How Frugal Living Makes Your Life Better

Many people associate frugality with deprivation. They assume that they'll suffer without the things they want and be miserable. I've found that the exact opposite is the case in my life. I'm what you'd call a "Black belt" frugalista, but I've found that my life is richer because of it. Here's some of the top ways that being frugal makes your life better.

1. Ability to work fewer hours. If you have lots of expenses and debts to repay, you have to make as much money as possible so you can pay everyone. If your debts are minimal or non-existent and your expenses low, you can chose to work fewer days or hours each week. This time can be used for hobbies, fixing up your house, reading, spending time with the kids, time with significant other or friends, or exercising.
2. Ability to retire early. If you keep your expenses low, but continue to earn a higher amount, you can bank that excess in a combination of retirement and other investment accounts. Once the balance is high enough, you can retire, and live off of your savings. You could actually retire while you're young enough to make the most of it.
3. Better health. The cheapest health care is preventative health care. Treating a heart attack is expensive. Preventing one through proper diet and exercise is cheap. Many frugal practices are great for your health. Perhaps you bike to work to save on gas and the cost of owning a car, but a side benefit is that you get a rocking workout twice a day five days a week. Or you want to save money on meat by eating more vegetarian meals, smaller portions of meat or stretching meat with TVP. This will lower your overall fat consumption and help to maintain weight and cholesterol levels. You can garden to save money on groceries, and the side benefit is that your kids get excited about eating vegetables because they grew them.
4. Higher quality time with loved ones. When you save money by going on a picnic instead of a movie date, you save money, but you also get to spend time talking and laughing. If you cut the cable, you can spend more time playing with your kids. I love it when my friends and I get together for cooking (see my post on my family's Apple Processing Day), foraging or crafting. It's much more fun than going to the mall.
5. You own you. Consumers are owned by their stuff. If you learn to want less, you own you. You can still get stuff (I'm still obsessed with books), but you are in control of them, not vice versa.
6. Freedom to switch jobs/careers. If you live a lifestyle that requires a high income, you are stuck in your job, or have a narrower pool of available job/career choices. If you have low expenses and a bank of frugal tips to fall back on, you can quit your job to take something that's a better fit, even if it pays less. If you regularly complain about how much you hate your job, or daydream often of owning your own business, frugality can free you to live your dream. 
7. Freedom from some tough choices. If your wants are in control of your life, you can have some tough decisions. What happens if your favorite band is releasing a CD right when rent is due and your bank balance is low. Do you buy the deluxe edition CD and hope the landlord is understanding? If you are frugal, you know that within a month the CD will be cheaper and eventually you can find it at thrift stores. Or you could check it out from the library. 
8. Option of having more or better. If you spend money as soon as you make it and don't practice frugal tactics, you're limited in options. If you have $25 for a book, that's all  you can buy new. If you have $25 for books, but shop at a thrift store, you can buy 5-10 for that price; a yard sale could yield 25-100 books for that price. If you are willing to buy clothes from the thrift store, you can nicer name brands or even designer apparel for the price of Wal-Mart clothes regular price.
9. Better food. When I was less frugal, I wasted money on fast food and junk food. It tasted like crap and cost me a lot. Now that I'm frugal, I get much better food. The money I used to spend on a fast food meal can make a pretty elaborate meal at home. I shop at farmer's markets and scoop up whatever is in season and cheap, and have thus discovered Jimmy Nardello peppers, dragon's tongue beans, and Sicilian eggplant. I've tried new recipes to use up garden surplus, bargain purchased goods, or trash (roasted squash seeds!). 
10. You get your life, not the Jones'es. When trapped in the consumer mindset, you have to have the latest gadgets, even if you don't use half of the features, the flashiest car even though you hate to drive, and a house in a fashionable neighborhood with impeccably fashionable landscaping and decorating. When you are frugal, you chose what is important to you and put your money towards that. If you want to have elaborate landscaping, you can do that, but if you'd rather live cheap and travel extensively, that's an option too. Your money is spent on what makes you happy.

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Not Buying It

I don’t shop on Black Friday (and definitely not on Gray Thursday). I like to save money, and I love to find a good deal, so why wouldn’t I love Black Friday?

Most of my purchasing is for things that I need, but I also do allow myself some things that are just wants. However, I do not buy things that I don’t really want. Black Friday and related days are about buying stuff that I’m supposed to want.

Most people buy things that they think they want, things they are told they need: fancy cell phones, flat screen TVs, and high-power blenders; 50 pairs of jeans, 100’s of T-shirts and even more shoes; New luggage, new computers, and new gaming systems; DVDs, name-brand sneakers and toaster ovens.

