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By Frugillionaire
 In my book “Frugillionaire,” I offer 500 tips on living a frugal, yet fabulous, life. Tip #485 is “Lower your expectations.”
It may seem odd advice in our “shoot for the stars,” “fake it ‘til you make it” society. But expectations are a powerful psychological influence over our spending; and they can, indeed, spell the difference between financial security and crushing debt.
Expectations play a particularly important role in the milestones we share with our significant other: like becoming engaged, getting married, and buying our first house. High expectations surrounding these events can be a recipe for frustration, debt, and divorce. Temper them, however, and you’ll experience the same amount of happiness — at significantly less expense.
Let’s start with the engagement. You’ve met Mr. Right, and you’re starry-eyed and love-struck. Any day now, he could drop to one knee and pop the question. The problem occurs when you have certain expectations of the rock he’ll put on your finger. Pressure to produce a 1-carat stone, or spend two months’ salary, may very well result in a fiancé with depleted savings — or worse yet, massive credit card debt. Not the best way to start off your financial relationship together!
If, on the other hand, you remove the burden of expectation — by making it clear, for example, that the size of the diamond means little to you — you’ll be rewarded with a significantly richer partner.
Fast forward to the wedding. Your expectations for this day have been building since you were a little girl — they may involve a country club venue, elegant ice sculptures, and a guest list in the hundreds. But is it really worth being princess for a day, if it means taking on debt of royal proportions? Consider instead if all you expected was a simple ceremony with friends and family. You and your groom would instantly “save” tens of thousands of dollars, and start your lives on solid financial footing.
Finally, let’s consider the biggest financial transaction of your life: buying a house. Expectations here can make or break you financially. If you envision yourself throwing dinner parties in a 4000-square-foot McMansion, anything less may feel like a disappointment — leading you, perhaps, to take on risky loans and live paycheck-to-paycheck. But if you want nothing more than a roof over your head, you’d be equally delighted with a modest bungalow. In the latter case, you’d not only have a warm place to sleep; you’d sleep much easier, knowing you can comfortably make your payments, and put money in the bank.
There’s nothing wrong with dreaming big — just channel those lofty aspirations towards personal, civic, or spiritual development. When it comes to consumer-driven life events — particularly the major ones you share with your partner — lowering your expectations can put you on the path to marital, and financial, bliss.
By Frugillionaire
 ‘Tis the time of year for New Year’s resolutions… Why not make yours a frugal one?
Just imagine how great it’ll feel, this time next year, to be *that much closer* to your financial goals. All you have to do is make 2010 the year you get serious about saving money!
Here’s ten New Year’s resolutions with a frugal twist:
1. Resolve to pay off your debt (or at least a percentage of it) by year’s end.
2. Resolve to build up an emergency fund of $ {insert amount here}.
3. Resolve to use only cash for your purchases.
4. Resolve to pay more than the minimum balance on your credit cards.
5. Resolve to pay extra on your mortgage each month.
6. Resolve to eliminate (or drastically limit) non-essential purchases.
7. Resolve to make a budget, and stick to it.
8. Resolve to not buy any new clothes (or electronics, or games, or books) for the entire year.
9. Resolve to stay out of shops and malls for a year.
10. Resolve to write down every penny you spend for the entire year.
Making such a resolution, and following through with it, could be an important turning point in your financial life—and will help you develop strong money-saving habits that’ll serve you well for years to come!
Happy New Year!
By Frugillionaire
 As we gather with friends and family this holiday week, many of us will find that despite the hardships of this recession, we are truly blessed. If you’re reading this blog, it’s pretty likely you have a roof over your head, a warm place to sleep, and plenty of food on the table.
We must remember, however, that others may not be so lucky. Too many homeless are sleeping on streets tonight; too many children are going to bed hungry; and too many people are losing their struggle for survival due to a lack of basic medical care and supplies.
Frugality isn’t only about pinching pennies and clipping coupons; it’s about prioritizing our spending so that it’s in line with our principles and values. It makes no sense to hoard every last dollar, when even just a few of them can make a significant difference in someone else’s life.
