How to be Happily Frugal

How to be Happily Frugal

I was honored to be invited to speak at the Bay Area Simplicity Conference in Santa Clara, California, in the heart of Silicon Valley, earlier this year. More than 400 people attended this conference, which featured such simplicity stars as Vicki Robin, Duane Elgin, Ernest Callenbach, Cecille Andrews, and Linda Breen Pierce. This is what they heard from me:

I'm Larry Roth, and I, too, once had a high-stress life right here in the Silicon Valley. In February 1995, just a little more than five years ago, I left my job, I left Silicon Valley, and I left California. I was 46 years old. And I have not once, in the past five years, awakened in the morning and said, "Gee! I wish I were going to work at Company L today."

In 1916, Robert Frost wrote about the road less traveled by. These days, frugality is definitely the road less traveled by. What I'd like to throw out to you are first some money-saving tips and then a few ideas that may make your traveling this road easier.

Never buy new if used will do. Quite often, you can find a used item for 10 percent of the cost of a new item. Buying recycled items also is kind to the environment.
Know the true value of your hard-earned dollars. So you make $50,000 a year. Really? After taxes, your 50 grand is more likely to be around $30,000. Both Your Money or Your Life (by Joe Dominguez and Vicki Robins) and Beating the System (which I wrote), which you can get at the library, have formulas in them for calculating how much you have to earn to have a dollar to spend.
Don't suffer from tax phobia. Remember, a tax deduction is not a rebate. If you are in the 28% tax bracket, you must spend $1.00 for every 28¢ you save in taxes. If this sounds like a good deal to you, send me $100. I'll send you $28. What the heck, I'll send you $29.
Remember, little things add up. If you can use a post card instead of a letter, you'll save 13¢ in postage. Do that three times, and you've saved more than the price of mailing one first class letter.
If you have time, shop garage sales and auctions. If you don't have time, shop thrift, resale and consignment stores. You will be amazed at how much you can save and pretty soon you'll consider paying retail prices for new goods a ridiculous waste of money. A few years ago I was asked to be part of a "cheap-off" for a major network. The contest winner would be the person who could buy the most back-to-school clothes. For the filming we needed a child, and since I don't have any, we borrowed the producer's niece. We filmed the segment at a children's consignment store in San Jose. The mother of the child, who lived in a decidedly upscale Peninsula suburb, was clearly miffed at having to be in such a place. We were able to find a lot of clothes at excellent prices, and for $88 the child was outfitted for school. After we were finished filming, the camera crew began looking around, and they found some things for their children. The mother, who had initially been so upset at having to be in a second-hand store, was so impressed with the prices and selection that she and the producer were still shopping when I left. I won the cheap-off, by the way.
Our country is so rich that people often throw perfectly good items out. Take advantage of this bounty. If you see something you can use on the curb on garbage day, grab it. I have a 1928 American Standard pedestal sink in my bathroom that I rescued from the trash collectors. The downside of this is there is so much stuff to be had for free that you will find you simply must limit what you take to what you actually need and hope the rest finds its way to someone else who can use it.
If you work for a company that has a newsletter that lets employees advertise items for sale, use it both to buy and sell.
Make your newspaper pay for itself. Clip coupons. Look for items you need in the classified ads. And shop grocery store and sale brochures (but only for items you need).
Practice guerrilla shopping. Combine coupons (or double coupons, if possible) with store "loss leaders." I have bought Hamburger Helper for as little as 19¢, though it usually costs me about 70¢ (I would never buy it at the regular price of $1.79). I've actually received money back on some items.
Stock up when things are on sale. I might spend $50 on groceries one week and nothing for a couple of weeks, depending on what is on sale.
Buy store brands and generic products. In 1998 there was an e-coli contamination at a Malt-O-Meal factory. As a result, the public learned that the same cereal sold as Malt-O-Meal was sold under more than 50 names in more than 30 stores. Juliet B. Schor, in her book The Overspent American, states that brand name drugs are the same as generics, that many vitamins are made by one company and sold under different brands, and that a "worldwide manufacturer" sells essentially the same jeans to Wal-Mart, Penney's, and Calvin Klein. Learn to ignore the labels. Let choosy mothers overpay for Jif. Peanut butter is peanut butter
Following up on number 11, even if there is a slight difference in quality - so what? Will you be savoring the taste of your last peanut butter sandwich a week from now? An hour from now? Ten minutes from now? I will admit to liking Reese's peanut butter best. But will I pay $2.29 for it when I can buy a store brand for 99¢ to $1.19? No way.
Beware of "Wholesale Shopping Clubs." We all normally assume that if we buy in massive quantities our per unit price is less. Sometimes this is true, but sometimes it isn't. Check the per unit prices at your neighborhood stores (where you can use coupons) as well as at Sam's and Price/Costco (which don't accept coupons).
Thinking for yourself is the most profitable do-it-yourself project. Only you know what is best for you and how to make what you want happen.
Live your life as you see fit. If you are over the age of consent, you do not have to listen to people, whether or not they are friends, relatives, or "talking heads," about what you "should" do. It has always amazed me that the most unhappy people seem to make it their business to live other people's lives. And it amazes me even more that other people try to please these unhappy folks. Be yourself. Be happy.
Take advantage of the Internet. There are all sorts of opportunities to save money. Looking for a book? Well, Amazon.com and Barnesandnoble.com have good prices, but the book you're looking for might be available cheaper at a used book store you can access through www.bookfinder.com.
Buy permanent press clothing when possible. Why pay for dry cleaning when you don't have to?
Look to the Internet for cheap phone rates. AOL offers long distance for 9¢ a minute. Other ISPs may follow AOL's lead.

