Tuesday, February 19th, 2019
Every now and then, we hear stories about people doing extreme things to save money. Several years back, there was even a show on television that featured people going to extremes for the sake of saving. I personally knew someone who lived a pauper's lifestyle and left an estate worth over 2 million dollars when he died.
What can these extremely thrifty types teach us about saving? Can we increase our net worth by applying some of their attitudes, habits and behaviours without resorting to over-the-top self-deprivation?
Here are five things I've learned from watching the extremely frugal do their thing:
Benjamin Franklin is quoted as having said: “Beware of little expenses; a small leak will sink a big ship." Extremely frugal people constantly watch those little expenses, from utilities to groceries to entertainment, knowing they add up over time. Many of us could likely do a somewhat better job at patching our own small financial leaks, for example, by turning the lights off in rooms we're not using, lowering the heating for when we're not at home and checking which store has the items we need at the cheapest price.
Resourceful and disciplined, extremely frugal people obsess over paying the cheapest price possible—so they do their homework. They diligently hunt down sales, specials and the cheapest vendors. They read the flyers, sign up for customer rewards programs and clip coupons. While we non-extreme types might not have the time or inclination to go to such obsessive lengths, we can probably find more savings by paying closer attention to flyers, mailbox coupons and online coupon sites.
Extremely frugal people buy only what they need and are extremely conscious of waste and costs. They rarely buy on impulse and never spend recklessly. Shopping with the same kind of intention or mindfulness can help us prevent wasting money and feeling buyer's remorse. Next time you're tempted to buy something you hadn't planned for, try thinking like an extremely frugal person and ask yourselves a few questions: Do you need it? Do you absolutely love it? Will you use it? If the answer to any one of these questions is no, it's probably best to take a pass and put the money you would've spent in savings or towards debt repayment.
Extremely frugal people know the status of their money at all times—what's coming in, what's going out and when bills are due—down to the last penny. For many of us this is a financial blind spot. However, taking a few minutes each day to go through chequing transactions or review our spending patterns can avoid potential drains on our savings like going into overdraft or overspending.
Extremely frugal people are not embarrassed to clip coupons, return glass bottles for a refund or shop at secondhand stores—and we don't have to be either. They also have no qualms about haggling, though I'd avoid doing it in circumstances where it's not considered appropriate. However, if you're at a flea market, garage sale or liquidation sale, there's no need to be shy about casually asking "is this your best price?"
You don't have to live like Scrooge to save more money. Just observe and apply some of the ingenuity, creativity and determination of extremely frugal people, without going overboard.