A satisfying retirement is built on much more than money. But, let's not be naive. Without financial resources retirement could be anything but satisfying. At this stage of the game, whatever the reason for your situation is almost unimportant. What is crucial is what you are going to do about it. But, if the forces of the financial world are aligned against you, what can you do?
There are a few things that make sense to me. You can control your spending by controlling your wants versus your needs. You can change your lifestyle to reflect the reality you find yourself in. You can adjust your attitude to become a positive force instead of a negative drag on your life.
I can't solve all the problems. If I had those answers I'd be running for President....no, wait. Who in their right mind would want that job? But, I have experience in being fired with two young children and a wife to take care of, having a company collapse from under me, living on mac and cheese for several months, losing 40% of my IRA and 50% of my house value in 2008, and being bled by health care costs. I've been there.
If you have been visiting this blog for a while, you know about some of the steps my wife and I have taken to adjust to our financial reality. This time I am writing more about an attitude change rather than a list of things you can do to get your budget under control.
Like anything else, there are different degrees of frugality that range from casual to extreme. For example, I can clip some coupons, look for price match opportunities, and stock up on something when it is on sale. Or, I can become an extreme couponer, getting massive amounts of products for free or low cost and spending hours on the computer to get 100 rolls of toilet paper for a few cents. Neither of those approaches fits my definition of frugality.
I think frugality may have become a captive of those who are extreme in their definition and pursuit. Using both sides of copy paper is fine when you are printing something for your home or to file away, using newspaper to wrap a present not so much. Taking handfuls of sugar packets home from Burger King, probably not. Keeping the air conditioner off all summer and heating the house to 55 degrees in the winter goes beyond what is reasonable for most of us. But, I would guess that the concept of frugality makes many think of those examples.
As a teacher of mine used to say, "I beg to differ." Frugal living means keeping more of what is yours, yours. It means not spending money for things you don't need and don't enjoy. It means eliminating the habits and activities from your life that take away your hard earned resources. All that sounds good to me. Retirement and frugality should go together. From the first year of Satisfying Retirement comes this post: Simple Living My Way. Take a look.
Several years ago US News carried a story, "The Secret to Living Well on $11,000 a year." This man's approach isn't one many of us would follow, but it makes for interesting reading. It was a follow up to "The Secret to Living Well on $20,000 a year." This fellow's life is more mainstream but still rather spartan. I'm afraid articles that these give a one-dimensional view of frugality.
So, my simple question to you is are you frugal? Do you think of yourself that way? Are you doing all you can to avoid waste and trim your expenses by eliminating things that no longer serve you well? Have you taken a hard look at everything in your life that costs you money, time, and effort and assured yourself that whatever it is passes the test?
If so, then I'd suggest you are frugal. Wear the badge proudly.
First, I laughed when I read that using newspaper to wrap a gift is maybe not a good idea - we use newspaper all the time! Black & white newsprint with reusable (cloth) ribbon makes a very striking and attractive gift wrap (so does the Sunday comics for kids' gift wrap). Using brown craft paper (from paper bags), and again tying with resuable ribbon, is also attractive and low cost or free. Anyway, we have saved a bundle the past few years by no longer buying gift wrap, and no one has complained that we don't any more; in fact, we've gotten compliments on our newsprint/brown paper wrapping.
ReplyDeleteFrugality is all about making choices, and knowing your own limits and goals. And, one person's idea of what constitutes frugality can definitely not be another's - we each have our own ideas and know what we can go without, or where we want to spend or what we're comfortable with. We went without air-conditioning during the summer and fall, and went through a few months of misery every year when we lived in Hawaii and I was once told how stupid we were, and that our whole retirement in Hawaii was a sham because we could not afford air-conditioning. We could have easily afforded to buy and run a couple of air-conditioners but chose to suffer a bit temporarily and save our money instead. Those savings mean we're now able to comfortably able to explore the world for a while and have a "soft" transition over to whatever we decide to do next.
My biggest issue with frugality is letting it devolve into "cheap" or "stingy." To me, being frugal means my choices affect me and my family only, while being cheap or stingy can involuntarily affect or involve others in some way or make them go along with my choices whether they want to or not. That's a line I try not to cross.
OK...scratch the dig at newspaper wrapping! I do find the price of wrapping paper ridiculous. We tend to use gift bags that are reusable year after year and there is no stack of paper to pick up and clog the landfill.
DeleteI remember when you got the snarky (no, mean-spirited) reaction to the AC-free lifestyle while living on Kauai. That person trolls most reasonable bloggers at one time or another. I have been hit multiple times. But, your point is perfectly made.
