463 | Superpower of Frugality | Frugal Friends

27:56And we're in a fortunate position where that's not breaking the bank. Right. And, and also my kids aren't getting any younger. They're 15 and almost 12. And I'm spending more now than I've ever spent in my entire life, but that's okay. It's okay. You know, my net worth I've saved for so long, like this, my wife and I, I'm like, this is, this is okay. And we're going to look back on these years as some of the best years of our life and to have missed out on some of these adventures, the rollercoaster trips or the going to see Taylor Swift or we're going to Europe next year to see Taylor again. These are expensive things, but they're so worth it.

28:30It's so true. I think sometimes we think it's a money and a math problem, but very often it's more of a mental capacity, freedom, permission, grace problem more than do we actually have the money, but can we give ourselves the permission to spend on this guilt-free? Yeah. And it's also a resources issue, right? You talked earlier about good stewardship of resources, time being the most important one to a large degree. And this season is finite. You think about like for me, having my not so young, young daughters in the house, this season is finite, right? So it's just, it's very important to be cognizant of these seasons in life, I think.

29:13So thank you for bringing that to the attention of everyone. Again, it's just so important. So, okay. Like I said, I'm going to double back to each of you for something. So Jen, I'm going to kick myself if I don't ask you, how did you pay off$78 ,000 of student loan debt in two years? Oh, wow. Have you heard of Dave Ramsey? I have heard of Mr. Ramsey. Actually, I will say the first episode I ever listened to Choose FI was the one that you did about the baby steps. Oh, wow. Way back. I think that was like episode seven or something. Yes. And so actually, we did a very similar one like two years ago because I was like, you know what?

29:52I think it's so far back in the Choose Fi archives. I think it's time for us to do our own. And it was, gosh, we've never gotten more one-star reviews on any other episode. But we knew it. That's all right. Eyes wide open. Yeah, it was so tastefully done. And it's fine. But we really subscribed to that mentality of beans and rice, rice and beans, no restaurants. We went hard. And part of it was I wanted to be done sooner so I could go back to spending money. I didn't yet have this concept of the radical middle, of not being extreme. Being extreme was my personality type at that time. I would no longer describe extremes as a personality type.

30:36But that's what we did. We just went all in. And that's how I ended up with that debt payoff hangover at the end. Because when you make a financial goal your identity and then you reach it, what's your identity at that point? And so I had to kind of re-figure out, okay, what's my identity. It cannot be a goal. It can't be any financial, health, education, business goal. Who am I outside of these goals? And I know that doesn't really say how we paid off the debt, but meal planning and making a grocery list and doing potlucks with our friends instead of restaurants and all the boring stuff that you've heard before.

31:24That's what we did. And we did it. we just chose to do it every day. And it was very helpful that I had somebody literally in my corner in my house that was as committed to it as I was because I think community is the unsung hero of reaching goals. If you can have a partner, not just for accountability, but gosh, commiseration and encouragement. So that was really like, those are the things that we did. And we did a lot of side hustles. And we did everything we could to increase the margin between income and expenses. Nice. And then just funneled every single dollar essentially to paying off that debt.

32:03Okay. And so Jonathan somewhere is screaming at me because he had an encyclopedic knowledge of all the episode title numbers. So episode five was the Dave Ramsey episode. So it wasn't seven. I got it wrong. So it's why everyone needs Dave Ramsey and why you should ignore him. It's still, the episode holds up. It's pretty good. Don't give us a one-star review. I know. Ours is, I tried to make it as similar to yours as possible, but just updated between, because I think that one came out in like 2017. Yeah. Early January, 2017. And ours was 2021. I can't remember the title or number of ours. Yeah.

32:40And the good thing is we were, I think very complimentary to Dave. I think he, well, obviously I have some significant disagreements with how hard line he is. I has just been a remarkable good for society at large. Of course, there is a natural end to it, right? And I think some of the dogma is a little much, to put it mildly, but nevertheless, very positive general thoughts on Ramsey, I'll say. But you talked about like the dangers of identity and I think that like you kind of skirted past that and you're like, oh, but we did Publix, we did this, we did that. Like the dangers of identity is so important.

