Retire in Style Even if You are Broke!


The other day I saw a startling and scary statistic. Over 60% of Americans, when asked how much money it would take for them to feel absolutely comfortable at retirement, quote a figure of 4 million dollars. Yet the average amount of actual retirement savings is a mere sixty thousand. This is a huge disconnect. If what you actually have at retirement age is 60K, either you are going to be living on a tiny social security check, or you will not be retiring at all, but rather continuing to work.

This situation is complicated by those that were “forcibly retired” in the crash of 2008. If you are over sixty and lost your job in the crash, and you have not been able to get another job, it would not be stretching the truth to say you are “retired”. This is a frightening and unfair thing, but there it is. So what do you do?

First of all, if your unemployment has run out and you are approaching 62, go get that social security check. It may not be much but it beats the alternative.

Then, whether you retired by choice or by force, try these tips:

  1. If you are going to take up a hobby, consider one that has side benefits, such as vegetable gardening, sewing, computer repair, or carpentry. These are all useful skills that can save you money, but they can also enrich you in other ways
  2. Cook your own meals. Nothing else has such an immediate beneficial effect on your wallet, your health, and your quality of life.
  3. Cut your housing expense by getting a housemate. Studies show that living with another person will help you live longer and healthier than living alone. Even if you are married having a housemate can be helpful in other ways than just cutting your living expenses. And if your home is in danger of being lost, using it to create income could save it.
  4. Having deep friendships is more important to quality of life than money. Stay in close touch and find free or inexpensive activities to enjoy together. Things like picnics and movie night.
  5. If you have a little capital, start a small business. Just make sure it is rock solid. Buying an already successful business and changing nothing may be just the ticket. Things like coffee carts and vending machines are possible choices. The idea is not to take a risk but rather to carry on with a sure thing.
  6. If you are a good salesperson and very social, try a network marketing business. Many of them are require a very minimal starting investment. Just make sure you really love the product. These businesses are all based on word of mouth, and your integrity is important. Also, really succeeding is hard work, but if you have the right personality and the right product you can supplement your fixed income nicely.

Then there are a few techniques that involve the underground economy, so I am not recommending them but merely reporting what others have done to create a better quality of life in retirement. These techniques are barter and creating an all cash business. Remember those useful hobbies mentioned above? Can you trade your skills in these things for things you want and need? Can you sell your skills for cash? If so, that is how you get those small luxuries that are necessary for a rich and happy life. You could advertise with flyers on bulletin boards or by word of mouth through your circle of acquaintances, and get paid cash.  There are retirees that enjoy a much higher standard of living than they would otherwise by using their talents and skills to advantage. Some of them are even having fun.

If you are getting near to retirement and are worried about having enough, look into some or all of these ideas, and above all, enjoy this phase of your life. You worked hard and you deserve an abundant life!


Cut Your Clothes Budget—Take Care of What you Already Own



Everyone wants to look good, and if you want to succeed out in the world the right clothes are a necessity. But it is not necessary to go out and spend large amounts of money on new duds every month. For frugalistas like us, it makes a lot more sense to take care of what you already have, and only replace things when they wear out. Follow these tips to keep your wardrobe in great shape and keep your money in the bank:

