294 comments

Wealth Advice that Should Be Obvious

incensedWe have been having a lot of fun around here, and thus straying into topics that are only loosely related to building financial freedom. These lessons can be handy, since getting rich is only the first baby step in living a long and prosperous life. After all, if you adopt a Mustachian ethos fairly early, you will spend most of your life in a permanent bath of surplus money, and thus your challenges and growth opportunities will lie in areas other than the financial.

But still, all this big thinking can cause us to gloss over the details a bit, and we don’t want to lead any new arrivals astray. With that in mind, this article will serve as a review of some of the basic principles that we don’t usually cover around here, because to many people they are already obvious. Read ‘em over, and see if they are already obvious to you.

1. You Don’t Try to Gamble Your Way to Wealth:

I read a fascinating article about the state lottery system the other day. It described life in the small low-income towns and rural  areas throughout the US. People struggle from paycheck to paycheck, frequently encounter medical bankruptcies, and almost everyone in town buys a shitload of lottery tickets every week.

You gotta be in it to win it

When my numbers finally come up in the powerball, I’m gonna get my life turned around

…and other such tragically misinformed nonsense.

A similar phenomenon occurs in Las Vegas and on every cruise ship on the planet. People feed their hard-earned little green employees into the slots and cashiers of these rigged games, impoverishing themselves and enriching the sneaky owners with mathematical certainty.

So let’s just put all of this to an end right now: You never, ever gamble if your goal is to get richer. It’s as simple as that.

Most gamblers and lottery winners I have quizzed believe in superstitious concepts like “luck” and “magic numbers”. They don’t exist. Every single person on the planet is equally lucky and just as likely to lose money in rigged games of chance. The only way to win, is to not play. The only way to get “lucky” in life, is to understand the odds in all areas, and place your own chips on the side where they are in your favor.

Gambling and lotteries are actually a double-whammy of loss: you are sticking your fingers into the spinning blades of poor odds, and you are handing over psychological control of your wealth to something out of your control. You are making yourself the victim: “I will become rich if the system decides I will, and otherwise I will remain poor”. It’s the wrong way to think.

Here’s how to get rich: earn as much as possible, waste as little as possible, and invest the difference. And no, investing doesn’t mean buying a hot tech or penny stock because you think it will triple – that’s just gambling again with only-slightly-better odds.

2. Windfalls are for buying Freedom, not Jet-skis

Almost every hard-working person ends up with a lucky break or two in his or her lifetime. You might get a raise or a bonus at work. A hefty insurance settlement for cosmetic hail damage on your car. A gift or an inheritance from family or friends.

Most people promptly go out and spend these windfalls.

“Thanks for your generous gift! I took my lady out to the restaurant we thought we would never visit!”

The annual bonus was hefty this year, and I’ll remember it every time I see that new Infiniti G37x sitting in my driveway

Shoes, shoes, shoooooes!”

and other such blunders.

No. None of it. When you get a windfall, it goes straight to your highest-interest debt, or your mortgage, or to buy your next chunk of index funds or your next rental house. Why would you inflate your lifestyle, when you haven’t even bought your freedom yet? Windfalls should be viewed as giant Groupon discounts on Freedom Itself.

For a windfall over $5000, you may get yourself one gourmet coffee or a Chipotle Burrito, but that’s about it.

3. You Don’t Buy Shit you Can’t Afford

“I can afford it, and I deserve it”, is a common refrain from people with high incomes and virtually no savings. So just a couple of reminders on how to tell if you can afford something:

If are in any sort of debt emergency, you probably can’t yet afford “it”

If you still have to work for a living, and would prefer to have a choice in the matter, the diagnosis is the same.

Occasionally, we will all break this rule if something is really important to us. But in general, it is a good guideline. It helps you avoid things like buying a new car or that $3000 set of cobalt-blue LG laundry machines on credit.

4. You don’t buy shit you don’t need

A more gentle version of rule #3, is to really think about what it means to “need”  something. For example, on a recent trip to Ecuador, my heart was captured by a very manly drinking flask made of leather and animal horns, and emblazoned with a badass South American face.

the_flask

AND it had a Huge Mustache, AND it was only ten bucks.

“Gasp!”, was my first response. “This thing is perfect! I must have this. I could fill it with wine and sling it over my shoulder for the weekly Longmont Bike Night.  I would be considered hilarious and become more popular with this product.

I indulged the fantasy, felt the temptation wash over me, then proceeded to not buy the flask. Why? Because I didn’t go to Ecuador in search of a flask. Digging deep into my past, I realized that I have never felt that my life was lacking in any way due to the absence of a carved leather-and-horns drinking flask, and I distinctly remember being perfectly happy in the recent past without owning one of these things.  I also remembered the storage room in my basement filled with other cool objects I never use yet still seem to have a hard time parting with.

Every material object must be looked upon as a lifelong burden. Will its benefits outweigh the lifelong burden? Consider carefully.

To put this principle into profitable practice, just remember this rule: You never, ever go “shopping”. You go to the grocery store and get stuff for salads and the healthiest meals you can dream up. And that’s it.

For everything else, you start a list. Replacement parts for the broken faucet. A new pair of hiking boots next year because your old ones only have a few hundred miles of hiking left in them. And eventually, when the items on the list become urgent, you go on a fast and targeted mission to buy only that item. Then you return and cleanse yourself with a hot shower to wash off the Shopping Juice.

Other things you never need to buy: bottled water, packaged desserts and convenience foods, soda, juice, status watches, jewelry,  and anything ever found in a “gift shop”.

5. You don’t Pay to Have Shit Stored

I was shocked to learn that many people pay to maintain a permanent storage unit in this country. No, not just for a month after selling one house and before buying another one. They do it for years. At $100 per month or more.

This is a sign from the Stuff Gods that you have too much stuff. There’s a new way to store stuff that actually makes you money instead of losing it: Craigslist. Use it to store the stuff you don’t need. Re-buy it in the unlikely event you ever need it again.

6. You Don’t think of Restaurants as a Source of Food

I love eating out as much as you do. Possibly more, because I appreciate the true amazing decadence of it every time I partake. “Look at me, I am renting this huge venue and paying an army of servants to prepare food for me!“, I marvel every time I do it.

But the world is not your personal buffet. It is a forest filled with bear traps designed to ensnare and impoverish your ass. And thus, you don’t go out on the town with no plan for where you’ll get your next meal.

This summer my wife I disregarded this advice while spending the day in Montreal. After several hours of walking, we ended up getting very hungry and still couldn’t find a reasonable place to eat. Everything was either fried foods, pizza, or closed on Sunday. Finally we found a cafe and gratefully sat down. Two shitty salads and $30 plus tip later, I reminded myself to follow my own rule. Sustenance comes from your backpack. Restaurants are for carefully planned experiences with good friends.

A very similar rule exists for Coffee.

7. You put the Good Shit on Automatic

When visiting family members recently, I was intrigued by the ubiquitous piles of opened telephone and utility bills. They explained that they still paid bills by mailing checks. This is crazy: your utility bills and credit cards need set to automatically pay themselves, just like your 401(k) deductions and other investment programs. Why waste time and risk late payments? There is no benefit to doing these things manually – free your brain and your cashflow for the task of actually getting rich.

Update: In the comments, some people shared scary stories of being overcharged for things like AT&T phone bills. To protect against this, I always do the automatic payments through a credit card (preferably a high-reward credit card to get some cash back). This gives you a 1-month buffer to review charges, plus you can simply block payment to any vendor that comes up with a charge you disagree with. The credit card companies are pleasantly ruthless on your behalf when you do this – it is up to the vendor to prove you owe them that money, rather than vice versa.

8. You Stock Up When Things are On Sale

In Canada, cheese is very expensive. 200-300% of what we pay in the US. But everyone still eats it. This summer, the country’s largest grocery chain had a sale on cheese, where it went down to US-like prices. This has never happened before.

“Wow, look at that”, my brother marveled, as he threw one pack into his shopping cart. “Good deal!”

What is missing in this picture?

Cheese lasts at least 3 months if you keep it closed in the fridge. His family uses about 1 pound per week. So the correct amount to put into the cart is twelve pounds of cheese, not one pound.

You must apply this philosophy in all areas of life, whenever presented with savings on an item you already use. It minimizes both the time and cost of shopping.

These are the obvious tips that have scribbled themselves into my notebook during our travels of the past year. None is worthy of an article by itself, but I hope that together they will instill some of the background fabric of efficient living that is essential for stitching together a happy and efficient life.

Once you get that happy and efficient life deal going, the fabled 50-75% savings rate that scares so many people away from this blog becomes automatic rather than torturous. And that is when the real fun begins.

What are your things that should be obvious? Lifestyle tips that are powerful, self-explanatory, and yet overlooked by most of the population?

  • mr. pop September 20, 2013, 11:15 am

    Amen to not storing stuff-the mental burden is almost as bad as the economic.

    Reply
    • Miss Growing Green September 20, 2013, 11:38 am

      Agreed! For me, often times the mental burden of just knowing I have more “things” I have to think about, worry about maintaining, etc. is the worst part. Sometimes when I express stress related to having to worry about material possessions, people raise an eyebrow at me.

      I wonder why it is that some people find comfort in their things while for others it becomes a source of stress.

      Reply
      • Ian September 21, 2013, 4:06 am

        I get the same sort of response from most people when/if I speak about it to them, too!

        Reply
    • Free Money Minute September 20, 2013, 11:39 am

      It is crazy to pay to store stuff you don’t really need and that is probably not worth what the monthly storage fee is. Donate it and write it off and buy is again if you ever need it (which will probably be never)

      Reply
      • sdpinaz September 25, 2013, 10:23 am

        At my rental I rent out half the small garages separately. They are aprox 8 feet wide by 15 deep. $100/ month. There is one lady that rents one of the garages, never ever opens it up, and the last time I peeked, there was a pile of “stuff” in the corner worth maybe 50 bucks, a pile that would fit in the trunk of my car. But she pays me diligently every single month, on time with no complaints…….hmmm

        Reply
    • Marcia September 20, 2013, 4:01 pm

      Oh yes. We had a storage unit for awhile, from 1998 (when we moved from a 2BR apt to a 1BR apt) until we moved back into a 2BR apt in 2001 (it had a garage).

      We had it because we had books and furniture and things that “we’ll need this when we buy a house!”

      Yeah, we bought a house. That was smaller than that 2001 apartment, and no garage. So in the end, we got rid of all that stuff that we “couldn’t live without”. Ha, live and learn.

      Reply
    • Ivan September 20, 2013, 6:31 pm

      You said it!

      Paying storage for your stuff is the epitome of burying your head in the sand and pretending all is (financially) well.

      Reply
      • Aimee@MiddleFingerProject October 5, 2013, 1:02 pm

        Absolutely! But I can’t believe the number of people who do pay to store their crap – it’s unbelievable to me. I’m not a minimalist – I tried that – I just love beautiful things too much. But I don’t have excess, when I feel myself and my life starting to edge on getting cluttered I pare everything down again. It feels sooo good to unburden oneself, you don’t even realize how much you attach yourself to objects until they are gone and you feel significantly free-er! (that’s not a word I know!)

        Reply
    • Hugh Grigg September 20, 2013, 6:40 pm

      Definitely! I think it’s actually a wonderful feeling to sell your stuff online. It feels like a kind of cleansing. And no matter the price, at the very least, someone is giving you money to take your old stuff away for you.

      Reply
    • Joe September 22, 2013, 8:24 am

      I love it – You don’t Pay to Have Shit Stored.
      That contradict with the stock up one though. You’re storing stuff when you stock up. I hate buying bulk and stocking up.

      Reply
  • No Name Guy September 20, 2013, 11:18 am

    “Never, ever go shopping”.

    Yup……it’s “procurement of necessary goods and foodstuffs”. Only go with a specific purpose.

    Shopping is for financial illiterates who don’t know what they need and wander aimlessly around stores looking for “it”.

    Reply
    • johnny5 September 20, 2013, 11:52 am

      The only time I go ‘shopping’ is to browse the aisles of the hardware store, trying to imagine more repairs I can do myself.

      Reply
    • MoneyAhoy September 21, 2013, 6:35 am

      I love this tip. I haven’t really been “shopping” in years. It really reduces your # of opportunities to make mistakes if you don’t put yourself in the situation in the first place.

      Reply
  • Uk Money Motivator September 20, 2013, 11:20 am

    I actually have a small plot of land that has zero chance of building planning permission for the next few years.

    At £2k for a 20ft container, which can be rented out for £250 a month, this could be a fun new business sideline to take advantage of the ‘buying shit you can’t store with money you don’t have’ lifestyle that is moving across the pond!

    Reply
    • Mr. Money Mustache September 20, 2013, 11:31 am

      Great idea. I should have noted that OWNING storage units to rent out is a great idea. Renting them yourself is terrible. But to do it ethically you would need to install a face-punching machine in the parking lot and offer free counselling on the burdens of unnecessary stuff :-)

      Reply
      • Brian1975 September 20, 2013, 12:13 pm

        I like the face punching machine idea. That could be a new business.

