This may not be a big surprise to my readers, but there are quite a few people in my life who might not guess how frugal I am. I live what appears to be a normal middle-class lifestyle in a nice suburban neighborhood. I have always been careful with my money, but in the last 10 to 15 years have taken frugality to a new level. I consider it a critical component in being able to retire early - I needed to reduce expenses by as much as possible, so I could live comfortably on a small income.
The big change came for me when I read Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence
. This book was truly life-changing for me - it helped me to clarify what my time is worth, and how much of my time I was willing to give up to make various purchases. Given that I value my time very highly, and that I have never really been much of a “material girl”, I frequently find myself deciding that I don’t want to give up the work hours (”life energy”) required to purchase goods or services.
I worked at a fairly high-paying corporate job for 25 years. In the early years, I never thought twice about spending money if I wanted something. After all, I worked hard and had the money available. I never went into debt, so considered myself responsible with my finances. And maybe I was, but I found I could do better. Or, more precisely, I found that I could manage my money in such a way to be more consistent with my values. And that’s what it is really all about: spending our hard-earned dollars in such a way as to be consistent with our values and to feel that the tradeoff of our life-energy is worth whatever it is we are getting.
So, what are some of the things I do to keep expenses to a minimum? Here are some examples:
Keep my car (almost) forever. I drove my last car for 19 years, and finally, reluctantly, had to admit that it was time for a new one. By that time, I had money set aside for the purchase of the next car.
Don’t pay anyone to do what I can do myself. This means things like cleaning the house, mowing the grass, painting the walls, trimming my bangs. Of course I still pay for things that I can’t do myself, or that would be dangerous: replacing a hot water heater, removing a dead tree from the property, putting a new roof on the house.
Buy clothing from thrift stores, eBay and on clearance. I don’t buy a lot of clothing, and I don’t spend much on what I do buy.
Look for cheap entertainment. This one’s easy for me since I’m a homebody. I’d often rather find things to do around the house and in the yard than go out looking for entertainment.
Ask myself if I really want this. This one is so simple, isn’t it? Yet we all forget to do it from time to time. Before making a purchase, I ask myself a few questions: do I have a place for it? can I keep it maintained and clean? will I get enough use out of it?
Borrow a book before buying it. I love to read so this self-imposed rule has saved me a lot of money. I used to buy anything I wanted to read. Now I have a simple rule: I must borrow it from the library first. Then if I still feel I want to own the book, I have “permission” to buy it. This has brought my bookbuying almost to a halt.
Clear out clutter on a regular basis. I’ve sold a *lot* of excess stuff on eBay over the years. There are some obvious benefits to this: it cleared out the clutter and made the house feel more spacious while earning some extra cash. But one big, unexpected benefit to this was that it helped me see how much goods depreciate after I buy them. So if I buy a “thing” for $50 and then sell it on eBay a year later for $20, it makes me realize that the cost of buying the “thing” was $30. So when I look at buying something now, I think about what might it be worth if I decide I don’t want it a year later and sell it. At a minimum, I try to buy stuff used if I still want to buy it.
Of course there are some areas where I do spend a bit more freely. In the future I will talk about alleviating guilt when I spend money on something I value!
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Tags: money management, planning, spending
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