February 26, 2013 — If you search on the Internet for “live like a cheapskate” you will strike a frugality bonanza. There are authors like Jeff Yeager who have written best sellers on the subject (“The Cheapskate Next Door”), plus plenty of websites offering their advice. There’s even a TLC show, “Extreme Cheapskates“. Our friend Robert Powell over at MarketWatch had a particularly helpful article earlier this year, “How to Retire Like a Cheapskate and Live Well“. This article will roll up advice from all over into our 15 top tips for living like a cheapskate.
First of all, a little etymology – if you are going to be a cheapskate you might as well understand where the term came from. In fact there is considerable uncertainty about the origin of the word. The main dictionary sites seem to think that “skate” was a late 19th century slangy term for a worn-out horse, to which cheap was added to imply mean or miserly. One Wiki source claims it refers to inexpensive strap-on roller skates; while we acknowledge those were horrible to skate on, we doubt that is the term’s origin.
A Penny Saved…
Benjamin Franklin had it right – a penny saved is one you don’t have to earn. For retirement that means if you can manage to save enough money on your expenses, you can survive – and maybe have enough to indulge in a few luxuries.
Our Top 15 Cheapskate Ideas
Here are some of the best ideas we have heard for saving money in retirement. Our advice is to think about the big things – steps you can take that can deliver serious money. Yes, you can re-use your dental floss and your paper and plastic bags, and you can hard boil your eggs as you run the dishwasher. But some of the steps that extreme cheapskates will do to save a few pennies seem a bit crazy – as in taking the idea so far you get obsessed about it. Here goes:
- Move to a smaller house. Real pennypinchers don’t wast money heating/cooling, painting, maintaining, and paying taxes on a house that’s bigger than their needs.
- Buy a reliable car, preferably second hand. Buy a basic model, and keep it until big things start breaking on it. If you have 2 cars – get rid of the gas hog.
- Move to a less expensive state. Hopefully one with reasonable real estate costs along with lower income and property taxes.
- Plan your major purchases in advance. Leo Babauta, author of several books including The Cheapskate Guide) suggests keeping a 30 day list – don’t buy anything until it has been on your list for 30 days. That way you avoid impulse buying, and you have the time to take advantage of deals.
- Buy only with cash. People get themselves into the most trouble with credit card-backed, sudden urge purchases. Having to pass over a wad of $50 bills has a powerful way of promoting restraint.
- Use cash and get discounts. Retailers hate paying credit card fees out of what they get from a sale. So offer cash; many times you’ll get a discount – if you ask.
- Take all available discounts. If you travel, get an AAA card. You’ll usually save 15% on motels. Senior discounts are about everywhere – ask if you don’t see them. If you live in a tourist area ask for the local discount – most places give them. Or, just ask – do you have any discounts – you’ll often be surprised.
- Take advantage of free entertainment. Read the newspaper and online guides – you’ll be pleased with how many free (and good) events there are. Many museums have one day a week or month that’s free. Use your DVR to record your favorite TV shows and classic movies – just about every good movie gets on TV someday! Use your library; they have many free and great programs and resources ready for your pleasure.
- Manage your communication expenses. Many of us are paying an astounding amount of fees every month for communication and the Internet. Cable TV, Internet access, home telephone, cell telephone, ipad Internet, Netflix, Sirius radio, and more. Most of these have become necessities, but the monthly totals can be amazing. Consider consolidating (get rid of the land line, get a family cell plan, put phone/cable/internet with same supplier). Cancel your cable and watch TV online. Talk on Skype or Facetime. You should be able to be cut something.
- Stay healthy. Co-pays, drugs, and other out of pocket expenses can actually drive you into bankruptcy. So save big bucks – get yourself into shape, cut down your vices, take your medicine, and generally take care of yourself.
- Travel by bike – or walk. At $4 a gallon every car trip you take costs you money. We guarantee you will enjoy a short bike ride or walk a lot more, and it will be free!
- Practice frugal gifting. Think ahead about what gifts you need to purchase in the coming year. Buy when they are on sale, or knit, draw, or build something more meaningful at a fraction of the cost. Last minute excursions to buy gifts almost always cost you more.
- Cut smoking, alcohol, and sweets. Besides killing you, the price of a pack of cigarettes is obscene (remember when you could buy a carton for $3?). Cut down or stop your consumption of alcohol and sweets, both of which can turn out to be a pretty big (and unhealthy) part of your budget.
- Maintain your stuff. You paid a lot of money for your car and household appliances. Read the manual and take the simple steps they outline to preserve their long life and cut down on repair bills.
- Make more money. The corollary to saving money is to make more of it so you have it to spend. Looking for a paying job that is fun or rewarding can give you the wherewithal to have some extra spending fun in your life.
For further reference
The Cheapskate Guide: 50 Tips for Frugal Living
What are your best Cheapskate ideas? Come on now Topretirements members – we bet many of you have some outstanding ideas on how to save money to make the best of retirement. Please share them in the Comments section below.