        Reply
        • Debbie M September 20, 2013, 1:36 pm

          Heh. And like casinos have ATM’s but also gambling counseling hotline numbers.

          You can also rent out an extra parking space in some situations.

          Reply
          • chermysl September 22, 2013, 11:07 pm

            The only place I ever see those 1-800-help-i-am-a-gambler numbers is on a very small card taped to the bathroom mirror. Do people actually look at themselves in the mirror once they’ve blown through their money?

            Reply
      • Rose September 20, 2013, 2:19 pm

        What if you live in a tiny NYC apartment, with no place to store important things like camping equipment and out-of-season clothing? Then it becomes a choice between paying $100 per month for a storage unit or $300 dollars per month for a bigger apartment – no?

        Reply
        • Laura September 20, 2013, 6:26 pm

          Or owning fewer clothes and renting camping equipment when you camp. Right now, you’re essentially paying $100 a month to rent your tent, month in and month out.

          Reply
        • Meghan September 20, 2013, 7:03 pm

          I say yes, and am paying $100 a month, but it is for a defined period of time. When I move out and no longer have the roommate situation, I’ll pay a lot more but I will have that stuff. I will pay $900 to store it but this arrangement will save me 3-4 times as much. I don’t think that keeping it forever is worth it, is it? Again, depends on how much you use what’s in there, what your living situation is and how much it saves you.

          Reply
        • Kate in NY September 21, 2013, 4:22 pm

          The ads for storage units in NYC are kind of funny, I must admit. There is the one that basically suggests that apartment dwellers rent a storage unit in lieu of moving TO THE DREADED SUBURBS. As someone who sold her apartment in trendy Bklyn (it’s now worth about 20% more) and moved to the ‘burbs (house now worth about 10% less) – I am thinking that the storage unit might not have been such a bad idea after all.

          Reply
        • Christof September 24, 2013, 4:13 pm

          Wouldn’t it make more sense just to buy what you need on Craigslist when you need it and sell afterwards. “Storage in the cloud” as someone here dubbed it a while ago…

          Reply
          • Rose September 24, 2013, 4:58 pm

            To be clear, I don’t actually have a storage unit – but I might consider it under some future circumstances.

            I do not think it’s a given that renting or repeatedly buying the same things due to lack of storage space is the frugal option. It depends on the circumstances, perhaps on how lucky you get in your CL finds.

            And after all, in theory, paying extra money to rent or own a storage unit is more or less the same as paying extra money to rent or own a home that is larger than your bare minimum bed/toilet/hot plate.

            Most people’s houses have some amount of storage space built into their rent or mortgage . . . i.e. closets. Some frugal folk even have basements or attics in their homes.

            So if certain people in cities with high housing costs choose to have their “closet space” at a different (less desirable/expensive) location from their main residence, who are we to judge?

            Obviously, I realize that this is a probably a small subset of Americans with storage units. In many cases I’m sure it’s just unloved, useless clutter.

            Just sayin’.

            Reply
            • frannie fargo November 3, 2013, 8:36 pm

              Rose, I hear ya. I bought a very small affordable condo, 542 square feet. It was totally self-contained and had it’s own utilities, laundry room, furnance, etc. the only problem was i wanted a big yard. so 50 miles away for almost a song and a dance i bought a 5 acre parcel of land which is mine to do with as i see fit. i can camp there, dig holes, plant things. my big back yard. not quite the best set up, but i do not have to worry about grass mowing (out in the country it does not matter if the weeds are 5 feet tall), snow shoveling or anything else for that matter. only pay somebody 2-3 times a year to mow out a path for my drivway and a patch where i can park/camp. so i got my house and my yard, not in the same spot, but they are both paid for so who cares?

              Reply
      • jim September 20, 2013, 6:29 pm

        Ha! Hysterical! We should start selling child-friendly face punching machines so they’re raised up right, from the get go. We could do a “not so friendly” version for spouses and/or adult children who should know better. LMAO!

        Reply
      • Justin G September 21, 2013, 4:08 pm

        Face-punching machine? What happened to muscle over motor? ;)

        Reply
        • Dom September 22, 2013, 7:27 am

          “Face-punching machine? What happened to muscle over motor? ;)”

          Oh, that’s easily solved. All stuff being brought in to the site has to be wheeled up a ramp onto a platform, which then descends to ground level whilst winding the face-punching machine. The heavier the weight of unnecessary shit being brought in, the more energy is stored and the harder the face-punch.

          Simple ;)

          Reply
          • UK Money Motivator September 23, 2013, 2:45 am

            Dom, that is a very good idea!

            Can also use the stored potential energy to power the lights inside the container that is about to be opened up!

            I always wonder why gyms don’t tap into the energy that is being expended by people using running/cycling/rowing machines… The more time you spend at the gym helping towards the energy costs of running said gym, the lower your monthly gym membership is.

            We could then have gyms being part of the national grid, with unemployed people being encouraged to spend the day at the gym!!

            I would call the gyms: “Power for the People”!

            Reply
            • Energy Engineer September 27, 2013, 5:03 pm

              I have considered this question, too. A quick look at the numbers will show why gyms don’t harness the “people power” expended in their facilities.

              A “Lance Armstrong” caliber athlete can put out 400 watts steadily over a one-hour period. (This is about 1/2 horsepower.) A more “average” athlete can maintain 150 watts steadily over an hour. Higher power production is possible over short periods, but can’t be sustained for long. If we’re talking about keeping the lights on, we need to think in terms of steady-state production.

              Let’s think of this output in terms of how many lights one cyclist could keep on. An older gym likely uses metal-halide type lighting. One fixture uses roughly 400 watts. That means one Lance Armstrong or about two and a half normal folks would need to be pedaling all the time to keep one light on. Newer gyms might use high-bay fluorescent fixtures. One of these uses about 190 watts. So, one Lance could keep two fixtures on, and one average dude would just fall short of keeping one light on.

              Now, let’s think of this in terms of electricity cost, and assume that the gym is paying $0.10 per killowatt-hour (kWh). This is low for the east coast, but just about right for the mountain west, where I live. One Lance athlete generating 400 watts, steady state, would produce 0.4 kWh per hour, or about 4 cents per hour. A normal guy would produce about 1.5 cents worth of energy per hour.

              I don’t point this out to pick a fight or to label your idea as “stupid,” but to bring light to the concept of energy use in our modern society. I agree with MMM’s philosophy that we all ought to minimize the impact we have on the environment, but I think most of us underestimate the magnitude of the energy that we use in day-to-day activities. I could pedal through the entire work day and generate 12 cents worth of energy. That would keep one light fixture on, but couldn’t power my computer or maintain temperatures in the office. Many people, it seems, are unwilling to make the lifestyle changes necessary to really reduce the impact of their energy use.

              Reply
      • MT Reeny September 22, 2013, 9:58 pm

        Agreed. My brother owns storage units, and I have helped clean out unit after unit of absolute crap when people didn’t pay their bills. But their over consumption is the college fund. For my brothers children….

        Reply
  • Jacob September 20, 2013, 11:22 am

    “You don’t Pay to Have Shit Stored”

    This one always blows my mind. I drive by SO MANY storage units on the way to work, and I seriously can’t comprehend how SO MANY PEOPLE hoard up enough crap to have to protect and store it somewhere else. I think the other half of this is “SELL CRAP WHEN YOU’RE DONE WITH IT”. We’ve been doing this for years, and selling stuff has funded our house projects for the entire year. Also, we’re effectively just borrowing everything we own, because we sell it when we’re done. At worst, we donate it to a reputable charity and get a tax write-off.

    Taking that into account, hoarding junk is a double-whammy. You keep stuff that continues to lose value, and are PAYING to store it and NOT USE IT. WTF?! Pretty sure that is what INSANE people do…

    Reply
  • Rory & Robin September 20, 2013, 11:24 am

    Excellent refresher on the fundamentals! #3 & #4, simply not ‘buying $hit you can’t afford’ and ‘$hit you don’t need’ is 90% of the battle.

    I would add my own little credo to it, though: “Money spent is a choice.”

    When you spend a dollar, you are saying, ‘I can’t think of a single better thing for this dollar to be spent on.’ If you then complain that you’d love to stay at home with the kids but can’t afford to, be sure to remember that new car payment. Then reflect on the fact that you made a choice. You decided that the new car was more important than your child.

    Now, use this process for all of your spending. Make a list of things you’d like to do: maybe stay home with the kids, retire early, save for your kids college, take a year off to travel, change careers, whatever. Then ask yourself whether the dollar you are spending is more important than everything on your list.

    Next, look at your spouse’s list. Is it more important than his/her dreams? Are you being fair to him/her when you spend money on whatever it is that you have to have?

    Or, are you being selfish instead?

    If that hurts, well, maybe it should. People don’t change unless the pain of changing is less than the pain of staying the same.

    Reply
    • Mrs PoP September 20, 2013, 11:42 am

      I agree that #3 and #4 hit the highest notes, though I’d also add immediately thereafter:
      Don’t buy $hit. (And by that I mean low quality stuff.)
      Not saying we should all go around wearing silk suits, but if it’s going to break and not be repairable, do you really want to bring it into your life?

      Reply
    • Mr. Hamlet Mustache September 21, 2013, 11:00 am

      To spend, or not to spend, that is the question:
      Whether ’tis Stashier in the bank to suffer
      The Nickels and Dimes of outrageous Frugality,
      Or to take Dollars against a Sea of baubles,
      And by spending get them: to buy, to keep
      Much more…

      Reply
    • SFBayAreaMMGrowers September 22, 2013, 12:04 am

      A correlated axiom is, “You can go broke ‘saving’ money”

      Reply
  • Rebecca Stapler September 20, 2013, 11:25 am

    Thumbs up on this post. I am that person stocking up on the proverbial 12 lbs of cheese! With the flask, at least you got a picture — now you share the pic and it takes up a lot less space, and money, than the actual flask. I have noticed that my spending is WAY down now that I don’t go shopping except for groceries.

    Reply
    • SZQ September 21, 2013, 7:22 am

      Yep, me too! Stay out of the malls, and I don’t know what’s “fashionable” and don’t need to know all of the “must haves!” I’m pretty oblivious to it now. And when I go into Target, I try to make it when I have to be “in & out” in a short amount of time – otherwise dwaddling in Target is not good! ;-)

      Reply
    • Brooks Conkle September 24, 2013, 9:53 am

      Nothing wrong with 12 lbs. of cheesy cheese!!

      And for me, it’s the restaurants.
      If I said yes to all offers to ‘go grab lunch’ I’d be eating 5 days a week.
      I try not to eat out unless it’s for a special occasion or for a business meeting.

      Unfortunately I always have to tell folks, “I can’t make it, I’ve got an appointment” or something, because they just don’t get “I don’t want to waste the cash”

      Reply
  • Tracy September 20, 2013, 11:26 am

    I decided against automatic bill payments several years ago when my phone company sent me a bill for $8000+ for one call that had never occurred. No amount of reasoning (or proof) could convince them that I did not owe that money, and I still receive weekly collections calls about it. Had I been enrolled in auto pay, they would have taken that money and I don’t believe I’d have gotten it back.

    Reply
    • Mr. Money Mustache September 20, 2013, 11:29 am

      Weird! Nothing like that has ever happened in my life, or to anyone I know.

      What phone company was it? We might as well make a public spectacle of them here (you might send your story in to the “consumerist” blog as well, run by Consumer Reports magazine). Send a scan of the bill if you have it.

      Reply
      • Tracy September 20, 2013, 12:04 pm

        It was AT&T. At the time, I had them as the long distance provider, with another company providing local service. (Business line, semi-rural- it’s all we could get at the time.) AT&T investigated the charge and determined it to be my phone equipment that caused the error. The Public Utility Commission told me to contact the FCC, the FCC didn’t express any interest and kind of just ignored me. NCO Financial used some pretty unsavory methods in their attempt to collect, too. It was a real cluster!@#$ at the time.

        Reply
        • Cyndy September 20, 2013, 2:01 pm

          We had to do the same back when we had a land line with Qwest we started getting collect calls from Cuba charged to our bill. We eventually got the charges removed but we cancelled the autopay just in case.

          Reply
      • Dee September 21, 2013, 11:42 am

        I pay all of my utilities automatically. Each utility (gas, electric, and water/sewer) sends me a copy of the bill (which I have now receive via email) a full 2 weeks before any money is going to be paid. When I did once receive an incorrect bill, I had plenty of time to call them and they promptly corrected the error.

        Reply
        • PW September 21, 2013, 3:48 pm

          I like to autopay bills with my credit card that earns 1% dividends. This way I protect my actual bank account, earn a microscopic amount of interest on the money while I wait for the credit card bill, and get bonus cash back from my credit card.

