Monday, May 13, 2013

Frugality - Working On It From The Top Down

When I first looked into ideas on being frugal, I saw that people were doing things like cutting out store bought toothpaste, cutting paper napkins in half, rinsing off coffee filters, using eggshells to start seeds in instead of pots. There were lots of things people talked about, but they were only penny savers. When I finally had to get serious about living on less money, I kept track of how we were spending our money in order to come up with a workable budget. At that point it dawned no me that saving pennies might be fine, but I could do a whole lot better by focusing on some of our bigger expenditures. Saving one big hunk off of a hugh expense was worth hundreds of little penny pinchers.

Our biggest expenditure by far was our medical : insurance, co-pays, deductibles. The first thing we did was downgrade the coverage from "high" coverage to "low". This saved several thousand dollars a year. Yes, it is a risk taking less coverage if something serious would happen, but that's what the insurance game is all about...weighing risk to benefits. So we chose the risk we were willing to take. Even so, our medical budget, excluding dentist and eyes, as long as nothing out of the ordinary happens, is $12,000 a year!!!  That's a hunk. Because of our remote location, the only alternative at the moment that is cheaper is to go without coverage at all. At our age, we are not yet willing to go the route. And for now we are not yet forced to do that.

By resisting going into debt (mortgage, car loans, credit cards, etc) we have cut those expenses out. No interest to factor in. A good part of being frugal, in my opinion, is avoiding debt when possible.

Other big expenses include real estate tax. By dedicating almost all of our main farm to pasture, plus using the other 1 1/2 acres 100% for ag, we reduced our tax burden by over $1000 a year. That forced us into being farmers, but  that was fine by me.

Fuel is another big expense. We were able to save hundreds of dollars on propane by making a couple of changes. We switched to wood heat for the house. About 3/4 of my cooking is done using wood heat. (I have access to abundant wood sources at the price of my time and labor). The propane tanks are turned off when not in use. I don't know yet the exact figure of how much we save per year, but it's in the hundreds. The other fuel is gasoline. To cut our gas costs I no longer use the truck for routinely driving about. Instead a more fuel efficient car is used. I try to organize my runs to incorporate all the errands in one trip. I also carpool when feasible for trips to Kona and Hilo. That shares the gas cost among the carpoolers. Plus friends in the community are now announcing if they are making a trip to town and offer to pick something up if needed. For example, just last week we went to Hilo and picked up a few items for a neighbor. The previous week a friend picked up a special tool for me. This sharing system saves a lot of gas expense.

Another frugal move was to shop online. Sure, the it hurts the local merchants. But in order to survive I need to be frugal in how I spend my money. I will often check prices online (taking in account the shipping and handling fees) before checking locally. If the local merchant can't come close in price, then I'll order the item online. Surprisingly I often can do ok locally if I ask. Plus another thing, if the shipping cost on an online purchase is high, I will email the merchant and ask if they can do better do better by using USPS flat rate. They often do. And if they don't, I tell them that this is why I'm not buying from them.

All these big savings are well and good, but that hasn't stopped me from doing many of the penny saving things too. From my point of view, it's a case of choosing where I want to be frugal and to what degree. As with other big changes in my life, I am learning the frugal habit by taking baby steps, making one change at a time. Plus by being frugal in some areas, it leaves
me with more money available for spending (or saving) in other ways. I suppose it comes down to deciding just how and on what I wish to use my money.

So what little penny savers am I doing? Oh lots. Some rather sensible, and some I'm sure my friends think are silly. I think I'll talk about penny savers on another post.


  1. I think the shift from the busy working-world with decent income each month to no "daily-wage", only careful dipping into the retirement funds is sorta like zooming off the big-spender autobahn to a peaceful country lane with a much more sedate pace. Instead of the high-speed we-can-afford-more-of-everything, it becomes appropriate to slow waaaay down, sometimes stop to appreciate the roses and join in Mother Nature's rhythms to become self-reliant and self-regenerative. It's not easy - but the rewards are nicer. Life's not a contest to hit the finish line - it is a journey to enjoy from one milepost to the next. May we all have many more mileposts ahead!

  2. Bingo, Barry! Raised as a child on the suburban Eastcoast, I was trained that life was a competitive race. At home were we subtly to do better than the neighbor kid, even better than our siblings. At school we were given grades A down to F for our effort, with the constant pressure to strive for as many A's as possible. My relatives even rewarded us with money for each A earned. At sports the coaches not only had us fight for each goal point, but taught and urged us to be aggressive, even combative. Everywhere I turned as a child I was trained to achieve more, want more, go for it, acquire more, and that being on the top of the pile was success.

    It's no surprise that we act the way we do as adults. We have been conditioned to "feel happy" with every material and social achievement and to feel like we are failures if we can't do that. The extension is the peer pressure to be achievers. How many times in the past have I looked down my nose at someone who doesn't have nice clothes, nice house, nice car, doesn't live in a nice area? How many times have I been told or overheard comments about myself? My own mother to this day still questions my choice of clothes and lifestyle, putting the pressure on to confirm, buy better, achieve different more acceptable goals.

    Making the shift to a less competitive life, a simpler life is like going against all my childhood training. It has not been easy for me. The psychological aspects have been just as hard as making the physical changes.

    I don't see the changes in myself nearly as much as my old friends do. They say that I've slowed waaaaaaaaay. I'm no longer competitive. Ya know, I'm much happier now.