year, and keep us warm and cozy through our long winters. Here he’ll share about the best wood-burning equipment available and how to come by this fuel for free.
Nothing is better on a cold winter’s day than warming yourself by a wood fire roaring in an efficient apparatus in your home. Especially if you’re a thermostat miser like me and free firewood is your only hope of thawing out in a blazing 75-degree room. A warm blaze also offers free entertainment for many of the social functions we host throughout the year.
Depending on where you live, firewood can be an excellent primary or secondary heating source. Two years ago I spent $200 on a cord of wood. This past year, I’ve collected a cord for essentially free, and I’ll use it to reduce my gas bill for heating throughout the winter. Help fuel your way to FIRE (financial independence/retire early) with free firewood.
Wood burning apparatus
To determine if firewood is a good heating source for you, take a look at the equipment you already have in your home. First, of course, you’ll need an apparatus to burn wood. There are many different kinds. Regular fireplaces, fireplace with heat exchanger, wood stove, wood stove insert, wood furnace, outdoor wood furnace, even wood-fired boilers. Most people have just a regular old fireplace. Unfortunately, this is not a viable way to heat your house, or even supplement with wood. Regular fireplaces use huge amounts of air from your house to burn the wood and push the smoke up the chimney. This causes the wood to burn quickly and attractively but is very inefficient. The air in your house is finite and generally sealed from the outside, meaning the air will be drawn in through leaky doors, windows, and outlets. Really nice fireplaces solve this problem by having a special duct from under the fireplace or through the wall to allow outside air into the fireplace and then up the chimney. This is a great improvement; however, very little heat will actually be transferred into the house without some sort of heat exchanger.
One product that allows some of this heat to be transferred into the house is called a grate heater. This product is basically a tubular rack that holds the burning wood and has air blown through it and into your house. This is a great product and has enormous BTU claims considering its relative simplicity: 40,000 per hour. Considering the rule of thumb for BTU/hr for a house is 20 per square foot, that means it should be able to heat a 2000 square foot house! I would never expect it to accomplish that feat, but it is an impressive claim. (http://www.wikihow.com/Calculate-BTU-Per-Square-Foot)
The cozy grate heater is the entry level into efficient wood heating. Next up in terms of efficiency is the wood stove fireplace insert. This is basically an approximation of a true wood stove shoved into the space your fireplace goes. It is way better at heating your house because not only does it have a heat exchanger, it also is much better at regulating how much air is being drawn from the room. This means it uses way less fuel while creating more heat. Even more efficient is the wood stove. A wood stove generally has the largest heat exchanger and ability to regulate air flow, making it the best choice for anyone who depends on wood for heat unless y get really serious and upgrade into wood burning furnaces and boilers.
I could barely fit this pile in one photo.
Finding free firewood
Getting firewood, like anything, can be about as cheap or expensive as you’d like. There is a local guy near me who sells pieces of wood for 50 cents apiece, ouch. Careful watching of Craigslist, however, can yield almost free wood provided you’re willing to do some work for it. Set up a notification with the keyword “firewood” for your city’s free section. CL rules apply for firewood, too: don’t drive far.
Aside from CL, keep your eyes and ears open. Once people know you’re the family that takes firewood, you’ll start getting offers. Let word of mouth brings you tip-offs from friends, acquaintances, and family members who are looking to get rid of wood. Also, listen for the sound of a chainsaw. It’s unmistakable and can be heard for miles. If you can track it down, you’ll likely find a good source.
Keep your eyes peeled for wood on tree lawns, plus fallen or felled trees in people’s lawns. I’ve been known to knock on doors, asking homeowners if are looking for help getting rid of unwanted wood. Stop by your city’s brush drop off site; I regularly fill my hatchback with pine (for outdoor fires) and even good hardwood from ours. Get in touch with local arborists. They often have to pay the dump to take wood after a job! They’d be happy to hand it off for free or a nominal fee. Don’t be afraid to ask, worst they can say is no.
Here’s the rest of it.
You’ll often have to be willing to haul, split, and stack wood yourself, but it’s all part of the fun. As the old saying goes, wood warms you once when you split it and again when you burn it. I’d add it also warms you when you move it from your car to the yard, when you stack it after splitting, and when you move it into your house for the blaze. It’s all part of my winter exercise routine. You won’t see me on a treadmill; I enjoy exercise that is outdoors and productive. There’s a real satisfaction when a sharp ax busts through a thick log. I recommend the Fiscar’s long-handled ax and a decent canvas log carrier. I also recommend cleaning out your chimney every season or so. I use this: http://www.amazon.com/Gardus-RCH205-Sooteater-Chimney-Cleaning/dp/B0010H5JXA/. If this is all too much for you or you’re unable in your current situation to burn, get one of these: http://www.amazon.com/Yule-Log-n/dp/B00E4V0IW6.
There is something quite mesmerizing and universal about staring into the flames of burning wood. Christmastime isn’t complete without it and it might even save you some dough on your next heating bill. Just make sure not to pay much for your fuel and enjoy the exercise it provides.
What are your tips for getting firewood? What other ways do you offset heating costs?