Budgeting

Guest Post: The Cheapskate Next Door

Posted by Jean

My friend Jeff Yeager knows all about living happily within his means, so I was excited when he agreed to write a post here on my blog to share some of his research and experience on the topic. Check out his post below, and for even more “Cheapskate” tips, check out his new book, The Cheapskate Next Door.

“Sure, we could afford to spend more, but why would we? It wouldn’t make us any happier.”

Those are the words I’ve spent the last two and a half years traveling the country to hear. It’s a simple but rare statement, given that nearly half of all Americans say that they literally live paycheck-to-paycheck and have little if any savings. How can some people live not only within their means, but substantially below their means, even when their incomes are often less than the national average? And here’s the biggest question of all: How can some of those same people insist that they are happier – joyous really – because of their thrift and frugality?

I traveled thousands of miles – nearly 3,000 of them by bicycle! – and surveyed more than 300 of my beloved “Miser Advisers” to find the answers. In my new book, The Cheapskate Next Door: The Surprising Secrets of Americans Living Happily below Their Means, I share what I discovered about people and families – many of them just like you – who not only know how to stretch their money, but who are more content and happier because of it. The book also includes hundreds of their practical, money saving tips — unique ideas that anyone can use every day.

Some of what I found may not surprise you: they despise debt and have found creative ways to eliminate it from their lives; they differentiate between “needs” and “wants,” and between “affordability” and “borrow-ability;” and, yes, most of them own and still wear at least one article of clothing dating back to the Carter administration (or earlier).

But other findings surprised even me, The Ultimate Cheapskate: only about 10% have a written household budget (“we live our budget – it’s second nature – we don’t waste time writing about it,” one cheapskate said); while they have savings in the bank, less than 15% have a formal “emergency fund” (“an emergency fund is for people who don’t have their financial house in order otherwise,” another cheapskate said); and more than nine out of ten say that they think, worry, and stress-out about money less – not more – than their non-cheapskate peers. They are 100+ times more likely to have a dog or cat adopted from a shelter than one purchased from a pet store; far more likely to own a crock-pot (or several) than an iPod or flat-screen TV; and they divorce at less than half the national average.

These aren’t your miserable, Scrooge-like cheapskates. These are folks who know what’s important in life, and they skip the rest. Here’s a glimpse inside the mind of the Cheapskates Next Door:

• Cheapskates Say “The Joneses Can Kiss Our Assets”: Cheapskates are highly self-confident and proud of their frugal lifestyles, caring very little about what others think of them and even less about things like buying designer brand names and keeping up appearances with the Joneses.

• Cheapskates Are Immune from Buyer’s Remorse: Most shoppers eventually regret nearly 80% of the discretionary items they buy; but cheapskates are “premeditated shoppers” and, because of it, are largely immune from buyer’s remorse. Nearly 90% of the cheapskates surveyed say they “never” or “rarely” regret a purchase. And they don’t shop for “recreation” or “therapy,” which is one reason they prefer shopping at thrift stores (with a more certain selection of merchandise) than wasting time shopping at yard sales.

• Cheapskates Appreciate Appreciation (and depreciation, too): Other than when buying a house, most people usually don’t think about whether something will increase or decrease in value after they buy it. Cheapskates are tuned into appreciation/depreciation, often preferring to buy antique furniture (like the Amish do) that will retain/increase in value, and buying everything from cars to computers to clothing used, rather than new, so that the first owner pays for most of the depreciation.

• Cheapskates Know That The Best Things in Life Aren’t Things: Social science has shown that “stuff” tends to disappoint us over time, but “experiences” – how we spend our time – is what adds true value and meaning to life. Cheapskates value their time, and the things they can do with it, more than money, and the things they can buy with it.

• Cheapskates Answer to a Higher Authority: For most of the cheapskates polled, it’s truly not about the money. Nine out of ten cheapskates say that their decision to live a more frugal life isn’t about trying to amass a big savings account; rather it’s primarily grounded in some higher ideals, such as religious beliefs or environmentalism. That’s why, of the cheapskates polled, they donate nearly twice as much to charity as the average American.

Jeff Yeager spent 24 years managing national nonprofit organizations in Washington, DC before launching his current career as a freelance writer, public speaker, and media personality in 2004. He is the author of two books, The Ultimate Cheapskate’s Road Map to True Riches and The Cheapskate Next Door, both published by Random House/Broadway Books. Dubbed the “Ultimate Cheapskate” by Matt Lauer on the NBC Today show, Yeager specializes in an offbeat blend of original humor and practical advice for living a better life by spending and consuming less. He is also the author of the popular blog The Green Cheapskate, which is syndicated through Hearst Publishing’s environmental website www.TheDailyGreen.com. His website is www.UltimateCheapskate.com. Jeff lives in Accokeek, MD with his wife, Denise, and his beloved compost pile, Gomer.