          Reply
    • Mike Stankavich September 20, 2013, 11:44 am

      Avoiding automation is one way to protect against being overcharged. Another way of eliminating the risk is to use a separate bank account for automatic bill pay that has only enough to pay any outstanding bills and a modest margin of error. In the case of the outsized bill the bank would decline the withdrawal due to insufficient funds.

      Reply
      • Dillon September 20, 2013, 1:26 pm

        Automation does not and should not equal ignorance. You may just as easily monitor your monthly bills and inquire about charges during billing periods with automated payments as you would with manual. And for whatever reason if you couldn’t get an erroneous charge taken off and were going to fight back a little more, you can simply change to manual payment until the situation is resolved if you so desired.

        Reply
    • Jay September 20, 2013, 11:49 am

      If you sign up for billing with your bank, instead of your service provider (meaning you sign into the bank website and type in your account number with the phone company, instead of the other way around), you will usually have an option like “alert me if the bill is higher than x”. All the benefits of auto-pay and you can still handle the edge cases. Not to mention the bank will send you an email a couple of days before they make the payment anyway.

      Reply
      • Tracy September 20, 2013, 12:06 pm

        Good plan.

        Reply
    • squashroll September 20, 2013, 12:32 pm

      Tracy- I agree with your approach. Never observed a ludicrous charge like that, but sometimes I do get over-charged. Comcast is a regular violator.
      For this reason I use my credit union’s bill pay, but I manually enter the amount and payment date for each bill. This process takes about 15 minutes a month and not only allows me to be mindful of the money going out, but also verify the legitimacy of a charge.
      A caveat would be the hour of wasted time arguing with ‘customer service’ folks at xyz, after the bogus charge is discovered…

      Reply
    • dc September 20, 2013, 4:14 pm

      I was going to say the same thing. Both AT&T and Comcast have tried to pull one over on me, more than once. I have automatic minimum payments from my bill pay account to theirs and then periodically check to make sure there aren’t any “extras” but I would never let these companies control my money.

      I was paying my credit card this way (one cc, paid in full every month) but then the credit card company started charging me “late fees” even though my payment wasn’t late, so I succumbed to them doing auto-pay, but I’m not happy about it and review everything bi-weekly.

      Reply
    • Executioner September 20, 2013, 5:23 pm

      Couldn’t agree more about avoiding the automatic bill payments. A few years ago I worked in a department that was in charge of correcting mistakes to automatic payments, among other things. Mistakes do happen, and when they do, they can really mess things up. The lesson I learned from this is that I never let ANYONE “pull” money from any of my accounts. It is always “pushed” out, by me, and closely monitored afterward for correctness.

      Reply
      • SZQ September 21, 2013, 7:24 am

        AGREE! I’m always the one plugging in the $$ amount going OUT of our accounts!

        Reply
      • Mother Frugal September 21, 2013, 10:46 am

        Yeah, I don’t trust automatic withdrawals. I’ve seen too many people get burned by them. The only time I did one was with my old mortgage, which was at the same place as my checking account (a local place I trust). Otherwise, I manually authorize my bank to make the payments.

        I sleep better this way.

        Reply
      • SwordGuy September 21, 2013, 11:01 am

        Agreed. I don’t like auto-payments where the vendor pulls money from my accounts. I want to decide when (or whether!!!) I pay that bill.

        It’s the same reason I refuse to use a debit card instead of a credit card.
        If someone makes a fraudulent charge on my credit card, the bank has paid the charge and they have to convince me to repay them.

        If someone makes a fraudulent charge on my debit card, **I** have paid the fraudulent charge and have to convice the bank to repay me.

        Reply
        • Pimp mustache September 21, 2013, 1:26 pm

          Debit cards offer the same protections as credit cards when processed as credit. If one “fraudulent charge has you worried to use your debit card you have bigger issues.

          Reply
        • Michael49022 September 21, 2013, 5:18 pm

          If your debit card has mastercard, visa, etc on it, it carries the same protection as a credit card.

          Reply
    • Kenoryn September 20, 2013, 5:33 pm

      Well I’ve never had anything that extreme happen, but have certainly had errors in bills charged to me. Most of the time I get it sorted out and get the money back. I did have a hydro bill one time, when I was moving out of an apartment, that charged me $450 for the last week that I had been there. It showed up on the bill as electricity used, and I thought perhaps they had been estimating my meter readings all year and been way behind, or something. I called them to figure out what it was and the agent I talked to said, no, that was just my electricity used in the last week. Maybe I had left the oven on, she said. I pointed out that even if I had left the oven on for the entire week, with the door open so it never got up to temperature, it wouldn’t come close to that amount of electricity. I got nowhere trying to fight that one, and never got that money back.

      Reply
    • greg September 20, 2013, 7:41 pm

      yes – that’s the reason I stay on more manual control, but with calendar alerts. Some credit cards allow generating a new number linked to only a portion of the credit line so there is zero risk of losing anything above a set amount.

      In time, this will be automated. Totally do-able, but there’s just not the market demand. Maybe it really isn’t worthwhile enough for the credit card companies to partner that closely with other companies even with the potential savings …

      Reply
    • Anonymous September 21, 2013, 12:59 am

      I use automatic payments for any bill that’s guaranteed to be the same amount month after month, such as my insurance or cell phone. I use manual payments for any bill that can vary month-to-month, because I don’t ever want to get complacent, even about regular bills. Every time I get a bill, I want to take a moment to think about how it could be smaller, about what I did to make it as large as it is, or about how I made it smaller than the previous month and how I should repeat that.

      Reply
    • Ian September 21, 2013, 3:26 am

      I’ve heard of phone companies doing similar things pretty often here in Aus, too (not usually that much $, though).

      I’ve been overcharged quite a few times on my utility bills (usually in the tens of dollars range) enough times to still want to pay them manually.

      Reply
    • MoneyAhoy September 21, 2013, 6:39 am

      I have this same fear that something like this could occur.

      Also, I’ve made a monthly routine of paying all the bills, seeing how much we’ve saved, how much we can invest, how the investments have been going, and updating my financial spreadsheet. It’s a little against your advice, but the 30 minute routine once a month is a good ritual for me to keep track of all the incoming and outing $$$.

      Reply
    • Joe September 21, 2013, 3:02 pm

      What you are referring to is direct debit. Automated bill payments is the bank sending a check for the same amount every month that you specify. This is useful for recurring charges like rent, electricity, and fixed loan payments. But terrible for charges that can change monthly, like telephone.

      I made the mistake of allowing direct debits before and never again. ATT took $400 one month (by mistake), which caused my rent, credit, and utilities payment to not clear. Which caused additional charges. And in the case of the credit card, put me on a higher APR for 6 months.

      Reply
      • Christof September 24, 2013, 4:27 pm

        It really depends on where you are living… In most of Europe you have 8 weeks to reverse a direct debit transaction with a simple call to your bank whereas if you initiated the money transfer and made a mistake that is enirely your problem.

        Reply
    • Scott September 22, 2013, 9:02 am

      My Bank let’s you set auto-pay with provisions. So I have mine set to automatically pay the gas bill, AS LONG AS it’s less than $150.

      Reply
    • Nitin September 22, 2013, 10:04 am

      I haven’t had such a huge error, but companies like Rogers and Bell in Canada have invoiced me incorrectly on more than one occasion, and its a PITA to get it corrected. For this reason even I prefer to manually pay my bills. Paying 4 bills manually every month (through online banking), is worth the time for me.

      Reply
    • CincyCat September 23, 2013, 10:39 am

      Interesting.

      Personally, I don’t equate “auto pay” with “never look at the bill before I pay it.”

      I have several utilities, bills, etc. set up with e-bills via my bank. I check my bank “bill pay” center at least 2x per week, and take the following actions:

      1) check to make sure the amount scheduled to be paid is what I expected (You CAN cancel auto-pay e-bills &/or change the amounts to be paid); and,

      2) re-arrange the bill pay date so that it lines up better with our pay schedules. (You CAN change the pay dates.)

      By the way – if you cannot take these two simple actions via your bank’s bill pay center, then you need a new bank…

      Result: We’ve never had a situation where a bill was actually paid for an unexpected amount, and we never have “surprise” payments come out at inconvenient times of the month.

      Reply
  • David C. September 20, 2013, 11:29 am

    A great refresher course. I just wish I could get some of my family and friends to follow this simple advice. I would cut down on the amount of bitching, about not having enough money, that I have to hear from them.

    Last year, I received a rare bonus from my employer. This was practically unheard of and very unexpected. I immediately used it to pay off a note for a replacement HVAC system, for which I had not adequately planned.

    If my ex-wife, most definitely not a Mustachian, were still in the picture, I am sure she would have lobbied for something more materialistic.Marry right might be another common sense bit of advice to follow.

    Reply
    • MarciaB February 6, 2014, 8:52 am

      This would be an excellent topic for MMM to write about.

      Mr MMM – how about it?! :)

      Reply
  • BeatTheSeasons September 20, 2013, 11:29 am

    And to link #1 and #2 – on rare occasions where you do win money by gambling, if you haven’t learned the knowledge of how to run your finances through your own hard experience, you will promptly lose it all and be back to square one. There are plenty of bankrupt lottery winners in the world.

    More obvious wealth advice? Walking and cycling instead of driving!

    Reply
  • Miss Growing Green September 20, 2013, 11:35 am

    Speak it brother! Great post to bring everyone back to the basics, and I couldn’t agree more with everything you said.
    One note though, on #8: Stock up when thing are on sale:
    I find that certain members of my household (not me of course! ;) use this as an excuse to increase consumption, which can negate the savings from buying things on sale. In your cheese example, for example, increasing cheese consumption to 2 pounds a week simply because there is such an abundance of cheese in the fridge.
    Any suggestions for reducing that effect aside from more willpower?

    Reply
    • cptacek September 20, 2013, 11:58 am

      Put the cheese in the freezer instead? Perhaps by it being out of sight while grazing in front of the fridge, the rate of consumption wouldn’t go up.

      I’ve heard of people who can their produce from their garden planning on canning 26 of something, and then marking them with the dates that they can use them, so they can have homemade canned wax beans once every 2 weeks instead of blowing through all 26 cans in 2 months.

      Reply
    • Kenoryn September 20, 2013, 5:59 pm

      Agreed, and you see the marketing ploy all the time that says you can “Buy 3 and SAVE $6!” when, in fact, if you only need two and you buy three for more than the price of two you have saved nothing. And if you buy anything that you would not otherwise have bought you have definitely not saved any money, no matter how good a deal it was. People still have the mindset that bargains = savings, when in fact bargains = spending, at a slightly lower level than non-bargains.

      Re: the cheese example though, if you eat 2 lbs of cheese per week, at least that probably means you’re eating less of something else, and if it’s something as expensive as cheese (like meat) it all works out OK.

      Reply
  • Jimbo September 20, 2013, 11:37 am

    What about running a shady bookie service in the grey market, is that acceptable? I kid, I kid… Although technically running a successful lottery service is a spectacular use of mathematics.
    Anyway, this was a fun refresher course. First class of semester type of lesson.
    I am veeeeery curious as to where you were in Montreal that had lots of places closed on a Sunday. This is not France, we don’t do this usually… But yeah, in a city we don’t know sometimes it’s hard to find a good place to eat quickly in a timely manner. I try to spot groceries when I travel. Loooove doing groceries in other countries and peer into the soul of the inhabitants…

    Reply
    • Jay September 20, 2013, 11:57 am

      I highly recommend the “checking out foreign grocery stores” part. I find that to be a VERY enlightening part of travel. Even more so than checking out monuments or museums; those are geared towards visitors. Grocery stores are a window into the CURRENT culture and life of the country. So if you want to really learn about what the country and its people are like, go to the stores that regular people there shop at.

      Plus, I am endlessly fascinated by the designs of packaged food items (coffee, sauces, noodles whatever) and how they vary country to country (I’m not kidding). When I spent 2 weeks in the Netherlands last year visiting my sister, I volunteered for just about every grocery run.

      Reply
      • plam September 20, 2013, 6:46 pm

        I do like going to grocery stores but I find that there’s a lot of homogeneity now between stores in Canada and the US; many of the brands have become similar. Our North American brands have even made it to many other continents as well…

        Reply
      • Derek P. June 8, 2014, 3:37 am

        Same here. I travel mostly just to eat and most of the words I learn in any language are about acquiring food :)

        Reply
  • Ron September 20, 2013, 11:40 am

    Always interesting, and another example that people aren’t rational, that the higher the lottery gets, and the worse people’s odds become, the more they rush to buy additional tickets.

    One of my best money lessons as a parent was when a large package arrived at our home. Thinking it was from one of their grandmas, my young daughters got excited, only to learn it was for me. Six pairs of running shoes, one model old, meaning a different color. I told them, instead of paying $120/pair for the new model, I paid $60 for the old. “You saved $360 one of them exclaimed!” Nice that she could do that multiplication in her head I thought. A few months later, she bought an out-of-season school sweatshirt for half off.

