Becoming frugal

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Carguy85
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Re: Becoming frugal

Post by Carguy85 »

Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
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22twain
Posts: 4032
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Re: Becoming frugal

Post by 22twain »

Carguy85 wrote: Wed May 26, 2021 5:20 pm Shop around the edges of the grocery store
Or get most of your groceries at Aldi, as my wife does. Which leads into the advice to marry someone who's more frugal than you are... 8-)
Meet my pet, Peeve, who loves to convert non-acronyms into acronyms: FED, ROTH, CASH, IVY, ...
dink2win
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Re: Becoming frugal

Post by dink2win »

Yes it seems the main points are:
- don't overspend on housing
- don't overspend on cars
- invest your savings
- don't overspend on anything

While I agree with the first three bullets, at some point, your happiness has to matter too. It's almost like most of you guys make this a mathematical equation.

Sure, you and your spouse can spend $0 on clothes, hair, skin, and only eat rice bean and instant noodles. You will probably end up looking like gremlins by 40. I don't know about you, but I would not want to spend 40+ more years with a cheapskate gremlin that has rotten teeth. (remember divorces are super expensive).

It's like a car. You don't avoid maintenance or put in motor oil from the dollar store, never wash or wax it and expect the car to last problem free for a decade or more. Sure sometimes you get lucky (a friend of mine had a Civic that he did nothing to other than put in the cheapest gas he could find and did only oil changes from the $20 place, and somehow it lasted 20 years. But even then the paint was peeling and the car looked horrible, while mechanically sound). Genetically some people get lucky, but for the vast majority it doesn't work that way.

Yes buy food on sale. But there is a difference between only buying instant noodles when it goes on sale vs buying fresh organic fruits and veggies. By not ordering out, you will still spend less buying good groceries than if you were to togo all the time. Take care of your body and exercise. Buy nice quality clothes and wear them for a long time before buying replacements. Spending an extra $2000 a year on some good groceries and health/skin isn't going to set you back that much but you'll end up a lot better looking and better feeling than living like a Spartan.

Otherwise you'll either die young (with your stash of money unspent) or end up spending up all that money with major medical issues later in life.
arsenal_fan
Posts: 119
Joined: Tue Nov 17, 2015 7:57 pm

Re: Becoming frugal

Post by arsenal_fan »

As someone whose spouse likes shopping and eating out a lot, I just max out my 401K with deductions from my paycheck (don't see the money in our bank account), and then set aside ~5K-10K in a checking account chasing some signup bonus for ROTH IRA/IBonds investments in the year. All bills to be paid come from a common checking account & every once in a while when the main checking account balance gets a little low, I show it to my wife so that she tones down the spend until the next paycheck. I really don't do much else and we spend as mentioned above. I could definitely save more but I'm not sure if it is worth living below means today for a "better" tomorrow.
delamer
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Re: Becoming frugal

Post by delamer »

dink2win wrote: Wed May 26, 2021 9:00 pm Yes it seems the main points are:
- don't overspend on housing
- don't overspend on cars
- invest your savings
- don't overspend on anything

While I agree with the first three bullets, at some point, your happiness has to matter too. It's almost like most of you guys make this a mathematical equation.

Sure, you and your spouse can spend $0 on clothes, hair, skin, and only eat rice bean and instant noodles. You will probably end up looking like gremlins by 40. I don't know about you, but I would not want to spend 40+ more years with a cheapskate gremlin that has rotten teeth. (remember divorces are super expensive).

It's like a car. You don't avoid maintenance or put in motor oil from the dollar store, never wash or wax it and expect the car to last problem free for a decade or more. Sure sometimes you get lucky (a friend of mine had a Civic that he did nothing to other than put in the cheapest gas he could find and did only oil changes from the $20 place, and somehow it lasted 20 years. But even then the paint was peeling and the car looked horrible, while mechanically sound). Genetically some people get lucky, but for the vast majority it doesn't work that way.

Yes buy food on sale. But there is a difference between only buying instant noodles when it goes on sale vs buying fresh organic fruits and veggies. By not ordering out, you will still spend less buying good groceries than if you were to togo all the time. Take care of your body and exercise. Buy nice quality clothes and wear them for a long time before buying replacements. Spending an extra $2000 a year on some good groceries and health/skin isn't going to set you back that much but you'll end up a lot better looking and better feeling than living like a Spartan.

Otherwise you'll either die young (with your stash of money unspent) or end up spending up all that money with major medical issues later in life.
I’m not sure where you get the idea that “most” Bogleheads are sacrificing their health & physical well-being in order to maximize their frugality.

I’d say the opposite. For most of us, those are the last things that we’d cut corners on.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
livelovelaugh00
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Re: Becoming frugal

Post by livelovelaugh00 »

Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
Excellent advice 👍
Fat Tails
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Location: New Mexico

Re: Becoming frugal

Post by Fat Tails »

Elena wrote: Mon Oct 29, 2018 5:22 pm If this makes any sense: buy high-end items, but only one that you will love and will last for a very long time. I have very few things compared to the average household, but they are all quality items. I research thoroughly before purchasing something. I have made mistakes, like many, but impulse purchases are not my thing, nor is polyester for non-sports clothing, lol.
+1. Elena makes a good point here. I am naturally frugal by nature and upbringing. My cheapness has, on occasion, cost me more in the long run than if I had bought decently in the first place. Shoes are a good example. Buy quality, but not extravagant, especially for those items that you use frequently and want to last. Impulse purchases rarely work out well.

It is more important to be frugal when you are young, in order to build your next egg. Once the miracle of compound interest had taken effect, you can spend more freely.
“Doing well with money has little to do with how smart you are and a lot to do with how you behave.” - Morgan Housel
Jaymover
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Re: Becoming frugal

Post by Jaymover »

dm200 wrote: Sun Oct 28, 2018 5:35 pm In most cases, I would not skip children.

There are, in my opinion, limits on frugality.
They can provide alot of free entertainment which saves money. People without kids seem to spend alot on fancy holidays, going out and grownup toys.

There is nothing wrong with just having one (like Mr Money Moustache), if you are able. Infact, the world would be a better place if everyone just had one kid as opposed to one family having 3 and the next couple zero etc.
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AllMostThere
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Re: Becoming frugal

Post by AllMostThere »

BenBritt wrote: Mon Nov 12, 2018 5:30 pm There is a fine line between being frugal and being cheap !
I cannot agree more, but there is a difference. When I first met my FIL nearly 30 years ago we discussed investing philosophy. This was before my discovery of Indexing, but I was a supersaver, with a No Load Mutual Funds at Schwab, and I lived modestly (paid for truck, owned my own house as a Single Male, etc.). After our discussion he said, "I like you, because you're cheap like me". I was rather offended and had to explain to him the difference between cheap vs frugal. I consider frugality as spending money based upon needs, not wants, and using my hard earned money to add intentional value to my life at the best price! I always liked a saying from a local Detroit 90's radio investment show (Rick Bloom), "Your money always looks best in your pocket rather than in pocket of someone else" :sharebeer
Last edited by AllMostThere on Thu May 27, 2021 9:39 am, edited 1 time in total.
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chazas
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Location: NoVa

Re: Becoming frugal

Post by chazas »

Don’t deny yourself so much that you’re miserable - I like to live well - but always thinks about what something costs.