33:15I know, I tend to focus on that. Like one time we shared our debt payoff stories because Jill has one as well. And we did episodes on that. And then I got an email after mine saying that I didn't say the steps that I took to pay off debt. I talked more about the identity and that stuff. So now I just caveat with, yeah, I learned how to meal plan. That's what I did. But yeah, to do it as quote unquote gazelle intense as is recommended in that method, you do have to make your identity. And I don't necessarily agree with that anymore. I think technology and I think the economy and just culture in general has drifted so far away from the capabilities of doing that method the way it was created in, gosh, like the late 80s.

34:06I think it's much more out of touch than it was. And so it just, it has to change. And if the method's not going to change, the execution's got to change. So you've got to change and do the things that work for you. You can't make a financial goal your identity. It's just not going to work because then you're going to reach it and it's not going to solve the problems you think it's going to solve. You're still going to have problems. So find some other identity and just work on financial goals in addition. Yeah, the identity, it's so important. And like you said, it can't be a goal because what happens when you reach it?

34:43Who are you then? It can't be a job. What happens when you retire or leave or get fired? It can't be success at X, even like a sport. I think of Olympic athletes, right? Like even if you reach a gold medal, what happens then? Who are you? Right? Like there's nothing left. If that's all there is, if it's that goal, if it's that thing, what are you left with when you lose that or you stop or you reach it? And so I like to look at like identity statement of I'm the type of person that dot, dot, dot. And then you fill it in with something that's obviously but one of a million different ways to think about identity.

35:14But like, I'm the type of person that and then likes to eat hot dogs. Yeah, sure. That's Jill. That's Jill. She's that type of person. It's a goal. But that's an action, right? If you can relate your identity to actions versus achievements, then it's a much healthier way to think about yourself because actions you can control actions you can do or choose to not do because what's worse than putting your identity in a goal, what's worse than reaching it is not reaching it. What if your circumstances and your seasons make it so that you cannot? Once I started learning about frugality, I started making my business my identity.

35:56It was an unhealthy cycle. I'm out of it now, but it took a long time. I was watching all my peers doing six-figure months or at least five-figure months and doing a million dollars in a year with their business. And I couldn't. For some reason, I didn't know the things that they knew or didn't want to do the things they did. And I just didn't know why I wasn't doing as well as these other people. And so to have that business be my identity and not be able to do the arbitrary achievement that I wanted to achieve, like that was crushing and that it was even worse. Yeah. It's all very, very interesting.

36:39It's certainly like this inner work that we need to do on ourselves and thinking about identity. And there's no easy answer certainly, but Jill, I want to ask you ultimately about frugality and minimalism because I'm kind of curious about that, but I did want to just touch on that one question, the lingering question that I have. So, okay. What are you looking at your budget every two weeks. So he said that in passing. What are we doing here? In a very tactical way. I don't mean this in a making fun way. It's super tactical. She's looking at how much she spent on hot dogs. It keeps coming back to the hot dogs.

37:10I would have bought more hot dogs. Do we have a favorite brand of hot dogs? Nope. Because whatever was on the floor of the rendering plant doesn't need to be fancy. Oh my goodness. But realistically, so I don't know where to go from there, but I'll tell you. So every two weeks I, you know, I track my money. Like I think I like to say that I look, you know, 10 minutes a month, but I'm constantly, I log into my, my bank account. I'm just quickly glancing. I still do the old school, like check register and stuff like ridiculous, like dinosaur type stuff. So I get the tracking, but like, talk me through it.

37:47Sure. So my husband and I get paid every two weeks. So it follows with our pay periods that once we're paid, I then it almost starts a new cycle. So I have a spreadsheet. I'm not doing the apps. They're not doing it for me. So it does include me looking through all of our transactions and logging them. You can put me on a watch list. It's okay. But it's amazing how many times I come across errors in what was this expense? This was an error. This was charged twice. It's not every single time, but at least a handful throughout the year that causes me to then be able to call the company or the place that the sale happened and be able to write that expense.

38:36And from there, we do live below our means. So it's a variable amount that I'm then able to put into savings. For me, I approach it a little bit different in that I'm kind of looking back at what was spent and now what's left over at the end of these two weeks that I can then funnel into savings and investing. I have various sinking funds for what's happening throughout the year. And so I can kind of decide and gamify it truly. I just like putting challenges in my head of I want to get to this number and I want to reach this number. So I might decide various percentages that I'm going to funnel to my different buckets of sinking funds.