Take a little time this week, and consider how you can incorporate charity into your frugal lifestyle. Whether you decide to help someone down the street, or halfway across the world, help someone. This simple act will make your life infinitely richer—and that’s what being a frugillionaire is all about.
Here’s links to some of the larger charities, for your consideration:
United Way
Salvation Army
Red Cross
UNICEF
Habitat for Humanity
.
By Frugillionaire
 We all have some financial skeletons in our closets—purchases, decisions, and behaviors that have derailed (or even destroyed) our fiscal well-being in the past.
Despite our best intentions, these demons can continue to haunt us, sucking the life from our bank accounts and blocking the path to our financial goals.
In the spirit of Halloween, I propose an exorcism: let’s call out each of these financial ghosts in turn, and banish them once and for all from our lives!
Debt. This is the biggest demon of them all. If you’ve sold your soul for a flashy car, designer handbag, or plasma TV, debt was your trade-off. You now have to suffer the hardship of trying to pay it off, as the interest charges snowball into ever-larger balances. Whatever you do, don’t ignore it—inaction will only make this ghoul more powerful and terrifying. Commit to paying it down, and do whatever you have to do to make that happen: give up your cable, go on a spending fast, eat beans, work a second job—you get the idea. And resolve to never, ever, ever let it into your life again.
Habit. This ghost is so pervasive, you may not even recognize it. But it can wreak havoc on your wallet, draining its contents for things like cable, mobile data plans, premium brands, overpriced insurance, and unnecessary services that you’ve already set up, or have become accustomed to. To get rid of this ghost, you’ll need to question all the recurring expenses in your life—just because you’ve “always” had cable, do you really need it? Can you lower your premiums by switching insurance companies? Does the grocery store down the street have better prices than the one you’re “used to?”
Guilt. This ghoul deviously disguises itself as gifts and generosity, usually meant to “make up for” some kind of transgression or lack of attention. It fuels spending on jewelry by straying husbands, toys by overworked parents, and lavish presents by friends who haven’t kept in touch as they’d promised. What the recipients really want, money can’t buy—and you can exorcise this ghoul as soon as you realize (and act) on that.
Indecision. If you’ve ever bought two of something because you couldn’t decide between them, or let extra money sit in a 0%-interest checking account because you couldn’t determine what to do with it, you may be haunted by indecision. It’s time to make some choices—waffling does little more than waste your money.
Ignorance. To get rid of this ghost, you need to get savvy! Don’t let ignorance be an excuse for poor financial decisions. Find out the best prices on the products you buy, and the services you need, and act accordingly. Learn the basics of investing, and how to get the best return on your money given your risk profile. Replace the words “I don’t know” and “I don’t understand” with “I’ll find out!”
Laziness. This ghost does a great job of protecting the others—because it takes real effort to change habits, make decisions, become financially-savvy, and save up for things instead of charging them. Exorcise this one, and you’ll have a much easier time destroying the rest. How to do it? By creating an action plan, and devoting the necessary energy and discipline to see it through.
Entitlement. If you’ve purchased a car, house, clothes, or electronics you can’t afford, better check under the bed for the ghost of entitlement. It’ll convince you that you “deserve” these things, and will encourage you to “fake it ‘til you make it.” It may even lead you to blame others when things go awry and you can’t make your payments. Foil this demon by ignoring the Joneses, living within your means, and only buying what you can comfortably afford with cash.
So while the kids are trick-or-treating this weekend, keep an eye out for ghouls and goblins of the financial kind. The sooner you recognize them, the sooner you can dispel them—and the less frightening it’ll be to open your next bank statement!
By Frugillionaire
Over the past year, mainstream interest in frugality has surged. People who never before hesitated to whip out their credit cards have been shunning retailers, clipping coupons, and making do with what they have.
Many have been forced into this new lifestyle by job losses, underwater mortgages, and mounting debt. Others have embraced frugality to establish a safety net should the same thing happen to them.
