These ain’t yo mama’s frugality tips…

bezos1I don’t know about you, but I don’t get excited about small scale frugality tips.

You know, things like: cut out the daily latte, bring your lunch to work in a Tupperware container and buy value toilet tissue.  It all seems a bit, well, unglamorous.

I can see both sides of the argument.  Cutting out the lattes and bringing your lunch into the office will save you a lot of money over a couple of decades.  The little things add up via The Aggregation of Marginal Gains.

It’s just that people focussed on extreme frugality often have great defence but poor offence. In other words, they hang onto what they earn (great) but don’t earn as much as they should (not so great). They often don’t get promoted at work and they fear the volatility of investing in the stockmarket.

So, even though I’m encouraging frugality around here, Ramit Sethi’s classic skit on penny-pinching makes a valuable point. It’s possible to be penny wise but pound (or $, €) foolish.

Some people function better after a coffee at work.  And getting to financial independence is not easy. So just cutting out the lattes is not enough.

So today I’m talking about going hard core. Going Medieval on your finances…or Gangsta…or Viking. Choose your preferred genre and, just for now, remove the following words from your vocabulary: nice, normal, sensible, reasonable.

Here are The Escape Artist’s TOP 10 EXTREME FRUGALITY TIPS. These are the things that really move the needle…so its strange that conventional personal finance advice mostly ignores them.

1. Be an environmentalist

The Escape Artist is an environmentalist.

But not a Swampy-style anarchist soap-dodger. Nor a wimpy, hand-wringing, metrosexual muesli muncher either.

northern forestFor example, I love that The Woodland Trust is creating a new great Northern forest in the UK.

To be honest, if it were down to me, I would give serious consideration to levelling Wolverhampton to the ground, planting trees and reintroducing bison, bears, golden eagles, lynx and sabre tooth tigers to The Midlands where they could roam free. You can probably see why I won’t be running for Prime Minister.

When I read that the birth rate in some countries is below replacement rate, I say good…more room for nature and for wilderness. And maybe we are not all doomed after all?

I hate waste, hate litter and hate the plastic packaging that comes with supermarket food and new stuff. Trying to cut spending is an uphill struggle if you think of it as depriving yourself. Better to tap into a powerful underlying motivation. Environmentalism does it for me.

2. It’s all just shit

Cutting spending is easy when you think about stuff the right way: its all just shit.

OK, I admit there are some possessions that I like. My 2 bikes. My Keep Calm and Carry On coffee mug. The birthday cards that my children hand made for me.  But even that stuff is all just shit. It is not me, it is not my children. If my house was on fire, it’d be a mistake to run back into the burning building to get it.

The title of the classic book Your Money or Your Life says it all.  Dick Turpin style highway robbers used to give victims the choice of giving up their possessions or their life. At gunpoint, most people hand over their stuff.  So why can’t people see that, by getting trapped in consumer spending, they are choosing stuff over their life?

When presented with a choice between 1) buying more shit or 2) your life, CHOOSE LIFE.

Hint: you are presented with that choice every day.

3. Start investing

It’s never too early to start investing.

Last week, when my 15 year old boy had saved up £500 last week from his earnings washing up at the local pub, I showed him how to buy his first shares.  When you understand the power of compound interest plus stockmarket returns, you realise that every £500 you don’t spend now could be worth £22,500 in 40 years time. No, that is not a typo.

ba-baracas-costume-4

And did I mention that you could easily save a million pounds of investing fees over a lifetime? Yes, I think I did.

But…I hear you say…what’s the perfect fund for me? is now the right time? and what if I know nothing about investing?

Well, I already answered those questions.

As Mr T would probably say to all you procrastinators:

Fools, quit your jibber jabber…start investing NOW

4.  Earn more

I know you’re smart enough to know that the more you earn, the easier it is to save.

But the hidden frugality benefit of earning more is that you’ll have less opportunity to spend your money. One of the side effects of a full on, high-paying job or your own small business is that it can suck up all your leisure time. The downside is obvious:  its hard work.

The upside is that you’ll never need to buy in passive entertainment…there will always be enough drama in your life already without watching TV, going to the cinema or to Dismaland, Florida.

Plus, what doesn’t kill you makes you stronger.

5.  Don’t buy the biggest house you can

OK, this is a trap that I fell into when I was young and stupid.  But the idea behind this blog is that I tell you the mistakes I made, so maybe you learn from them the easy way?

Buying the biggest house you can is a sucker move. First, you pay dearly for more square footage…but extra square footage had no impact on my happiness.  Second, you’ll pay more interest to the bank. Third, nature abhors a vacuum…so the more space you have, the more shit you’ll buy to fill it up.