39:17And it's just kind of fun for me being able to see where am I at in my savings goal for travel this upcoming year. How much do I have left to go to save for the holidays? And it's enjoyable for me. So that's what I'm doing every two weeks. That's very cool. Okay. So you, as I'm conceptualizing this, you have kind of like a floor amount you keep in, let's say your main checking account. And then it's basically the prior two weeks, whatever is essentially left over, then you manually put in to investments in some level or these sinking funds. And if you could explain sinking funds for the audience, just in case people are unfamiliar with that and where you keep that money.

40:00Absolutely. So sinking funds, just being essentially savings buckets that you intend to spend, usually for the more shorter to midterm goals. So for instance, for me, I have a sinking fund for travel. That's usually to last me throughout the year. I've got a sinking fund for medical expenses. So I like to keep it at or around whatever my deductible is. So as I utilize it, I try to refill it back up again. I've got a sinking fund for car expenses, these types of things that we know are going to happen. And we'd love it to not have to come out of just our checking account or feel like this catastrophic event that happened and where's the money coming from.

40:46So as I go along, I kind of put the money away that I can then pull from throughout the year. So, okay. Very like tactical question on this, because I'm sure somebody is wondering. So what happens if you are filling up your travel sinking fund throughout the year, but you take your trip on January 15th? I guess at the beginning, did you set up like a balance and then you pull from it that first year and then you're appropriating for the next year? Like, I know it sounds silly, but I'm sure there are people that are really curious about this. Yeah, sure. It rolls over, honestly. And for me personally, not everybody has to approach it in this way, but I like to pull from it and then replenish it when I'm able.

41:29So for instance, I have about$2 ,000 in my travel fund. I haven't touched it. Even though I've gone on some vacations since then, I've been able to pay for$100 plane tickets just out of my checking. I'm more so right now going to keep that aside for a bigger trip that I might do. But let's say I pull$500 from it. If over the next couple of months after that trip, I'm able to put$50 back in,$100 back in. So it's a little bit more of a revolving bucket than it's a bring it down to zero by December 31st and then raise it back up. And then to answer your second part of that question, I keep it in a high yield savings account.

42:10Okay, nice. Yeah, it's amazing nowadays that there are actually high yield savings accounts paying 5%. It's wild. It's so great. Oh my gosh, I know. I'm so glad they're back. So nice. I remember when they were 0.6%. We're back to the good old days. Yeah, I never thought I'd say. I remember, this certainly dates me, but my first job in 2001, ING Direct was the first online savings account. And it was like 5.1%. It was something crazy. And for the last 20 years, it hasn't even come close to approaching that. I thought those days were gone. And now to see something like CIT Bank at like 5.05 at the last I looked at, it's like, damn, this is amazing.

42:49So yeah, it pays to be a saver again. I like it. And Jill, I wanted to actually double back and ask about minimalism, right? So I mentioned a couple of minutes ago, I'm curious about the intersection of frugality and minimalism and how you think about minimalism. I think there's a story in your past here that could be rather interesting for the audience. Yeah. So we believe, to add in another word of simplicity, that minimalism kind of falls under the umbrella of simplicity and that being another one of the foundational principles of frugality, that wherever we can identify areas that we can simplify and become more efficient and limit the amount of decision fatigue that's happening for us in all aspects of our resources, right?

43:38Where we can simplify mental and emotional energy spent unnecessarily, where we can simplify our finances, simplify our physical space. This is all going to help us because we are whole people and all aspects of our personhood is going to intersect with one another. And so we've talked about some of the ways that we can simplify our finances, where we can keep our savings buckets and all of that, only looking at our budget once a month. But I think, too, we can. Heathens. Heathens. Come on. We can simplify our physical spaces. We can simplify our schedules. And all of this is going to have a positive impact and benefit to our finances.

44:19And so speaking specifically of spaces, I certainly have lived a more minimalist lifestyle. I think that there's a spectrum to be seen here. I don't think that to consider yourself a minimalist, it has to include white walls, one plant, one chair. It can look a variety of different ways, but I think the goal is having enough and being content with that, kind of repelling this overconsumption for happiness or just buying for the sake of buying or because you've been sold something, but we mindlessly purchased it without even knowing, is this going to be for me? One of the ways that we lived minimally was living in an RV.

45:02So at one point we were in a motor home, my husband and I, and then at another point we lived in a kind of pull behind trailer. We actually ended up downsizing from the motor home to the trailer. The trailer was 170 square feet and could be pulled by our Toyota 4Runner and that was literally everything we owned. That is extreme. I'm not going to lie. I know that we say we don't advocate for extremes, but I think we can visit extremes for the sake of learning and discovery and self-understanding and for the benefits that it can provide, but we don't have to stay there. It doesn't have to be long-term.