According to the Washington Post, however, the novelty of this new fiscal responsibility is wearing off—and some people are struggling with “frugal fatigue:”
Frugality falling out of fashion?
When the recession slowed business at her public relations firm, the Silver Spring fashionista put herself on a strict spending diet. She avoided online retailers and her favorite Georgetown haunts. She unearthed clothes in her own closet that she had never worn, some with the tags still on.
After about six months, however, her virtue has begun to feel like a heavy cloak she longs to cast off.
“I had not shopped in so long I was going through withdrawal,” said Kwawu, 34. “I thought, ‘I have to get something now. I’ve been good long enough.’ ”
Malls and boutiques are filled with people such as Kwawu these days, shoppers who have cut their spending — some drastically — during the downturn and are now suffering from what some call “frugal fatigue.”
It’s just like being on a crash diet—at first we feel righteous and noble nibbling our celery sticks, but then a sense of deprivation kicks in and that chocolate cake starts to look more enticing than ever.
On the other hand, had we simply adopted a healthier way of eating—allowing for the occasional “treat”—it’s unlikely we’d feel the same temptation to be “bad.”
It’s the same with our finances. When we quit spending cold turkey, all those things we “can’t have” start to look more and more attractive. And if we give in to temptation, there’s a real danger that we’ll overcompensate for our sense of deprivation—and end up with some serious debt.
However, if we take a more balanced approach to our money management—making wise choices, but allowing an occasional indulgence on something that’s important to us—we’re much more likely to stick with the program.
Frugality isn’t about depriving ourselves of ALL consumer goods. Rather, it’s about being more mindful of our money, and making sure that the way we spend it accords with our other goals in life.
Suppose you love to eat out, but have decided to cut your restaurant expenses to save up for a down payment on a house. You’ve determined your priorities—homeownership is more important to you than dining out every week. However, that doesn’t mean you can’t indulge in the *occasional* restaurant meal. Such a “treat” every once in awhile won’t derail your home buying plans; plus, it’ll keep you from feeling deprived and falling off the wagon altogether.
The key, really, is BALANCE. Doing things in moderation is always so much easier than taking extreme measures (and more likely to lead to success). If you’re living frugally, a well-considered expenditure won’t lay waste to your plans—on the contrary, it may very well help keep you on the path to your financial goals.
By Frugillionaire
I think frugality often gets a bad rap. Unfortunately, there’s a misconception that cutting costs means depriving oneself of the good things in life.
Not true! The practice of frugality itself can bring real pleasure, and enrich our lives in myriad ways. In fact, sometimes there’s nothing like a great deal, averted expense, or creative use of resources to make your day.
With that in mind, I decided to compile a list of my Top Ten Frugal Pleasures—please chime in and let me know yours!
1. Shopping my closet. I almost always find some forgotten “gem” in there that I can bring back into regular rotation.
2. Borrowing and lending things. Avoids the hassle and expense of ownership, and just gives me a warm fuzzy every time.
3. Borrowing books from the library. I’ve been doing it since I was a kid, but it will never cease to delight me that I can read a book absolutely free.
4. Finding a good coupon. Before I buy anything, I look online for an applicable coupon. When I find one (whether it’s $1 off or free shipping), I feel like I’ve scored a little victory.
5. Comparison shopping online. I’m not the type to drive all over town looking for a good deal, so I love that I can achieve the same result with just a few minutes on my laptop.
6. Reducing my utility bills. Call me geeky, but I get a little thrill out of using less kWh this month than last.
7. Tracking my expenses. I’m a bit of a data junkie, so I actually enjoy tracking my expenses and crunching the numbers each month.
8. Bartering. I recently traded some web design services for a tailoring job. It’s very cool to meet your needs without exchanging money.
9. Driving my non-status car. I love how my car makes no statement about my aspirations or net worth. A little mystery is always appealing.
10. Attending free events. I’ve met interesting people, expanded my horizons—and generally had a blast—going to festivals, outdoor concerts, and other community events.
