Cheapskate Guide

I am typically frugal (though not always), though on occasion I take it too far: I have T-shirts with holes in them and I ran in my previous pair of running shoes until the soles were smooth.  (I’m prety sure my personal trainor at the gym thought I was totally crazy!)

Lately, I have learned to be frugal in ways that I would recommend to others. I don’t feel you should have holes in your t-shirts, and you should definitely replace your running shoes more often than I used to.  There are ways to cut back on spending and live a frugal lifestyle.

Why live frugally? Mostly because it allows you to spend less than you earn and use the difference to pay off debt, save or invest. Or all three. Second, because the less you spend, the less you need to earn. And that means you can choose to work less, or work more but retire early.

If you’d like some tips on frugal living, here are just a few. I should note that I do most, but not all, of these tips.

1. Go with one car. Besides your house, your car is probably your most expensive item. If you can do with one, you should.
2. Go with a smaller house. Just because you can afford a larger house, doesn’t mean you should live in one. Live in as small a house as you can and still be comfortable.  You can save thousands a year with a smaller home. Many times, if you get rid of a lot of clutter, you don’t need a large house.  (Me, I recently downsized to a 670 SF studio apartment.) Clutter has become a thing of the past for me– which means it is MUCH easier to clean without so many “dust catchers.”
3. Go with a smaller car. Again, you can save thousands by going with a smaller car. A car instead of an SUV is a big savings. Be comfortable, but don’t overdo it. You’ll save a lot on gas too. (Me, I now drive a Honda Civic. Great on gas mileage and really fun to drive.)
4. Rent rather than own. This will probably spark a huge debate.  Basically, don’t assume that buying is the better investment. If you calculate the interest you pay on a mortgage, the cost of insurance and maintenance, buying is often much more costly than renting … and if you rent, save money, and then invest the difference, you can actually end up well ahead in the long run. Now, it’s not a given, so do a comparison, factoring in all expenses.  (I’m 50/50 on this one. Personally, I am currently a renter and this is because I really don’t have the skills needed to maintain my own home. More on this later.)
5. Look for used first. If you need something — I mean really need it, not just want it — see if someone you know has one that they don’t need anymore. Send out an email to family or friends, or ask around. You might be surprised. If no one you know owns one, try freecycle.org or craigslist.org. Then look to buy used, at garage sales or thrift shops.  (I recently became part of the San Diego Freecycle group– fabulous! Lots of good stuff out there looking for a new home.)
6. Eat out less. One of the biggest expenses in our daily lives is eating out — the average person spends well over $2,000 a year on eating out. Restaurants are expensive, including fast-food (not to mention the health hazards). It’s much cheaper to cook your own food.  Lately I’ve even been prepping it in the morning, so it’s a breeze to cook dinner when I get home.
7. Brown bag it to work. Instead of eating out, bring your lunch. (I bring my lunch to work on most days, eat at my desk and go for a 30 minute walk for light exercise– all a win/win.)
8. Adopt a minimalist wardrobe. This tip won’t be for everybody. I generally wear jeans or casual pants, a T-shirt or Polo-type shirt, and sandals or shoes. Plain, solid colors are my favorite. Everything goes with everything else, and I don’t have too many clothes. This saves me the stress of picking out an outfit.
9. Stop online impulse buys. Realize that online buying can be way too easy (you don’t even have to go to a store) and therefore, we make impulse buys. Buy online if you really need something and it’ll save you money, but beware the impulse buy.
10. Don’t “shop”. Don’t go to the mall or other shopping area or department store to look around and shop. Go to a store if you know what you need and get out.  (I admit– this is easier said than done as I am an avid “shopper.”)
11. Use a 30-day list. To curb impulse buys, create a 30-day list. When you want to buy something other than a true necessity (medicine or food, for example), put it on this list, with the date you added it to the list. And make it a rule that you can’t buy anything for at least 30 days after you put it on the list. And stick to it.
12. Cut out cable. It saves money every month (in my area, about $60, or more than $700 a year), and also forces you to do things like read and have conversations and go outside. (Confession time: I have not been able to cut out cable!)
13. Use the library. Instead of buying books, check them out. The library often also has a great selection of DVDs (depending on your area), saving you even more.  (I love love love the local library! They have the newest magazines for free and of course plenty of books and DVDs).
14. Find free entertainment.  The average person spends about $1,800 a year on entertainment (not including eating out). Now, I’m not saying you shouldn’t have fun … but there are cheaper ways to do it.
15. Frugal exercise. Exercise is important, but it doesn’t have to cost a lot of money.  What about going on a walk? It’s free!
16. Stay healthy.  Staying healthy can save you tons of money on doctor’s visits, hospital bills, and medicine over the long run. An ounce of prevention–eat healthy, and exercise. Simple.
17. Commute by bike. Even if you own a car, commuting by bike will save you gas, and get you in shape at the same time.
18. Carpool or ride the bus. Find a friend or neighbor who works near you, and arrange a carpool. Or take public transportation.
19. Walk. Often we drive to the store, or to a school that’s less than a mile away. Leave a few minutes early, walk, burn some calories, and save gas.
20. Sell your clutter. This is not so much saving money as making it, but the frugal, simplifying cheapskate, like myself, will want to declutter and make a few bucks doing it.                                                                                                                               Hold a garage sale or sell it on eBay.   
21. Frugal gifting. Gifts can cost a lot of money over the course of a year. Look for ways to do it cheaply. Make a gift, or give a consummable like cookies, for example.
22. Quit smoking. I know. It’s hard. Not only will you save on cigarettes (which are expensive over the long run), but also associated costs (I used to buy a soda or beer to go with my cigarettes) … and of course the huge, long-term medical costs. In less than 2 years of not smoking you can save well over $3,000.