Next, a few tips for making your life easier. First, whether it be religion, a new diet, or, yes, frugality, recent converts tend to become enthusiastic, convinced that their way is the only way, and that their job is now to get others to see the error of their ways and accept the new religion, diet, or whatever. This is not a new phenomenon. Ralph Waldo Emerson wrote about it in his 1844 essay, "New England Reformers." As you might imagine, I have had many people, some of them perfect strangers, walk up to me and suggest a diet I might want to try. One recent suggestion came from a young man who recommended I buy a daily waffle breakfast at McDonalds, forgo the butter and syrup, and wash it down with a diet soda so it would "expand" and fill me up. First, I don't like either McDonald's or waffles, and, second, I'm just not up to drinking soda in the morning. So, even though this diet may have worked for this young man, and he swears it did, I'm afraid it's just not for me.

Similarly, we must accept that frugality will have the same appeal to many people that the diet of waffles and soda had to me. And we must get over our belief that frugality is something the world needs to embrace (though I think the world would be a better place if people did embrace frugality). I believe we can lead simpler and happier lives by accepting that frugality is the path for us. And I believe we can be more effective by showing the world what frugality can do for us rather than trying to convince the world we are right. If you would like to understand why people don't see the world our way, I suggest that you study any of the books on the Enneagram by Helen Palmer or Don Riso.

Once you are financially independent, you will find it takes a year or so to adapt to your new, slower lifestyle. During that time you will undoubtedly explore several options. I first worked with an animal rescue group, but I found the leader of that group devious and more than willing to take over my life (though I did wind up with a pretty good dog out of the deal). I then worked with AARP's tax assistance program, and I really enjoyed that. I suggest that you avoid fanatics and their causes whenever possible. Remember that you are simplifying your life. You are gaining control of your time. These people will be more than happy to substitute their agenda for your boss'. You'll have your old schedule back, and the pay will be lousy!

Don't give in to the "should's." Don't do things or get involved with causes because you think you should. Remember the reason you became financially independent was so you could do what you want. When in doubt about getting involved (and, if you're in doubt, you may well at least subconsciously not want to get involved), ask yourself, "Is this something I really want to do?"

Remember that your time and energy are resources, as is your money, and you will not want to waste any of your resources.

Avoid negative people. Now, I'm not saying turn your back on your friends in times of need, but if you have someone in your life who insists on seeing the world through shit-colored glasses and who leaves you tired after every visit, get that person out of your life. You've got a tough enough row to hoe without having these psychic energy sinks around you.

These are the kinds of people who'll complain about the things many of us feel make life beautiful. These are the kinds of people who will, for example, complain about church bells, Christmas carols, and so on. These people can take something beautiful and not only make it ugly, but try to make you feel guilty for having enjoyed the beauty. And speaking of beauty, I'm not particularly religious, but Christmas is just about my favorite time of the year.

