Are You a Cheapskate...or Intelligently Frugal?
Before we begin, let's talk about the social consequences of being extremely frugal. People will look down on you sometimes. People may even call you a cheapskate.
Don't listen to them. A cheapskate is a person who holds onto his money, even when it would make sense to spend it. For example, a cheapskate would avoid paying for costly repairs on his car and choose less effective and cheap quick-fix methods, even if it means that his car won't last as long. A cheapskate would spend an extra two hours in a store to save $10 in coupons, when he could have just worked for those two hours and made much more than $10.
A frugal person, on the other hand, sees money as more than just something to have and hold onto—it is something to use, and to use wisely. A frugal person has a long-term attitude towards money, and a cheapskate has a short-term attitude. Sometimes you do have to spend a little bit of money, so don't think that I'm advocating being a cheapskate here.
Having said that, most people spend way too much money. If you really look through everything that you're spending, you'll probably find that there's tons of things that are unnecessary. If you want to identify and cut the "fat" from your life, then this is the article for you.
The methods I suggest here are not for everyone. Some of them may seem ridiculous—because they are. If you are able to be this extreme, however, you will find that you'll have a lot of freedom as well, since you'll have to rely less on material things.
Everybody has "fixed costs," and these are usually the most necessary and also the most expensive. They include shelter, clothing, food, and transportation. You can push the cost of these way down by making some ridiculous modifications to your life. Let's take a look:
1. Shelter
Most people pay a lot for their living accommodations. Whether they pay a mortgage or pay rent, it's often a huge chunk of their income and the biggest single expense that they will face every month.
How much of your house do you really need, though? How about your apartment? If you live alone, for example, do you really need every room and every square meter of that space?
Chances are, the answer is no. For those of us who are still young and supple, at least, we don't even really need a building to live in. A tent in the woods would work just fine if we live somewhere with weather that isn't too extreme.
Am I suggesting that you live outside? Yes. Many places, the outdoors is actually free to live in. In other places, it's not too hard to find a campground that will rent you a pile of dirt to sleep on for much less than you would pay for more typical accommodations. Many times these areas will also come with showers, and if not, you can pay a small monthly price to join a gym or a bathhouse in your area.
If you think this sounds like being "homeless," then I suppose it is, but homelessness is often a matter of mindset. Being anything-less is a matter of mindset. It has to do with whether you feel like you lack in something or not. Keep in mind that thousands of people every year spend their summer at campgrounds just for fun, and they don't consider themselves as being homeless for a few months—they call it "vacation" or "holiday."
Similarly, our ancestors slept outside before they developed shelters, and they never felt ashamed about it until some people started building fancy shelters. There's nothing wrong with living outside and it doesn't make you a bum anymore than it made all of our ancestors bums.
If you plan to live in the deep woods, then investing in a survival course may be a good idea, but there are plenty of campgrounds near civilization that you can choose from. You won't be alone, either. Lots of people make a full-time hobby out of camping.
Besides, it's cheap. Even when paying to live in a campground, it's almost always cheaper than living indoors. This is especially true in cities that are over-priced. That actually brings me to my next point:
If you live in an expensive city, move. You can still be frugal in New York City or San Francisco, but it's much harder and your quality of life would suffer. Unless you have a very high paying job where you are, consider moving to a place where the cost of living is much less. Especially if you refuse to live outside, look for somewhere where rent is low.
Now, this may seem obvious, but a lot of people who live in densely-populated, expensive cities seem to forget that life is very different in cheaper places. If you live in a place with very reasonable rent, people from over-priced cities like New York may not even believe you when you tell them what you pay.
Rent across the United States, for example, can vary wildly. In the South, it's often a fraction of what it costs in the Northern areas.
If you have a house, rent it out. Do you own a house, but don't occupy every room? Consider renting out the empty rooms. If you're wary of strange room mates, perhaps you can rent them out to friends or family. In fact, you could earn a healthy income and pay off your mortgage sooner if you move out of your house completely and live in a tent, then rent out your property. You could combine what you make every month from your tenants with what you were paying for your mortgage and pay off your house twice as fast.
If the weather is bad where you live, you could rent out your house and live outside part of the year during the milder months, and then live in your house the rest of the year. Consider it a vacation. You could even use AirBnB to streamline the process.
If you rent an apartment, get roommates. Similarly, if you have an apartment, get some room mates to save money. Even if it's only one bedroom, you can just use bunk beds. If you can't stand to live with other people, see the section on living outside.
Consider moving out to the countryside. Shelter is usually cheaper in the countryside, and you also often will have more freedom to build your house the way you want to build it. Unfortunately, things also tend to be further away, so your transportation costs may go up.
Anyway, the point here is to not take your living situation for granted. There are many ways to get around the expense of shelter. Get creative.
2. Clothing
Clothing is basically essential, unless you plan to live in a nudist colony. (In which case, you still need a towel at least.)
Thankfully, clothing is actually one of the cheaper things that we'll discuss here, since it they don't have to cost much, they last for years, and they don't usually result in recurring costs.