And what if interest rates go back up to 15% as they did in 1993? Worrying about keeping a roof over your family’s head is one of the most stressful things imaginable. Remember what’s in The Bankers Jar.

So buy (or rent) smaller, and dig a well before you are thirsty.

6. Don’t have children

Yes, I know you’re allowed to have one kid.  Or even more than one.

I have three and I love them dearly. But it’s hard work. My daughter has a stomach bug and last night I got woken up to find she’d been sick on the bathroom floor.  Guess who ended up mopping that up? She’s 17 (years not months). I’d been lead to believe that this shit would be over by now.

The Escape Artist has done some things in life that other people say are hard. Some of them (e.g. running a marathon) are actually not that difficult.  But being a good parent really is that difficult. Anyone that says otherwise is deluding themselves or doesn’t really understand the role. Let’s not pretend that having children is anything other than a huge challenge….financially and emotionally.

Yes, I know that the population would shrink if most people stopped having children…but see point 1 above.

7. Avoid private education

OK, so you already have kids. Why not give them an elite private education without the cost?

I know that its natural to want to protect your babies from the big bad world and give them the best start in life. But I’m just not convinced that paying for private education offers a decent return on the investment. And its a BIG investment.

What if you took that money and put it in a tracker fund for them? Or better, what if you taught them The Incomparable Advantage of Having to Work for what you get?

8. Get some Game

Let’s be honest, this one is mainly aimed at guys. Especially younger guys who haven’t yet found their Special Love Muffin.

Trying to impress women via spending is the ultimate sucker move.  It usually doesn’t work.  But even worse than when it doesn’t work is when it does. You are then a Walking Wallet.

Your have 2 choices here. First, you can go the consumerist way and buy stuff that promises to make you irresistible to women.  It’s all bullshit.

Or second, you can learn some “Game“. I don’t mean magic tricks, tarot cards and wearing a feather boa.  I mean learning about emotional intelligence (yes, that’s a thing), the science behind attraction and doing some work on yourself.

Just as most good financial advice boils down to self-improvement, so most good dating and relationship advice boils down to self-improvement.

9.  Don’t get divorced

After you’ve found your Special Love Muffin, you need to keep working on it. Like, forever.

Humans are naturally lazy and the messages we get about marriage can be confusing. Just because you’ve got a piece of paper, doesn’t mean you own that other person. It’s so easy to take your SLM for granted as the years go by and life gets in the way. The trick (so my wife tells me) is to find ways to keep showing your love without just throwing money at the problem. It’s the thought (and the attention to detail) that counts.

Yes, sometimes divorce is the only way to go…sometimes we don’t get to choose.   But it’ll be a disaster for your freedom fund.  Divorce courts often penalise the higher earner in a couple. One of my coaching clients, a hard working career woman, had no children and still got taken to the cleaners, having to pay maintenance to her ex who was perfectly capable of working…WTF?

I can’t speak from experience but, from what I’ve heard, getting divorced using lawyers is like letting 2 competing packs of wolves into a petting zoo. It’s not pretty.

10. Be a health freak

Without really meaning to, I’ve turned into one of those strange people that go to the gym 5 or 6 times a week.  It’s addictive and its also a great way to cut your spending without depriving yourself.

When you’re seriously into health & fitness, you’ll want to cook real food yourself and exercise more. You’ll also spend less time doing things like shopping, visiting food courts, and drinking in the pub. You’ll never be bored when you have the option of going to the gym. You can always justify not going out, as you’re trying to improve your physical health.

When you’re really into health, it’s no longer about giving something up…its about getting something better.


Further reading:

fin-coaching-widget

  1. The Aggregation of Marginal Gains
  2. Financial coaching

 

10 comments

  1. “Nor a wimpy, hand-wringing, metrosexual muesli muncher either.”

    Love it, you do have a way with words. I hear what you’re saying about saving on the small things, it can seem silly. But the good part is you don’t have to save on all the small things, just the one’s that don’t matter to you. The aggregation of marginal gains is indeed real.

    I function better on coffee too, so I don’t save there. Well, by not buying a environmentally wasteful $300 Keurig I guess I do….

