Category Archives: The Frugal Mindset

“I Want You to WANT to Save!”

credit: Alice Pasqual (Unsplash)

credit: Alice Pasqual (Unsplash)

In the 2006 movie The Break-Up, there is a funny sequence where the Vince Vaughn character and the Jennifer Aniston character get into a huge fight. It’s pretty relatable for many couples who have dealt with similar circumstances.

So let me set the scene: After a dinner party with friends, Jennifer Aniston’s character (Brooke) wants to do the dishes. Vince Vaugh’s character (Gary) is playing Grand Theft Auto.

B: Well, I’m gonna go do the dishes.

G: Cool.

B: It’d be nice if you helped me.

G: No problem. A little bit later. I’m just gonna hit the streets here for a little bit (playing GTA).

B: Gary, come on, I don’t want to do them later. Let’s just do them now. It’ll take 15 minutes.

G: Honey, I am so exhausted. I just honestly want to relax for a little bit. If I could just sit here, let my food digest, and just try to enjoy the quiet for a little bit. Get some! Get some! Get some! (beating people with a club on GTA) That’s what happens. And we will…you know, we can clean the dishes tomorrow.

B: Gary, you know I don’t like waking up to a dirty kitchen.

G: Who cares?

B: I care! All right? I care! I busted my ass all day cleaning this house and then cooking that meal. And I worked today. It would be nice if you said thank you and helped me with the dishes.

G: Fine. I’ll help you do the damn dishes. (throwing his game controller down)

B: Oh, come on. You know what? No. See? That’s not what I want.

G: You just said that you want me to help you do the dishes.

B: I want you to want to do the dishes.

G: Why would I want to do dishes? Why?

B: See, that’s my whole point.

G: Let me see if I’m following this, okay? Are you telling me that you’re upset because I don’t have a strong desire to clean dishes?

B: No. I’m upset because you don’t have a strong desire to offer to do the dishes.

G: I just did.

B: After I asked you!

(Check out a clip of the scene here if you’re interested)

I’m a bit of a weirdo I guess because I really don’t mind doing dishes all that much and that’s with NO DISHWASHER! I’m no saint though because doing the dishes probably means I get out of doing some other chore I hate more!

Obviously no one really likes to do the dirty work, the grunt work, the menial tasks like washing the dishes. But it’s not really about doing dishes. It’s about sharing the household chores in a marriage and loving your spouse so you don’t want them to have to do these menial tasks all by themselves. Sure, everyone has those sweep-you-off-your-feet moments where you write a romantic poem for your wife. You bring her home fresh flowers when she’s feeling down. But no one really things of doing the menial tasks like washing dishes, cooking dinner or cleaning the bathroom as ROMANCE. These are thankless jobs. However, if you’re like me and your “love language” is “Acts of Service” then you probably feel loved when your spouse does these tasks so you don’t have to. Many people will profess their love for their significant other, but are they willing to do the little things to strengthen that relationship?

What does this have to do with Money?

Similar to the above example, a lot of people read exciting headlines about those who paid off a ton of debt in a short period of time, people who retired extremely early, or people who started a blog, making tons of money. A lot of people also make these their goals. Who wouldn’t want to attain these goals? But how many people want to do the dirty work to get there?

When it comes to paying off a ton of debt or saving up enough money to retire extremely early, you’ve got to save a lot of money. But who really wants to save? Who enjoys saving?

Who wants to cook their own meals rather than having something cook it for them?

Who wants to forego that Starbucks venti iced mocha latte?

Who gets joy out of watching their bank and investment account grow rather than spending your paycheck on new shoes or new iPhone X?

Who actually wants to set up a meeting with their spouse to discuss finances and to set up a budget?

When it comes to starting a business, who wants to sit down and actually do research on that industry and to write up a business plan?

For those aspiring money making bloggers, do you like learning about SEO and how to do stuff on Pinterest? (Oh boy, I don’t even know the proper terminology for that!?)