Learn to cook. I love to cook so my Bluestar cooktop was a great splurge - but in comparison to restaurant eating it’s a bargain. I just ate at a good but not spectacular place in a strip mall in the exurbs near me and dinner for two - one shared app, two entrees, two drinks apiece - was $200 with tax and tip. Don’t get me started on restaurant costs in DC. I’m doing a CSA share from a farmer friend this summer, but normally I shop the edges of the store, and I save a ton of money by going to the less expensive chains and ethnic groceries and spending a few minutes downloading coupons on the app before I go in.

For bigger ticket purchases, think before you buy. I have things that are on my “to get” list that I’ve been chewing over for years - not worth making a hasty expensive mistake. When you decide, first shop used on Craigslist and FB marketplace and be a little patient. I got almost new Williams Sonoma Home dining room chairs for 1/3 the price of the same thing from the website. I splurged on an expensive 4K home theater, but I got two rows of high quality leather electric recliners for a fraction of the cost of new. Just this week I got an almost new Breville food processor for pennies on the dollar. If you can’t find what you want used, then track prices for a bit and buy at the biggest discount you can find.

Learn how to fix things yourself. Service calls are super expensive. YouTube is a great help. Just recently I repaired my kitchen faucet (after learning that Delta basically send you free parts for life), repaired an expensive lawn sprinkler, and replaced the drive cable on my mower.
smitcat
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Re: Becoming frugal

Post by smitcat »

Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
"Never finance or lease anything"
Loans/leases/financing that can be positive:
- educational
- business
- credit card
- zero/low interest vehicle
- rental home loan
- primary home loan
Jaymover
Posts: 214
Joined: Wed May 12, 2021 8:19 pm

Re: Becoming frugal

Post by Jaymover »

smitcat wrote: Thu May 27, 2021 6:43 am
Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
"Never finance or lease anything"
Loans/leases/financing that can be positive:
- educational
- business
- credit card
- zero/low interest vehicle
- rental home loan
- primary home loan
I think he means things like
- entering a contract for a mobile phone
- entering a lease arrangement for a car
- entering a contract for data - always pay as you go
- entering a contract for a gym

I think this is correct. Many companies rely on customers stuck in contracts that they dont use, have balloon payments etc. Better to always pay as you go as you can then keep shopping around for a better deal.
smitcat
Posts: 13308
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Re: Becoming frugal

Post by smitcat »

Jaymover wrote: Thu May 27, 2021 6:55 am
smitcat wrote: Thu May 27, 2021 6:43 am
Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
"Never finance or lease anything"
Loans/leases/financing that can be positive:
- educational
- business
- credit card
- zero/low interest vehicle
- rental home loan
- primary home loan
I think he means things like
- entering a contract for a mobile phone
- entering a lease arrangement for a car
- entering a contract for data - always pay as you go
- entering a contract for a gym

I think this is correct. Many companies rely on customers stuck in contracts that they dont use, have balloon payments etc. Better to always pay as you go as you can then keep shopping around for a better deal.
he could have meant anything , he said this....
"Never finance or lease anything (ok maybe a house)"
donaldfair71
Posts: 1241
Joined: Wed Mar 06, 2013 3:15 pm

Re: Becoming frugal

Post by donaldfair71 »

All of these are in American dollars:

1. Never pay more than $200 for a phone and never use it for less than 3 years. If you go down below $100, use it for a minimum of 2 years.
2. Cut your own hair (this is the biggest frugal hack I have ever found personally).
3. Never buy a new car unless you are ready to commit to 15 years. Start at 3 years old, then for every year used after that, knock 2 years off the waiting time. Buy an 8 year old car? You can buy your next car in 5 years. Pay cash. But keep a "payment" in a savings account for the next one.
4. Never pay more than 2.5 times gross pay for a house. I have been called over-the-top frugal on this rule, on this here forum, and that's fine. I would assume most calling me that have made more than me and achieved FI much later in life. This thing has tradeoffs.
5. Manage taxes. We have 2 cars whose values equal about 20K and pay local property taxes of about $400 on them. I have friends and neighbors with shiny new vehicles who pay in excess of $1000 a year in property taxes on them. Hidden alpha.
6. Eat at home. This is probably my second-biggest frugal hack.
7. Don't buy more home internet speed than you need. The lowest level probably meets most people's needs just fine.
8. Don't have cable. Too many streaming options available these days to pay $10/month renting cable boxes.
9. Drink at home.
10. No, this is THE MOST IMPORTANT THING. DO NOT GET ON THE HEDONIC TREADMILL. Once you experience a standard of living, it is almost impossible to give it up or scale back. Find a modicum of happiness, one within a Live Below Your Means budget, then tailor all future financial decisions on simply maintaining that financial status rather than advancing it. That frees up future raises to be saved, future bill payoffs to be saved, etc.
YeahBuddy
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Re: Becoming frugal

Post by YeahBuddy »

I've never made much money, so frugality was a necessity for me. Wife came from another country where they literally had to stuff hay into their beds/pillows. They moved to the US and upgraded huge, the 5 of them living in a 700sq ft apartment in the US with all used furniture/hand me downs. This is just for perspective.

So, from most impactful to least...

1. Marry the right woman. Took me 10 years but I really got to know her, her spending, family, long term commitment, attitude, personality etc. Divorces are expensive.
2. Kids. We had 2, semi planned, took hand me downs, gifts, never bought the trendy expensive stuff and taught them the value of a dollar.
3. Bought a house in our price range. This is where lifestyle creep came into play. But for our family it was the right move. But not necessary.
4. Inexpensive cars always (even if new, it's still Toyota over luxury). Downgrade to 1 vehicle if possible, or 0 if public transportation is an option.
5. Eat at home 95% of the time
6. I always "brown bag" aka meal prep work meals.
7. We had a very small wedding with a JP and sister/brother in law.
8. The rest is just lifestyle stuff. Question every purchase.
9. Search for a better price online.
10. Analyze spending and reduce if possible.
11. Use cash as forking over cash is associated with more "pain" than swiping a card.
12. Live like a broke college student.
13. Shop the reduced good section of the grocery store
14. Use coupons.
15. Consume less
16. If you are normal or overweight eat less food but healthy (fruits, veggies, lean protein but eat 1/2 of what you normally eat, save for next day). Don't attempt if you're underweight
17. Drink tap water only. Cut out all other beverages.

Do everything yourself
landscaping, auto motive, home repairs, basically don't hire anybody for anything
No home upgrades are are not absolutely essential.

Analyze your current lifestyle and downgrade it. Most here can do it but probably don't want to. None of us NEED any of the stuff we have or use. Big house, cars, etc. I could continue forever but I'm sure I lost most of my audience by now.
Light weight baby!
donaldfair71
Posts: 1241
Joined: Wed Mar 06, 2013 3:15 pm

Re: Becoming frugal

Post by donaldfair71 »

RobLyons wrote: Thu May 27, 2021 7:19 am I've never made much money, so frugality was a necessity for me. Wife came from another country where they literally had to stuff hay into their beds/pillows. They moved to the US and upgraded huge, the 5 of them living in a 700sq ft apartment in the US with all used furniture/hand me downs. This is just for perspective.