  2. Survivor · · Reply

    Hey, ‘find ways to keep showing your love without just throwing money at the problem’ – I had the opposite problem, my special preying mantis wanted me to show my love by just throwing all my money at any problem [but particularly her] all of the time. When I ran out of ammo, I threw the house up in the air & ran for it while she slept off digesting such a big meal, running from my life …..to having a life. 🙂 [So pick wisely is the moral of that bedtime story]

    I saw a good film in which a middle-aged guy in a bar is hit on by an attractive girl about half his age – understandably then assuming it wasn’t for his personality [she didn’t know him] he politely told her he was sorry, but he couldn’t afford her. She got offended & protested that it wasn’t an entrepreneurial offer ……to which he responds that he then definitely can’t afford her. Hohoho.

    ‘And what if interest rates go back up to 15% as they did in 1993?’ maybe that’s why back then when partying like it was ’93 they took smiley-face, happy-coloured pills, then jumped up & down at free venues for a few hours in the dark …..instead of a weekend city breaks on the continent. [ Arguably quite FI-savvy an optimist might say 🙂 ] ‘if it were down to me, I would give serious consideration to leveling Wolverhampton to the ground/You can probably see why I won’t be running for Prime Minister.’ ……or mayor of said Wolverhampton?

  3. ladyaurora · · Reply

    Once again TEA hits the nail on the head with sound advice and revelation with a touch of humour. I like the ” its all s…t ” so true but put it that way it really hits home. And i was just pondering treating my self to a new dress!!
    Maybe another tip would be no pets. Ive adopted a cat and he’s wonderful company didn’t want a pet but he’s here now.
    Fortunately he runs away from trouble.
    FI in sight for me now 5 months off. Will carry on working part time for 2 more years though as my work has benefits other than money . Its a fabulous feeling of freedom and choice im beginning to feel. who wouldn’t want that over big houses expensive cars and s…t.
    The problem is society is brainwashed.

    1. Fatbritabroad · · Reply

      Good advice 400 a month between girlfriend and i to cover dog walkers holiday cover etc 😊. Hes great though and you have to enjoy the journey as well as the destination

  4. The good thing is that some of these points are interconnected. Moving to a smaller house has the added benefit of making you get all your shit out of the cupboards you hide it in and realising just how shit it all is and how you don’t want it to take up space in your new more compact and bijou life. Win Win!

    Seriously though I think one of my key FI lightbulb moments was packing for a move and realising how much stuff I had shelled out good money for that I hadn’t set eye or hand on…. since the last time I packed and moved it many years earlier.

    The mantra, when tempted in shops, of ‘remember you will just have to pack it next time you move’ has been an excellent money saver.

  5. Muesli is the cereal environmentally conscious? Have never made that connection before.

    And I’m also for reforestation…..Lynxes are cute.

  6. Bahaha, this is awesome. Sometimes you have to do more than the “make your own coffee” frugality. After a few baby steps, it’s much easier to take more dramatic steps to save even more money. I love the note about being a health nut. I’ve been working out regularly, using a standing desk, and focusing more on healthy eating. It’s crazy how those changes make you feel better while saving you money.

  7. BucketBabe · · Reply

    Excellent points as always and I LOL’d a few times as usual. What we need is a big giant flying predator…I actually worked with an ER physician for years who used to say that out loud. 🙂 I loved working with him.

    It absolutely IS all shit. All of it. I have been listing shit for sale all day on Etsy and Craigslist, and cannot wait to pawn all of that shit off on someone else so I can go hike the Camino.

    I only had one kidlet. And I can tell you, although she is 30 (years not months), it still never ends. There’s always something although I am really really good at boundaries now. BUT I still get suckered into paying for every damn meal out….I am going to suggest walks in nature from now on though because I have discovered I am an environmentalist too.

    More trees, less people. My environmentalist mantra.

  8. I have to admit, #7 is a hot topic in our household. It’s currently a work in progress, although I understand the opportunity cost fully.

    #9 – This to me comes down to not leaving a back door open when one gets married. When you’re in, you’re in!

    hahaha @ your 17 year old! Surely you must be looking forward to her departure to university? or is that off the cards? I am only 5 years into the parenting game and I already feel much older!

  9. Loving it. It’s a refreshing way to look at frugality. I could talk about number 8 all night long…

    ‘The Game’ revolutionized the world of dating like ‘Your Money or Your Life’ is to the FIRE world. It spawned a large number of communities globally. It was self-improvement to the max. I personally loved ‘peacock theory’, that was my USP. One of my friends used ‘neg theory’ as part of his repertoire and he was a class act. A true PUA (pick up artist).

    Anyway, like the FIRE scene, it’s all good in moderation!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Mr. Money Mustache

You can escape to financial freedom...

Altucher Confidential

You can escape to financial freedom...

Monevator

You can escape to financial freedom...

Mad Fientist

Financial Independence

jlcollinsnh

The Simple Path to Wealth

%d bloggers like this: