08071 Fundamentals of Frugal Living

He who does not economize will have to agonize. — Confucius

Our life-long exposure to mass media conditions us with more wants and greeds than we could possibly ever achieve, even if we acquire great wealth. This perpetual state of dissatisfaction drives alienation and depression and makes us unhappy.

Frugality is the strategy associated with weaning us away from this perpetual cycle of consumption, waste, excretion, and more consumption. It closes the door on the economy of scarcity and plants the seeds of the good-life living of an economy of abundance.

Here are some of its fundamental techniques.

1. Know how much it costs you to live. Save receipts for purchases and bills and keep a record of your expenditures. If you have expenses that occur at regular intervals, divide those amounts by the number of months to find a monthly amount that you need to set aside each month for those expenses (such as insurance or taxes on a house, repairs, etc.).

2. Be wary of "expert advice" about finance and money. You've noticed that everybody wants your money. Many voices say to you: GIVE ME YOUR MONEY! There is no end to their demands. Be wary of so-called experts who are nothing more than hired guns for people who want your money. Most of us have about five different places to spend each dollar in our pocket. You don't need an expert to advise you to give him or her your money. Use common sense and smart design to make the most of your resources. Experts are fine as resources to consult as you research your options. Never look at them as authorities. Trusting yourself and your own judgment is one of the prerequisites for effective permaculture good-life design.

3. Get out of and avoid debt. "The borrower is the slave of the lender." If you want to buy something like a car or a house, make payments to your savings account until you have enough money and pay cash. You will get a better deal and pay less money than if you borrowed the money and paid it back with interest.

Never carry debt for entertainment or frivolous consumer spending expenses. Don't use credit cards — or even worse, payday loans or pawn shops — as "phantom income" to increase your expenditures for consumer items or entertainment. Every penny you borrow must be paid back with interest, and as your debt increases so do your payments.

Sometimes debt is unavoidable, often in conjunction with medical expenses. If your debts become a source of financial distress in your life, don’t persist in an unsustainable debt repayment system. "Unsustainable debt repayment system" is defined as a situation where you are only making the minimum payments on your debts. Look for a reputable nonprofit credit counseling service affiliated with the National Foundation for Consumer Credit and get into a repayment plan with them or declare bankruptcy. If after making monthly payments on your credit cards, you then charge more on your cards, running them back up to your limits, thus wiping out your payments each month, you are in grave financial danger. In that situation, I think a bankruptcy lawyer is your best choice as well as some study as to why you are in the situation and how to avoid it in the future.

See 08111 for a more extended discussion of debt and the advantages of getting out of debt sooner rather than later.

POP QUIZ! How many iPermie warnings does this make thus far about debt? What does that suggest about the dangers of debt?

4. Pay with cash instead of plastic. There’s lots of research indicating that people spend more money when they spend on plastic instead of paying cash. This is true for both credit cards and debit cards.

5. Question your expenses and live within your means. Save pennies and save dollars. Search for entire categories of spending to eliminate. For example, living without a car (or with one car instead of two) can easily save a family $200 or $300/month or more (gasoline, repairs, insurance, tickets and fines, taxes, licenses, registration, purchase cost of the car, etc.). This may require living close to your work, or close to public transportation, and/or a willingness and ability to ride a bicycle.

6. Increase your savings. As you learn to live better with less, you can save some money every month. Always pay yourself first. Learn to defer present gratification for future gain.

7. Ignore all advertising! Commercial advertising is an enemy of your good life. Advertising is manipulative propaganda that encourages you to spend money you don't have for products you don't need to impress people you don’t care about anyway. Your life will not be better if you buy more and more advertised products. It's like a financial methamphetamine addition. You will never be able to get enough stuff. Use advertising only to check availabilities or compare prices. Learn the tricks of advertisers and teach your kids to ignore them.

8. Living better with less does not mean living cheaply or second best. The goal is to live a good life within your means. Whatever our circumstances, accumulating large amounts of material goods is not what the good life is about. The good life is about our relationships — with family, with friends, with our neighbors and community, and the good that we do to them and to others. It is earning an honest living by honest work.

When we pass from this life, nobody's hearse will have a trailer hooked to it piled with junk to be buried with them. The old phrase, "He who dies with the most toys wins," is horse manure. If you find yourself spending money to buy more junk all the time, you need to look within yourself and find and resolve the emptiness and hurts that you try to heal by consumption.

9. Teach your children well. Your children will face grave challenges in their futures. Anyone who teaches their children to embrace instant gratification, spend money frivolously, to find the meaning of their lives in the right clothes or the perfect car gives them a serious disadvantage in the years and decades to come. Teaching your kids these bad habits lays a curse on them that will plague them all of their lives.