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 Jane from Reveal Real Estate.
What does frugality mean to you?
For me frugality means spending less but living more. It’s about cutting down on overconsumption and overspending and freeing myself up to explore new opportunities, take on new challenges and see more of the world.
It’s also a mental adjustment: a decision to worry less about money, become less attached to specific outcomes and more generous to other people.
What is something that you do that is ‘typically’ frugally?
I maintain a savings account with 18 months of living expenses. I think of this as my ‘rainy day fund’ or my ‘freedom fund’.
I first built up the fund while I was working in corporate London. It took some sacrifices (fewer nights on the town, fewer taxis and less expensive clothes) but I didn’t see it as scrimping for the sake of it. I was doing it to reach a goal. I knew that once I had my fund in place I would feel freer to take risks, to try new things and get more creative with my life direction.
Well it worked. Three weeks after building up my financial cushion, I gave up my job, moved abroad and started a new business.
What is something frugal that you do that is unusual?
In 2004 I decided to move to a country with a cheaper cost of living and launch an online business. I had no illusions about get-rich-quick strategies on the Internet. I knew that an online business would take time to build. So my strategy was to find a country with a low cost of living, where my rainy day fund would stretch much further than it would back in London.
I settled in Nicaragua, attracted by the beauty of the country and, of course, its dollar-stretching economics. I am currently living very comfortably for under $1,500 a month as a renter. My budget includes meals out, cinema tickets, tourism outings, trips to cafes and bars, transportation and even a full-time maid. (If I was living in my own home this would come down to $1,100 a month even taking into account property taxes).
Here’s my monthly budget breakdown:
- Rent $500 (nice apartment in the capital)
- Food $350
- Entertainment $250
- Full time maid $170
- Electricity $75
- Transportation $55
- Fast Internet connection and Cable $40
- Gas for cooking and hot water $20
- Telephone $30
- Water $10
My business is still not quite paying its way, but by living here I’ve given myself more time to succeed. Also I’ve met a fantastic community of adventurous, inspirational people – the kind of characters I would never have met back home.
What are some of your long-term goals that being frugal will help you to accomplish?
Living frugally has helped me expand my horizons and freed me up to pursue a more adventurous life abroad. I realize that overseas living is not for everyone, but it works for me. To coin a phrase, it feels like I am living ‘twice the lifestyle for half the price’.
But even without running the numbers, I know that mentally I’m beginning to see the world from a different point of view. My attitude to money has changed, I spend far less time worrying about it and I have the sense of freedom to try new things.
Following a career in the corporate sector in London I made the shift to worry-free frugality by moving to Nicaragua. Here I am able to live very well for far less than I would back home. Since moving to Central America I’ve got involved in the real estate sector and now write regularly on the state of the international property market over at RevealRealEstate.com