So, from most impactful to least...

1. Marry the right woman. Took me 10 years but I really got to know her, her spending, family, long term commitment, attitude, personality etc. Divorces are expensive.
2. Kids. We had 2, semi planned, took hand me downs, gifts, never bought the trendy expensive stuff and taught them the value of a dollar.
3. Bought a house in our price range. This is where lifestyle creep came into play. But for our family it was the right move. But not necessary.
4. Inexpensive cars always (even if new, it's still Toyota over luxury). Downgrade to 1 vehicle if possible, or 0 if public transportation is an option.
5. Eat at home 95% of the time
6. I always "brown bag" aka meal prep work meals.
7. We had a very small wedding with a JP and sister/brother in law.
8. The rest is just lifestyle stuff. Question every purchase.
9. Search for a better price online.
10. Analyze spending and reduce if possible.
11. Use cash as forking over cash is associated with more "pain" than swiping a card.
12. Live like a broke college student.
13. Shop the reduced good section of the grocery store
14. Use coupons.
15. Consume less
16. If you are normal or overweight eat less food but healthy (fruits, veggies, lean protein but eat 1/2 of what you normally eat, save for next day). Don't attempt if you're underweight
17. Drink tap water only. Cut out all other beverages.

Do everything yourself
landscaping, auto motive, home repairs, basically don't hire anybody for anything
No home upgrades are are not absolutely essential.

Analyze your current lifestyle and downgrade it. Most here can do it but probably don't want to. None of us NEED any of the stuff we have or use. Big house, cars, etc. I could continue forever but I'm sure I lost most of my audience by now.
5, 6, 17 really hit home here, and 10 I think is probably a must. It is difficult to know where you can improve your habits if you don't chart your habits.
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RickBoglehead
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Location: In a house

Re: Becoming frugal

Post by RickBoglehead »

Frugal, like many things, is in the eye of the beholder. Some versions of frugality are viewed by others as extreme, or "being cheap". Some are very creative. Do what works for you.

Here's some that we have come up with over the years:

1) We moved into a development where trash pickup rates are negotiated by the township, one company allowed. Property owners then setup service. In the contract (which no one reads), it specifies an option called "bag tags". Instead of paying for weekly trash pickup, buy a "bag tag" and put out a garbage bag with the tag on it instead of the big 95 gallon can. Annual cost for roller cart is over $200. Bag tags are now $2.85. Since late 2009 when we found this option, we have saved over $2,200...

2) Brown bag lunch at work. I did this as a C-Suite professional. Caveat - not in a line of business where "business lunches" are done to generate business. Assuming a daily cost of $7.50 for lunch, vs. $1.50 for brown bag, that's $3,000 a year AFTER tax savings, meaning you have to earn $4,000+ to pay for lunch.

3) Make your coffee at home. Drink free coffee provided by work. I don't know the exact cost of coffee at home, we just bought an 11oz can for $1.79 (Maxwell House French Roast). Let's assume 50 days (2 scoops per day for 2 people), that's 1.8 cents per day. Round up to 2 cents. Starbucks is what, $3.50 a day? Annual savings of $870 after tax, $1,300 a year pre-tax.

4) Avoid impulse buying. We rarely buy something that we don't need, and research any large purchase, probably more than most people. On negotiable purchases (i.e. car), we probably get better pricing than 95% of consumers. We utilize sales, we use sites like Camelcamelcamel to watch prices, etc.

5) Marry someone that doesn't like shopping. Don't marry a clothes horse. :mrgreen:

6) Find opportunities to save money that match up with your interests. I like technology. We cut the phone cord in 2011. We cut the TV cable cord in 2013. I loved switching, setting up an OBI in 2011 (no longer use it), switching from Comcast's TV service and DVRs to a PC with software and an antenna in the attic. My wife, probably not.

7) When the opportunity presents, show a provider of services why it's worth giving you a discount, or similar. Many years ago, Comcast paid for referring neighbors for internet service as dial-up went away. I referred my entire neighborhood of 50 houses. :mrgreen: When I needed something for my F-150, I contacted the company re: fit questions. They didn't know, so we agreed they would send me one unit to try. It fit, so they then had me pay cost for the other 3 units (4 needed). Small potatoes, but an example.

8) Push for what's yours. If you buy a product, or service, and it doesn't meet the requirements or promises, contact the company and provide feedback, and then ask for compensation if deserved. Just had a needlepoint framed by leading retailer. Wife went to pick it up, no one at framing desk, "they're at lunch at 3:30". General staff person gets it for her, but they put it in frame backwards... Left with note for staff, we called an hour later, they said "oops" and "it will be ready tomorrow". Asked for compensation for having to make two 45 minute roundtrips. They said company policy is no. Department manager said same the next day, and said they were "stressed out" being short staffed. Contacted company via social media, zone manager contacted us, immediately apologized and said company policy IS to provide compensation, and appreciated us telling him that we were concerned that staff in a framing department is "stressed out", this is framing, not nuclear science. He agreed and thanked us for contacting him and provided $25 gift card (1/4 the cost). Companies cannot fix what they don't know, and want feedback, and will often thank you for pointing out shortcomings by rewarding you. They also like praise by the way, we do both.

9) Stopped going to a barber in 2012. Liked my barber, but the other chair was run by a person that didn't seem mentally there. Then the barber (a woman) asked me advice on opening a store that was selling products, and to consumers, that I found upsetting. Never went back. Savings of $300 a year.

10) Rarely eat out. We found we didn't enjoy spending that kind of money for most meals we got. We are going to try and change that in retirement though.

More to come as I think of it.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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Sandtrap
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Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.

Re: Becoming frugal

Post by Sandtrap »

Jwymer167 wrote: Sun Oct 28, 2018 12:57 pm Good evening from the UK ☺️
I thought i would try to start a small thread on frugality. Being able to save big lumps of your paycheck, to use as capital to invest is obviously very important

I was wondering, what ways have you practised frugality in order to save nice amount of money? For me personally:
£5 phone bill
No financing fancy cars
Share lifts occasionally
Im able to cut my own hair
Dont buy stuff i dont need etc etc.

Im always looking for other ways to save, so im interested to see what some of you guys do ☺️
Frugality is sometimes a way of life and lifestyle because of low income, etc.
1. Shopping for school clothese for the children, and work clothes, at the Salvation Army/Savers/Goodwill/Thrift Stores.
2. Budgeting between paying monthly rent and putting food on the table.
3. Careful food buying because of #2.
4. Buying used cars that one can afford and pay in cash because there is no money for monthly payments.
5. Working 3 jobs 7 days a week to feed one's family and keep the cars running and pay the rent.
6. Buying anything that exceeds the above is not possible because there is no money to do so.
7. Etc.

While the austere time's in life are unforgettable and truly a struggle, etc, it can become an ingrained habit and mindset for a lifetime of frugality.
These things are contextual based on each person's life experience, culture, background, etc. To some, not buying a New Lotus Elite is frugal. To others, having "hamburger helper without the hamburger" for dinner is not a choice. So, in that context, "practicing frugality" is not an option, though it is for those with greater finances, etc. There is no "becoming" frugal.

