Mr. Frugalwoods and I realize we might seem a bit odd to those of you new to the philosophy of Early Retirement Extreme and Mustachianism or just starting out on your frugal finance journey. Curious how we live day to day? For starters, we’re not total weirdos, I promise! Though we are kinda weird because the way in which we structure our lives is certainly not mainstream.
If you saw us walking down the street with Frugal Hound, you wouldn’t know we’re frugal weirdos. We’re clean, we’re well groomed, Frugal Hound has a real leash (not braided tree branches) and our clothes are pretty stylish, thanks to the excellent thrifting opportunities in our ‘hood. We don’t grow food in our basement (yet), live in a hovel (anymore), or knit our own toilet paper (uh, never), and we enjoy a lovely life in the middle of Cambridge, MA–a charming urban locale.
So, how do we save a whopping 65%* annually when the average savings rate for Americans is just 4.3% (source: The Federal Reserve)?
* This is cash saved after taxes, after both maxing out our 401Ks. In other words, we calculate our savings percentage by the following equation: monthly after-tax savings / take-home pay. We both work full-time and we combine all of our finances into joint money market and investment accounts. We hold separate 401K retirement vehicles through our respective employers.
1) We don’t have any debt other than our mortgage.
Thus, we don’t pay any loan payments or interest. If you do have debt, pay it down. If you don’t, save! But that’s another post for another time.
2) We spend very little on entertainment.
We don’t have cable. Or Netflix. We do have a Roku (a one-time expense of $50), which provides us with great content to peruse.
We don’t go to museums, concerts, bands, movies, the theatre, the ballet, the symphony, or the circus. If it has a ticket price, we don’t go. Period. Instead, we take advantage of the free opportunities in our city. There are plenty! Plus, our public library offers free passes to local museums that residents can borrow for specific dates. We’ve gone to countless interesting (and totally random) things we’d never think to attend but, hey they were free!
For the most part we entertain ourselves with free hobbies like hiking, singing, yoga, woodworking, home improvement projects, reading, writing (HEY! I’m writing right now!), cooking, and dressing Frugal Hound up (she loves it).
Every. Single. Day.
4) We rarely eat at restaurants or go to coffee shops or bars.
And when I say rarely, I mean approximately twice per year.
5) We shop Costco and Amazon.com for household supplies.
Buying in bulk is cheaper! We’re not tied to brands or specific products–we buy whatever’s on sale. Trust me, folks, you do not need to use the same shampoo every month.
6) We thoughtfully prepare each week’s grocery list and plan our meals in advance.
We’re frugal but healthy on this front. We could shave off a few more bucks if we didn’t buy so many fruits and vegetables, but health is a priority for us, so this is an instance where we’re happy to pay a little more. We spend on things that bring value to our lives.
We mostly cook from scratch and don’t eat much meat, dairy, or packaged foods as they’re pricier. And, precious little food goes to waste in the Frugalwoods kitchen.
7) We don’t have a new car, so we don’t have a car payment.
The one car that we share, Frugalwoods-mobile!, is 19 years old. We don’t care–she runs just fine and we don’t owe a dime on her.
8) We ride bikes, walk, or take public transit whenever possible.
Yes, even in the Boston winters.
9) Almost everything we buy is used.
Clothes, furniture, you name it, someone else probably owned it before us. Except for underwear–I told you, we’re not gross! Our mattress is new, but our guest bed is used. Thrift stores, garage sales, and Craigslist are all essential sources. Plus, we take stuff off the side of the road. Judge not!
10) NO impulse buying! I’m serious about this you guys, none!
Mr. Frugalwoods and I discuss and consider every purchase we make. We ask each other: do we really need this? Do we own something similar that could substitute? Could we borrow it from a friend? What is the price new vs. used?
And, again, do we really need this? Will buying it bring us immense joy or is it a necessity that would be unsafe or unwise to do without (like a carbon monoxide detector)? Will purchasing it now stave off a future more costly expense? Most importantly, is it something that will enable greater frugality? Here are the 10 shockingly expensive things we DO own.
11) We don’t pay people to do stuff for us.
We consider ourselves to be radical insourcers. We clean our own house. We wash our own car. Mr. Frugalwoods cooks all of our meals (much tasty, very yums). He also does our taxes. And all of our financial planning and investing. I do all of our laundry (rare is the dry cleaners for us). We make, repair, sew, and otherwise reuse everything we can (hey baby, let me stitch that hole in your jeans for ya). We do all of our own home improvements and repairs. We walk and entertain our own dog (no dog walkers, no doggy day care). We write our own jokes. Bet you thought we had a professional!
12) We do all of our grooming at home.
I cut Mr. Frugalwoods’ hair. He has a buzz cut, which makes my job easy. Ok, I did accidentally shave a bald patch the first time I did it, but my technique has improved greatly. And, Mr. FW cuts my hair too–he’s quite the pro!
I do my own eyebrows, manicures, and pedicures (on the rare occasions that I crave painted nails). Mr. FW would like to point out that he does his own eyebrows, manicures, and pedicures too.
I’ve eliminated wearing most makeup, which saves a shockingly large amount of dough. And time too! My daily routine is: sunscreen, mascara, and lip gloss. We bathe Frugal Hound, clip her nails, brush her teeth, clean her ears, and groom her ourselves. Hey, she’s our girl and we love her. Even if she does mysteriously get funky dirt (is it dirt?!?) in her ears.
13) We keep our utility bills looooooowww.
Air conditioning doesn’t get turned on until it’s too hot to sleep at night (usually circa July) and is turned back off as soon as late August brings cooler weather. We follow these 11 frugal hacks to avoid turning our heat on until absolutely mandatory. And, once we do turn the heat on, it’s set at a frugal 62 during the day when we’re home, and 58 at night and when we’re away.
To save water, Mr. Frugalwoods installed a low-flow showerhead for us. I do as few loads of laundry every week as possible and, I line dry most of our clothes. I do run the dryer about once a week to tumble our sheets, towels, and socks.
Something you probably noticed in this list is all of the “we.” A critical element of a frugal lifestyle, if you live with another person, is being on the same page. Mr. Frugalwoods and I never argue about money or fight over expenses. We throw down over other stuff, but are 100% in agreement over how to use and save our assets. If you’re interested, check out this post I wrote about our marriage: Behind the Scenes of a Happy Frugal Marriage.
Getting to a place where you and your partner/spouse share the same financial destination and goal is key. Knowing what you want as a family for the long-term is the first step to deciding how to spend your money together. For us, it’s liberating to not worry about money or fret over how much we’re spending. Free yourself and frugal it up!
Want to ramp up your own savings rate? Try taking our Uber Frugal Month Challenge and let us know what you think! If you’re interested in how we manage our money after we save it, check out How We Manage Our Household Finances.
7/27/14 update: As I share in our About page, Mr. FW and I have always been frugal by nature and lived well below our means. Without really breaking a sweat, we were saving 65% annually, which is what this post discusses. However, when we made the decision in early 2014 to accelerate our timeline to financial independence and solidified 2017 as our early retirement year, we were able to increase our savings rate to 82%. We’ll have to wait and see how 2014 shakes out on the whole, but I’m cautiously optimistic that we’ll be able to hover near a 70-75% rate of savings. Wish us luck!
1/9/15 update: The results of our 2014 spending are in and we’re delighted! Check out the full story in Well Hot Damn, Frugality Works! Our 2014 Savings Rate Revealed.
5/26/15 update: Wondering how our year-plus of extreme frugality is treating us? Look no farther than How A Year Of Extreme Frugality Changed Us.