Once again, I am a weirdo, a financial weirdo, and so are some others in the personal finance world. We get great enjoyment pulling up our portfolio seeing how it has grown. Some people look forward to having a financial meeting with their spouse. Some even say that Budgets are Sexy!

That’s not the majority of the people though. Most people have these grand plans and goals, but how many follow through and actually put their plans into action. How many even take the first step towards that goal? It’s not a surprise that the majority of people’s New Year’s resolutions fail by February. Don’t tell me your grand plans and goals. Show me what you are doing right now to achieve them!

Behind every person who killed their debt, who achieved FIRE, or started a successful business is a trail of hard-work, discipline, and sacrifice. The goal is exciting and sexy, but the work that is required to get there, often is not. But if you truly want to attain that goal, you’ve got to do the unglamorous dirty work. If you are just all talk and no action, then don’t complain when you haven’t achieve those goals. Now go out there and start taking action. And don’t forget to help your spouse with the dishes!

What are your goals and what are you doing right now to achieve them?

That Time Image Mattered to Me

image is everything
I often like to think that I’m so emotionally mature that I don’t care about image at all. I don’t need expensive clothing, a luxury car, or high tech gadgets; and I don’t really care when people notice that I don’t have these things. It doesn’t matter to me. Until it did.

It was a Saturday morning and my wife was making breakfast when she noticed that we were running low on milk. I said I would get it from the supermarket which was only two blocks away. She asked me to bring our 15 month old son along with me, as he’s starting to climb on furniture and she wouldn’t be able to supervise him. My 4 year old didn’t want to come. He was too busy watching his cartoons.

On my way back from the supermarket, I stopped by my minivan to pick up a box of diapers I had bought the previous day. As I turned around, I saw a familiar face. It was a girl that I kind of went out with back in college. More accurately, I guess we hung out and then I was banished to the dreaded “friend zone” while she would go out with other guys. Anyway, long story short, back then I remember imagining myself being this successful guy with a fancy sports car and her regretting banishing me to the friend zone. Um, yea…I was kinda shallow and petty back in my college years. Sometimes, I still might be =) In defense of my pettiness and for some perspective, I want to disclose that I was a bit of a dork back in my college days…I still am…so that might be an explanation as to my pettiness!

In any case, I bump into her and she was with her husband. They were dressed up and probably going out to brunch. My hair was disheveled. I hadn’t shaved yet that day. I was wearing sweat pants, holding a box of Huggies diapers, and pushing a stroller, standing next to my minivan. We exchanged pleasantries and said how time has flown and that it was such a small world that we would bump into each other there.

After we parted ways and I was on my way back home, I was seething. Why couldn’t I have been driving a luxury SUV or something! Argh! Maybe I should have thrown on a nicer pair of jeans and combed my hair, before I left my house! I tried to remind myself why I don’t have a fancy car or expensive jeans. I have bigger goals: I want to be FI! But it’s not like I can show off by wearing a shirt that says “I’m on the Path to FIRE!” Did I mention that I can be shallow sometimes?

When I got home, I opened the door and my 4 year old jumped into my arms. “Where are we going today, papa?!” My 15 month old, still strapped in his stroller, stretches his arms out asking to be picked up too. My wife brings out breakfast. She made oatmeal and we’re also having Mickey Mouse shaped waffles.

I started to feel embarrassed. I was ashamed of myself for feeling like it mattered what someone I barely even knew thought about me. What really mattered were those people in that room with me at that moment. I have a loving and caring wife. I have two wonderful kids who adore me. Why did I waste my time in mental anguish over what someone else may or may not have thought about me.

Do you have any moments of weakness when you care too much as to what others may think of you?

Frugality is Just the First Step

credit: Neonbrand on Unsplash

credit: Neonbrand on Unsplash

One of the heated controversies in the personal finance world is whether you should focus on cutting your expenses or increasing your income. Team Cut Your Expenses argues that increasing your income won’t do much if you also inflate your lifestyle and spend more than you earn. Plenty of people have high incomes, yet, they are still living paycheck to paycheck. Team Increase Your Income argues that you shouldn’t “live within your means,” you should “expand your means.”
There is only so much expenses you can cut in your life and who wants to live a life of sacrifice and depravation. Why not increase your income as the potential of that is unlimited compared to saving a few bucks using a coupon. Team increase your income tells you that leaving below your means is depravation and cutting out lattes is unnecessarily, when you can just “expand your means.”