Actionably:
Embrace the idea of "waste" and "need" into one's self and daily life. What is truly a "need" vs a "want"? What makes one happy temporarily, or is rewarding permanently, whether material or non material.
With this mindset and habit from that mindset, the list of frugal things to do becomes infinite, and the financial rewards in the long term also become unlimited.

Per the forum Wiki, invest regularly, keep things simple, strategize financially for the very long term.
j :D
Wiki Bogleheads Wiki: Everything You Need to Know
stoptothink
Posts: 15368
Joined: Fri Dec 31, 2010 8:53 am

Re: Becoming frugal

Post by stoptothink »

delamer wrote: Wed May 26, 2021 10:18 pm
dink2win wrote: Wed May 26, 2021 9:00 pm Yes it seems the main points are:
- don't overspend on housing
- don't overspend on cars
- invest your savings
- don't overspend on anything

While I agree with the first three bullets, at some point, your happiness has to matter too. It's almost like most of you guys make this a mathematical equation.

Sure, you and your spouse can spend $0 on clothes, hair, skin, and only eat rice bean and instant noodles. You will probably end up looking like gremlins by 40. I don't know about you, but I would not want to spend 40+ more years with a cheapskate gremlin that has rotten teeth. (remember divorces are super expensive).

It's like a car. You don't avoid maintenance or put in motor oil from the dollar store, never wash or wax it and expect the car to last problem free for a decade or more. Sure sometimes you get lucky (a friend of mine had a Civic that he did nothing to other than put in the cheapest gas he could find and did only oil changes from the $20 place, and somehow it lasted 20 years. But even then the paint was peeling and the car looked horrible, while mechanically sound). Genetically some people get lucky, but for the vast majority it doesn't work that way.

Yes buy food on sale. But there is a difference between only buying instant noodles when it goes on sale vs buying fresh organic fruits and veggies. By not ordering out, you will still spend less buying good groceries than if you were to togo all the time. Take care of your body and exercise. Buy nice quality clothes and wear them for a long time before buying replacements. Spending an extra $2000 a year on some good groceries and health/skin isn't going to set you back that much but you'll end up a lot better looking and better feeling than living like a Spartan.

Otherwise you'll either die young (with your stash of money unspent) or end up spending up all that money with major medical issues later in life.
I’m not sure where you get the idea that “most” Bogleheads are sacrificing their health & physical well-being in order to maximize their frugality.

I’d say the opposite. For most of us, those are the last things that we’d cut corners on.
We are easily among the most frugal families on this board (4, annual household expenses ~$25k, and we follow pretty much every frugality rule mentioned in this thread), but physical health is our passion and my career. I don't even understand what dink2win is suggesting, nobody here is going without health insurance our subsisting on government cheese in the name of frugality. There is zero association between the cost of the food you eat and clothing you wear and your physical health.
Wanderingwheelz
Posts: 3145
Joined: Mon Mar 04, 2019 8:52 am

Re: Becoming frugal

Post by Wanderingwheelz »

chazas wrote: Thu May 27, 2021 6:35 am Don’t deny yourself so much that you’re miserable - I like to live well - but always thinks about what something costs.

Learn to cook. I love to cook so my Bluestar cooktop was a great splurge - but in comparison to restaurant eating it’s a bargain. I just ate at a good but not spectacular place in a strip mall in the exurbs near me and dinner for two - one shared app, two entrees, two drinks apiece - was $200 with tax and tip. Don’t get me started on restaurant costs in DC. I’m doing a CSA share from a farmer friend this summer, but normally I shop the edges of the store, and I save a ton of money by going to the less expensive chains and ethnic groceries and spending a few minutes downloading coupons on the app before I go in.

For bigger ticket purchases, think before you buy. I have things that are on my “to get” list that I’ve been chewing over for years - not worth making a hasty expensive mistake. When you decide, first shop used on Craigslist and FB marketplace and be a little patient. I got almost new Williams Sonoma Home dining room chairs for 1/3 the price of the same thing from the website. I splurged on an expensive 4K home theater, but I got two rows of high quality leather electric recliners for a fraction of the cost of new. Just this week I got an almost new Breville food processor for pennies on the dollar. If you can’t find what you want used, then track prices for a bit and buy at the biggest discount you can find.

Learn how to fix things yourself. Service calls are super expensive. YouTube is a great help. Just recently I repaired my kitchen faucet (after learning that Delta basically send you free parts for life), repaired an expensive lawn sprinkler, and replaced the drive cable on my mower.
This advice ought to be read twice. All 3 categories are huge money savers for a household that is willing to put in the time.

One tip I may offer is I try to negotiate on any item/service I purchase that’s more than $1,000. Most people have no idea how much price negotiation goes on- they just pay whatever is being asked on stuff. Huge mistake.
Being wrong compounds forever.
YeahBuddy
Posts: 2505
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Re: Becoming frugal

Post by YeahBuddy »

donaldfair71 wrote: Thu May 27, 2021 7:21 am
RobLyons wrote: Thu May 27, 2021 7:19 am I've never made much money, so frugality was a necessity for me. Wife came from another country where they literally had to stuff hay into their beds/pillows. They moved to the US and upgraded huge, the 5 of them living in a 700sq ft apartment in the US with all used furniture/hand me downs. This is just for perspective.

So, from most impactful to least...

1. Marry the right woman. Took me 10 years but I really got to know her, her spending, family, long term commitment, attitude, personality etc. Divorces are expensive.
2. Kids. We had 2, semi planned, took hand me downs, gifts, never bought the trendy expensive stuff and taught them the value of a dollar.
3. Bought a house in our price range. This is where lifestyle creep came into play. But for our family it was the right move. But not necessary.
4. Inexpensive cars always (even if new, it's still Toyota over luxury). Downgrade to 1 vehicle if possible, or 0 if public transportation is an option.
5. Eat at home 95% of the time
6. I always "brown bag" aka meal prep work meals.
7. We had a very small wedding with a JP and sister/brother in law.
8. The rest is just lifestyle stuff. Question every purchase.
9. Search for a better price online.
10. Analyze spending and reduce if possible.
11. Use cash as forking over cash is associated with more "pain" than swiping a card.
12. Live like a broke college student.
13. Shop the reduced good section of the grocery store
14. Use coupons.
15. Consume less
16. If you are normal or overweight eat less food but healthy (fruits, veggies, lean protein but eat 1/2 of what you normally eat, save for next day). Don't attempt if you're underweight
17. Drink tap water only. Cut out all other beverages.

Do everything yourself
landscaping, auto motive, home repairs, basically don't hire anybody for anything
No home upgrades are are not absolutely essential.

Analyze your current lifestyle and downgrade it. Most here can do it but probably don't want to. None of us NEED any of the stuff we have or use. Big house, cars, etc. I could continue forever but I'm sure I lost most of my audience by now.
5, 6, 17 really hit home here, and 10 I think is probably a must. It is difficult to know where you can improve your habits if you don't chart your habits.