Did anyone here overdo it financially this past Christmas? Well, now is a good time for you to start working on a simpler and more enjoyable Christmas for yourselves. There's plenty of time to alert your friends and family that you're not going to engage in the gift wars again this year and to ask them to honor your gift truce. If they don't, well, a gift is a gift. It doesn't have to be an obligation. Only you can be dragged into the fray.

Don't let any book become your bible or any writer become your prophet. Remember, all we can tell you is what worked for us. I can truthfully say that two books changed my life. The first was Paul Terhorst's Cashing in on the American Dream, which was published in 1988. Paul validated the belief that was growing within me that there must be more to life than a corporate job. I didn't agree with his recommendations that one should not own a home and that one should only buy short-term CDs, so I ignored that part of the book. Likewise, Joe Dominguez' and Vicki Robins' Your Money or Your Life gave me a concrete path to financial independence and, most important, the means to know when I was there. I didn't agree with their recommendation that I invest solely in U. S. Treasuries or that I never work for money again once I was financially independent, so I rejected that advice. And lived. Read our advice, but think for yourself. We don't live in a one-size-fits-all world.

Next, get over past mistakes. Stop beating yourself up for having wasted money, time or energy in the past. Remember that what seem like mistakes to us are sometimes happy accidents of the universe. If there's something in your past you're letting weigh you down, let go of it. To give your regrets some perspective, consider John Greenleaf Whittier's 1869 poem, "Maud Muller." In this poem a wealthy judge out riding one hot summer day is given a drink of cool water by a poor farm woman, Maud Muller. As a result of that one chance meeting the judge spends the rest of his life fantasizing about being Maud's husband and a poor farmer; Maud, meanwhile, spends the rest of her life fantasizing about being the wife of a rich judge. In other words, even if the fantasy romance had come to fruition, neither party would have been happy. Whittier concluded,

For of all sad words of tongue or pen,
The saddest are these: "It might have been!"

Know when to repair and when to replace. Alexander Pope said way back in the 18th Century, "Be not the first by whom the new are tried, nor yet the last to lay the old aside." In 1984 I bought a VCR that cost more than $400. I kept repairing it because the repair people said, "They don't make them like that any more." The last repair cost $80 and lasted four months. I saw an ad for a new VCR for $69. The new VCR programmed itself, it's smaller and lighter and fits on top of the TV. The repair people were right. They don't make them like they did in 1984. They make them better and cheaper.

Don't do your living in the future. I don't believe we were put here to live lives of drudgery, either by staying forever in oppressive jobs or engaging in extreme self-denial. There is a happy medium. Find yours.

Beware of causes du jour. Many of these have backing from people and organizations that stand to make money from legislative action. Rodale Press' Guide to Organic Foods Shopping and Organic Living quoted a study in 1970 that "[i]n 10 to 15 years from now every man, woman, and child in the hemisphere will have to wear a breathing helmet to survive outdoors." Thirty years later, this statement looks pretty silly, as will most of the prophecies of doom being stated as fact today. (Take the recent Y2K sky-is-falling hoopla, for example.)

Along those same lines, don't be so quick to condemn our era's contributions to society. A few weeks ago I needed some underwear. I went to the Penney's outlet store where I do a lot of my clothes shopping. The place was disorganized and, when I finally found the underwear, I thought it cost too much ($8 for three pair). There's a Wal-Mart store a block away, so I decided to see what they had. Well, first they had a person at the door who told me exactly where in the store to find underwear, and then they had a package of seven pair of Fruit-of-the-Loom briefs for $5.96. As big and ruthless as these places are supposed to be, they certainly provide value and they respect their customer's time. No wonder they are doing well.

That same day I visited the former site of a Venture store. Venture was a chain of stores that I found particularly annoying. Not only did they not have any qualms about advertising things they didn't have in stock, they'd actually blame you for not dropping what you were doing and running to their store when they had their sale items. I can't remember how many times their customer service people said, "We had plenty of those last Sunday." Well, Venture eventually made so many people mad they wouldn't go there if they were giving stuff away. And Venture went broke. Home Depot bought the site of the Venture store I used to have so much fun at, and they just had their grand opening. I know a lot of people who are into simplicity don't like stores like Home Depot and Wal-Mart, and I say let that be their problem. To me, any time I can make one trip to one store instead of several trips to several stores, I'm saving time and fuel, and I'm a happy camper.