Increasing income by investing it is great but it takes money to make money. You need to be able to save money first to invest it. Building a business always sounds sexy and exciting, but it will most likely take a lot of work and time. There is no shortage of products out there trying to sell you on how you can increase your income. Some are scammy and shady, while others are probably truly trying to help the client. However, increasing your income will always require hard work and often times some luck. This doesn’t mean you should try. You absolutely should try to increase your income.

As frustrating it is to sometimes hear proponents of Team Increase Income bash frugality, sometimes Team Cut Your Expenses can be equally frustrating. Cutting coupons to save 25 cents and reusing dryer sheets is going to help you build wealth. And spending your valuable time doing these tasks will keep you from finding path to finding wealth. Another issue with those who tout frugality is when I read blogs where the writer shuns consumerism and embraces frugality and makes it appear as some unknown magic elixir. They write about how they cut out some costs in their lives a few years ago and will soon retire early. Wow, that easy right? Just don’t buy stuff you can’t afford! Yes, this is great advice but there’s something missing. A good INCOME! There are many who already shun consumerism and are frugal, but are doing it because that’s the only way they can get by. It cannot be disputed that it is much easier to save a large percentage of your income when you have a larger income. While it is impressive to have a high savings rate when other similarly high income people spend it all, it is obvious that Income Matters.

So which side is right? Most people love taking one side and forcefully arguing it. Maybe it’s someone who touts frugality but doesn’t know ways to increase his or her income. Maybe it’s a guru trying to sell you their product which will increase your income. Everyone chooses a side. Most people have an agenda. The real answer, however, is that both sides make valid points. But, why can’t you do both? Why can’t you cut down your expenses while trying to increase your income! With that said, frugality is the first step.

Frugality is the first step because it is much easier. Just follow the rule: Don’t buy stuff you can’t afford and don’t need! Voila! You’ve saved money. Call up internet provider and ask for a discount. Switch to generic brands. Find a more affordable cellphone plan. Cut cable television. Cook meals and bring your lunch to work. All actionable steps which can easily be taken which will save you money not just once but over the long term. No need to learn SEO or WordPress to build a blog telling other people how to make money by starting a blog. No need to create and sell an online course about how to build online courses to sell to people. No need to publish and market a book about how to make money publishing and marketing books. No need to learn the ins and outs of real estate investing. While these skills can be great and something you might want to learn to increase your income, let’s start with the low hanging fruit.

Frugality is also an essential first step if you have debt and/or low cash reserves. It is much harder to increase your income either through a business or investment if you have debt. One of my friends struggling with debt often talks about wanting to invest in stocks or start a side business, but is struggling with a large credit card burden. How are you going to invest money in stocks or invest money in starting a business when you’re in a ton of debt? It would be akin to going for a brisk walk in the mornings as exercise, while eating hamburgers, fries and soda at lunch every day.

Once you’ve gotten your expenses under control, you should focus on income. Obviously, there are things that you can do concurrently, like learning new skills to find a better paying job, looking for a better job, asking your current employer for a raise, or working on a side hustle with low start up costs. However, if you plan on increasing your income by starting a business or investing in stocks or real estate, you’ll need some money. Having your expenses under control will form the foundation for you to increase your income. You will have money to invest in either your business or in stocks/real estate. You will also have an emergency fund as a buffer so that you are not at financial risk if you suffer a setback. That emergency fund will give you the courage to find a better paying job or start your own business.

Are you on Team Cut Your Expenses or Team Increase Your Income or both?

