This is What Frugal Looks Like is a series that highlights different ways that people can be frugal in their lives- after all, frugality doesn’t have to be drastic or just about clipping coupons. Frugality can be fun and easy. Each respondent answers the same four questions.
Today’s interview is with VH of Funny About Money.
What does frugality mean to you?
Living within your means. It means spending no more than you have coming in. Part of that is getting out of debt and staying out of debt. I never charge up a bill unless I have enough in the bank to pay it.
What is something that you do that is ‘typically’ frugal?
Probably the most “typical” thing I do is to pay myself first. Starting with the first paycheck I ever earned, I’ve always set aside at least a few dollars each month for personal savings. Right now the base amount that goes direct from my paycheck to the savings account is $200/month. Actually, the real amount going over there is $573 a month, because whenever some “found” money comes my way, it gets added to the monthly savings. Paying off the second mortgage on my house put $169 in my pocket, and at one point I realized I was undershooting my budget by $204 a month, so that started getting transferred, too.
What is something frugal that you do that is unusual?
Maybe the habit of budgeting weekly instead of monthly? I call it “microbudgeting.”
Actually, I have two budgets, one for regularly occurring monthly expenses that’s keyed to most creditors’ first-day to last-day-of-the month cycle (for things like utilities, insurance payments, and the like), and the other for discretionary spending, which all takes place on a credit card and follows American Express’s 21st-to 20th-of-the-month cycle. To avoid charging up more than I can pay, I budget a specific amount for credit card charges (everything other than monthly bills: groceries, household and yard supplies, workmen, the vet, doctors’ copays, etc.). Right now that’s $1,200 a month. To stay within the limit, I break the month-long budget cycle into four roughly week-long “periods,” each with a $300 microbudget. If I run out of money before that $300 “week” is over, I quit spending until the next microbudget “week” starts. This works effectively to let me pay off credit-card charges in full each month.
What are some of your long-term goals that being frugal will help you to accomplish?
Well, I’m afraid the goals are here, having arrived somewhat prematurely. My original goal was to achieve permanent financial independence, so that I could quit working and never have to work again. Truth is, I was about there a year ago last spring, and at that time seriously considered quitting my job and launching a peaceful retirement. The collapse of the Cheney-Bush economy, however, brought end to that scheme. And then the depth of the recession’s severity resuscitated it: My employer is closing our office and canning me and all four of my staff members, effective December 31.
At my age I’m not going to get another decently paying job. Young people with highly marketable skills can’t get work; you can be sure no one will hire an elderly Ph.D. with arcane skills who likely will retire at the earliest possible moment and whose mere presence will instantly jack up the company’s health insurance premiums.
So…my plan is to go ahead and take retirement, ready or not! It will be extremely tight–one set of figures shows that over a year I’ll have $50 of play in the budget. But because of the generally frugal habits I’ve developed and because of the extra savings, I should get by OK. I hope.
My only remaining long-term financial goal now (other than bare survival) is to preserve enough capital to have something more than my paid-off house to leave to my son.
A survivor of the Cretaceous, vh is the proprietor of Funny about Money, where she holds forth about personal finance, ways to combat stress (most of it work-related!), life, the universe, and all that. Formerly an associate editor at Arizona Highways, vh has a doctorate in English literature and fifteen years of real-world editorial experience, as well as a long academic career. She owns and operates The Copyeditor’s Desk, Inc., an editing consultancy that has helped authors and publishers take more than 30 books to print. Along those lines, she has published four books and more than 150 articles of her own.