  1. Buy right to begin with. It is OK to have a few delightful dry clean only items in your closet. But always be aware of the maintenance costs when you are considering a purchase. If you work in a very conservative or style conscious profession you may need to get some dry clean only items for work. The rest of us can probably stick with wash and wear.
  2. Know the difference between “dry clean only” and simply “dry clean” on the care tags on your clothes. One is mandatory, the other is merely a suggestion. If is says “dry clean” you may be able to hand wash it gently and either hang or lay flat to dry. Heavier knits and other stretchable fabrics should be dried flat so the don’t get pulled out of shape by their own weight. Lighter, non-stretchy items may be hung up on hangers and left on your shower rod, or hung outside.
  3. Silk can generally be washed if has a light colored dye. The brighter colors may fade if you wash them. Cashmere washes nicely. It may even work to put them in the washer on gentle, then lie flat to dry. Wool should NEVER be dried in a dryer.
  4. Do separate your darks and lights to avoid ruining the lighter items. And pull everything out of the dryer as soon as it is finished to avoid pilling.
  5. Don’t over-wash. Every time you wash an item it gets a little more worn out. Just keep your clothes presentable. Don’t wash them to death.
  6. If you get a stain, try to remove it immediately. The longer it sits the harder it is to get out. Different stains require different treatments. One product that does the trick in most cases is Oxy Clean. Just apply to the stain and wet down. Soak for a few minutes before you wash.
  7. Get things taken up or in as needed. Especially if pants are to long. Hem them before the bottoms get frayed. You’ll look better and the pant bottoms won’t be ruined.
  8. Small tears can be usually be mended. If the tear is along a seam it is very easy. Otherwise you need to access whether it is worth the trouble.
  9. Take off your good clothes and hang them up when you get home. It is just to easy to start watering the garden or cooking dinner and then something might go very wrong. You’ll feel better anyhow if you separate work from play. Changing signals your mind that you are home.

If you follow these simple rules you will come out ahead and still look fabulous.

Here are some links to for more helpful information:

Your Routines Could Be Making You Broke


Coffee and the Paper

Habits—everyone has them. Even the most freedom loving among us have some kind of daily and weekly routine. There are good reasons for this. One of them is biological. Our bodies are designed to run in a rhythmic fashion.  Our sleep patterns, for example, cause us to cycle on a daily basis. The second reason is psychological. Our minds are designed to categorize information. Huge amounts of undifferentiated data are just too much to process. Habits and routines are one of the ways we dial the information overload that comes barreling into our consciousness every day. In and of themselves habits are neither good nor bad.

If you are trying to manage your money and cut your expenses you must create the right habits to give you a push, and defeat the habits that cost you. The first step is to identify your current routine. Let’s start in the morning: You roll out of bed, and then what? For many people the answer is to get a stimulant such as coffee into their system as fast as possible, often coffee in the western world. How do you get your coffee? How much does it cost? In addition, many of us eat breakfast, and according to nutritional experts all of us should. So, how do you handle that, and how much does it cost?

To do a good audit, pay attention to your routines for a few weeks. Each time you identify one, ask yourself if there is an expense associated with it. Remember to multiply the cost by how often you partake in the habit. For instance, the cost of to-go coffee should be multiplied by 365 if you do it every day. Do this exercise on the daily, weekly, monthly, and even yearly levels.

Once you know what you are doing now, it may be time to tweak those habits. You may be shocked at how much money is leaking out of your sieve without you even being aware of it consciously. Changing habits, especially those that are deeply engrained, may take quite an effort. But it can be done. If your money wasting (and often unhealthy) habit is one known to be tough to break you may want to get some help from a support group. If it is something like smoking you may need medical help. But, with the right plan in place virtually any habit can be defeated.

You may also have some good habits, walking each morning for example. Don’t forget to include these. Knowing you are doing some things right will improve your morale. You may also want to make a list of habits to integrate into your life, such as making a healthy breakfast at home each day, packing a healthy lunch, or socializing outdoors instead of expensive indoor venues. Developing a little habit such as making your bed a certain way each day can anchor your day at no cost to you except a few moments of your time. These are the habits that enrich us and bring order to our lives.

Everyone has 24 hours each day, and we all fill them with habits. With a little work your habits can make you richer, healthier, and more fulfilled.

Making a Budget? Let Your Value System be Your Guide!


Reflect in Silence Before Deciding

What do personal value systems have to do with a frugal life? Everything! Your value system is the key to what you should spend money and time on, and where you can skimp without lowering your quality of life. When you make a budget, list your needs before your wants. Basic needs include shelter, food, potable water and water for hygiene, a bathroom, a way to do laundry, a small amount of clothing (enough to be cover your body and stay warm in cold weather), some kind of phone/internet connection, some form of transportation, education for the children, medical care, and some kind of entertainment.