By Frugillionaire
I sometimes wonder if game show contestants and sweepstakes winners really want the (non-cash) prizes they’re awarded. It seems like the mere possession of such things can make life unduly complicated (and possibly more expensive). I like to imagine how I’d respond if offered some of these “finer things” of life.
If it was free, would I really want…
An enormous McMansion. No, thank you. I’m a minimalist at heart, and would hate to have a bunch of rooms I never use. I’d also find the cleaning, maintenance, and utility bills overwhelming.
A fancy car. This gets a resounding “No!” I simply wouldn’t want the headache (or the insurance bills). I’m the type that parks a new car at the far end of the parking lot, and doesn’t start to relax until it’s at least three years old. Compound that with a fancy hood ornament and I’d go crazy.
Expensive jewelry. I’ll pass on this one, too. Even if it was free, I’d worry about losing it; and I certainly wouldn’t want to pay to insure it.
A designer wardrobe. I’d only accept it if it had no visible labels or logos. It’ll take a lot more than some free swag to turn me into a walking billboard.
A membership to a super-exclusive country club or spa. There are probably a million other things I’d choose to do before spending my day at such a place. I’m afraid it would almost feel like an obligation to go.
The chance to meet a pop prince or princess. Something tells me we wouldn’t have that much in common. And after the obligatory handshake and photo-op, I think things might possibly get awkward.
A giant flat-screen TV. I’d take it, but only in order to give it away. In the intervening period, I’d enjoy the extra attention from all the men in my life.
A new laptop, iPod, cell phone, or other electronic gadget. If I need one, I already have one. And if I already have one, the last thing I want to do is learn how to use a new one.
A year’s supply of [fill in the blank]. To be honest, it doesn’t sound like that much fun to have a year’s supply of anything.
An all-expenses-paid trip around the world. Yes, I’ll take that one. I’m frugal, not crazy. 
By Frugillionaire
 Let’s face it: consumer debt is one of the biggest obstacles to financial security. Carrying a balance on your credit card is a slippery slope: as finance charges accumulate, you slip deeper and deeper into debt—making it increasingly difficult to get your head above water.
What can you do to avoid this terrible fate? Adopt a Pay-As-You-Go lifestyle. When you cut credit out of your life, you’ll put an end to the vicious cycle of debt. Instead of enriching banks and credit card companies with your monthly interest payments, you’ll be able to focus on building your own wealth.
All it takes is a change in attitude, and shift in spending habits. Just follow these six Pay-As-You-Go Principles to dramatically transform your finances:
1. Save up for what you want. Don’t pay interest for instant gratification! When you buy something on credit, you’re overpaying for the privilege of having it immediately. Whether it’s a new dishwasher or trip to Disney World, make do without it until you have the cash.
2. Pay with cash. Cut up your credit cards, and use only cash—it’s the easiest and most effective way to put the brakes on overspending. It’ll also eliminate those expensive impulse purchases, since you’re unlikely to be carrying enough cash when the urge to splurge strikes.
3. Never carry a balance. If you must use a credit card (for example, to make an online purchase), pay off the balance in full each month. Carrying a balance is the worst blow you can deal to your personal finances—resolve to do everything in your power to avoid it.
4. Don’t finance a car. Make your car fit your budget, not the other way around. Instead of financing a flashy new convertible, save up your cash and settle for a used sedan. Until you have the funds, explore alternative transportation options like biking, public transit, and sharing rides with friends and family.
5. Borrow things instead of money. It’s always better to borrow an item, than borrow the money to buy it! Instead of running to the store the next time you need something (for example, a ladder to clean your gutters), ask friends or family if they have one to lend.
6. Rent seldom-used items. If you can’t find someone to lend you an item, consider renting it. If it’s a seldom-used item—like a camcorder, steam cleaner, or circular saw—it often makes better financial sense to pay for temporary use of it than to buy it.
By nature, the Pay-As-You-Go strategy makes you live within your means—because without credit, you can’t spend any more than the cash you have on hand.