    Reply
    • Brian1975 September 20, 2013, 12:23 pm

      The thing I find Ironic with the Lottery system is State’s push it as a way to help the poor and those who can’t afford this or that. I actually think they take the money from those very same people while giving a portion to those who are not poor. How is it our legislators can honestly suggest this is a good thing. They need to visit the face punching machine.

      Reply
      • Ron September 20, 2013, 12:33 pm

        Those of us who elect pro-lottery candidates need the face-punching.

        Reply
        • JW September 20, 2013, 6:06 pm

          I’ve grown tired of arguing with lottery ticket purchasers. Now I just thank them for their contributions to the education system and if they win, to the state income tax.

          People are so foolish and ignorant on this they think it is criminal that windfall’s are taxed but complain that dividends and capital gains aren’t taxed even higher.

          Reply
      • Anonymous September 21, 2013, 1:03 am

        While I’d rather see them cut the spending the lottery allows for, I’ll happily take the lottery over taxes, because the lottery is an optional tax only paid by the foolish.

        Reply
      • Cindy September 21, 2013, 11:30 pm

        A lottery is a tax on the stupid.

        Reply
      • Renee September 23, 2013, 11:01 am

        I’ve actually written a letter to my congressman suggesting we use the profits on the lottery to fund the food stamp program. Then the poor people who find enough money to buy a lottery ticket are actually funding their own food stamps.

        Reply
    • Brian Romanchuk September 20, 2013, 9:06 pm

      When the amounts got large, we would have an office pool to buy tickets. That was the only time I bought – I figured I did not want to be the only person in the department who was not a winner. If everyone else quit, there would have beena lot of work to do (although salary negotiation would be easier).

      Reply
  • jman September 20, 2013, 11:52 am

    I think it was Warren Buffett that said he used to restrain his spending by thinking of the cost of things not as the current cost but as what that money would be worth in 30 years if invested. As in, that TV will cost me $10,063 dollars in 2033 money – $1000 x 1.08^30.

    Reply
  • Mark September 20, 2013, 11:52 am

    I think that should read “Other things you never need to buy” vs. “Other things you ever need to buy” :)

    Reply
  • Done by Forty September 20, 2013, 11:53 am

    I love this line: “Every material object must be looked upon as a lifelong burden.”

    That’s exactly the thing I’m going to tell myself the next time I hear the siren call of consumption.

    As for an easy tip we all should do? Share things. Stuff that is rarely used ought to be shared with friends or others in your community. We share (rent) the bedroom in our house that we wouldn’t use. For over a year our neighbor borrowed our lawnmower (before going out and buying his own for some odd reason). We use his sawsall & other tools. When a friend brings over a new boardgame, we do not go out and buy it ourselves if we like it…we just ask them to bring it again in a few weeks.

    There is no flipping reason each house on the street needs to have one of everything. It’s shockingly inefficient on every level.

    Reply
    • Stephen September 20, 2013, 12:18 pm

      I tend to agree. I find that sharing most objects is way better than owning it and having to store it 98% of the time when you are not using it. That was the entertaining/sad thing I noticed about life in the suburbs is that everyone owns everything! I really like #4 better than #3. I find myself it situations where I don’t need something but could certainly afford it. I also liked the notion that buying my freedom should be my #1 priority.

      Reply
    • sockigal September 21, 2013, 10:57 am

      Living in the burbs myself, I have often wondered why everybody in the neighborhood has the exact same items like all the landscaping equipment when we each only use them maybe once every week during the summer and maybe once a month in the winter. It seems silly to waste of space and resources. I live in one of those planned communities and have often thought that it would be a great idea if we had a community center where there was communal property for all to share includiing: books, movies, magazines, yard equipment, a sewing machine, ect… All the things you don’t use much and could share.

      Reply
  • Christine September 20, 2013, 11:57 am

    Cheese is that much cheaper in the US?!?! Oh yet another thing we don’t get!!

    Reply
    • squashroll September 20, 2013, 12:35 pm

      Don’t you folks get universal health care? That’s gotta be better than cheaper cheese…

      Reply
      • Christine September 20, 2013, 12:44 pm

        Haha! Well yes. But our taxes are so high that it isn’t really “free healthcare” plus our healthcare has been cut back over the years too. I use my employer’s healthcare coverage to pay for prescriptions, dental, glasses and contact lenses. I’ll visit my doctor with an OHIP card. Here’s what OHIP covers:
        http://www.health.gov.on.ca/en/public/publications/ohip/services.aspx

        Honestly I wouldn’t think to only rely on OHIP alone. Luckily I’ve never had to.

        Reply
        • Kenoryn September 20, 2013, 6:22 pm

          Bizarrely we still actually pay less for healthcare than they do in the US! How do they manage to make it so expensive down there? OHIP is still pretty good though. I see lots of people on the forums, in comments etc., particularly in non-mustachian comments like the Washington Post article, saying that they can’t retire, or that they must save up some massive sum, for fear of a serious illness. You just don’t have to worry about that here. If I get a serious illness, or accidentally cut off a limb, people will take care of me. It’s all good. Also you don’t have to pay for general doctor visits. I’ve always wondered how this impacts people’s habits in the States – are they much more likely to avoid seeing a doctor about something, and wait until it’s more serious? What about annual/biennial physicals – would you still get them if you had to pay for it? (Since I hate getting them anyway I’m thinking that might be the tipping point for me. ;))

          Plus our taxes go to a lot more than just healthcare here – lots of other social/education programs that they don’t have the same way in the States. I do wish we had more sales tax and less income tax, though. GST back to 7%!

          Reply
        • jim September 20, 2013, 6:36 pm

          Christine,
          Thank you for being the sound of reason from Canada. WAKE UP AMERICA – there is no FREE lunch and there is no FREE health care.

          Reply
          • Jen September 22, 2013, 7:38 am

            No, but America’s system is not good. We shouldn’t be at the mercy of an employer for health care, because right when you get sick and lose a job is when you need it (and COBRA doesn’t work for most people who don’t have $1500/mo to spend while they are out of work).

            Also, hospitals should not get paid for every service they provide, it’s no wonder costs have gotten crazy. Docs should be on a salary and hospitals should be paid for outcomes.

            I am hoping the Affordable Care Act will start to bring some good changes in the over the top decadence of our health care system. I have visited doctors in England and they get good results but they are no nonsense! They don’t have to treat you like a McDonald’s customer and give you everything you want like we expect in the US.

            Reply
          • Kenoryn September 23, 2013, 11:49 am

            As a Canadian I think it is insane to have anything other than universal healthcare. When only the rich can ‘afford’ to get seriously ill – well, that’s just incredibly nuts. And sickening. Having to make decisions about your health based on money? Your entire life derailed because of an illness? It’s terrifying and it’s madness to throw your poorest people under the bus like that. And does that system save you money? Absolutely not – in fact it costs you almost twice as much as healthcare in Canada! Talk about a rip-off!
            http://kff.org/health-costs/issue-brief/snapshots-health-care-spending-in-the-united-states-selected-oecd-countries/

            Reply
          • Ishmael September 24, 2013, 8:11 am

            It’s not a “ffree lunch” or “free health care” – we pay for it collectively through taxes – which seems to be WAY more efficient than getting corporations and lawyers involved and waste vast resources bickering over who is going to pay for what, etc., Plus, there’s economies of scale for pharmaceuticals and equipment, controlling salaries, etc.

            It’s also legislated to be “universally accessible” – meaning everyone is treated equally according to need, regardless of whether you are rich or poor.

            It means Doctors making the critical decisions about your health, not “death panels” of lawyers and/or accountants. :)

            It also provides a means of identifying and mitigating wide-spread health issues that are starting to affect a large percentage of the population. There is always pressure on government to keep health care costs from rising, so they will take steps to improve the health of people overall. There were many successful anti-smoking campaigns over the last 20 years, for example.

            And it creates way more freedom – if I wish to change employers (or not have one), I am not forced to restrict my options based on the nuances of health plans.

            Universal health care has quite a few benefits over what exists in the US. It’s not perfect, by any stretch, but I recommend you study it more closely and ignore what the idiots on Faux News say.

            Reply
        • plam September 20, 2013, 7:00 pm

          Researchers at Statistics Canada have estimated that in the $50k-$99k range, Canadians pay about 5% more taxes, but then there is free healthcare. That would work out to $2500-$5000 for healthcare + other services.

          http://www.statcan.gc.ca/studies-etudes/75-001/archive/e-pdf/5071-eng.pdf

          Prescriptions actually cost less in Canada as well, because we regulate the price of patented medicines. They are known to be more expensive in the US than anywhere else in the world.

          But yes, cheese and cellphone plans are cheaper in the US.

          Reply
          • Alix September 21, 2013, 8:20 am

            WHY is cheese so expensive in Canada?

            Reply
            • seth September 21, 2013, 1:25 pm

              How cheap is it in the US? I’d never noticed it being expensive in Canada. OK, “regular” price is high, maybe CAD 16-21/kg, but who would pay that? At least in Ontario, it seems like somebody has it (unsliced cheddar and mozzarella anyway) on sale under $10/kg every month, and it’s in the $7-9 range every few months. Looking in my fridge, the expiry dates for medium cheddar are 6 months in the future.

              Reply
              • Kenoryn September 23, 2013, 12:03 pm

                Alas, I pay $29/kg for cheese (organic). Can you get organic cheese at Costco?

            • wendi1 September 22, 2013, 12:03 pm

              Cheese is expensive in Canada because of the Milk Marketing Boards. These organizations protect the interests of milk producers at the expense of the consumer.

              There is some political pressure on these organizations to bring prices down, hence the sale.

              Reply
        • Dan September 23, 2013, 10:23 am

          Christine, that’s the thing about universal healthcare in the US, the media portrays it as being “free” and the same service levels of our somewhat paid, somewhat subsidized US system. For example, we can get a hip replacement in the US immediately within needing one.
          People in the US simply don’t want to pay for healthcare, they would rather buy lottery tickets, cigarettes, booze and go uninsured instead.

          Reply
          • Christine September 23, 2013, 1:33 pm

            I can agree with some of this. If a person made a decent wage in the US and either the employer gave them healthcare or they paid for their own private healthcare, they may be doing better than a Canadian – as our wages tend to be lower and we are taxed 30-40%. I think once a person has this extra money in their own hands some will spend it on fun items.. instead of making sure their health is covered. Americans have that choice to spend their money however they see fit.. while the government of Canada will make sure we are covered for certain health conditions.

            I do have some concern about Americans making a low wage with multiple part time jobs. They might find it difficult to afford healthcare rates. However I’m not completely savvy to all the details of our healthcare systems.

            I do know you can dissolve all your assets in the United States and then the government will help you out. Some couples actually divorce so one person has all the assets while the other has nothing so their “pretend” spouse can get proper care. Seems pretty drastic to me though…

            Reply
            • Kenoryn September 25, 2013, 11:51 am

              You have to be making a serious amount of money to be taxed 30-40%. Here in Ontario, I make a little under $70K, and am taxed at 21%. My marginal tax rate is 32%, but that’s only applied to the upper portion of my income. If I made $30,000, I would be taxed at 13%. If I made $300,000, I would be taxed at almost 40%. You hit the 30% marker at about $120,000 (per person). So most Canadians certainly aren’t taxed at that rate. All of those figures of course assume no contribution to RRSPs, and no other tax credits like charitable/political contributions, public transit, kids in sports, etc.

              For a retired Mustachian, making, say, $30,000, your tax rate would be 13%, or $326/month. Here in Ontario healthcare is about 46% of government spending. That means you’re paying about $150/month for healthcare. Of course, that’s for a single person. If that $30,000 income is for a household, split between you and your spouse, your tax rate would be 6%, or $76/month ($152 between both spouses). That works out to a household cost of $69/month for healthcare – what a family like MMM’s would pay for healthcare in Canada. No deductible, of course. And obviously everyone is covered, regardless of their state of health, none of this ‘pre-existing health conditions’ BS.

              Of course the basic healthcare in Canada doesn’t cover dental work or glasses. These are covered by employer health insurance plans (also there is emergency dental care for kids in low-income families). Not sure if private health insurance in the US ordinarily covers these things – since MMM’s has a $10,000 deductible it would have to be some expensive dental work or glasses to make the threshold!

              Reply
              • Christine September 25, 2013, 12:12 pm

                Okay so yes I am talking about tax rate with no deductions. Don’t Americans also get tax breaks for contributing to retirement accounts? Also wouldn’t your marginal tax rate be closer to 32% or are you talking about your actual taxes paid after all deductions? What are Americans marginal vs actual taxes after their deductions??