It's like anything in life, it's hard to recognize behavior patterns and change them unless we want to recognize them, chart them, and make a concerted effort to change. Social interactions, spending, diet, exercise, faith, business, wellness, environmental impact, the list goes on. I have a very frugal friend that I speak with about spending from time to time and it's always a "Wow" moment when he gives me ideas that I never even thought of for reducing spending. Sometimes I'm not always willing to make the change but interesting nonetheless.
Light weight baby!
Bibliothikarios
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Re: Becoming frugal

Post by Bibliothikarios »

Most everything I think on this subject has been mentioned in one way or another in the thread. But I wanted to post my thoughts on the subject, for my own benefit.

Big picture: spend money on what's important to you. Be frugal with the things that don't matter. I find too many people spend money in a way that does not reflect what is actually important to them.

First off, the things I know I have to buy, but don't care about, I try to find the best way to take care of those costs cheaply. I buy all of our toiletries and health and beauty aids at Sam's Club. I always use my 5% wholesale club categories to stock up on things or wait till the items I buy every year are on sale "Instant Savings". I save $100 a year buying what we need when it is on sale. The $1, $2 and $4 off sale prices add up. No Costco where we live. Money really ads up when I get the instant savings prices and the 5% cash back in a quarter.

Travelling and eating ethnic foods I can't make at home easily are important to us. I've discovered that I can make over $100 an hour doing credit card and bank bonuses. I have $3,500 in free money ready to go for our trip to the U.K. next year, hopefully. The high salary people will turn their nose up at $100 an hour, but that's four times what I make at my job lol.

I treat maximizing credit card categories as "my part-time job". The few hours I work a year just making note of what to use and when put's an extra $1k in our pocket. And then other bonuses can another $500 to $2,500, depending on how the opportunities fall.

The combination of being frugal with things that are not important, with taking advantage of the "free money", subsidizes the things we love: international travel and eating out (Thai food etc.)

I'm currently driving a 2002 Civic with 220k miles. It runs great, still.

In addition to marrying the right spouse, marrying into the right family is also important. My in-laws have done a lot to help us (gifted my wife a home etc.). Of course I did not know that would happen when I got married, but still.
H-Town
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Re: Becoming frugal

Post by H-Town »

Many good advice in this thread.

What if you don't need to become frugal? What if you just need to keep your standard of living same as when you're in grad school or just start out your career? Don't buy fancy things when you get a raise. Don't buy a bigger house and fancier car when you get a promotion. Maybe wait until you achieve FI?

It's far easier to keep your standard of living than dipping your toes in luxury lifestyle and try to scale it back.
Time is the ultimate currency.
Carguy85
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Re: Becoming frugal

Post by Carguy85 »

Jaymover wrote: Thu May 27, 2021 6:55 am
smitcat wrote: Thu May 27, 2021 6:43 am
Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
"Never finance or lease anything"
Loans/leases/financing that can be positive:
- educational
- business
- credit card
- zero/low interest vehicle
- rental home loan
- primary home loan
I think he means things like
- entering a contract for a mobile phone
- entering a lease arrangement for a car
- entering a contract for data - always pay as you go
- entering a contract for a gym

I think this is correct. Many companies rely on customers stuck in contracts that they dont use, have balloon payments etc. Better to always pay as you go as you can then keep shopping around for a better deal.
Ok explaining myself will be a bit controversial I suppose but here goes. I was mainly thinking loans/leases on cars or any other depreciating asset...likewise credit cards provide too little friction so you almost certainly WILL spend more. Way easier to sign up for a 0% loan than to write a check. Furthermore, companies offering 0% or “awesome” lease deals aren’t doing it out of the goodness of their hearts. There is absolutely no free lunch. Ok and the last controversial statement....$100k for an underwater left handed mid evil basket weaving degree is a total waste of money and 4 years. I should have added maybe education in addition to a house but ONLY if you have a business plan knowing what you want to do and how you are going to pay it back. A marketable education plan is certainly not a depreciating asset. Like cars and homes, cheap readily available money has dramatically raised prices. In the case of higher education this has far far out paced inflation or even healthcare.
MathWizard
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Re: Becoming frugal

Post by MathWizard »

Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
Invest in your human capital .
If you have to finance education which will increase your future income, that is OK debt.
KlangFool
Posts: 31529
Joined: Sat Oct 11, 2008 12:35 pm

Re: Becoming frugal

Post by KlangFool »

Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
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Carguy85
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Re: Becoming frugal

Post by Carguy85 »

MathWizard wrote: Thu May 27, 2021 5:57 pm
Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
Invest in your human capital .
If you have to finance education which will increase your future income, that is OK debt.
You are right as long as there is a viable path that is marketable that specifically requires a certain piece of paper... and then do it as inexpensively as possible but without cutting corners. All of the knowledge of the world is practically at anyone’s fingertips for next to nothing. My undergraduate degree was 100% worthless as far as marketability other than the DDS program that required pre req’s closely aligning with it...I actually was able to get in to the program a year before competing the undergrad degree (2-3 out of 2000 applicants at the time pulled this off). ..so yes I’m a college “drop out” so take my opinions about college for what they’re worth😀
Last edited by Carguy85 on Thu May 27, 2021 6:31 pm, edited 1 time in total.
RadAudit
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Location: Second star on the right and straight on 'til morning

Re: Becoming frugal

Post by RadAudit »

When choosing your parents, make sure they were raised during the Depression.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
chazas
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Location: NoVa

Re: Becoming frugal

Post by chazas »

KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
Sounds frugal to me, just not cheap.
delamer
Posts: 17459
Joined: Tue Feb 08, 2011 5:13 pm

Re: Becoming frug

Post by delamer »

KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
When you bought your the house, did it require a smaller monthly mortgage payment than a lender would have been willing to finance based on your income?

If so, I’d venture that you are more frugal than most Americans.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
User avatar
ResearchMed
Posts: 16795
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Re: Becoming frugal

Post by ResearchMed »

MathWizard wrote: Thu May 27, 2021 5:57 pm
Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
Invest in your human capital .
If you have to finance education which will increase your future income, that is OK debt.
"If you have to finance education which will increase your future"... employment satisfaction or even enjoyment... THAT is OK debt.
:happy

Not everyone chooses jobs/professions/etc., "for the money".

I'm sure there are quite a few other categories, and far more individual experiences/decisions, but for quite a lot of people who choose to go into academics, money isn't the goal.
Yes, enough to live on, and hopefully be comfortable, is important!
In many cases, some could have earned more heading to non-academic positions.
However, the enjoyment is worth more than the money that was probably or even definitely forgone (well, most of the time... there are always "those days" or "those problems"; nothing is perfect...)

It isn't always "the money".

For those who end up with a profession they truly enjoy AND get paid very handsomely... enjoy!

RM
This signature is a placebo. You are in the control group.
KlangFool
Posts: 31529
Joined: Sat Oct 11, 2008 12:35 pm

Re: Becoming frug

Post by KlangFool »

delamer wrote: Thu May 27, 2021 6:29 pm
KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
When you bought your the house, did it require a smaller monthly mortgage payment than a lender would have been willing to finance based on your income?