Do these things really make anyone happy? Has anyone ever gotten a high out of using their new blender? Do you watch all of your new movies and conclude that your life is awesome? Do you jump higher when wearing your new basketball shoes? Does your new cell phone really make you more connected? Do your family members enjoy those Christmas gifts so much that they are glad you skipped Thanksgiving dinner so you could go buy them?

Black Friday is a scam. Just like television commercials and programs that show us all of the wonderful, shiny, delightful things we just must have, Black Friday is about making us think that our lives will get better if we buy this stuff. Our food will taste better when prepared with power blenders and fancy coffee makers. Our friendships will be richer once we have an iPhone to chat with others. Our sex will be better if we wear the right underwear. We’ll finally feel rested if we cover our bed with the right high-thread count sheets.

Full-color sales ads are delivered to every house shouting out ridiculously low prices on great things. There are extremely low stocks of the “good stuff” for which people will wait in line for 12 hours, but that doesn’t stop the hunger for more goods. People trample each other, vying for the best position to get the newest gadgets. Fights break out. People die. Somehow we turn into more primitive versions of ourselves.

And at the end of the day, our cars are packed full of all these attempts at happiness. We drive home, unload the car and spend the evening alone in our house. Our only companions are silent; somehow they don’t seem quite as dazzling now as they did mere hours ago in the store. But never worry, soon the credit card bills will come in. The phone will ring off the hook as the collectors come calling.

Living Well On $25k Or Less: Financial Goals

It's hard to save money. It's even harder when your income is in the lower brackets. It can feel impossible to save up enough money for a new car, a house, retirement or a vacation when you barely have enough money to pay your bills on time. Unfortunately, delaying saving for the future until that distant day when you earn six figures might mean that you won't get there. The good news is that it is possible to not only save for, but meet your financial goals, even when your income level is low.

First, think about where you want to be. Daydream. What do you think will make you really, truly happy? What needs do you foresee? Here are some common goals:

* Buy a house.
* Get married.
* Have a child.
* Take a trip.
* Start a business.
* Replace a car.
* Remodel a room/whole house.
* Go back to school.
* Retire.

Next figure out a realistic time frame. How long do you think your car can last before it needs major, costly repairs? How long do you think you will be able to and enjoy working? 

Put a dollar amount to each goal. It doesn't have to be exact, but do try to be reasonable. Now, figure out how much you will need to save from each paycheck to meet that goal. Is that amount reasonable for your current budget? If not, can you push back the date or increase your income through a part time second job?

Make a reminder. If you want to buy a house, post pictures of houses you love around your apartment. If you want to take an extended hiking trip, post breath-taking scenes. If you're expecting a child, get those ultrasound photos up. Look at them often and allow yourself to daydream about when your goals will be met and how happy that will make you.

Open an interest earning account that charges no fees for small balances. You don't want to pay $3/month while you are trying to build up your balance. A savings account is great, but you could also purchase $25 savings bonds or open a CD that allows deposits. For the latter two, make sure that you won't need the money before the funds are available; these are best for moderate-term goals, 3-5yrs out. 

Make it automatic, if possible. I've found that it is much easier to save money if I don't see it. I save for retirement automatically through my employers 401k. Since it comes out of my paycheck, I never miss the money, but it sure adds up fast. Ask your bank about setting up an automatic transfer to your savings account. Otherwise, treat this savings goal as any other bill. Pay it before you start spending on entertainment or other non-essentials. 

Now I know that it is not easy to come up with big amounts of cash when you're making a smaller income. Saving a small amount regularly adds up very quickly, however, and it's relatively easy to do. Here are some ways that I have had success finding money to save:

* Clip coupons for groceries. Deposit the amount saved into savings.

* Redeem rewards points for cash back. My card nets me $20 about every month ($240/yr).

* Tax refunds.

* Birthday money. I only do this if the goal is really exciting for me (taking a vacation vs buying a new commuter car)

* Sell stuff that you don't want/need. Old books, movies, and collectibles can earn you a bit of savings money and you'll have more space.

* Whenever you get an extra paycheck in a calendar month, put at least half into savings.

* If your employer offers a match, take it (401k).

* Cut unnecessary services such as netflix, even if for just a short while.

* If you pay off your current car payment, continue to make payments, but into your savings account. Same with credit card bills.

* Take spend free challenges.

* Fill out rebate forms and deposit the checks, however small.

* Figure out how much it costs in gas to commute to work. Bike or walk and deposit the savings.

* Live below your means. Buy cheaper clothes than you can afford. Rent a cheaper apartment (as long as it is safe enough). Drive your car a little longer before replacing. 

* When you get a raise, deposit that little extra bit each paycheck. If you don't plan to save it, you'll quickly adjust your spending to use it all.