Adopting such a plan will stabilize your finances and keep you out of debt. But if you really want to see results, take it one step further and live below your means. Embrace the challenge of living on less than your paycheck, and invest the remaining money. When you make interest work for you (instead of against you), you’ll be on the road to financial security!
By Frugillionaire
 Let’s take some time out today for a little inspiration (especially for those participating in the $100-A-Week Challenge!).
Here are ten of my favorite frugality quotes. Heed these wise words, and you’ll be well on your way to becoming a frugillionaire!
1. “Beware of little expenses; a small leak will sink a great ship.” – Benjamin Franklin
2. “He who does not economize will have to agonize.” – Confucius
3. “The safe way to double your money is to fold it over once and put it in your pocket.” – Frank McKinney Hubbard
4. “By sowing frugality we reap liberty, a golden harvest.” – Agesilaus
5. “Without frugality none can be rich, and with it very few would be poor.” – Samuel Johnson
6. “The way to wealth depends on just two words, industry and frugality.” – Benjamin Franklin
7. “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” – Will Rogers
8. “We make ourselves rich by making our wants few.” — Henry David Thoreau
9. “Frugality is one of the most beautiful and joyful words in the English language, and yet one that we are culturally cut off from understanding and enjoying. The consumption society has made us feel that happiness lies in having things, and has failed to teach us the happiness of not having things.” – Elise Boulding
10. “If you realize that you have enough, you are truly rich.” – Lao Tzu
By Frugillionaire
 1. There’s a designer logo on your handbag, shoes or clothing. Don’t pay a premium to flaunt a famous name on your attire (they should be paying you for all that free advertising!). Many designer items are made in the same Chinese factories as less expensive goods. The only message those logos convey is that you paid too much.
2. You have a key to a public storage unit. The problem here is twofold: you spent a lot of money on things you don’t use, and you continue to waste money on storing them. The best course of action: sell the contents of the unit on Craigslist, eBay or at a garage sale, and hand over the keys!
3. It takes you more than an hour to clean your house. Consider if you really need all that square footage. Downsizing to a smaller abode can save you money in myriad ways: you’ll reduce your rent or mortgage payment, utilities, and the amount of stuff you need to buy to “fill” your space.
4. You have no idea what your tap water tastes like. Packaged drinks (like juice, soda, and bottled water) can do a number on your grocery budget. Quench your thirst with tap water instead—the recommended eight glasses of water a day cost only about $1 per year.
5. You often receive compliments on the color of your hair, toenails or fingernails. If you’re a regular at the salon, cut your visits in half—or better yet, eliminate them altogether! Have a spa day at home instead: light some candles, put on some relaxing music, and give yourself a DIY manicure or pedicure.
6. You think you’re too young/old/rich/poor/cool/busy to save for retirement. No excuses—everyone should be putting something away for when they’re old and gray. Make it automatic: have a certain amount from each paycheck deposited straight into savings. It’s an effortless way to achieve financial security!
.7. There’s a fancy hood ornament on your car. A car is a means of transportation from point A to point B—not a reflection of your identity or success (as marketers would have you believe). Luxury cars are more expensive to purchase, maintain and insure. Sell that money-guzzler and instead of looking rich, be rich.
8. Your refrigerator is empty. When there’s no food in the house, it’s much too tempting to eat out (or stop for takeout). Action plan: make a menu for the week, shop with a grocery list, and stock your fridge with fresh food that’s easy to prepare. Consider cooking several meals at once and freezing them; they’ll be ready-to-eat on those nights when you’re too tired to cook.
9. You set foot in a shopping mall more than once last month. The best way to save money is to stay out of stores—it’s an incredibly easy way to preserve your wealth. And by all means, don’t shop for entertainment; limit your purchases to necessities, and spend your leisure time at the park instead.
10. You’re still paying off holiday credit card bills. You’ll have much happier holidays by heeding the following advice: never buy gifts on a credit card. Tailor your budget to the cash you have on hand. If you have little to none, don’t despair: give people handmade items, baked goods, or the gift of your time. It’ll be much more appreciated than anything bought in a store!
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