Take your total income at this moment and assign a figure to each need. You may not have anything left when you are done adding, or worse yet, you may not even have all your basic needs met. This is true for many in this economy. If this is true for you, don’t despair. That won’t help. Try instead to get the uncovered needs met in some way that doesn’t involve money. Try barter or the gift economy.

But, if you are one of the lucky people with a surplus, you also have a potential spending problem. Unless you are very wealthy (and perhaps even then) you can’t buy everything on your list of wants at the same time. The process of values clarification will act as a beacon for your spending priorities. In the meantime, put the surplus away. You need to think and plan before you spend.

Many values clarification systems rely on a list of possible values and then ask you to pick the top three or five or maybe even ten. This is worthwhile to a point, but to practice values- based frugality you need to go deeper, and then you need to be very precise. The precision is a tool to help you translate a value, which is an idea, quality, or feeling, into a spending decision. When you spend you have to spend on a specific item, service, or experience.

Here is how it works—you discover that beauty is a quality you value deeply. Does that translate into buying a painting for your wall, or a trip to a beautiful place, or to getting your hair and nails done? What does beauty actually mean to you?

Or if you say you value the arts, which ones? Do you mean music, theater, or graphic arts? What is it that attracts you? Because you can’t buy “the arts”, but you can buy tickets to a concert or download some new tunes. Or, when you dive deep, you may find that it is actually creativity that you value. In that case, what medium do you want to use? That will guide you in your spending. As long as you don’t know what you really want, don’t make any big spending decisions.

Once you have done all the homework and know what you truly value you can start shopping. A frugal shopper always tries to get the best value for their money, but this does not mean buying the cheapest thing. It means buying the best tool for the job at the best available price. For example, if you have creativity as a high value and your medium is photography, it makes sense to buy a good camera even if it seems “expensive”. When you are spending in alignment with your personal values system, expense is a relative term. This is principle is not carte blanche permission to dump the whole budgeting process. If the photographer in the example buys an expensive camera and lenses, they may have to dial down the clothes expense or some other area that is not so important to them. That is why self-knowledge is so important to frugality.

One of the most common questions I am asked is about whether it is “OK” to go to out for coffee every day. The coffee habit is one often fixed upon by financial pundits as a budget buster. To discover the answer for yourself, look at your values. And then ask yourself WHY you are buying your coffee out. Do you buy a fancy expensive concoction to go and drink it while speeding down the freeway barely tasting it? Then it is likely a big waste. Make your own and use a commuter cup. But, if you are meeting you two best friends once a week and enjoying every sip, go ahead and get the jumbo chocalata supreme. It’s actually about friendship and connection. And that is a perfectly valid expense.

Here is some links for  books about values clarification:

Remember to try your library first, unless owning a lot of books is a high value for you!

Basic Frugal Tools—Tracking What You Have

Track Your Money

Why Track?

Tracking your material possessions, and most importantly your cash flow, is one of the basic principles of a frugal life. It is what a scale is to weight loss. How can you know what you are doing if you have no tracking system? Lack of a good tracking system is what causes fees such as overdrafts to accrue. If you don’t know what is really in your account this is not surprising. It is also what causes shortfalls in the face of normal expenses.

Why Doesn’t Everyone Do This?

The main reason people fail to track their cash flow is the tediousness of the process, and the rush of life in the modern world. There is no tracking system that doesn’t require a little extra effort every time you take in money in any form, and every time you spend money in any form. It also requires saving receipts.

How to Track

That being said, there are many ways to track your cash. If you are faithful in your record-keeping and the method suits the complexity of your life, it doesn’t matter which you use. If you have a simple situation you can use a little notebook that you carry with you everywhere. If you spend, you write it down. If you get paid, you write it down. For a simple all cash system, this will work.

Next in complexity is using a bank debit card and cash. I favor this method because under the new rules debit card can’t be overdrawn, and they don’t bounce. Keep a sharp eye on the online bank statement, which should reflect your cash flow accurately. And use the notebook for tracking cash. Why? Because little cash expenditures can create a real leak over time.