                Okay so a larger range for marginal taxes is 20-40% (30K to 100K incomes)

              • Tara September 25, 2013, 12:19 pm

                At $65K and no deductions in Quebec, I am paying 33% income tax. That is effective tax rate, not marginal. My effective tax rate at the same salary in the US was around 10% less.

              • Kenoryn October 4, 2013, 8:16 am

                Yes, Americans would have deductions as well. But ignoring all deductions, the tax rate for 30K-100K incomes ranges from 13% to 27% in Ontario.

                The marginal tax rate is really not relevant as it does not determine how much you pay in taxes. All it tells you is how much you pay on one small piece of your income, which isn’t useful information when you want to know how much you’re actually paying in taxes in total.

                My point in considering deductions is that most of us don’t actually pay 13-27% taxes, we pay less, and therefore we pay less for healthcare, too. In the US, their costs for healthcare are not related to their income and deductions on income taxes do not lower their healthcare costs.

                In the States, they do not all use a tiered tax rate system. In Colorado, for example, state income taxes are 4.63% regardless of your income. That means higher income people tend to pay less and lower income people tend to pay more than they would in Canada. For the sake of comparison, in Colorado, at $30K you would pay 14.63%. At $100K you would pay 16.4%. (According to one online US income tax calculator. According to another one I found it would be 13%-23%. Not sure why I should get such different results for such a simple question…) Obviously I’m not a US tax expert so this is my best guess at rates. :)

                While we pay CPP and EI on top of that, it looks like Americans pay Social Security on top of that. According to this income tax calculator that was about 7.5% for both the $30K earner and the $100K earner.

                (Compare that to what I pay for EI and CPP, which is 4.7% for both combined.)

                Also, I understand American municipalities can charge income taxes as well. They don’t have that power here in Canada. So, for example, if you live in New York you will pay another 2.9-3.6% in taxes.

                Since 46% of our taxes go to healthcare, which Americans don’t get, their taxes should theoretically be 54% of ours in order for them to be paying the same amount of tax. As you can see the low-income earner pays way more than that, and even the $100K earner pays more than that, even on the low end tax estimates I got.

                In conclusion, Americans pay more tax than Canadians, healthcare aside, AND they pay more for healthcare, AND they pay more for added programs (i.e. social security). Unless you have a very high income. Very high income people pay less than they do in Canada.

                Tara: Quebec does have higher taxes, but at $65K you should still only be paying 26%. Are you including other deductions like CPP/EI premiums in that?

              • Tara C October 4, 2013, 9:43 am

                Yes, I was referring to the total of all deductions, not just federal and provincial income taxes.

    • Steve September 20, 2013, 9:36 pm

      I actually find that cheese is much more expensive in the US than Canada. And the selection is much better in Canada. The best place to buy it is Costco.

      Reply
  • Szarka September 20, 2013, 12:00 pm

    Closely related to “don’t buy stuff” is:

    Which is a better ROI, practicing to use the stuff/skills you’ve got already, or adding new letters to your alphabet?

    Those new letters come with a lot of expensive (and usually invisible) overhead. This has been the major lesson of the last year as we discovered the lifestyle we wanted, and have been eliminating associated goods of the lifestyle marketed to us. Marketing is now much less meaningful (have you watched The Century of the Self yet??), and that ‘fear of unrealized potential’ easier to dismiss with “that doesn’t fit into our lives now”.

    Reply
  • cptacek September 20, 2013, 12:01 pm

    Thinking specifically of food, don’t be brand loyal and give generic items a chance. At least try them. You might not even be able to tell the difference.

    Stock up on things you use, not things on a list someone else made for their pantry.

    Learn to make your own instead of buying it. For instance, yoghurt is very easy to make at home, even without a fancy yoghurt maker. Greek yoghurt, too!

    Reply
    • Debbie M September 20, 2013, 1:40 pm

      And in general being open to trying different strategies is a good idea. It’s amazing how many strategies there are that people have never heard of these days. Some people don’t even know how to cook anything because their parents never cooked, for example.

      Reply
      • imsharper February 18, 2014, 7:23 am

        My sister used to can all of our garden food stuffs … learned from my Grandma … I started a few years ago and when I married my husband (from Portugal) I (and my Mom) taught him … he is now the major “canner” for our little family and the tomato soup has never tasted better!!!

        I can’t believe how many people don’t bother to can their own produce… you always know what you are eating :)

        Reply
  • Giddings Plaza FI September 20, 2013, 12:07 pm

    Right, “You don’t pay to have your shit stored!” I have friends with storage units, or even worse, friends who are expanding their houses or moving to larger ones. Then they buy even more crap for their larger spaces, don’t know what to do with the outdated or unused crap, and yup, get storage units. Amusing and bemusing. Oh, and, from other bloggers, it looks like you had a great time in Ecuador!

    Reply
  • cdub September 20, 2013, 12:09 pm

    Well that’s it – I’m never moving to Canada. I LOVE CHEESE!

    Reply
    • Christine September 20, 2013, 12:14 pm

      LOL Why do I live here!?!?!?

      Reply
  • Abby P September 20, 2013, 12:15 pm

    Once I went shopping for a new pair of shorts. On this day at this store, shorts were on sale–buy one get one half off. I took one pair of shorts up to the counter. The sales clerk notified me of the sale, walked me back over to the shorts, and tried to get me to buy another pair because IT WAS SUCH A GOOD DEAL. I told her “No thanks, I only need one pair of shorts today, and I’m only going to buy one pair of shorts today.” She looked at me like I had just told her that I was from Mars.

    So my advice is, when you do have to go shopping with your list, remember that no store wants you to buy only the things that are on the list. They WANT you to over-consume and they advertise and arrange their products just for that purpose. Most coupons and sales are for things you’ve never heard of or that you never use or that you shouldn’t be eating/using because they are terrible for you. Buy one get one half off doesn’t matter if you only NEED one.

    Reply
  • Brian September 20, 2013, 12:16 pm

    Agree with most everything here. Except the part about not buying juice. What’s wrong with juice? I love juice. It’s delicious. Some people like the fermented variety, I like mine unadulterated and with breakfast.

    Reply
    • jay September 20, 2013, 2:21 pm

      Most juices have sugar and preservatives added, which make them bad for you. Even if a juice has no additives, it’s generally better to eat the fruit than squeeze it and drink its juice. The fruit gives you more nutrients and fiber from the bulk and the sugar is absorbed more slowly, which means you don’t get hungry for longer.

      Not to mention that processing the fruit into juice and packaging it means that more fuel and resources were expended (think how many juice containers you throw out or recycle). Oh, and you’re filling up the pockets of those same dastardly companies that lobby to sell carbonated sugar water in school cafeterias and deplete and pollute groundwater in third-world countries.

      Reply
    • Rachel September 20, 2013, 4:10 pm

      I’ll admit to buying juice now and then, but try to think of it as a treat. Juices take out a lot of the fiber and leave in the sugar. That can be quite a hit of sugar to your body. Also most store bought juices are hardly juice at all once you read the ingredients. It’s best to juice for yourself or seek out a product made direct from the fruit, nothing added, and preferably not twisted and turned into various states before being reconstitued into something that looks like juice.

      Reply
  • John Dough September 20, 2013, 12:36 pm

    Great post.

    I haven’t seen a post about raising a child in a sensible Mustachian way, and it may be on the horizon for me in the next couple of years. (Significant other’s idea, not mine). I’m lobbying strongly for none, or just one.

    What are the pitfalls and ways around overspending on kids?

    I plan to have my 3 family house paid off in 3.5 years, and looking at FI ideas, but a child may be a monkey wrench in my plans.

    $250,000 from infant to adult per child is very frightening to me.

    Reply
    • sweetncrunchy September 20, 2013, 6:48 pm

      Don’t forget that $250,000 is what the average slave to consumerism will spend on their child. It assumes that you’ll buy everything new, that you’ll use disposable diapers instead of reusing simple cloth prefolds, that you’ll believe that your baby HAS TO have the latest swing, bouncy chair, developmental toys, and ergonomic baby bottle, that you’ll supplement with formula (crazy expensive) rather than breastfeed exclusively, that you’ll buy all the snack foods that children are “supposed” to like. And don’t get me started on private preschools and extracurricular activities.

      The bottom line is that, as in every other area of life, how much money you spend on your child largely depends on the choices you make.

      Reply
      • Mr. Money Mustache September 20, 2013, 7:03 pm

        We’re still running at about $300/month for our son on average .. which implies about $72k total by the time he’s off making his own living and sending gifts home to his beloved parents..

        Reply
        • Prob8 September 20, 2013, 7:58 pm

          It might make some sense to break that $300 down a bit. That will probably produce a “light bulb” (or cfl bulb) moment for many readers with kids.

          Reply
          • squashroll September 21, 2013, 5:49 am

            LOL, “cfl light bulb moment”

            Reply
        • Justin G September 21, 2013, 12:28 pm

          I’ve definitely found that the cost of raising children is vastly exaggerated, just like most areas of life.

          Just keep that in mind when you’re telling people they should get rid of their dogs to keep expenses down. If you already have a dog, and you don’t fall prey to “ivy league doggie daycare syndrome,” pets are extremely cheap.

          My dog costs us about 15 bucks a month, including all food and flea treatments. They cost a bit at the outset, for their shots, neutering and whatnot, but if you aren’t the kind of person who panics and goes to the vet every time your doggie has the sniffles, the marginal cost of continuing ownership is extremely low, especially when considering the immense benefit they bring the home (teaching children how to interact with animals, providing friendship, home guarding and waste disposal services, keeping squirrels out of the garden, raccoons out of the garbage and foxes out of the chickens).

          I do agree that people in financial difficulty should hold off on GETTING a pet though, since that is the part that can be costly.

          As far as too much stuff goes, being in the military and moving every year really teaches you to hate your stuff. Nothing like packing it up, hauling it around and unpacking it constantly to make you very good at cost-benefit analysis.

          Particularly useful was our experiment in late 2011/early 2012, 4 people a dog and a cat in a 600 sq foot one bedroom (more of a loft, actually). Got our possessions pretty well optimized during that period, with surprisingly little rebound now that we’ve moved into a 1500 sq ft 3 bedroom.

          Reply
        • Nina September 22, 2013, 3:59 am

          300 dollar is a lot of money for 1 child.
          Here in Belgium we get monthly childcare. We have 2 kids, 4 and 5 years old. We raise them on the amount of childcare we get from our government (about 250 euros for both of them every month). And maybe we even ‘win’ some money on them for now. :-)
          Here in Belgium kindergarten is free. We buy clothing, shoes and toys second hand and sometimes we make furniture for them.
          We do go out on trips, we make about 2 birthday party’s for each of them every year (they get lots of presents from family and friends) and we go out having breakfast for one euro each now and then.
          Children can be a moneymaking hobby! ;-)

          Reply
    • Cats Eye September 20, 2013, 7:57 pm

      Sound thinking. There is absolutely no need to keep popping out babies simply because that is the norm. I’m at an age where people I run into ask me if I have family, and when I mention it’s a family of two, people get uncomfortably quiet. If you choose no kids and your SO is on board, power to you. We talk about conserving resources and stuff, but somehow the idea of over population doesn’t strike people as a form of overconsumption.

      Reply
      • Kelsey December 27, 2013, 12:09 pm

        +1

        We’re planning on no kids, but it’s uncomfortable to say “nope not having any” when people ask here in the South, where people are popping out babies left and right. For a little while I’ll be able to get away with “we’re going to enjoy our just-married time for awhile!” but I’ll have to think up a new excuse later on….

        Reply
    • MoneyAhoy September 21, 2013, 6:42 am

      You can get kids clothes, shoes, games, toys, etc. from yard sales for 95% off if you do a little pre-planning such as what MMM suggests.

      Seriously, if both parents work, the largest expense by far will be daycare. Figure this out, and everything else will be easy!

      Reply
    • sockigal September 21, 2013, 12:10 pm

      I have a 12 year old boy and a 16 year old girl. Having children is extremely expensive. Just last week I had to take my son to urgent care, his doctor, and to buy antibiotics, plus he had to have three different lab tests. With great insurance I was still out a bundle. So many things come up for kids that you never imagine like: school pictures, school fundraisers, yearbooks, art fees, class t-shirts, ect… Multiply these things by the number of kids you have and it adds up quickly. How do you say no? I only let them do one extra curriculars outside of school. They both do karate and are soon to be black belts. It costs $300 a month for both kids. I probably wouldn’t have let them start this activity with my new money mindset figuring the four years of karate would cost us over $14000. Ouch! But three years ago I wasn’t thinking about long term costs, just that having a black belt would look great on college apps. I would love an article written on cutting costs of raising kids frugally. If a bunch of us said no to the yearbooks, fundraisers, and class tshirts then I wouldn’t feel so bad!

      Reply
      • Mr. Money Mustache September 21, 2013, 2:51 pm

        Sockgal, I find that although kids can be very expensive, it’s still mostly in our control.