What Would Your Younger Self Say to Your Present Self?

credit: Unsplash

credit: Unsplash

“Waking up to who you are requires letting go of who you imagine yourself to be.” – Alan Watts

I’ve read many posts asking what advice you would give your younger self if you could go back in time. When it comes to personal finance, many people might tell their younger self to not live above their means, to not try and keep up with the Joneses, or to start investing earlier. And of course, there will be people who say they would tell their younger self to invest in Google! Your present self is older and wiser, learning much from experiences that your younger self has yet to go through. It makes sense that we would love to go back in time to impart advice to our younger selves to save him or her from making the same mistakes that we did.

In one of the comments from an article asking what you advice you would give your younger self, one person said that it wouldn’t matter what advice he would have given because his younger self wouldn’t have followed it anyway. He said that sometimes you have to experience those failures or mistakes to truly learn from them. In an interview, Tony Robbins said that he would not change anything about his past, even after sharing his experiences growing up where his mother physically abused him. He said those experiences shaped how he is today and he wouldn’t be where he is if he changed the past.

I think those, “What advice would you give your younger self” articles are fun to read. While there is obviously no time machine so you can’t go back and give advice to your younger self, a younger person reading your experience would hopefully learn from your own mistakes and hopefully avoid making them. Thinking about this question, I started to ponder the reverse of this question. What would your younger self say to your present self? I thought it would be an interesting question to ask. And a question that only you could really answer as only you truly know your past self and your present self.

Your younger self was probably not as wise and experienced so it would be tough to ask him or her for advice. But your younger self was probably more ambitious, naïve, more of a dreamer, idealistic and less cynical than your present self. Would your younger self be excited about what you’ve done with your life or would your younger self be disappointed that you didn’t fulfill the dreams you had when you were younger?

Thinking back to when I was in high school and college and trying to put myself into the shoes of the younger Mr. Living Rich Cheaply, I think overall my younger self would be proud of where I am now. My younger self always thought that at this age I’d be married with two kids and working as an attorney. So I have crossed those expectations off the checklist. I was a frugal person even when I was younger so I wouldn’t have been too surprised that I am still living below my means.

However, I’d be lying if I said that my younger self wouldn’t also be a little disappointed as well. My younger self may have been the type to live below his means, but he always thought my older self would have BIGGER means to live within! I’m pretty sure my younger self would have expected that my older self would own a house, especially with a family of 4, rather than in an apartment that is about 800 square feet. Sorry, younger self…housing is expensive in NYC! Also, while my younger self thought that I would become an attorney in the future, I probably pictured one in a prestigious position or one who was helping to change the world. Hey, I was young and idealistic, okay! I’m pretty sure I didn’t imagine that I’d be working in a back office, mostly writing and doing research. Not to say I dislike my job. It’s okay and I enjoy parts of it, but I’m sure my younger self wouldn’t be daydreaming about it.

What would your younger self think about how your present self is doing in life?

Strive for FI or Take it Easy?

credit: Link Hoang

credit: Link Hoang

One topic that I’ve been obsessed about is the concept of reaching financial independence (FI) at an early age. It’s not about not working. It’s about spending time doing things that you want to do with your time. One obstacle that I face is that I live in a high cost of living city in NYC. Yes, I realize this is a decision that my family has made as moving to a lower cost area would definitely speed up our journey to early FI. However, we have no plans to leave the area because our family and friends are here.

I’ve always been a frugal person and a good saver. When I got my first job, I immediately signed up for my employer sponsored retirement plan. I also opened an IRA account thanks to the encouragement of my father. However, after reading stories of regular people reaching FI in their 30s and 40s, I started wondering if I could do it as well. While I had saved a good amount in retirement accounts, especially when compared to my peers, I was no where close to FI. I had to turbo-charge my savings and investing rate if I wanted to get there. I started to max out my 457 contributions and I increased my wife’s contributions. I also increased our contributions to each of our Roth IRA accounts as well. My wife and I are naturally frugal. Always have been. We had no consumer debt and never did. We were living well within our means, but having an audacious goal like early retirement/financial independence really motivated us to go from ordinary savers to extraordinary savers.