45:41And for us, what that meant was just living and owning within our means. I'm sure you and your audience are very well aware of how much we can save when we look at our biggest expenses, like housing. And we were able to significantly reduce how much we paid for housing by owning these RVs and then ended up being able to renovate them and sell them at a profit, which the first sale paid for my master's degree. The second sale was our down payment on our house. And so this was kind of our way of being efficient, simplifying and practicing a more minimal lifestyle, learning what is it to be content with just a one foot by two foot closet?

46:26And how can I get creative and problem solve with my finances, with my resources? How can I achieve a low waste lifestyle? And what does that mean for then what's available to me? And for me and my husband, it certainly did not feel like deprivation. Certain parts of it were sacrifice, but what we gained in community opportunity to spend time with people because we're not focused on cleaning and organizing our things every weekend or what we were able to save in rent or mortgage costs was just phenomenal. So I know it's an extreme example, but we do think wherever we can get creative with simplifying, minimizing our space, our schedules, we can see great benefits to our whole personhood.

47:11Yeah, that is really beautiful. And like you said, having enough and being content with that. That's just so important, right? How many people are not content with what they have? That's where frugality is a superpower because I think if implemented well, that's where you can come to that place. Not necessarily that you'll always stay there. We go in and out. Life is lumpy, as you said. But I think that we can get to a place where we are spending guilt-free. We're experiencing permission to spend on the things that we want and living a lifestyle that feels beneficial to us. Yeah. And I love how you threw simplicity in there, right?

47:47So frugality, minimalism, and simplicity. And I think I literally was thinking about this morning because I saw some tweet on Twitter. I was like, simplicity to me is the guiding principle of my life. Like that was what I hit on. I can't think of any aspect of my life where there's complexity that it makes any sense or adds any value. It's like, I'm always searching for simplicity. I'm searching for the essence of something. And you think about even just brass tax or whatever they call it, in terms of financial products. Think about any type of complex financial product. It's usually somebody selling you something or someone getting rich instead of you, them basically stealing your money through complexity.

48:30There's no secret. There's no like, hey, you get wealthy and there's some secret complex thing that you get to invest in. That is all a mirage. It's simplicity, simplicity, simplicity. So thank you for highlighting that. And I love that you downsized to 170 square feet. That's amazing. And like you said, it doesn't have to be the extreme example. And I use a much less extreme, extreme example in my own life of moving, moving 400 miles away, moving from a high cost of living area to a low cost of living area. And like, I'm always a little bit sheepish about this because I don't want people to get the misimpression that you have to do something like that, that you can't possibly pursue FI in New York City or San Francisco Bay Area.

49:13You certainly can. It was just for our lives that move made all the difference in the world. And that was a values-based decision, really. It was based on how do we want to spend our time? What does our future life look like? It wasn't, oh, we have to get out of here because we just have to spend less money. So I think that's really, really critical. And speaking of values-based spending, Jen, I wanted to double back to you because I think this is a really important aspect. And like we talked about a while back, you need to really think about your values, right? And you need to just have a sense of, okay, what am I not, I don't want to spend mindlessly.

49:50I want to actually spend based on value, but what happens if sometimes your income just simply doesn't support all of your values? What do you do then? How do you prioritize? Yeah, it's going to happen to everyone because I think we're so programmed to want to use money to solve our problems or meet our values. It's almost our first go-to. But regardless of where you are, regardless of your income, everyone is going to want to do things that they can't quote unquote afford. They can't afford right now. It just depends on where your lifestyle inflation has gotten to. And lifestyle inflation is not bad.

50:29I think we vilify it. But it's only when that lifestyle inflation creeps above what your income is. So when there comes a point where you have multiple values that you've identified that you love spending on, but the margin between your income and expenses is not enough to support spending money on all of them. First, you look for places where the value is not being met 100%. So in my story, I value community almost over anything. I'll drop anything to go hang out with a friend, and I will spend money to be around people, to be around friends. And so that's something I really didn't want to give up.

51:11And I was spending... When we were starting to pay off debt, that was my biggest hangup. I didn't want to stop doing brunches on Sundays and happy hours on Fridays and going to movies and museums and all these things. But as we got started, I realized that it wasn't the brewery. It wasn't the museum. It wasn't the brunch that I valued. It was the community. And so how could I meet the true value of community without spending money? And honestly, those things that I was doing weren't fully getting me what I wanted. It's loud at bars. And so how much relationship building are you actually doing?