The only argument I've heard against these monster stores is they're bad for the indigenous businesses. First, let me point out that existing business did not come with Adam and Eve. They replaced something else. Nothing is permanent. And second, some of these indigenous businesses deserve to be replaced. My neighborhood recently lost a natural foods store and a book store. I did not do much business with the book store because it always impressed me as a very unfriendly place, but I did have a friend who tried to do business with the natural foods store. She wanted a brand of soy milk the store already carried in a flavor they did not carry. The store told her she'd have to order 24 containers, which she agreed to do. She gave them the information. They said they'd call when her order came in. In 1945, when cars were in short supply, my father ordered a 1946 Buick. Both he and my friend are still waiting for their orders to be filled. My friend, by the way, found what she wanted at Wild Oats, and they even give a discount for buying a full case. Just because some business has been providing bad service forever does not mean it deserves eternal life.

Learn to say no. Use this powerful two-letter word when you're feeling overburdened. If you're asked to do extra work, be on a committee, etc., and you can get away with it, say no if you feel like it. Limit your activities to those you enjoy or truly believe in. There are other people in the world who can do these things, and only you can take care of you.

Listen to your body. If your body says it's tired or hungry, take care of it. It's the only one you get. Learn to slow down. While sloth is generally considered a vice, being constantly busy is not necessarily a virtue. Being busy is often used to avoid self-examination.

Don't save things you won't use. Learn to use the garbage can or to recycle. I bought a rental house from a woman who had saved hundreds if not thousands of those Styrofoam trays you get when you buy meat in the supermarket. I would say set a reasonable limit to accumulating such things as margarine tubs, cottage cheese containers, etc. To me, if you have, say, 10 of these things, it's time to stop. You have nothing to gain by accumulating number 11.

Decide what you want and what your objective is. In my case, I wanted an income that would enable me to live without a job. Your objective could be to live on one income, to afford a larger home, etc. Very few people, I believe, have frugality in mind as an end. It is, rather, the means to an end. As an aside, here, I don't know about others, but I find it empowering to know that I can live without something society as a whole believes is a necessity, such as cell phones, electric can openers, etc., and I love finding things I can use at garage sales, estate sales, thrift shops, etc.

We are living in truly amazing economic times. Both unemployment and interest rates are low. Many consumer goods, especially computers and electronics, cost much less than they did just a few years ago. When I think about the inflation and malaise of just twenty years ago, today's economy boggles my mind. Will it last? The honest answer is no one knows, but I can tell you much of Europe considers our economy to be a bubble similar to the one Japan went through a few years ago. And even some surprising sources are waving the caution flag. The Wall Street Journal had two articles in 15 days earlier this year that discussed how previous booms have ended and how this one might end. Whether the economy holds or folds, though, I suggest that we all consider these times an opportunity to feather our nests. If the economy fails, we'll have some money in the bank. If it continues to soar, well, we're just that much better off and just that much closer to our goals. Being frugal in good times, in other words, is a no-lose proposition.

Finally, the question I personally have been asked most often is "What did you do about health care?" And I want to address that issue here. I was extremely fortunate in that I had Kaiser Permanente and I was able to convert my group plan in California to an individual plan in Kansas City. The bad news is that my monthly rates have gone from $126 to $285 in five years. Health care is a problem for people who do not have employers, and I cannot help but believe this one issue keeps more people in their current jobs than any other issue. There are possibilities out there, one of which is "Simplecare," a plan that is taking root in Seattle, wherein people pay cash for most health care and carry catastrophic insurance for major medical problems. But will Simplecare spread to other markets? I don't know.

There is talk about simplicity becoming a "movement" in the political and social sense, and I personally have some issues with that, since a movement implies leaders, followers and a certain degree of groupthink. If we could form a movement on a practical level, however, that would result in our being able to obtain group rate health insurance for those tied to their jobs because they cannot get affordable health insurance elsewhere, I believe that would be the most immediately productive project we could tackle. This would result in financial independence becoming a possibility for many more people. Affordable group rate health care, in other words, would expand the movement.

For information on Larry Roth’s Living Cheap Press, visit his Web site at www.livingcheap.com.

Larry Roth's book, Beating the System, can be purchased in Mind Like Water's Coral Reef Store.

Larry Roth, July 2000