The main way that you can save as much money as possible on clothes is by:
- Never buying your clothes new
- Not having a lot of clothes
Second-Hand Clothing
Lots of clothes stores have sales and "deals," but the deals usually require you to buy a lot of merchandise. It's a much better idea to go to second-hand stores and claw through the clothing racks there.
In the US, there's a thrift store chain called Goodwill, and some of their locations will sell you clothing by weight, which is much cheaper than buying it off the rack. You'll be paying a fraction of the price compared to retail.
The only exception to this is when a retail store is going out of business, and they're offering new clothes for about the same prices that you would pay at a second-hand store. Take advantage of these unusual cases, but still be careful not to go crazy and overspend.
You can also sometimes get clothes for free if you ask for it, as well. Consider posting on a site like Craigslist and asking for clothing your size. Some people might be moving and dying to get rid of clothes that they never wear.
Reduce Your Clothes
Reducing the total amount of clothes that you need by, say, rotating the same 3 or 4 shirts with the same 3 or 4 pants, obviously can save you a lot of money in clothing costs, too. However, there are even more hidden savings. Have you ever had to move and were shocked at how expensive it was to hire a moving truck for all of your stuff?
Having less clothes makes it cheaper to move and cheaper to store your things if you ever need to put them into a public storage unit. Reducing the number of your possessions in general makes things a lot cheaper for you.
Laundry Time
Having less clothes can also save you money when it comes to laundry, since you won't have to do more than one load every time.
Another way that you can save money on laundry day is by just having it less often. You might be thinking, "How is it possible to wash my clothes less, if I have less clothes to wear? Won't I run out of clean clothes faster?" There are two answers to this:
- Yes
- No, not if you relax your definition of "clean clothes"
If you've ever been dirt poor, like as poor as I used to be, you quickly learn that if you hang up your clothes and let it air out a little bit, it actually starts to lose its smell. Eventually, you can barely smell the musk of your armpits on your shirt, and if you wait for a few days, the smell will often be completely gone.
For this to work best, you'll want to hang it out in the open. For a particularly tenacious piece of smelly clothing, grab one of those odor-reducing sprays that they sell for upholstery and the like. Currently, there's one called Febreze on the market, but there are plenty of cheaper generic ones that you can get instead to save money. Spray the "problem areas" and that will allow you to use that piece of clothing for longer.
Now, no matter how much you "air wash" it, you'll eventually have to wash your clothes. Dead skin and oils from your body will accumulate, and after awhile even hanging it up for a week won't make your favorite shirt any less crusty. When that's the case, go ahead and wash your threads at a laundromat, but consider drying it outside.
Washing machines are a great invention and it's hard to do as good of a job washing your clothes as a machine does. For a dollar or so per wash every month, it's a bargain, too. However, drying your clothes outside will give you similar results as drying it in a mechanical dryer, except that it is cheaper and the clothes will also get less worn.
3. Food
For most people in developed countries, food is a huge expense. For example, according to Gallup, the average family living in the United States spends over $600 per month on food. Most of us also eat way too much of it.
Now, a lot of people who are into saving money suggest that you cook your own food at home instead of eating out, but I have found in practice that this really depends on the kind of food you're buying. If you're getting fancy organic hipster food, then you'll be paying a lot even if you cook it yourself. Similarly, if you're eating at fancy sit-down restaurants for breakfast, lunch, and dinner, then of course your food is going to cost a fortune compared to just eating at home.
However, if you're eating at cheap, greasy fast food restaurants, I've found that it averages out to about what you would pay making your own meals with cheap ingredients. There's also a hidden cost with cooking for yourself: it costs you more time.
There are several solutions to this problem. Probably the best of all worlds, though, is to eat a very spartan diet, made of healthy, cheap foods. You want your diet to have these three advantages:
- The food is easy to prepare, so you save time.
- The food is cheap to buy, especially in bulk. It has a high calorie-to-dollar ratio.
- The food tastes okay, but isn't too tasty, so you're not tempted to overeat.
Lots of people may disagree, especially when it comes to the last point, but I hold the stance that food is fuel for your body, and that it's better both for your physical and mental health to not turn it into a pleasurable pastime. It's too easy for some people to get addicted to food and to spend time and money snacking on junk. Keep things simple and bland.
Depending on where you live in the world, the staple foods will be different. In general, though, these are my recommendations:
Rice
There's a reason so much of the world consumes rice on a daily basis. It is high in calories, very filling, and very cheap. Sometimes you can get 2,000 or 3,000 calories of rice for as little as $1. You can buy it in bulk very cheaply, and it keeps for a long time if it is dried.
It is versatile and can be made into a large number of dishes, if you happen to enjoy cooking. It is bland so easily picks up the flavor of whatever you add to it.
It comes in many different forms, almost all of them inexpensive. If you're too lazy to cook rice the usually way (in a pot), you can get a dedicated rice cooker to save you time and effort. You can also get instant rice for a bit more than standard uncooked rice to save even more time.