51:51So how could I fully meet my value and do it for free? And so that's where we started doing these pantry challenge potlucks where we just got together with friends and everyone would bring a dish. But the challenge was you can't buy anything for your dish. It had to be from stuff you already had. Or we would just get a$3 bottle of Aldi wine and finish it and stuff like that. How could we do it for low cost or free that was meeting the value 100 %? Focusing on the value, not the activity. But then there came stuff that really did cost money. And then I had to prioritize. The magic words for me were no but.

52:32Basically, but. But is the magic word. So if I'm like asked to do something, so maybe contribute to a fund or a bridal shower thing that I actually can't afford right now. This is something where I say, I can't do this or I can't do what you've asked me, but how can I like volunteer my time in some way? How can I volunteer my space in some way or my mental capacities? We're looking at all of our resources to kind of make up for the money that we don't have. I still want to participate, but what else can I do? And so we're getting creative and thinking, how can I meet this value? And we prioritize, right?

53:15So maybe I can put money towards this value this month, and the next month I'm doing something for another value. And I'm saying, this value that I spent on last month is lower on the list this month, so we don't get to do this. So I think getting creative, prioritizing, those are, you know, kind of the attributes that when you build those, it becomes much easier to practice values-based spending. Yeah, that's great. It's again, it's cutting to the essence of what are you trying to get out of life, out of a situation. And it doesn't have to be, like you said, going to the expensive brewery. If what you're actually looking for is to spend time and talk with your friends, it might actually be a negative.

54:01Just the brewery in and of itself might be a negative aspect, totally excluding the money factor, right? Because it's loud, you can't hear them, it's uncomfortable, whatever it may be. So try to find that essence. I really enjoy that. This has been such an interesting conversation. I have probably two pages of notes here and just all of these incredible things that paint the case for frugality as a superpower, right? We're talking about value-based spending, the radical middle, this transformation of how I wanted to live life, all of these things, honor your season, so many, like over and over, having enough and being content with that.

54:36You have left us, both of you, with just so much to think about. I think this is really important because frugality is more than just deprivation. It's so much more. It is that superpower. It allows us to think about what do we want to get out of life? It's that simplicity, right? It's the minimalism. It's all of this combined. So Jen and Jill, thank you for being here. If people want to reach out to you, I know we already mentioned the Frugal Friends podcast, but where, where can people reach you? Yeah. Anywhere you listen to podcasts, we're there. Frugal Friends podcast. We also have a newsletter that's for free where we let people know about freebies that are happening every week, savings tips, money hacks, and you can get that just by going to our website, frugalfriendspodcast.com.

55:19Nice. frugalfriendspodcast.com. And yeah, I see you here on every page, get the friend letter. I think that's what we're talking about, right? Yeah. Awesome. Okay, my friends. Well, until next time, I really appreciate you both coming on. Thanks, Brad, for having us. Yeah, thanks for having us. Thank you for listening to today's show and for being part of the Chooseify community. If you haven't already, the best ways to get involved are first subscribe to the podcast. So you're listening to this on a podcast player and just hit subscribe and then subscribe to my weekly newsletter. I actually sit down every Monday and write this by hand and I send it out Tuesday morning.

55:55So just head over to choosefi.com slash subscribe. And it's really, really easy to get on the newsletter list right there. And I would greatly appreciate it. It's the best way to get in touch with me. You can actually just hit reply to any of those emails and it comes directly to my inbox. So that's the way that I keep a pulse of the community and how we keep this the ultimate crowdsourced personal finance show. And finally, if you're looking to join an in-real-life community, we have Chooseify local groups in 300-plus cities all around the world. So head to chooseify.com slash local, and you'll find a list of all of those cities in 20-plus countries all across the world.

56:33And if you're just getting started with FI, or you have a family member or a friend who you think would be interested, two easy ways. Chooseify episode 100 is kind of our welcome to the FI community. And even though it's a couple years old at this point, it still stands up. And it's a really great just starting point to get an understanding of what is financial independence? What are we doing here? Why are we looking to live a more intentional life where we save money and use it as a springboard to live a better life? And then Choose a Vi created a Financial Independence 101 course that's entirely free.

57:07Just head to choosefi.com slash fi101. And again, thanks for listening. Thank you.