Frugality

Frugality is Not “Not”!

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Many who have a negative opinion of frugality see it as “not” having a big house, “not” driving a big car, “not” going out to eat, etc. Viewed that way it is no wonder that they have a negative opinion of frugality. Frugality, like many things, can be defined by what it is not but that isn’t the best way to define it.

One way to define frugality is that it is about making choices. For example driving a small, fuel-efficient car rather than a big SUV so that you will have more money for retirement. Or living in a small house rather than a large house so you can put more in your children’s college fund. That is a better definition but still not ideal because it is making your choices look like sacrifices.

The best way of viewing frugality is realizing that the frugal choice can be the preferable choice. For example, your small car saves you money on gas, contributes less pollution to the environment, and is easier to park. The small home is easier to maintain,easier to clean, and cozy. Cooking at home can provide you with better tasting and more nutritious food. Plus when you do eat out it is a treat not just a boring routine.

Less is more. Frugal is better.

5 Practical Ways to Save on Commuting

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This guest post was written by Dean Sherwin, owner of the blog Art of Stinginess. His blog features daily tips, tricks and lifestyle design guides which aim to save you money.

Very little is free in this life, yet by being stingy or at least by following some very simple guidelines we can easily cut back our expenses. One expense that many of us have is commuting. It can be a pain shelling out to get to a place just to earn money, can’t it?

Or maybe it’s not a job you commute to, maybe it’s college. In that case chances are you’re a student looking to save every penny you can. Here are some tips so you can do just that.

Public Transport

I for one used to cringe at the thought of getting public transport. The mere image of late buses or standing in the cold waiting turned me off. But then one day I did some calculations and the amount I would save as opposed to driving was astounding. I guess you could say I was rapidly converted.

Plus, you can use the time on your commute for other things rather than just mindlessly staring out the window. Many people take out a laptop and do some work. Others listen to music or watch TV shows on their MP4s. Public transport is what you make of it and by putting in the effort you can make it into that little bit of ‘me time’ we all like.

Use Your Status

Young People, Senior Citizens, Students, Civil Servants and other such members of our society are almost always entitled to discounts when it comes to transport. You have that I.D. for a reason so use it.

Discounts can go up to 40% or can wave the fare all together depending on where you live. So why pay extra when you don’t need too?

Cycling or Walking

Still, why pay anything at all? For those lucky enough to live within walking/cycling distance of their jobs, why not walk instead of taking your usual method. This way it won’t cost you a dime.

Once again you can listen to your MP3 player or just enjoy the stroll before the long working day starts. It’s great exercise and it’s good for the environment. (I even hear many life insurance policies are starting to lower their premiums for people who commute by walking or cycling so you could save even more money).

Car Pooling

Public transport or hoofing it might not always be on the cards. It could be pouring down rain or you may not live near a bus route. So car pool with your fellow employees who live close to you!

You’d be surprised how popular this is becoming. With the rising cost of gas and car insurance, many co-workers take joy in taking turns driving each other to work. Just ask around your workplace or enquire with HR to see if there’s a program already up and running.

Tele-Commute

If your job can be done from home (maybe you’re a designer, writer, programmer etc…) why not ask your boss if you can work from home 1-2 days per week? It saves on your commuting costs and it increases your quality of life. Plus with E-Mail, file sharing and Instant Messaging it’ll practically be like you’re at the office!

Many jobs are now making this an standing invitation as it pleases their employees and saves on their operating costs (electricity, phone etc…). Normally they will subsidize (to a certain extent) your own costs of a home office.

By implementing just one or two of the above tips you could potentially save hundreds of dollars per year. That’s good spending money for you vacation, right?

Simplest Way to Cut Heating Costs

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The simplest way to cut your heating costs is to not turn on your heat.   This article tells of a  no heat contest where people see how long they can go into the winter without turning on their heat.  The family that won last year made it to December 31.  They live in New Jersey so they must have been pretty cold.  I’m a tight-fisted miser and all for being frugal but I think that is a little too extreme.

That being said I haven’t turned on my heat in my apartment yet.  Since my apartment is on the the third floor it seems to be absorbing heat from other apartments in the building.  Even though the outside temperature has been in the 30s, I don’t think the temperature in my apartment has been below the 60s.  We do have several cold days forecast so I will probably have to turn on my heat sometime this week.  Saving a little money on my heating bill isn’t worth being uncomfortably cold.

Frugality and Location

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I thought about including this in my post on housing but decided this topic deserves its own post since it concerns more than just housing.

Where you live greatly influences your living expenses. Some areas are simply more expensive to live in than others. I’m lucky to live in one of the lowest cost areas of the U.S. One of the drawbacks of living in an area with a low cost of living is that wages are usually lower than average also. If you can manage to make an above average salary in an area with a low cost of living than you are doing well. If you live in a high cost of living area and you are not making an above average salary you should consider moving.

Of course the cost of living isn’t the only thing to consider when determining when to live. You don’t want to move to a low cost of living area if you wouldn’t enjoy living there. Or you might have obligations that require you to live in a high cost of living area. If this is the case your location can still save you money. If you are able to find a location close to your work and other places you regularly visit you should save money. If you are renting you can use a tool such as Rentometer to make sure you are paying a fair price for your neighborhood.

Whatever your location if you put a little thought into where you choose to live you can save a lot of money.

Frugality 101: Housing

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Housing is the area where most people can see their most significant savings. Most people live in too big of a house and spend more than necessary on housing. The average U.S. home size has gone from 1400 sq. ft. in 1970 to 2330 sq. ft. in 2004. Granted the average American has gotten larger during that time period too but it isn’t like they are taking up that much more space.

My housing cost has been around $400 the past few years. With a little effort I could reduce that and I probably will before the year is up. I think $400 a month is a reasonable target for your housing expense. It is much easier to do here in the Midwest than in other areas but it is possible in more areas than you would think. My best friend lived in the S.F. Bay area last year and paid $400 a month for a room in a house right by the ocean. Even in some high cost areas you can find reasonably priced housing if you are willing to be a little unconventional.

If you find the $400 amount too constricting you could consider keeping your housing expense at 20% of your income. That would still keep your housing cost below average and should allow you to save a significant percentage of your income.

If you still think it is impossible to do this in your area then you might consider moving to a different location. I’m going to do a separate post on location in regards to frugality.

If you need some ideas on how to lower your housing cost check out “Twelve ways to become rent or mortgage free” at Wise Bread or check out Jacob’s post on living in a RV at Early Retirement Extreme.