If so, I’d venture that you are more frugal than most Americans.
US median household income is around 50K to 60K. I spend about 50K to 60K per year. So, how could I claim that I am more frugal than most Americans?

KlangFool
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rockstar
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Re: Becoming frugal

Post by rockstar »

Give yourself a cooling off period before any big purchases. Review all of your credit card purchases each month to both check for fraud and to see where the money went. Those are two big ones for me. And never coveth they neighbor's stuff. Keeping up with the Jones is not a new concept.
Wanderingwheelz
Posts: 3145
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Re: Becoming frugal

Post by Wanderingwheelz »

KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
I’m not here to defend being house poor, but there are definitely people here who’ve overspent on a home and have done very well financially by doing so. Leverage taken on an asset that goes up in value at a rapid pace can do amazing things for your net worth, especially if you’re young and your earned income grows beyond what was once a tight budget because of a large home expense.

I doubt you’ll find many people here who’ve overspent on cars and dining out and have done well financially by doing so.
Being wrong compounds forever.
lostdog
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Re: Becoming frugal

Post by lostdog »

I married a frugal woman. She is 43 and a millionaire. She still cuts coupons and shops at Aldi. It's in her blood.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Carguy85
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Re: Becoming frugal

Post by Carguy85 »

Average yearly home appreciation over the last 25 years has been 3.8% as per a few different sources. Factor in increased taxes/utilities/repairs/insurance/mortgage interest/realtor fees on a larger home in addition to inflation/opportunity cost....other than in very specific markets where someone simply gets flat out lucky I don’t see how it would work out that great.
KlangFool
Posts: 31529
Joined: Sat Oct 11, 2008 12:35 pm

Re: Becoming frugal

Post by KlangFool »

Wanderingwheelz wrote: Thu May 27, 2021 7:35 pm
KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
I’m not here to defend being house poor, but there are definitely people here who’ve overspent on a home and have done very well financially by doing so. Leverage taken on an asset that goes up in value at a rapid pace can do amazing things for your net worth, especially if you’re young and your earned income grows beyond what was once a tight budget because of a large home expense.
Wanderingwheelz,

Or, it will destroy the person financially like many folks in my area. The housing price had just recover above 2004/2005 level. It only recovered up to 2004/2005 level at around 2019. 15 years of no appreciation.

Many of my peers overspent on their houses and brown bagged their lunches. But, they still save close to nothing.

KlangFool
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delamer
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Re: Becoming frug

Post by delamer »

KlangFool wrote: Thu May 27, 2021 7:08 pm
delamer wrote: Thu May 27, 2021 6:29 pm
KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
When you bought your the house, did it require a smaller monthly mortgage payment than a lender would have been willing to finance based on your income?

If so, I’d venture that you are more frugal than most Americans.
US median household income is around 50K to 60K. I spend about 50K to 60K per year. So, how could I claim that I am more frugal than most Americans?

KlangFool
To some degree, frugality is relative to income.

Take three families, one making $50,000, one making $100,000, and one making $150,000. If they all spend $40,000/year, and save the rest of their after-tax income, are they all equally frugal?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
KlangFool
Posts: 31529
Joined: Sat Oct 11, 2008 12:35 pm

Re: Becoming frug

Post by KlangFool »

delamer wrote: Thu May 27, 2021 10:58 pm
KlangFool wrote: Thu May 27, 2021 7:08 pm
delamer wrote: Thu May 27, 2021 6:29 pm
KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
When you bought your the house, did it require a smaller monthly mortgage payment than a lender would have been willing to finance based on your income?

If so, I’d venture that you are more frugal than most Americans.
US median household income is around 50K to 60K. I spend about 50K to 60K per year. So, how could I claim that I am more frugal than most Americans?

KlangFool
To some degree, frugality is relative to income.

Take three families, one making $50,000, one making $100,000, and one making $150,000. If they all spend $40,000/year, and save the rest of their after-tax income, are they all equally frugal?
delamer,

A) Or not. I may spend less as per my income. But, I am not living a frugal lifestyle as per US median household.

B) Meanwhile, my income peer may be living a frugal lifestyle as compared to me on everything else. But, by overspending on their houses, they still save nothing.

C) There is a myth out there that someone has live a frugal lifestyle (stop going Starbucks, eat out) in order to save a lot of money. But, the truth is at my income level, it is always come down the big 3 expenses: house, car, and college education. And, that is my point.

KlangFool
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ImUrHuckleberry
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Re: Becoming frugal

Post by ImUrHuckleberry »

donaldfair71 wrote: Thu May 27, 2021 7:09 am
3. Never buy a new car unless you are ready to commit to 15 years. Start at 3 years old, then for every year used after that, knock 2 years off the waiting time. Buy an 8 year old car? You can buy your next car in 5 years. Pay cash. But keep a "payment" in a savings account for the next one.
This rule would have left me needing to get at least 500,000 miles from my new cars, back in the days before Covid-19 opened doors for working full time remote.
donaldfair71
Posts: 1241
Joined: Wed Mar 06, 2013 3:15 pm

Re: Becoming frugal

Post by donaldfair71 »

ImUrHuckleberry wrote: Fri May 28, 2021 6:41 am
donaldfair71 wrote: Thu May 27, 2021 7:09 am
3. Never buy a new car unless you are ready to commit to 15 years. Start at 3 years old, then for every year used after that, knock 2 years off the waiting time. Buy an 8 year old car? You can buy your next car in 5 years. Pay cash. But keep a "payment" in a savings account for the next one.
This rule would have left me needing to get at least 500,000 miles from my new cars, back in the days before Covid-19 opened doors for working full time remote.
I imagine you use your car for work?

If so, then the common rules would not apply.

Neither would the housing rule if, for example, it doubled as a working office.
ImUrHuckleberry
Posts: 672
Joined: Sat Apr 15, 2017 7:44 am

Re: Becoming frugal

Post by ImUrHuckleberry »

donaldfair71 wrote: Fri May 28, 2021 7:02 am
ImUrHuckleberry wrote: Fri May 28, 2021 6:41 am
donaldfair71 wrote: Thu May 27, 2021 7:09 am
3. Never buy a new car unless you are ready to commit to 15 years. Start at 3 years old, then for every year used after that, knock 2 years off the waiting time. Buy an 8 year old car? You can buy your next car in 5 years. Pay cash. But keep a "payment" in a savings account for the next one.
This rule would have left me needing to get at least 500,000 miles from my new cars, back in the days before Covid-19 opened doors for working full time remote.
I imagine you use your car for work?

If so, then the common rules would not apply.