        So, wealthy people should have little hesitation about spending thousands per month on optional stuff (private schools, $300 karate, etc.)
        On the other hand, non-wealthy people might want to think twice about trying to squeeze a rich-kid lifestyle into a non-millionaire’s income.

        I wrote a bit about it here: http://www.mrmoneymustache.com/2011/10/12/avoiding-ivy-league-preschool-syndrome/

        In summary: you don’t need to spend on “opportunities” – kids will prosper if you give them support for unlimited learning (especially reading) – and most of this happens at home.

        As a counterpoint to the expensive stuff: even with fairly high wealth, our son chooses to do only a few low-cost extracurricular activities, and he is absolutely flourishing!

        Reply
        • Ann September 22, 2013, 6:20 pm

          We have 3 kids, ages 4, 9, and 11. Our monthly budget for kid activities (including the random school stuff like pictures) is $150. They probably eat half our food budget ($300) and use half our clothing budget ($100). Even adding in a $50 fudge factor for what I forgot, we are probably at about $200/kid. Add in savings for college and the $300/kid is very reasonable. We try to do one sport and one other activity per kid at a time, and go with school or park and rec activities. Like travel level baseball would be a couple thousand dollars (once you factor in the travel part) per season, while the park and rec league is $75/3 months. Scouting, at least at the levels we are at, is cheap too–and they can earn $$ towards camp by selling crap. I don’t factor in housing costs as we bought the house before Where it gets expensive is flying to visit family, but my parents usually cover that :)

          Reply
      • Brian September 21, 2013, 4:49 pm

        @sockigal

        I just have to say, I found it very funny about the blackbelt looking good on college apps.

        In that situation I would advocate lying. Just put it on the app, just lie. How would anyone be any wiser, ask you to fight for admittance to the University?

        Reply
        • plam September 23, 2013, 9:14 am

          Well, universities will expel students for lying on applications. So I don’t advocate that.

          Reply
      • Angela September 21, 2013, 5:33 pm

        If you really want to impress colleges, mentor your kid to start a non-profit or a business. I bet it will be a lot more rewarding (and cheaper) than spending a lot of money on extra-curriculars that look the same as everyone else’s.

        Reply
      • Dan September 23, 2013, 10:34 am

        Sockigal, I am the youngest of five children raised by parents with far less income than you have. Your expenses are in your head. They are manufactured. I didn’t do any sports but the inexpensive ones my school offered, had a paper route at 12, started working at McDonald’s at 15, went to college, studied accounting, got married had two kids, now 2 and 4, and am well on my way to a million dollars invested, over half way there. We 1. worked hard. 2. Lived well below our means 3. Didn’t do stupid stuff like “buy a house now” at the height of the market in 2006 when everyone told us we “had to.” It’s really easy if you grew up this way. Be a leader, not a sheep. Speak to your children about why you can’t afford to do karate, a black-belt might provide personal enjoyment, but they can get this as adults on their own dime and unless they do this professionally, won’t ever earn them another dime. Soccer is a very inexpensive and, in my opinion, one of the physically best children’s sports.

        Reply
  • Andy September 20, 2013, 12:55 pm

    I’ve been in the process of extricating myself from some crap–a chest freezer and temp control (for home brewing), bought for $360 and $50, respectively, sold for a combined $130; kegging equipment sold at a quarter of the purchase price; an industrial kitchen range (left from a house purchase) that lists at $3600 (mgfr site), $1000 refurbished, and sold for $300. Listed a guitar that was at least $250 10 years ago, couldn’t get $70 for it.

    The point, the thing I’m learning… think of the future value (or depreciated value) of every item before purchasing and then compare that to what the sticker says in the store. Will the usage be worth the difference? Crap depreciates in value at an alarming rate the second it walks out of that store, regardless of the condition.

    Just to be clear, I’m not saying don’t sell your crap because of how little you’ll make. The amounts I got for stuff noted above sucked, but at least it was better than zero and definitely better than paying to store it all somewhere. Sell!

    Reply
    • Michelle September 20, 2013, 2:36 pm

      On the flip side, when you do decide to buy something, shop at thrift stores and craigslist. I am downsizing and we are practically giving our stuff away. Some of the stuff is very good quality and gently used. There is also freecycle to get/give stuff for free. I got a rice maker and a bread maker through that site.

      Reply
      • Kenoryn September 20, 2013, 5:53 pm

        Agreed, that just means you should have bought this stuff from Craigslist/Kijiji in the first place! For many things the depreciation happens between “new” and “used” and doesn’t decrease much after that. I have a few items of furniture in my house that I paid under $100 for and can probably still get the same amount for now. If you get a good deal from someone who wants to sell quickly you might even be able to use it for a couple of years and sell it again for more than you paid. I got my living room couch for free and I figure I can get at least that for it when I get rid of it! ;)

        Reply
    • Emmers September 24, 2013, 5:26 am

      Interestingly, I am currently *considering* buying a chest freezer so that we can *save* money – by cooking ahead of time and freezing a whole week or two worth of meals. It’s all up to your individual situation.

      Reply
  • JMK September 20, 2013, 1:02 pm

    Good on you for leaving the mustacheoed flask behind. I’m sure everyone at sometime has been guilty of buying something because of the reaction it would get from others.

    Maybe it’s the admiring/envious glances. Maybe it’s the laughter. Maybe it’s so we somehow fit in with others and feel we now “belong”.
    I suspect it’s the same drive that causes people to post trivial nonsense on Twitter or Facebook hoping people will “like” whatever it is, or retweet it to someone else. It’s an odd human need for validation. And it’s often costly.

    Whatever it is eventually I’d like to think that a big step on the road to financial independence, is that we all stop spending money because of what others will think and instead spend our money only on what truly enriches our lives.

    Reply
    • Kenoryn September 20, 2013, 6:04 pm

      I’m sure it’s much more than “everyone at some time” – probably “most people at most times when making unnecessary consumer purchases”. Would people still get fancy cars and new clothes and tons of shoes if they knew no one else would ever see them? I doubt it.

      Reply
    • Angela September 21, 2013, 5:37 pm

      “The need for validation is often costly.” How true!

      I really like that MMM took a picture instead of buying the flask – a free way to share with us!

      Reply
  • Krista September 20, 2013, 1:10 pm

    Bank fees. My family members (Canadians) are always complaining about these. I can’t figure out why they haven’t switched to free checking accounts yet.

    Reply
    • Rob aka Captian and Mrs Slow September 21, 2013, 12:30 pm

      This brings up a good point, the cost of services.

      I just moved to Munich Germany home of sky high electricity costs so naturally the first thing I do is research providers. So I was talking to the neighbor and he seemed shocked that you could shop around. Than I our tenants gave notice, so I asked about heating and hydro and they spend an insane 100€ a month for a 1 bedroom apartment, I spend half that on a 3 bedroom place.

      Secondly I volunteer at the local food bank and was talking about the cost of cell phones and several people told me they spend 20€ a month. And I was like Holy shit batman, that’s expensive, So I proceeded to tell them about Aldi Talk. I pay 8€ a month for the same coverage. And when you’re poor every penny counts!!!!

      I figure between the two I’ll save 500€ a year, money that flows right to our bottom line.

      What I am struggling with is our furniture took a real shit kicking in the move and it’s really really hard not to lust after shiny new furniture!

      Reply
      • Spoonman. September 23, 2013, 1:11 pm

        It is amazing what people will donate to thrift stores. My wife and I have been very successful furnishing our house (moved two years ago from a 600 sqft apartment) with extraordinarily inexpensive but high-quality furniture from a local thrift store that benefits a hospital’s pregnant women and children fund.

        It is right next to Costco so we just stop in when we have to go to Costco, not buying anything most of the time of course.

        Even better, it has a rewards program, so we got a basically free ottoman last time we were there.

        Reply
      • Christof September 25, 2013, 1:31 pm

        There is a lot of furniture on http://kleinanzeigen.ebay.de (the German version of Craigslist).

        Reply
  • Elyse September 20, 2013, 1:12 pm

    I have read your blog a good while now. I just started my first “real job.”

    I save about 45% of my take home currently (includes 401k). I am about to buckle down and scale back my lifestyle, but it amazes me how I am ALREADY saving so much more than my coworkers! I feel like I’m spending so much, and yet they all ask why I’m not buying a new car or house.

    I can get down to 55% savings while still having a very nice apartment, nice clothes, still good social life, and rather expensive organic food. And I’m single. If I was married, like some of my coworkers, I would have so much more saved! My coworkers are paid the same I am. One of them was complaining about his bills. I have almost half my paycheck going straight to investments. I will never be complaining about money. I just don’t understand how they do this…

    You say people should know these rules…sadly I think that is very rare.

    Reply
    • JW September 20, 2013, 6:26 pm

      Most of it slips through their fingers in many small drips. Daily coffee purchases, $10 a week in lottery tix, eating out, paying credit card interest, upgrading to newest phones, expensive hair cuts, paying full price for essentials instead of coupons / deals, memberships never used, etc. All of that spending (hundreds per month) produces zero tangible assets, no improved lifestyle, and a pay check to pay check existence forever.

      Reply
    • Victor September 21, 2013, 3:09 am

      Being married doesn’t automatically mean that you save money. That is only true if your spouse has the same level of spending as you.

      You get to split the rent, but you don’t have as much flexibility about the location if both of you have to go to work. This might mean that you can’t get the cheapest place that would fit YOU, because it doesn’t fit YOU BOTH (i.e. might force the other person to commute).

      When you are single you can spend money only on the things you like to do (or choose to do things that does not require money). If your partner likes different things, you will probably end up doing at least some of that as well. In addition you probably want to do the stuff you like, so that might lead to just doing more stuff. And a part of this stuff might be more expensive then what you personally would choose to do if you were single.

      Of course, you can try to influence your partner, but you can’t force someone to change. What I’m trying to say is that it is incorrect to think that if one were to get married that would just mean that you can split the rent/utilities/internet etc. and thus save more $$$.

      Reply
      • Elyse September 23, 2013, 9:25 am

        But it shouldn’t spend the entire other paycheck. And it shouldn’t cost double, so both wind up saving at least a bit.

        I’m the type of person where I don’t know if I’ll ever get married. I would need complete compatibility with the other person. I know that is a lot, which is why I’m not unrealistic about the idea that it may never happen.

        My family is very open about the monthly budget. My mom retired early to raise my siblings and me, but she had as much say in what happened to my dad’s income as he did. Being married, to them, meant all the money was a group effort. So saving was a group effort. They saved the same amount (% wise) as each other back when she did work. They had different opinions, sure, but neither one was leaving the table without an agreement on how to handle the money.

        And I’m not settling for any less than that type of group effort. Sure, it will mean living expenses will go up. But income also goes up. And stay-at-home people can bring in income from home. My mom ran a very small business from home while raising us, back before the internet.

        Sure, people have different hobbies. People will do different things. But it shouldn’t equate cost of mortgage all over again, else they really need to look at their spending habits. Living expenses shouldn’t double for two people.

        Even when I had a roommate, it freed up around 20% of my take home pay, and we weren’t even splitting groceries. I’m not in a situation where I can do that right now, though.

        Reply
  • Scott September 20, 2013, 1:18 pm

    #5 really resonated with me. My wife and I marvel at the amount of shit people will pay to store.

    You may want to check that last line of #4, “Other things you ever need to buy:” maybe should be never?

    Anyway, thanks for the great site. My wife now has a $5.00 per month iPhone because of you.

    Reply
    • Mrs EconoWiser September 21, 2013, 1:17 am

      Ah, I wanted to point out the typo as well. I do believe MMM meant Never.

      Reply
  • Scott September 20, 2013, 1:32 pm

    “What are your things that should be obvious?”

    It should be obvious to everyone who agrees with everything on this list, and it’s sort of in there. But mine is:

    Don’t spend money you don’t have.

    If you write a check to the school and you know they won’t cash it for two weeks, do not try to use that money. Don’t ever attempt to float. If you write a check or an online payment, subtract it from your register and be done with it. Never mind that the bank says you have $700 but your register says you have $200.

    Reply
    • CincyCat September 23, 2013, 10:56 am

      The nice thing about my bank’s online system is that you can add placeholders for checks you wrote, and the bank will add that amount to the “planned spend,” and deduct it from the “free” (uncommitted) remaining balance. We also put in placeholders for the monthly transfers that we have set up for our “irregular expenses” account (taxes, insurance, etc.). It works great!

      Reply
  • Debbie M September 20, 2013, 1:34 pm

    Some people think that participating the market is gambling. So rather than saying never gamble, I’d say never gamble unless you know the odds are in your favor and only with money you can afford to lose.

    My biggest tip is don’t pay for stuff you don’t even want.

    Don’t do things that lead to getting late fees, speeding tickets, bounced checks, etc. Accidents happen, of course, but if they keep happening, try to find ways to change your behavior.