And, let's be real. Using fans and being a bit uncomfortable on a Hawaiian Island is different from someone who tries to be "frugal" by keeping their home just above freezing in upstate New York for the winter.
Frugality is a word that has been radicalized to mean things it was not meant to mean.....sort of like our current political environment!
Hi Bob,
DeleteI retired a couple of years ago after a 33 year career in education. I just wanted to reach out to you to let you know
I read your Blog faithfully and find it full of useful tips and and encouraging observations. Thanks for being there as we go on this retirement journey together.
By the way, you have been talking about being frugal lately. My wife (also recently retired) and I pride ourselves on
being thrifty. We are financially comfortable but we see no need to waste money. One of the ways we have saved
a lot of money over the years is by visiting garage sales on the weekends. We have done this for many years and
have found many outstanding deals. We tend to avoid the scruffy ones and focus on the more upscale neighbourhoods.
I love to read and have amassed enough good quality, current, books to keep me going for the next ten years. Books at a garage
sale normally go for a 50 cents (soft cover) or $1.00 (hard cover) I would certainly encourage your readers to consider going to garage sales. Aside
from the bargains, garage sales are quite social. It is like a little community after awhile as you get to know the other buyers.
All the best,
Brent Steele
Surrey, BC
Canada
Brent,
DeleteThanks so much for the vote of confidence. I appreciate your kind words and support.
My wife and I enjoy going to flea markets for the same reason: some very interesting finds at much less than retail. There are folks who make a nice side income by buying things at garage or flea sales, doing a little refinishing or repair work and selling them for a nice profit. I do that with vintage (1940s) radios.
I will use your comment to put in a plug for buying used books at your local library. Usually, there is an excellent selection of both paperback and hardcover books for just a little more than the prices you mention. Plus, the proceeds help the library. Can you tell I am involved with the Friends of the Library in our hometown? !!!
I think you would be surprised at how many people prefer to be thought of as extravagant as they think it makes them look well off. If they are - great. However we prefer to manage our resources and not worry about our financial future. I agree with Laura's statement that frugality is all about making choices and knowing your own limits and goals. I like to chose where my money is spent while knowing that I have prepared for the future.
ReplyDeleteOverall, our society rewards conspicuous consumption. However, I am sensing a trend, a change. Younger generations (any non-Baby Boomer) will not hesitate to spend on technology, but that is different. Living in a McMansion or driving a top of the line BMW is meant for show. Having a device that makes work, communication, and entertainment better is a private matter. I have no idea if you have the new $1,100 Apple iPhone unless you tell me you do.
DeleteSpending money to enhance my life cannot be compared to spending money for show or image. Frugality means not wasting money on something that doesn't enhance my life or move me toward a goal.
Great post, Bob! Pretty much reflects my own philosophy.
ReplyDeleteOne of the best books I've come across on this theme was: How to Retire the Cheapskate Way by Jeff Yeager. It amused once to have someone snap my picture while reading his book as I sipped a cocktail on a Caribbean cruise.
There is a bit of irony there, Gerry. But, inspiration and idea-generation can come from any source.
DeleteOf course, the fact that you were on the cruise says something about your economic controls and what is important to you.
We have always lived beneath our means. We knew early on we had to save in order to someday retire. The frugality we learned as young married stayed with us all the way up till our current retirement.We splurge on what makes us truly happy, but on a day to day basis, it comes quite naturally to be more careful so we can KEEP what we have earned! EVeryone seems to be comfortable with a different level of frugality.I find buying clothes in my fave consignment store to be fun and frugal.But a friend of mine thinks I’m crazy and deprived. I enjoy cooking at home much more than I enjoy a lot of the food in restaurants, so we only go out to lunch dates at a few favorite places.Setting a beautiful table, playing Dean Martin while enjoying my own home cooked lasagna— not deprivation! Attitude is everything. I felt “rich” when I lived in a mobile home at the edge of a beautiful corn field,
ReplyDeletewhile Ken went to school in Iowa, and I will always feel blessed.. after all we live in a country where we have indoor plumbing, Starbucks, and plentiful grocery stores!! Great post!
I'm not a fan of Starbucks, but your points are solid, Madeline!
DeleteOne thing I hope this post does is allow us to not be intimidated by what others say frugality is, or pass judgements on our lifestyle.
BTW, on occasion we have something perfect for what we need at Goodwill. Saving the money is nice but so is helping an excellent organization.