Neither would the housing rule if, for example, it doubled as a working office.
It was just transportation to get to work, plus usually long travel almost every weekend for climbing and hiking.
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Becoming frugal

Post by smitcat »

Carguy85 wrote: Thu May 27, 2021 4:22 pm
Jaymover wrote: Thu May 27, 2021 6:55 am
smitcat wrote: Thu May 27, 2021 6:43 am
Carguy85 wrote: Wed May 26, 2021 5:20 pm Avoid sugar, tobacco, alcohol
Shop around the edges of the grocery store
Never finance or lease anything (ok maybe a house)
"Never finance or lease anything"
Loans/leases/financing that can be positive:
- educational
- business
- credit card
- zero/low interest vehicle
- rental home loan
- primary home loan
I think he means things like
- entering a contract for a mobile phone
- entering a lease arrangement for a car
- entering a contract for data - always pay as you go
- entering a contract for a gym

I think this is correct. Many companies rely on customers stuck in contracts that they dont use, have balloon payments etc. Better to always pay as you go as you can then keep shopping around for a better deal.
Ok explaining myself will be a bit controversial I suppose but here goes. I was mainly thinking loans/leases on cars or any other depreciating asset...likewise credit cards provide too little friction so you almost certainly WILL spend more. Way easier to sign up for a 0% loan than to write a check. Furthermore, companies offering 0% or “awesome” lease deals aren’t doing it out of the goodness of their hearts. There is absolutely no free lunch. Ok and the last controversial statement....$100k for an underwater left handed mid evil basket weaving degree is a total waste of money and 4 years. I should have added maybe education in addition to a house but ONLY if you have a business plan knowing what you want to do and how you are going to pay it back. A marketable education plan is certainly not a depreciating asset. Like cars and homes, cheap readily available money has dramatically raised prices. In the case of higher education this has far far out paced inflation or even healthcare.
All of these can represent a positive financial change when used correctly, like everything in life you can choose to use these anyway you like.
Loans/leases/financing that can be positive:
- educational
- business
- credit card
- zero/low interest vehicle
- rental home loan
- primary home loan

"There is absolutely no free lunch.
Like cars and homes, cheap readily available money has dramatically raised prices."
These statements can be true but thinking that they are always true is a mistake.
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Becoming frugal

Post by smitcat »

KlangFool wrote: Thu May 27, 2021 8:09 pm
Wanderingwheelz wrote: Thu May 27, 2021 7:35 pm
KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
I’m not here to defend being house poor, but there are definitely people here who’ve overspent on a home and have done very well financially by doing so. Leverage taken on an asset that goes up in value at a rapid pace can do amazing things for your net worth, especially if you’re young and your earned income grows beyond what was once a tight budget because of a large home expense.
Wanderingwheelz,

Or, it will destroy the person financially like many folks in my area. The housing price had just recover above 2004/2005 level. It only recovered up to 2004/2005 level at around 2019. 15 years of no appreciation.

Many of my peers overspent on their houses and brown bagged their lunches. But, they still save close to nothing.

KlangFool

"Or, it will destroy the person financially like many folks in my area. The housing price had just recover above 2004/2005 level. It only recovered up to 2004/2005 level at around 2019. 15 years of no appreciation."
There is no data support for that statement, please see the kink for home price appreciation:
Average home prices in the NVA area over time:
http://joefacenda.com/2015/01/23/sales-since-1975/

Even then you continue to cherry pick years rather than look at the larger picture of home appreciation.
Selecting home values beginning in 2004 and ending in 2019 is not a good method to determine a likely scenario ...just like picking any specific 15 year period for stock or bonds is a poor method.
KlangFool
Posts: 31529
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Re: Becoming frugal

Post by KlangFool »

smitcat wrote: Fri May 28, 2021 8:04 am
"Or, it will destroy the person financially like many folks in my area. The housing price had just recover above 2004/2005 level. It only recovered up to 2004/2005 level at around 2019. 15 years of no appreciation."
There is no data support for that statement, please see the kink for home price appreciation:
Average home prices in the NVA area over time:
http://joefacenda.com/2015/01/23/sales-since-1975/

Even then you continue to cherry pick years rather than look at the larger picture of home appreciation.
Selecting home values beginning in 2004 and ending in 2019 is not a good method to determine a likely scenario ...just like picking any specific 15 year period for stock or bonds is a poor method.
smitcat,

1) You can be drown in a lake with an average depth of 3 inches. Folks should use Zillow to check the price history of the houses in their neighborhood. We do not buy average house. We buy one house at a time.

<<Selecting home values beginning in 2004 and ending in 2019 is not a good method>>

2) It proves a very important point. House price does not goes up all the time. It goes in cycle. And, the cycle could be very long. So, if someone buy a house at the peak, it may take 10+ years to recover.

<< look at the larger picture of home appreciation.>>

3) Unless someone buy 20+ houses, how does the average helps? Normal folks like me only buy one house at a time. The big picture does not help me if my house is underwater.

KlangFool
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donaldfair71
Posts: 1241
Joined: Wed Mar 06, 2013 3:15 pm

Re: Becoming frugal

Post by donaldfair71 »

ImUrHuckleberry wrote: Fri May 28, 2021 7:04 am
donaldfair71 wrote: Fri May 28, 2021 7:02 am
ImUrHuckleberry wrote: Fri May 28, 2021 6:41 am
donaldfair71 wrote: Thu May 27, 2021 7:09 am
3. Never buy a new car unless you are ready to commit to 15 years. Start at 3 years old, then for every year used after that, knock 2 years off the waiting time. Buy an 8 year old car? You can buy your next car in 5 years. Pay cash. But keep a "payment" in a savings account for the next one.
This rule would have left me needing to get at least 500,000 miles from my new cars, back in the days before Covid-19 opened doors for working full time remote.
I imagine you use your car for work?

If so, then the common rules would not apply.

Neither would the housing rule if, for example, it doubled as a working office.
It was just transportation to get to work, plus usually long travel almost every weekend for climbing and hiking.
In that case, I would be buying used. :happy
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Becoming frugal

Post by smitcat »

KlangFool wrote: Fri May 28, 2021 8:11 am
smitcat wrote: Fri May 28, 2021 8:04 am
"Or, it will destroy the person financially like many folks in my area. The housing price had just recover above 2004/2005 level. It only recovered up to 2004/2005 level at around 2019. 15 years of no appreciation."
There is no data support for that statement, please see the kink for home price appreciation:
Average home prices in the NVA area over time:
http://joefacenda.com/2015/01/23/sales-since-1975/

Even then you continue to cherry pick years rather than look at the larger picture of home appreciation.
Selecting home values beginning in 2004 and ending in 2019 is not a good method to determine a likely scenario ...just like picking any specific 15 year period for stock or bonds is a poor method.
smitcat,

1) You can be drown in a lake with an average depth of 3 inches. Folks should use Zillow to check the price history of the houses in their neighborhood. We do not buy average house. We buy one house at a time.

<<Selecting home values beginning in 2004 and ending in 2019 is not a good method>>

2) It proves a very important point. House price does not goes up all the time. It goes in cycle. And, the cycle could be very long. So, if someone buy a house at the peak, it may take 10+ years to recover.

<< look at the larger picture of home appreciation.>>

3) Unless someone buy 20+ houses, how does the average helps? Normal folks like me only buy one house at a time. The big picture does not help me if my house is underwater.

KlangFool

"1) You can be drown in a lake with an average depth of 3 inches. Folks should use Zillow to check the price history of the houses in their neighborhood. We do not buy average house."
Over a few past posts I have provided links to articles showing a strong housing appreciation growth in your area over time by year in detail.
Please provide one link to any data that supports any of your statements.