* Buy goods (groceries, clothes, household items) on sale and deposit the savings.

It may not seem like it, but these tiny amounts add up. If you use $10 worth of coupons per week, that is $520 a year. If your car gets 20 mpg and you commute 4 miles each way by bike, you'll save 2 gallons of gas a week ($4/gallon currently) for a savings of $32 a month. Several tips can quickly add up to a sizable deposit and get you closer to something that means a lot to you. 

So how does this work in real life? Actually, pretty well.

Three years ago, Trucker and I decided that we wanted to buy a house. We wanted space, hardwood floors and a huge backyard for gardening. We spent this time stretching our dollars to the limit. We deposited money into our savings account as soon as I got paid, and learned to live on what was left. Sometimes we didn't go out to eat when we wanted to. We learned to enjoy cheaper or free entertainment. Any extra money we received was deposited into our savings account. Sometimes it was hard. Sometimes we felt like we'd never save enough for closing costs and down payment.

Yesterday we closed on our house. It is roomy, and has hardwood floors and a big backyard for me to plant veggies. We were able to reach our goal through hard work, even while our income was well below the $25k mark. 

Don't wait until you get a better job to start saving for your future. Start now to work towards the things that matter to you.

So let's hear your story. What savings goal have you met? What did you do to make it happen?

Living Well on $25k or Less: Housing

Many young people are graduating from college and finding that they are not getting what they were promised. They thought once they graduated, they'd find meaningful, well-paying jobs with good benefits. Instead, many of them are working as baristas, servers and cashiers. At my last job, I knew a guy with a doctorate who was washing dishes. Despite a salary much lower than anticipated, student loans still have to be repaid and at least a little bit of money left over for rent and food.


If you are in this situation, it may be frustrating and more than a little scary. Fortunately, there are many ways you can cut your expenses without completely eliminating your quality of life. For the last several years, I've been living on a lower income (between $15k-25k/yr), but for the most part, I've still been able to eat good food, go out, and even save money for my goals.

Over the next few months, I'll share my experiences and tips from others on living well on less than $25,000 a year. This week, I'll talk about housing expenses.


First, limit your accumulation of "stuff." The more things you have the bigger a home you must have. If you have several thousand books, you'll need at least an extra bedroom to house just that collection. If you can keep your number of possessions low, you can rent a smaller apartment, perhaps a studio or one-bedroom apartment instead of a two-bedroom townhouse. This will save you a lot over the course of a year, plus you'll save money from not shopping.


Live near your favorite neighborhood instead of in it. A few years ago, I found a neighborhood in Chicago that I really enjoyed. It had lots of coffee houses and galleries and was just wonderful. It was also expensive. By living a little further north in a slightly less fashionable neighborhood, I was able to save a few hundred a month in rent. It was still close enough that I could walk there in fifteen minutes. That minor inconvenience was more than compensated by the lower costs.

Living with a roommate is a common way to cut expenses. You can split a two-bedroom apartment with one other person or rent a house with several others and save big bucks over renting a one- or two-bedroom apartment yourself. You'll also save on internet, cable, heat, electric and water. Find someone compatible and responsible, and make sure you both sign a written agreement.

Work for rent. While you might have to search to find such a situation, you may be able to find an opportunity to work in exchange for free or discounted rent. A friend of mine lives in an apartment at a car dealership. He keeps an eye on the place overnight in exchange for free rent.

You can be a live-in nanny or housekeeper and may get a small salary in addition to free housing. Some people are companions for the disabled or seniors who aren't ready for a nursing home but need a little help with cooking and cleaning. House sitting is great for transient types. For singles or couples, managing or maintaining an apartment complex usually provides free rent in exchange for basic care of the property and showing units occasionally. During the early years before children and lots of other commitments, you could really save up a lot of money (or pay down student loans) if you didn't have to pay any rent.

Communal living is great for those who like living with others of common goals and ideology. You can become completely self-sufficient or work on an organic farm. You'll have to work for the good of the community, but you'll have free housing, possibly free food and the opportunity to build relationships with like-minded people.

Rebound. Okay, this one may temporarily reduce your quality of life. Living with mom and dad for a short period of time may be a great way to set a strong foundation for your future. For the couple years after I graduated from high school, my parents let me stay with them rent-free so I could get my life together. I was working a full-time job  and banking 65% of my gross pay. I started funding my retirement accounts, paid for school while I was attending and built up a 6-month emergency fund. To help the family, I did most of the grocery shopping and cooked several meals a week in addition to helping clean and maintain the property. If you decide to go with this approach, make sure everyone involved is on the same page. Ideally, get it in writing just to avoid drama. This situation works best if it is on a short-term basis, perhaps for 6 months so you can build up a 20% down payment for a house.