For the more complex set-up or the more technically savvy amongst us, the Quick Books program provides a great tracking system. If you are running one or more businesses, this is for you. Just set up another company called Me Inc. or something like that. Take a few moments each day to input the day’s transactions.  You must still write down cash transactions as they occur, or get a receipt for each one.  That is the only way to handle cash.

Cash Flow Management

Tracking is just the first step. Planning for upcoming expenses takes further effort. But tracking is an essential first step. Even if your flow is so small right now you could do it in your head, writing it down is a good habit to develop. And if the shortfalls are caused by lack of income, rather than lack of tracking and planning, at least you will know exactly what you need to make it through.

Here is a  helpful link:  Quickbooks

Getting the Most from Your Bank

Keep Close Track of Your Banking

Dealing with Banks can be Difficult

Dealing with banks can be a necessary evil for the forcibly frugal. Especially since the financial crisis of 2008 and the consolidations that happened in the finacial sector, more and more banks are charging for services that used to be free. Finding truly free checking is getting harder and harder. But it can still be done if you are willing to do a little work.

One Improvement

There has been one improvement, such as the opt-out on an debit card overage fees. This means that they can’t set a very small “grace” credit and charge you a large fee for using something you don’t want. Now, the default is to turn down the card if you go over what you have actually available. Just ask about the opt out at your financial institution.

What Can You Do

The best option is a local credit union. According to Wikipedia “A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members. Many credit unions exist to further community development or sustainable international development on a local level.” This means that the money in your credit union account will stay in your community. And many credit unions have free checking with your savings “shares”. Many also offer other services such as car loans and even “share to share” loans where one member can put up collateral for another member (who would not qualify on their own,) to get a loan. For more information on the credit union difference check out If you want to find a credit union go to

But No Matter What Bank You Choose

You absolutley must keep track of every penny in your account to avoid overdraft fees. The fact that many banks engage in predatory behavior makes it even more important to keep close watch on your balance. It might be a good idea to not use checks at all, but rather to use the opt-out noted above on your debit card, and use just the card and cash. Cash doesn’t bouce, and your debit card can’t overdraw if your opt-out. The only thing to be careful of is using the card as a credit card when the creditor doesn’t input the charge right away. That is why you must always balance your checking account as you go. If you have access to a computer and a Quickbooks program you can set up your personal finances like a business and track your checking that way.

The Difference between Spending and Wasting

Both spending and wasting money  involve having money leave your possession. The difference lies in what you receive in return. This may seem self-evident, but money and its use is a much more emotional subject than most of us will admit to, and in the heat of the moment things can get confusing. There are people who make impulse buys as a matter of course, who shop as a form of emotional comfort or who have a shopping addiction. These are the people that have money issues directly relating to waste.

But there are also those who are so afraid of making a bad decision or being wasteful that they are paralyzed into never buying anything at all. The danger here is not normally wasting money but rather wasting life. Money is one of the tools we use to accomplish the things that are important to us. One of the worst things about poverty is the loss of opportunities and experiences. Whatever amount of money you have flowing through your life needs to be managed, not hoarded. That being said, when a hoarder does decide to spend they often do it poorly. Pent up needs and desires combined with lack of practice do not make for good buying decisions.

So what can you do to make sure that you are spending in a healthy life-affirming way and not wasting or hoarding? First ask yourself some serious questions about your past spending behavior. You probably already have an inkling about where you fall as regards this behavior. If you are a waster, try putting things back on the shelf for at least twenty-four hours as cooling off period. If it is a fancy meal or a service that you crave, put off making the appointment or reservation.If you still really want it after the cooling off period, do some checking to make sure it is a good deal. If you are a hoarder, make a list of things you really want. Pick ONE of them, check your bank balance, do some comparative shopping, and just buy it. Try this at least once a month. Even if you are desperately poor. Just make your list with things that reflect your ability to pay. Sometimes, for me, my one thing was a real latte at a busy cafe. Just getting out where there were people and treating myself was an enriching experience. See if you can find something small that will make your life better. This is not a waste but a gift.

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