Beans
Beans offer a lot of calories as well, and a lot of protein. They might make you gassy, but they're very good for you because they are rich in fiber. They are also dirt cheap. If you're lazy, you can buy them pre-cooked and canned, but buying them dry will give you the best bang for your buck.
Eggs
Eggs are full of fat and protein and other important nutrients. They're also usually pretty cheap. Get them from a local farmer and you can sometimes get even a better deal than at the grocery store.
Milk and Dairy
Milk is highly caloric, and usually pretty cheap. It is also filled with many important nutrients. It's kind of hard to digest for some people, so often it's better to stick to some fermented or processed form, like yogurt.
Organ Meat
If you feel that you must have meat, then organs are the way to go. Hearts, livers, stomachs, kidneys, and the like are often much more nutritious than the muscle meat of an animal, and yet they are also very often the cheapest.
These are just a few suggestions, but you can technically live off just the things listed above. Most importantly, make sure you have a good source of healthy fat and protein, and that your protein source contains all of the essential amino acids. Diet is a very individual thing, but the main idea is to choose basic staple foods that are tried and true.
Things to Keep in Mind
Here are a few others tips that have worked well for me:
- Eat roughly the same thing every day. This way it's easy to budget and calculate the cost of every meal. In addition, it's easier to prepare your meals and easier to buy just those few ingredients in bulk.
- Develop a taste for the things most people don't want, as these will usually be cheaper. For example, food that is close to its expiration dat, but is still edible, or foods that are nutritious but are seen as undesirable by your culture (like organ meats).
- Buy food in bulk to save lots of money. Join some kind of warehouse club if you can.
- Try to find food for free where you can. It's not too hard if you live in a country where food is very plentiful.
- Consider catching food out in the wild if you're good at it and it is legal.
Dumpster Diving for Food
I've never had to do it myself, but some people swear by it. If you want to pursue this path, then find a mentor that will help you learn how to do it safely and efficiently. There's nothing to be ashamed of, and retail stores throw away perfectly edible food all of the time.
Have a Plan
No matter where you source your food, just make sure that you have a plan for your meals. Nothing creates opportunity for "surprise" spending more than not having a plan.
4. Transportation
People often get used to highly inefficient modes of travel, and then forget that there are alternatives. For instance, many times folks feel obligated to get a car, when it might actually be faster to get around their city through public transportation or some other means.
Occasionally, a car is the most efficient method, especially if you're also using your car as shelter instead of a more expensive house, but this often isn't the case. A car not only can cost a lot upfront, but it also has other hidden costs as well:
- Payments, if you go into debt for the car
- Insurance costs
- Regular maintenance costs
- Repair costs if something goes wrong
- Fuel costs, whether your car is gasoline or electric
- Parking costs, if you live in a crowded city
- Taxes to the local government in order to drive your car on public roads
- Fines paid to the local government if you misbehave with your car
Really, there are tons of costs associated with a car. Here are a few alternatives:
Get a Bicycle
Seriously, bicycles are more efficient than cars most of the time. They may be slower in terms of speed, but depending on where you live, they can actually get you where you are going faster because they can bypass so much of the traffic.
On top of that, they allow you to exercise while you're commuting, so they can indirectly help you avoid healthcare costs by promoting better cardiovascular health. More cardiovascular exercise can also help you live longer.
Bikes cost a lot less up font, unless you get something really high-end, and the maintenance costs are usually a lot less. In fact, you can often do the maintenance yourself.
They last a long time, have fewer moving parts than cars, and often can even be modified to provide electric or gas-powered assistance with small motors. If you're struggling to buy or keep a car, consider switching to a bicycle.
Get a Motorbike
If it's safe to ride a moped, motorcycle, or scooter in your city, you might consider getting one of these vehicles instead of a car. They are usually more fuel efficient and often require less expensive maintenance. This is especially true if it's an electric vehicle.
Use Public Transportation
Often the problem with public transportation (besides the stench of other humans) is the "last mile problem," meaning that you can get close to the vicinity of where you need to go, but the amount that you have to walk to get to your final destination from the bus stop or train station is too far. In cases like these, you can often combine a bicycle and your favorite mode of public transportation to solve this problem.
Sometimes, public transportation is more expensive than owning a car. However, this is rare considering the total cost of having your own vehicle, such as maintenance, repairs, gasoline, and so on.
If you would like to get rid of your car, but find that there are a few specific instances—like grocery shopping, and other times when you need trunk space—that stop you from switching to a bike or public transport, then considering using a ride-sharing service or a service that allows you to rent a car by the hour. For example, you might want to see if Zipcar is in your city. This will allow you to use a car when you really need it, without having to pay the high price of maintaining one.
Conclusions
So we've gone over some of the four main ways to greatly reduce the fixed costs that are weighing you down.
You don't have to use every method outlined of course, but just keep in mind the general principles:
- You don't have to do something just about everyone else is doing it, especially if it's expensive.
- Be creative in your frugality. Find new ways to save yourself both trouble and money every day.
- Spend money on the things that are actually important to you by reducing your basic living costs. This will save you a lot more than trying to cut coupons or save a little here and there on random purchases.
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