    Don’t buy things just because you’re supposed to or because it’s expected. You have your own priorities and desires–if you can spend less in other areas, then you’re ahead.

    Of course sometimes you have to buy things you don’t want directly due to indirect reasons. So you’d rather not wear clothes, but also would rather not live in prison (where they make you wear clothes anyway). My sister’s thinking of keeping a too-big coffee maker just so she doesn’t have to deal with my mom complaining every single time she visits. You might wear ties/high heels/make-up even though you don’t like them if they get you treated better at work. My brother found that wearing short-hair wigs made his life easier in many situations, from job interviews to getting pulled over by cops.

    Sometimes it’s shocking when you find out you don’t actually want some stuff that seemingly everybody else wants. But it can be freeing, too.

    Reply
  • Johnny Moneyseed September 20, 2013, 1:44 pm

    We marveled at those drinking flasks for a while. I’m surprised one of us didn’t falter and buy one to at least make Mustachian Rosés with for the remainder of the week. But, a picture is just as good enough in all reality.

    I didn’t realize until earlier this year that auto-payments were the best route to go. It always made sense to me to see my bills before paying them. But, like you said, why risk a late payment? We missed a payment once, because I thought I had already paid it. Never making that mistake again.

    Reply
    • Maslow September 20, 2013, 3:59 pm

      Taking pictures of things instead of buying them, and taking pictures of things before getting rid of them are great ways to satiate those “connection” neurons in our brains, yet not add to our Shitbase of stuff. I’ve used this Jedi Mind Trick on myself countless times.

      By taking a picture of the flask, MMM could describe it to Mrs. MM, M Jr., and all of us, without it ending up hanging on his wall.

      Awesome post!
      Maslow

      Reply
      • Emmers September 24, 2013, 5:32 am

        I’ve also used the “take a picture” strategy to finally sever my sentimental connection to some crap items (mostly clothes that were gifts from family but which no longer fit).

        Reply
        • Laura September 24, 2013, 5:54 pm

          Me, too. I recently got rid of things at my mom’s house that she had been keeping for some reason. HS scrapbooks, dolls, old toys. I took photos of my most treasured things and then dumped them.

          Reply
    • squashroll September 21, 2013, 6:05 am

      Whoa, whoa, whoa! That flask looks pretty badass– MMM, you go to a WEEKLY bike night? $10 for an item you would sling over your shoulder EVERY time, and worth less than the liquid it contains? Totally worth it! Not the same category as the usual gift shop garbage.

      Reply
  • Insourcelife September 20, 2013, 1:44 pm

    Let’s see, every single item on this list is how we try to live our lives already. End result? The 60-75% savings rate right inline with what was mentioned by MMM at the end of the article. I am constantly amazed by the number of people that choose not to live like this hoping to retire in their 70s or maybe “never”.

    Reply
  • GiNo September 20, 2013, 1:45 pm

    Cheese keeps a good deal longer than 3 months in the freezer. I agree that sustenance comes from your backpack while you are out and about and $30 restaurant tabs are a major cause of indigestion. Restaurants are best used when you have a coupon for 20% off as I did recently, coupled with a deal to earn points at an online site [points to be traded in for paypal money or other gift cards] when a certain credit card is used, and the restaurant gave an additional bonus of a free meal later if I completed an online survey reviewing my dining experience with them. I racked up!

    Reply
  • Mike T September 20, 2013, 1:59 pm

    One of my actuary friends calls the lottery a “tax on people who can’t do math.” hahahaha. That’s a simple way to put it.

    Reply
  • Moises September 20, 2013, 2:03 pm

    Do not compare yourself with other people. Sometimes, they look richer than actually are, and there’s planty of people trying to be like them. Don’t be this person. Capitalism encourage us to fight each other when we are, in fact, giving money to whom are already the big shots, and getting less money than just comparing our situation with ourselves in the past. Try to be better than you yesterday, and not better than your neighbor with a more expensive car.

    Reply
  • Sandy September 20, 2013, 2:29 pm

    My obvious lifestyle tip is that you can do without a cable subscription. Really!

    When I used to tell people I had a full-time job, was in school part-time, with daily hours of study time needed and still managed to run my house and family AND find time for hobbies etc., folks would marvel. “Where do you find the time?” they’d ask.

    Turn of your tv! Really. You’ll have truckloads of time to spare in which you can actually do something more useful and I promise: without cable, you will live (and even thrive!).

    Reply
  • Dan Michaud September 20, 2013, 3:42 pm

    Five things that are crucial to my well being but the mere idea of doing seem to make a lot of people’s heads explode:
    1. I don’t own a TV
    2. I cook almost all my meals and bring leftovers for lunch
    3. I walk or ride my bike to work, to the grocery store, and anywhere I can
    4. I hang my clothes up to dry
    5. I borrow books from the library

    Reply
    • Leno September 20, 2013, 5:05 pm

      I do all of these except for number 4. :)

      Reply
    • mike September 20, 2013, 8:50 pm

      You’re a good man Dan. Keep it up. Inspiring.

      Reply
    • meagain September 21, 2013, 12:27 am

      Me too on every item on your list.

      1. I have enough to do without tv. My internet provider keeps calling, trying to convince me to get “extra value” by adding their cable. They just can’t seem to grasp the concept of not owning a tv.

      2. Makes sense. I’m just surprised more people don’t do it! Eating out is a luxury.

      3. Choosing to not own a car means I have no choice but to walk or bike, and it keeps me fitter and allows me to have belly room and money for extra chocolate bars.

      4. I’ve been doing this one for over two years now and don’t know why it took so long to get started. Clothes last longer. When it’s hot, the clothes dry from the heat. When it’s cold, they dry from the warm air used to heat the home anyway.

      5. I just started grad school, and it’s amazing how many students buy the expensive books and complain about it when within 15 minutes managed to request nearly all of them online from the school or local library.

      Reply
      • David W September 23, 2013, 8:00 am

        Every time my cable (internet) provider asks if I’d like to save by adding services I ask a couple of simple questions.

        1. How much am I paying now?
        2. How much would my bill be after “saving by bundling”?
        3. How is that saving if I’m spending more?

        They rarely have a response.

        Reply
      • Gypsy Queen October 4, 2013, 6:07 pm

        Also about #4 in the cold: the house smells like clean laundry, and the heated air gets back the humidity it needs.

        Reply
    • MoneyAhoy September 21, 2013, 6:45 am

      Awesome – go to the head of the class!

      Reply
  • Marcia September 20, 2013, 4:02 pm

    So why do old people gamble? I mean, my mom, who never paid the lottery, in her last couple of years would go play the slots at the Indian casinos.

    And my friends’ parents do the same. All around the age of 60, it started.

    Reply
    • Jennifer September 21, 2013, 3:58 am

      My mom and her sisters (65+) do this too which seems so strange to me since they are all very frugal people.

      Reply
    • MoneyAhoy September 21, 2013, 6:46 am

      Greed. The chance of winning a lot of money is a strong lure for many people. They can’t see that in the long run the odds say they will almost certainly lose money.

      Reply
      • Marcia @Frugal Healthy Simple September 21, 2013, 7:15 pm

        But why does it start at 60? At least in my mom’s case, she never played more than she could lose (I think she and my stepdad never gambled more than $50).

        But that’s not the case for all my friends’ parents.

        Reply
        • Ann September 22, 2013, 6:25 pm

          Company? In some ways, spending $10 to play Bingo with a bunch of other people might be a better choice than $10 to watch a movie. My mindset is that if you view it as ENTERTAINMENT and can afford it, have a nice time. My roommates and I bought $10 of scratch off lottery tickets at the beginning of the year in college, and rolled the money we earned to buy tickets the next trip. That $10 lasted the entire school year, and was waaaay more entertaining than one movie.

          Reply
          • De Minimis September 25, 2013, 5:18 pm

            I think in many cases it’s retired old folks that are the big gamblers, or at least the ones I’ve known have been that way.

            Guess they figure the check will come in every month no matter what, so no big deal if they blow some of it. However, the people I know who have been this way have almost always been dead broke at the end of the month, every month.

            Reply
  • Micro September 20, 2013, 4:23 pm

    I know I have the option of putting my bills on auto pilot but I just don’t like the idea of doing it. I like having the control to have to send in the payment because it forces me to see what I am being billed for. I am more likely to spot an erroneous charge that way. It also helps make things easier change what card pays the bill if I need to close the account.

    Reply
  • henrigolo September 20, 2013, 5:37 pm

    Funny, there is a $3000 set of cobalt-blue LG laundry machines in the place I rent. For real!

    Given the rent I pay, the landlord must be hemorrhaging tons of money. I have a price-to-rent ratio of 32, it takes 3.5 months of rent payments to cover property taxes, and another 2 months to cover maintenance fees. Under these circumstances, a house is some shit I can’t afford.

    But this is Canada and it’s different here, house prices always go up, so landlord will be a multimillionaire soon. (sarcasm off)

    Reply
  • Jane Savers @ Solving The Money Puzzle September 20, 2013, 5:42 pm

    My ex-husband has a full sized transport trailer full of stuff parked in his driveway and 2 more full to capacity at his friend’s property. He is very proud of all his stuff. I like to throw things out. It is a big part of why we are divorced.

    Stuff drains your money and your energy.

    Reply
  • Kenoryn September 20, 2013, 6:05 pm

    How about: don’t smoke! It amazes me how the poorest people in our society tend to be the smokers. How do they do it?? It is so incredibly, unbelievably expensive to smoke, and so totally, indisputably unnecessary.

    Reply
    • Scott September 20, 2013, 6:16 pm

      They smoke because it is a drug addiction. Addicts will often give priority to what they are addicted to over food, hygiene, etc. If you smoke, hygiene is usually not that high on the list of priorities. Use all the mouthwash you want, I can still tell you are a smoker at 10 paces.

      Reply
    • ael September 21, 2013, 12:54 am

      I used to smoke a pipe–perhaps cheaper for supplies and slightly less dangerous than cigarettes. On the eve of my 46th birthday so I could say I quit when I was 45 I smoked it one last enjoyable time at sundown, dug a hole on a farm I rented and buried the pipe. I knew I was too cheap to buy another. That has been 26 years now.

      So my point is the utility of irrevocable decisions in furthering your goals. It can be applied in many situations. A close and previously MMM espoused corollary to this would be making yourself accountable to others for changes you need to make. Works.

      Reply
  • Harriet September 20, 2013, 6:16 pm

    I just had to comment on this: I’m 55 years old and have been doing all the things you suggest for most of my life. The only one I don’t usually do is stock up when things are on sale. My reasoning is that generally the “sale” isn’t that great — just a ploy to get you to spend more than you had intended — and oftentimes the stuff will go bad or degrade in some way before you get around to using it, and I just don’t want to have to store it and be tripping over it for months on end. Otherwise, I feel oddly gratified that you advise people to follow most of my habits. :)

    Reply
  • Maverick September 20, 2013, 6:17 pm

    Yep, I don’t autopay for the same reasons others have mentioned. I do take interest in seeing what people discard at the curb on trash day. So many tv’s, children’s plastic toys and cheap pressboard furniture! All of it was junk the day they bought it. On recycling day you will likely find lite beer cans in their recycling bin. Just like inferior products, I don’t understand people who buy inferior (lite) beer. Have one good quality beer, say a German wheat beer, and call it a day. Nope Joe American needs a 30 pack Coors lite on Friday nite…don’t get me started. :)

    Reply
  • Steve September 20, 2013, 6:21 pm

    As always I agree with the majority of your writing, but have to completely disagree with your first point. Yes, certain types of gambling are for idiots (lotteries, slots, casino games). But by using the same principles we use for stock investing and a Maths based model, it is possible to make a much better return then any other investment.

    I have been testing this myself over the past 3 years and have tracked everything on my blog. In those 3 years I have made over $200,000 by betting on sports.

    Next time a bit of research might be practical before saying gambling is not a way to make money.

    In saying all that, I would not recommend people try this unless they have great self control and can manage their own finances.

    Reply
  • Justin @ RootofGood September 20, 2013, 6:22 pm

    I feel so mustachian! Other than some bottled water, junk food, juice and soda purchases, I conform perfectly to the 8 fold path as laid out by Mr. Mustache. Living a simple authentic life makes me feel (and actually be) wealthy!

    Reply
  • jim September 20, 2013, 6:24 pm

    Oh God! I loved this article. Great job cutting thru the crap and laying it on the line. Hell, you sounded like me talking to our kids – ha! Altho I must admit the “no gambling” as sound advice as it is (and it definitely is) did tug at my heart ’cause I remember having LOTS of good times in Vegas – back in the day – ha!

    Reply
  • Ivan September 20, 2013, 6:34 pm

    Definitely agree with #1, #3, and #4. And I absolutely cannot believe people do #5!