Live in a cheaper city. Living in a city like Chicago or New York is wonderful, but pricey. Paying 60-75% of your pay towards rent gets old really quick. A few years ago, I moved from Chicago to a cheaper city where the rents are around 2/3 of the price, and the houses are even cheaper. I've been able to save up money for a house rather quickly. I'd love to live in Chicago again, but for now, I'm enjoying building up my savings account.

Lifestyles Beyond Money

The American Dream costs money. You have get married (average wedding cost: $28,000), have a few kids (average cost to raise a child to 18: $222,360), buy a nice house (average sale price in 2010: $272,900), work a full time job (average hours worked a week 35) until you are too old to be useful, when you die alone in a nursing home (average cost per year: $70,008). Yuck.

Fortunately, there are lifestyles beyond the American Dream model. These lifestyles are more suited to your own reality, fantasy or desire. They may require money, or they may not, or they may require less than the average family. You can work as little as you want, or for as little money as you want. You can take seasons off, or work from home. It all comes down to what you want out of your life.

Self Sufficiency. The self sufficient lifestyle is when you produce everything you need, from food to clothing to transportation. You do not need a job to survive. Potentially, your only expense would be property tax. The money needed to pay the taxes can be quite low depending on house and location, and could be paid with interest income, or odd jobs. 


Self Reliance. Short of complete self sufficiency, is a lifestyle of ever increasing self reliance. You produce some of your needs, while still holding some form of job (or while living off other forms of income, such as investment earnings, or retirement payments) to pay for others. Perhaps you could produce all of your energy needs through solar panels, all of your food through gardening. This is easier than complete self sufficiency and very rewarding as you can simply look for ways to eliminate those expenses you despise.

Anti-consumerism/Freeganism. Anti-consumerism entails bucking the current consumer model of constant need. You realize that you don't need stuff and eliminate mindless consumerism from your life. You pay only for needs and instead of shopping, turn to the free pleasures of life: family, friends, community, self enrichment. You capitalize on the wanton waste of our society by diving dumpsters, shopping curbs, or scraping plates.

Frugal Living. Cutting expenses is a tried-and-true method of living on less income. You find ways to save money and reduce expenses. You cut the expenses as far as you can before you start to lose quality of life. For example, if you used to have full cable, frugal living would call for cutting back on the channels, then eliminating cable opting for renting movies, then checking movies out from the library, then throwing away the TV. Other options in frugal living are extreme couponing, thrift shopping, cooking at home, and single car living.

Nomadic living. You eschew the traditions of house and home and find yourself on the road. You may live in your car, or a hotel, or in a park. You can try out new cities and small towns. If you feel happiest when traveling, this lifestyle can be the way to live every day like it's the first day of vacation. You can work odd jobs when you need money or work freelance.


Independently wealthy. This requires money, and a lot of it, but may free you from needing a job. You combine extreme frugality with working many hours at a high paying job. You aim to live on as little money as possible and bank every penny. After a relatively short period of time, your investments will build to a substantial amount. Once the interest you earn is enough to live on, you quit your job. As long as your investments hold out, you'll never have to work again a day in your life. 

Simple Living. Living can be simple. You need air, good food, good water, shelter, personal enrichment and love. Everything else can be done without. You look for ways to simplify every area of your life. You have no clutter and little stress. You set up automatic payments for all bills and avoid unnecessary business. You spend time relaxing or spending time with family. This is a great way to live if you are retired, or have children you want to watch grow up.


There are other niche lifestyles that I will touch on in other posts. You can live car free preferring to transport by foot, bike or public transportation. Environmental responsibility calls for ethical and safe products, and an elimination of waste. You could eliminate all use of plastics, or implement a religious adherence to the three R's. Vegetarianism/Veganism puts your ethics to work while potentially saving you big bucks. Locavores eat only locally produced food and keep all (or at least most) of their money in the community. Self employment gives you control of your earnings, your hours worked and your moral integrity.Volunteer poverty allows you to live in solidarity with those who do not have the opportunities to climb the economic ladder. Holistic living means living outside the 21st century concept of medicine and health, opting instead for herbal remedies, nutrition, exercise and natural products.

You can incorporate bits and pieces of all of these concepts to make your life what you want it to be. I produce some of my own food, and wildcraft for even more. I own a car, but walk or bike as often as I can. I cut expenses in many areas of my life, and dumpster dive often. I eat little meat and hate to shop. What all of this means practically, is that my life is mine. Trucker (my significant other) was able to spend the last two years getting his business off the ground, while I work four days a week in a lower income job that I love. I have time to spend with him, and have all of the things I want, most of which are intangible. I wouldn't have it any other way.

Live happy!