Saving Fatigue

Brandon from the Mad Fientist talked about how there were some dark times in his road to FIRE. He wrote that he went from being frugal to depriving himself and isolating him and his wife during his pursuit of FIRE. I am not facing that dark time. I am just uncertain whether early FIRE is attainable. And if it is not, would I be better off loosening the purse strings and coast to semi-early FIRE at age 55. If I was certain that I could hit FIRE, then by all means I’d push to get there. It’s hard to keep motivated when a goal is almost 10 years away. It’s even harder if you don’t know for sure if you’re reach it.

I’m already on track for semi-early retirement!

In my previous post, I wrote that I will have a pension at around age 55. I have no doubt that I would retire at that point. Actually, as a frugal family, I think we would be able to retire on the pension alone. But I wouldn’t want to do that. We save a good amount in our 457 plans as well as in our Roth IRA plans. Even if we loosen the purse strings, we would still save for retirement in these accounts. There is a calculator on my 457 provider’s website which tells you whether you are on track for retirement based on how much you think you’ll need, how much you’ve saved, and what you’re contributing to your retirement accounts. It tells me that not only am I on track for retirement at age 55, our savings rate exceeds what we’ll likely need in retirement. Of course, these are only estimates and being a bit risk averse, I’d prefer to overfund. Chances are if I don’t hit FI in my mid 40s, I’ll likely stick it out until age 55. Those golden handcuffs get stronger as the lure of a fully funded pension and subsidized health benefits might be too hard to pass up.

What would change if we ditched the early FI goal?

Many in the frugal and FIRE blog space write about value-based spending and intentional living. They write that if they came upon some extra money, they wouldn’t change anything with their spending. I have written that living a rich life doesn’t have to be an expensive life. That still remains true. But I would be lying if I said, my financial choices wouldn’t change one bit if I had an extra thousand dollars coming in each month.

No, I wouldn’t suddenly buy a fancy car or go out to expensive 5-star Michelin rated restaurants. That’s just not me. I’m never going to be a spendthrift wasting money on frivolous things. I do think that I would like to move to a bigger place at some point as we will likely outgrow our 850 square foot apartment. Housing is expensive here in this high cost of living area. This is the main area in our budget which would expand if we decided to loosen the purse strings. I’d be more likely to take on a higher mortgage or rent payment if early FI wasn’t the goal. I’d also be more likely to splurge on travel and entertainment activities too. And we’d be okay financially. We just wouldn’t be able to reach financial independence in our 40s.

Will I still want to retire early in 10 years?

Of, course I would, right? At first, it sounds like a silly question, but something that still needs answering. The main reason I’m obsessed with FIRE is because I feel like I have no time. My work days consists of a long commute as well as driving the baby to and from grandma’s for childcare purposes. By the time, I get back, it’s dinner time, bath time for the kids, and some household chores. When we wake up the next day, it’s the same routine. On the weekends, we try to run some errands while also making sure we do something fun with the kids. We also try to visit our parents. Many parents with grown children tell me not to miss these precious moments. Mr. Money Mustache and his wife retired early to rise their son together without the shackles of the 9 to 5 job. I’d love to have that freedom as well.

A lot can change in 10 years. By that time, my kids will be in the pre-teen to teenage years. Will they even want to spend that much time with good old dad? I haven’t really fleshed out what I would be doing in early retirement as it seems still far away. Sure, I’d love to spend more time on this blog, but would this blog still even exist? I would like to volunteer, spend more time with my wife, and travel. But, I have a decent amount of vacation days from my employer and my job isn’t too stressful. Is the extra freedom worth taking off my golden handcuffs? Would I enjoy spending a little more in the present rather than saving a whole lot for early FI?

So should I put the pedal to the metal and strive for FI or just take it easy?

Related posts: Just as I was facing this dilemma, I read some blog posts related to this issue. The blogger at Bayalis is the Answer said that you can’t fail at fire, because no matter what, you’ll get somewhere that is worth going. Likewise, Matt from Optimize Your Life, wrote that he is saving for FI because it gives you options even if you haven’t fully reached financial independence.