I interpret, and try to practice, frugality as it pertains to those things in my life that do not deliver appropriate pleasure in return. Meaning we likewise keep an eye on our A/C and heat settings, seeking to find the offset between comfort and cost. We enjoy finding free parking vs. using a pay lot because we genuinely enjoy walking. I still cook from scratch because I dislike the blandness of supermarket prepared foods. Conversely, we use the library for pleasure reading, but have begun purchasing e-books for our joint book club readings because we need two 'copies' and trying to share a single copy, plus keep notes, has turned out to be a pain, plus we can then easily take them along when traveling.
ReplyDeleteI could site a dozen more examples, but won't. For me it boils down to value. Do I truly value what we're choosing to spend money on, or is it being done due to some sort of external pressure? It helps that I keep a detailed budget, which allows me to look backward with the benefit of time. Every so often I'll have a SMH moment, but for the most part I feel good about the choices we've made, so I think we're striking the right balance.
(And Laura, I too once got attacked on my blog for writing about packing our lunches while traveling, vs. dining out. That silly, misdirected comment has caused me to smile more times than I can count, generally while in yet another beautiful new travel location. ☺ )
Tamara, as a responsible homeowner, such as yourself, you understand the value of maintaining some level of air conditioning in a home located in a hot climate environment. Failure to use some semblance of air conditioning and controlling interior home humidity levels can destroy a home. Uncontrolled humidity destroys building materials, creates the dreaded black mold (which is very harmful to your health), destroys furniture and clothing. Where I live, its very hot and humid, and if you live in a multi-apartment complex, you will be fined for not running your air conditioner at a standard, required interior temperature, as I would be causing interior black mold to accumulate which would affect my connecting neighbors.
DeleteSometimes trying to save a buck can be more detrimental than we realize.
Cindi, I remember reading about your experiences in this area with your Florida dwellings, so I hear where your coming from. Rest assured that California's humidity levels are quite different, even along the coast where we reside. So, while we have other nuisances to worry about, like wildfires and earthquakes, humidity really isn't one of them.
DeleteI remember well the peanut butter sandwich incident, lol. And I keep my AC as close to eighty as we can stand it, plus running ceiling fans all day long. On the other hand, my heat in the cold months can get as high as seventy two.
DeleteLiving in the Phoenix area, we would be in real trouble without AC. But, we have learned to be quite comfortable with an internal AC setting of 79 or 80 degrees. Compared to 105 outside that is almost chilly!
DeleteAnd, like Tamara, our humidity levels are not an issue. In fact, with readings at 8% or lower during the summer, some folks have to buy humidifiers to keep the level in the house high enough to prevent wood (and nasal passages) from drying out. Mold is not an issue.
Barbara, we keep our house close to 70-71 in the winter. Of course, daytime highs are usually in that range, so the heat only comes on at night.
Frugal? Deprived? No.
We didn't own the home we lived in in Hawaii, and the landlord, who has lived on the island for nearly 50 years, did not have A/C installed nor feel he needed to. It wasn't our responsibility to pay to install it to maintain his house either. Buying and running an A/C would have been purely for our personal comfort. Most single houses (not high-rise condos) in Hawaii are not air-conditioned. Also, the humidity in Hawaii is nothing like what exists in Florida or Southern Maryland or other places back east where it felt at time like you could cut the air with a knife. It's only uncomfortable in Hawaii for a few months each summer and early fall. Not having A/C could get uncomfortable at times but neither we nor the house were in danger and not buying and running air-conditioners was a choice we made in order to save.
DeleteAbsolutely. And, as I and others have noted, it is really nobody else's business about AC choices. I should note you and your husband are spending the year traveling around the world. Clearly, you were doing something right and had your eyes on a bigger goal!
DeleteI do not use air much in Alabama. My house is shaded and buily similar to old timey dog trot style. Cindy in the South
DeleteI think that I come from the perspective of nothing being too extreme if it gets you to your goals. Or put another way, one person's extreme is another person's normal. I actually think that's part of the judgement difficulty. I, for example, consider using newspaper and ribbon and other alternative wrapping to be creative and not extreme-and earth friendly for those of us who consider buying traditional wrapping not earth friendly-even if itis sometimes re-used. I have even sewn up fabric scraps to make gift bags instead of paper bags. Also, how "extreme" one will get will depend on the goal, if I can use Laura above as an example. While I no longer write about specific ways to save on my blog and instead write more about my life in general through that lens, when i did so it was amazing what some folks considered extreme, and the perspectives were all different. One regular commenter said that checing out a local or city theater, as opposed to "Broadway" was unacceptible. I do a lot of Volunteering with beenfits (checing ticets for an hour at the Botanic Gardens for multiple free entry) and some people think that is extreme. Similar to other people, I spend money on those things that are important to me, while doing them as low cost as possible. There are other areas that I simply dont want to spend on and in those areas I am willing to do the supposedly extreme stuff. in my life, that means I am an extreme couponer (although it surely doesnt take me hours a week), make tings do double or triple use around the house clothwise (as much for the environment as my pocketbook), never buy popular fiction or literature but get it from the library and so on. Doing that enables me to go toexpensive, TV chef restaurants, spend good money on alpaca yarn and quality fabric, take a mississipi cruise and a beach vacation this summer, and yes, pay my son's expensive tuition out of pocket for ayear. So if that means eating PBJ (or in my case fried egg when I'm home) sandwiches, carrying water bottles wherever I go with my beverage of choice, couponing in the extreme, using leftover paper for wrapping or whatever, I'm fine with that. Laugh or cringe though others may.