"<<Selecting home values beginning in 2004 and ending in 2019 is not a good method>>
2) It proves a very important point. House price does not goes up all the time. It goes in cycle. And, the cycle could be very long. So, if someone buy a house at the peak, it may take 10+ years to recover."
That is good because you need to live in a home for a longer period of time. Please see the 10 year growth appreciation numbers in the linked article as all of them are 'healthy'.

"3) Unless someone buy 20+ houses, how does the average helps? Normal folks like me only buy one house at a time. The big picture does not help me if my house is underwater."
Home values go up in areas as a whole.
Where have you lived since 2019?
Did the home not go up since 2019?
What homes did you live in before this one?
Did they not go up as well?

FWIW - all of the homes we have owned have gone up in value regardless of how long we owned them or where they were located. Some more than others but up all the same.
KlangFool
Posts: 31529
Joined: Sat Oct 11, 2008 12:35 pm

Re: Becoming frugal

Post by KlangFool »

smitcat wrote: Fri May 28, 2021 8:21 am
"1) You can be drown in a lake with an average depth of 3 inches. Folks should use Zillow to check the price history of the houses in their neighborhood. We do not buy average house."
Over a few past posts I have provided links to articles showing a strong housing appreciation growth in your area over time by year in detail.
Please provide one link to any data that supports any of your statements.

"<<Selecting home values beginning in 2004 and ending in 2019 is not a good method>>
2) It proves a very important point. House price does not goes up all the time. It goes in cycle. And, the cycle could be very long. So, if someone buy a house at the peak, it may take 10+ years to recover."
That is good because you need to live in a home for a longer period of time. Please see the 10 year growth appreciation numbers in the linked article as all of them are 'healthy'.

"3) Unless someone buy 20+ houses, how does the average helps? Normal folks like me only buy one house at a time. The big picture does not help me if my house is underwater."
Home values go up in areas as a whole.
Where have you lived since 2019?
Did the home not go up since 2019?
What homes did you live in before this one?
Did they not go up as well?

FWIW - all of the homes we have owned have gone up in value regardless of how long we owned them or where they were located. Some more than others but up all the same.
smitcat,

1) Why don't you prove your point providing Zillow at your location instead? The cycle would show up too.

<<That is good because you need to live in a home for a longer period of time. >>

2) Only if you are not forced to move due to your job.

3) Prove your point by showing Zillow at some of your locations. It should be clear that you were lucky so far.

KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
New Providence
Posts: 555
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Re: Becoming frugal

Post by New Providence »

Sandtrap wrote: Thu May 27, 2021 7:37 am
Jwymer167 wrote: Sun Oct 28, 2018 12:57 pm Good evening from the UK ☺️
I thought i would try to start a small thread on frugality. Being able to save big lumps of your paycheck, to use as capital to invest is obviously very important

I was wondering, what ways have you practised frugality in order to save nice amount of money? For me personally:
£5 phone bill
No financing fancy cars
Share lifts occasionally
Im able to cut my own hair
Dont buy stuff i dont need etc etc.

Im always looking for other ways to save, so im interested to see what some of you guys do ☺️
Frugality is sometimes a way of life and lifestyle because of low income, etc.
1. Shopping for school clothese for the children, and work clothes, at the Salvation Army/Savers/Goodwill/Thrift Stores.
2. Budgeting between paying monthly rent and putting food on the table.
3. Careful food buying because of #2.
4. Buying used cars that one can afford and pay in cash because there is no money for monthly payments.
5. Working 3 jobs 7 days a week to feed one's family and keep the cars running and pay the rent.
6. Buying anything that exceeds the above is not possible because there is no money to do so.
7. Etc.

While the austere time's in life are unforgettable and truly a struggle, etc, it can become an ingrained habit and mindset for a lifetime of frugality.
These things are contextual based on each person's life experience, culture, background, etc. To some, not buying a New Lotus Elite is frugal. To others, having "hamburger helper without the hamburger" for dinner is not a choice. So, in that context, "practicing frugality" is not an option, though it is for those with greater finances, etc. There is no "becoming" frugal.

Actionably:
Embrace the idea of "waste" and "need" into one's self and daily life. What is truly a "need" vs a "want"? What makes one happy temporarily, or is rewarding permanently, whether material or non material.
With this mindset and habit from that mindset, the list of frugal things to do becomes infinite, and the financial rewards in the long term also become unlimited.

Per the forum Wiki, invest regularly, keep things simple, strategize financially for the very long term.
j :D
Sandtrap -

I like the way you frame the issue. Hoarding money is not of interest to me (hoarding anything for that matter), but "waste" and "need" are rational concepts that I can fully support.

Being cheap for its own sake has no value to me because life is very short and money is a good tool to use to improve my quality of life while I am on this planet. Many people around the world, in fact, live very frugal lives and they are desperate to move to America to not live in those conditions.

But being wasteful, for example, adds not value to my quality of life and therefore that's something to be aware of.
H-Town
Posts: 5911
Joined: Sun Feb 26, 2017 1:08 pm

Re: Becoming frugal

Post by H-Town »

Wanderingwheelz wrote: Thu May 27, 2021 7:35 pm
KlangFool wrote: Thu May 27, 2021 6:07 pm Folks,

I do not believe in being frugal. I keep control on my major expenses: house, car, and college education. I save 1 year of expense every year and I spend the rest. I am not frugal. I spend 50K to 60K per year. By spending less on my house, I have plenty of money for everything else. I buy new car and I eat out regularly.

The irony is I found that many folks that claimed to be frugal saved much less than I do. They had overspent on their houses and then tried to save money. It was too little and too late.

KlangFool
I’m not here to defend being house poor, but there are definitely people here who’ve overspent on a home and have done very well financially by doing so. Leverage taken on an asset that goes up in value at a rapid pace can do amazing things for your net worth, especially if you’re young and your earned income grows beyond what was once a tight budget because of a large home expense.

I doubt you’ll find many people here who’ve overspent on cars and dining out and have done well financially by doing so.
I would agree if it's an investment property that they clearly have a concrete plan to generate cash flow and/or recognize the gain on the sale of property. If this is a primary residence, I don't think it's financially sound decision, nor a rational decision, to leverage and overspend on their primary house.

If one is house poor, most of their paycheck will go towards the house (mortgage interest, insurance, property taxes, repair & maintenance, landscaping, etc.) The bigger the house, the more upkeep expenses that go with it. If you look at the mortgage amortization table, most of the interest expense that you pay to the bank will be paid up front. Just a small portion that will go towards the principal. The house poor group would be lucky to save 10% or 15% of their paycheck and will have to work until 60 or 65.

On the other hand, if one chooses to buy less house when they start their career, they can save majority of their paycheck and put it towards stocks and bonds portfolio. They can get to FI pretty early because their expenses is low and their saving rate is high. Once they get to FI, they have the options to buy investment properties, etc. without having to work for their paychecks ever again. If they show up at work, that is because they want to show up at work.

We made a decision to buy less house and focus on FI goal. It took us 10-11 years to get to FI. We didn't do anything special. We didn't take risk on entrepreneurial endeavors. We are just a couple of W-2 wage earners. But we save a majority of our paycheck consistently over 10 years.
Time is the ultimate currency.
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