ReplyDeleteI DO wish that there was another word that we could use because of the bad press this one gets. Rightsizing works when it comes to housing and the like, and even to travel but not day to day life, and simplifying is simply not the same asfrugality for many of us. I think we have to lead by example, in our bogs and elsewhere when we can. And when we have naysayers, like above, explain the realities.
We have become a very judgemental society, haven't we. I would think the steps you take would be applauded instead of criticized. How each of us spends our money is our own business. Unless money is being thrown around with no thought other than instant gratification, who are we to cast stones (or $20 bills)?
DeleteWasting money to prove you have enough to do so is silly. The next time we have a major economic downturn, and we will, you will become a person who suffers less than many. Feel good about that!
I agree that it's all about attitude. It's probably obvious, but if you think a frugal decision will result in you feeling badly ("why didn't I splurge on that when I had the chance!), then don't do it. If, on the other hand, you will get some pleasure from choosing frugality, then go for it.
ReplyDeleteA couple of examples of the latter, for me: I enjoy the occasional craft beer, but find myself more often choosing to buy them to have at home, rather than ordering them with restaurant meals at three times the price. Water often works just fine at restaurants. I also recall getting ready for some decorating at home last Christmas. We had a choice between a plain green garland at $4, or a garland with little fake red berries at $10. We chose the plain one and reveled in our frugality for the rest of that day!
Maybe I should have a post that asks for everyone's best frugal ideas. That should fill the comment section!
DeleteWater is our beverage of choice, both at home, and at restaurants. I will make an exception for a Coors Light during Happy Hour. $4 is within my idea of what a beverage should cost!
Great idea - a post with the best frugal ideas. I would enjoy that.
DeleteOK, Jeannie...I've made a note.
DeleteI love your post because I challenge myself to be as frugal as possible and I love reading about how other people live frugal lives. I spend a fair amount of time, okay A LOT of time watching YouTube videos on the subject. Clara’s Great Depression Cooking is one of my favorites. I have developed the mindset that every product I consume should be treated as though it’s in short supply, and should be treasured. My biggest frugality challenge is to not let food go to waste. My French friend who came to the U.S. at the age of 19 learned life-long lessons and to this day she never lets a single food item go to waste. As for myself, I often come up short but I enjoy the challenge of emulating her by being a frugal grocery shopper and enjoying my own home-cooked meals.
ReplyDeleteIf Betty and I could change one thing we do, it would to be better stewards of the food we have bought....the stuff that gets shuffled to the back of the refrigerator and eventually turns into something unrecognizable as food.
DeleteWe have been better at this recently with one simple step: if we buy something for one meal, we immediately think of some other meal that could use for that item and write it down. Sour cream, fresh herbs, and things like fig spread are the best examples I can think of. Without actively considering how else to use them....into the garbage in 2 weeks!
Hi Bob! I think anyone who reads my blog knows that I am definitely frugal. But I tend to call it "rightsized". I am fiscally conservative as they say (while staying socially liberal!) I find that this lifestyle not only makes me very well prepared for anything that might lie in my future, but in many ways it is far more satisfying because it keeps me from spending money mindlessly. Instead I carefully weigh the value of things as far as how important they are to me and my family. Since my husband and I began rightsizing about 9 years ago we've been able to enjoy ourselves in more ways than I imagined AND at the same time sock a lot of money in savings. How? By getting rid of costs that we simply didn't need--like a bigger house, new cars, and a lot of toys and equipment. Instead, we travel, spend time with friend and create memories. Yes I am frugal and I highly recommend it as a lifestyle! ~Kathy
ReplyDeleteHard to argue with that approach.
DeleteI have always prided myself on being frugal, even before it became more fashionable than it used to be. My attitude was for a simple purpose - to have the financial freedom to eventually say that we no longer wanted to work, and to do so on our terms. We accomplished that and being frugal and living below our means were the defining reasons why we were able to do so.
ReplyDeleteI will echo others as well. A post specifically on frugal tips would be both amusing and helpful to everyone. Looking forward to seeing that, Bob.
I've always considered living below our means as simply the wise thing to do. There4 is too much uncertainty in the the economic world to treat anything as a give.
DeleteYes, I will request frugal tips on a post coming soon!
One thing is to recognize there's a difference between being frugal and being cheap. I learned years ago when I was working in a trade that good high quality tools (expensive!!!) are a far better way to spend your money than on inexpensive tools that don't do the job well and secondly don't last. I find the same thing when buying appliances for the house. In many cases spending more (sometimes a lot more) to buy quality pays. As Tamara said it's about value.
ReplyDeleteOn the other hand I buy my jeans at discount retailer. Brand name durable blue jeans for just $20, the classic "dad" jeans. My wife complains that they are baggy and don't fit properly, I say they are roomy and comfortable. I see it as good value, my wife not so much. Certainly your own personal priorities of what's worth spending money on plays a role too.
Spending more on something swell made and designed to last is the frugal choice. Cheap materials, shoddy workmanship, sloppy finished = constant replacement. We own a few tools that come from the grandparents of both side of the family. They are probably close to 100 years old and remain completely usable.
DeleteThe "dad" jeans conundrum...fit or cost? I feel your pain. I have a wife and two daughters who would side with your wife!
As young adults, Alan and I embraced frugality as a way to achieve our goals in life and indulge in our dreams. As early retirees, frugality still works for us and I'd say it remains the top reason we're enjoying a satisfying retirement now.
ReplyDeleteBecause we all have our own priorities in life, I don't think anyone's spending and saving habits will be exactly the same as someone else's. Similar at times, perhaps, but not the same. We spent money throughout our married life on what was most important to us (travel and outdoor activities), but always bought store brand cereal as long as it tasted fine to us and never spent money on clothing unless something had worn out. Those things didn't matter to us. Maybe frugality is simply the judicious use of financial resources - and to each his own!
To each his own is the key, Mary. Frugality must be in the eye of the beholder or it becomes a rigid, judgemental set of rules. We all set goals or try to do things that please us. Frugality is one way to do so.
DeleteA friend and I both go to the beach each summer to listen to good live music. The local bar on the beach puts on good bands every afternoon all summer. They have a locals day each week where drinks are half price. I go that afternoon and have a drink and enjoy the music. My friend goes 2-3 days a week and sets outside the bar on the beach and listens to the music and drinks beer from his cooler. He also has to ride his bike to the location as parking is pay but deductible from your bar tab. He thinks he is frugal. I think I am frugal by going on locals day. Everyone has their own view of frugal.
ReplyDeleteA good, practical definition. You both are satisfying your frugal side, albeit in different ways.
Deleteyears ago one of my son in laws said to me, "you are not frugal, you are just cheap."
ReplyDeleteWell, do you agree?
DeleteI would say yes, I'm frugal and I was frugal before it was a necessity. I've always been a bargain shopper. For me it's like hunting. I'm not cheap. I enjoy nice things but I love a deal. Now that I live on a fixed income my bargain shopping skills are serving me well.
ReplyDeleteFor many people, frugality is a necessity, not a choice. I watched an excellent TED talk recently that addressed the fact that the majority of American baby boomers are heading into their retirement years without enough to live on. It was by Elizabeth White, and the title was - An honest look at the personal finance crisis. (Sorry, the link won’t copy).
ReplyDeleteFor those not in dire financial straits, frugality is still complicated. On the one hand, in our society there is a drive toward consumerism, self gratification, and and keeping up with the Joneses, all pushing us toward spending money on stuff and experience upgrades. We display our identities by the kind of car we drive, neighbourhood that we live in, and brand of shoes we wear. For many, frugality means finding the “right” car, neighbourhood, and shoes at a discounted price. Yet, this kind of frugality can lead to garages full of unused stuff and overflowing landfills.
Frugality may be associated with being a good manager of finances or thriftiness. On the other hand, there is the association of “frugality” with being stingy or cheap. There might be enough money for a nice bottle of wine for oneself, but not enough to make a charitable donation or help out others. This is an interesting topic, to be sure.
It really is an individual definition. My frugal might be your cheap, or my need might be someone else's want.
DeleteIt can lead to too many worthless purchases, full garages, and a booming business in storage units. I hope this post has given people some ideas that will work for them while helping to put a more positive interpretation of what frugality really is.