    I use to go out to restaurants a lot too. Then I realize I’m way overpaying on food that wasn’t healthy and aren’t even that good. I still go to restaurants with friends occasionally. But now it is a very planned and conscious decision to do so.

    One more rule I would add is this: go ahead and read/listen/watch how other people invest, but YOU decide what’s best for you and don’t let anyone else tell you otherwise. I know people who blindly trust their money to someone to manage just because they don’t want to learn a few basic concepts. Scary…

    It’s your future, so wouldn’t you want to know what’s being planned for you?

    Reply
  • Frugal in DC September 20, 2013, 6:39 pm

    With Halloween around the corner, I’ll add a modified version of what I always tell my kids: There are many *tricks* in our consumerist society to separate you from your money. The real *treat* is financial independence.

    As a corollary to #4, I’ll also add “Run, don’t walk, away from shit with luxury status symbols.” This includes things like luxury cars and handbags with designer symbols plastered all over them.

    Reply
    • Brenden September 20, 2013, 8:09 pm

      Clever saying! I agree with your corollary. Luxury symbols and branded goods often seem to have a high markup. Personally I have stopped buying shirts with words or symbols on them. They don’t age as fast. I know a guy who wore a lot of “Big Dog” brand shirts. Now I laugh to myself when I see one out in public.

      Reply
      • SZQ September 21, 2013, 7:44 am

        Yep – AGREE! My husband always said we’d never live in our money (McMansion), drive our money (flashy cars), or wear our money (designer clothing/bags/shoes). Probably the reason we have a net worth of $5M today – instead of making those executives at Coach & Lacoste, etc. rich, we made ourselves rich! :-)

        Reply
  • Mustachian in the Making September 20, 2013, 6:41 pm

    Oh great, of course I read this before we go out for dinner. We are still on the right track though so I can’t complain too much.

    Reply
  • Fellow travelling mustache September 20, 2013, 7:26 pm

    Great post.

    I have a friend who’s been hit hard by the recession. He’s in his middle 50’s, lost a good job, and now has a low wage job as a delivery man. Fortunately, he has no children to support and has been single for many years.

    All the detritus of the middle class life that he lived but couldn’t afford even when he did have a well paying job is in a storage bin for which he pays a monthly fee out of the tips on which he lives.

    We were talking the other night, and he said he planned on retiring two days before he dies, adding that he figured that the financial mistakes he’s made in his life have cost him a million dollars. I agreed and suggested he start trying to save a little money now.

    He said it wasn’t possible on what he makes.

    “Are you sure?” I said.

    “Oh, I could save if I tried,” he replied, in a tone suggesting he couldn’t possibly make the effort.

    Sad.

    Reply
  • Rich M September 20, 2013, 7:57 pm

    One of my favorite posts!

    Reply
  • dodojojo September 20, 2013, 8:04 pm

    I pretty much got out of buying tchotkes on travels due to a backpack. Not much to be being frugal. I bought the wrong type of backpack for backpacking traveling and it was too damn heavy. The thought of buying stuff, any stuff, to add onto the weight sent shivers down my back. I had a no buying crap rule just because I didn’t want carry it around for the rest of my trip.

    As I grow older, I just have a no buy crap rule period.

    Reply
  • lentilman September 20, 2013, 8:21 pm

    Fantastic article.

    The best item was about people who pay to store items. This has always baffled me, although I have family that does it.

    The weakest item was about gambling – your examples such a the lottery were correct, of course, but too simplistic. There are many types of wagers that you can make where the outcome is uncertain but have a long-term positive expected value. Examples include the market (as a poster above pointed out), loaning money P2P, laying insurance (those 100 story insurance buildings are paid for by profits), poker (assuming proper skill), and blackjack (assuming a competent counter).

    Reply
    • KMB September 21, 2013, 5:52 am

      Excellent point Lentilman

      With a small amount of study, the typical house edge in blackjack is about .5%. However, with additional study and the willingness to think while you play this edge is pretty easily reversed.

      This actually makes for a nice metaphor to mustachianism. The House, aka society at large, expects you not to think while you play, and actually, some people are so brainwashed as to consider it illegal!

      Reply
  • mike September 20, 2013, 8:47 pm

    I was going to post in the forums if anyone bought a lottery ticket this week at $400MM.

    Boy, I’m sure glad I didn’t post that. I would have been in deep doo doo;-)

    Reply
  • alison September 20, 2013, 10:06 pm

    I got a small raise this year, cost-of-living adjustment kind of thing. I immediately figured out the monthly difference between new paycheck and old paycheck, and increased my automatic monthly deposit to Vangaurd accordingly. I’ll never know the difference. (I imagine the cost of living will catch up eventually, but until it does, this seems like no-brainer to do every year when the raise happens)

    Reply
    • Spoonman. September 23, 2013, 1:17 pm

      Don’t forget the power of asking for a raise. I did that last week and got a big-ass raise – more than I asked for.

      Reply
  • Numbers September 20, 2013, 10:21 pm

    I’ve been a lurker for a few months now and have a basic question as well as a comment.

    I was thinking through the 50-75% savings goal that is referred to and realized you have to be talking about after tax income %. Is that correct? In our household we have something like a 30% federal and state combined rate… That said, we are on track for ~51% savings of net income this year.

    Secondly, after some thought I think you have the terminology wrong. You are NOT retired (though the main stream media will pick on that term better for sure). What you are is: Financially Independent. How else can you explain all the ‘work’ you do?

    Reply
    • Mr. Money Mustache September 21, 2013, 9:53 am

      Yes – I always define savings rate as a percentage of your take-home, rather than gross, pay.

      As for retirement: I hear you – that’s why we decided to redefine the word to something more suitable for modern times (after all, who wants to retire early and then do NOTHING??)

      This happened in February, 2013: http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-vs-the-internet-retirement-police/

      Reply
      • Kenoryn October 4, 2013, 2:37 pm

        I think this is a mental block/bias issue, actually, and not a definitions issue. People don’t REALLY think that you only count as retired if you spend all your time playing golf or watching TV. But they basically think you can’t be retired when you’re so young. If they were talking about a person who put in a 45-year career and retired from it at age 65, and in retirement took the occasional odd job helping someone build a deck, I’m willing to bet they wouldn’t be pointing fingers at that guy and saying, “Aha! That’s work! You’re not retired!!” – It’s just that you don’t fit their mental stereotype of a retired person. There is no real logic to their definition. Retired means you are finished your career and no longer work for a living, and I’m pretty sure that it means that to the Internet Retirement Police as well. They’re just taking the opportunity to nitpick about things that don’t fit into their current worldview.

        Reply
  • 5inatrailer September 20, 2013, 10:22 pm

    I actually derive pleasure by paying my bills individually through a mobile app on my phone when the bill arrives in the mail. Mind you, i only have a electric bill (no water/sewer//gas/garbage, ) and the monthly credit card (at 3%cashback).

    I know they did a psychological study once that proved the same thing- people like paying their bills….

    Reply
    • Wrecked September 21, 2013, 7:40 am

      I absolutely hate paying bills. Unfortunately in my country it is only possible to put bills on automatic if the monthly amount is fixed.

      Reply
  • Anne-Marie September 20, 2013, 10:26 pm

    My obvious lifestyle tip: You don’t pay someone to do jobs you can (learn to) do yourself.
    My husband and I have repaired our dishwasher, remodeled our bathroom, diagnosed a major electrical fault for the power company to fix, replaced a gear in the mixer, etc., etc. Google, the library, and Youtube can teach you how to do almost anything.

    Reply
    • Leslie September 21, 2013, 12:26 pm

      My hubby and I were cleaning our townhouse today, and figured that we save $350/month doing it ourselves, based on the rate we were quoted for biweekly basic cleaning from a national franchise service in Rockville MD (a ridiculously overpriced area in which to live and we can’t wait to move back to Colorado). $4200/year! makes us feel better when we’re swabbing out those bathrooms.

      Reply
  • Survive The Valley September 20, 2013, 11:19 pm

    I have a PUYOS philosophy… i.e. “Pick Up Your Own Shit”! What I mean is stop outsourcing tasks to others… whether it’s cleaning your house, hiring a gardener, or even buying a latte every morning on the way to work. Learn to do these things for yourself and not only can you become a worldly renaissance man, you can also save tons of money!

    Reply
    • meagain September 21, 2013, 12:32 am

      Amen

      Reply
    • Osprey September 21, 2013, 4:09 am

      Exactly this. The idea of insourcing and “muscle over motor” is unfortunately very unpopular. But once people change their mindset about these things I believe there will be an amazing ripple effect into all areas of society.

      Reply
  • Ann Stanley September 21, 2013, 1:19 am

    Last week I decided to quit my well-paying job to pursue the simple life I’ve imagined for years. We have a house and are debt free but have very little savings so I’ll still have to work for a living and spend less. Bring it on! Being able to pay for restaurant meals and expensive gifts is not the road to happiness. I’m changing my habits with MMM and ‘Your Money or Your Life’ for support and here is today’s success:
    I walked with my husband in the sunshine to the op-shop at the end of my street and bought Katharine Hepburn’s autobiography for 50cents. This is to read on the plane tomorrow and replaces the $20+ book I always buy at the airport for holiday reading. (Books in Australia are like cheese in Canada). I walked away from the set of beautiful crystal glasses in the same shop, saving myself $15. We sat in the sun at the river for a while without paying for coffee and muffins at the nearby bakery, as is our wont. This saved $12. I made an omlette with two eggs from our hens and parsley and chives from the garden, instead of buying pies from the bakery to bring home for lunch. We’re usually so freakin’ extravagant! That’s another $8. I also borrowed three CDs from the local library, but I wouldn’t have bought three CDs today anyway, so that’s not really a saving. I would like another hen, but I’m waiting for a ‘free to a good home’ ad. on Gumtree.com. So much free stuff there. It’s crazy! Anyway, thanks for the inspiration. I saved $55 today. I’ve been tracking what I spend. Now I’m going to track what I don’t spend too. Could be very edifying. Here are my tips: 1. If you want something see if you can get it for free or sell something to pay for it. 2. Write down each day all the things you could have bought but didn’t.

    Reply
    • lentilman September 22, 2013, 9:43 am

      You couldn’t have gotten Hepburn’s autobiography at the Library to save the $0.50?

      Just kidding :) – good job on the nice day.

      Reply
  • Georgina Goosen September 21, 2013, 6:39 am

    Powerful! I do read through older posts often just for the encouragement which saves me a lot of money especially when the older posts give me a guilty conscience. A healthy dose of remorse is a great way of spending less. So reading your blogs make me spend less and save more. Great job Mr. Money Mustache.

    Reply
  • MoneyAhoy September 21, 2013, 6:48 am

    Great article! I really love the example of the man-wine-flask!

    I’ve gotten so many trinkets like this over the years that are such a waste of money. More recently, I’ve been able to get into the same mindset as you and prevent wasting money on junk stuff that doesn’t have a half-life over a week.

    Reply
  • jestjack September 21, 2013, 7:01 am

    Thank you for another insightful article. You are so correct that these things we buy do become a “burden”….and to go a step further if you own enough stuff…it owns you. However i will share there is no better feeling, for a “pack rat” like me, than being able to fix a broken item with “inventory” from a salvaged item. I just did this when our very large patio umbrella cord broke as a result of dry rot. I was able to replace this with salvaged cord from a broken umbrella left behing in a rental. Pretty gratifying and saved quite a bit of money. I do have a request/question….recently it has come to my attention the price of building materials specifically exterior paint has gone thru the roof. I am in need of some white semi-gloss exterior. I went on line and Behr white semi-gloss approaches $40…a gallon. True this is good paint but MAN…$40! Your thoughts and strategies are appreciatted…

    Reply
    • Cindy September 21, 2013, 11:49 pm

      Often you can get free paint at landfills or other locations where people drop off their “household hazardous waste”.

      Reply
  • Derek R September 21, 2013, 7:11 am

    If you like buying Lottery tickets there is a way of doing it without losing (much) money. Just follow these steps.

    1) Open a high-interest savings account
    2) Pick your lottery numbers and write them down.
    3) Whenever you would normally buy a lottery ticket, pay the money into the savings account instead.
    4) Check the numbers when the draw is made.
    5) If you win, pay yourself the winnings out of the savings account.
    6) Once the savings account is paying enough interest to cover the cost of a lottery ticket, use that interest to buy a lottery ticket as well as doing steps 2 & 3.

    Step 6 is optional of course but the ticket can act as insurance in case you actually win the jackpot. Good luck with that!

    There is a small chance that the savings account will not contain enough to pay your winnings but it is very small. Normally you will win small amounts on the lottery and after a few weeks you should have enough in the account to cover that possibility. If you actually do get the jackpot numbers before reaching step 6, you’ll just have to shrug your shoulders and write yourself an IOU, I guess.

    Reply
  • Mr. 1500 September 21, 2013, 7:34 am

    Use your own power to get everywhere. Walk or bike. You’ll be saving on car expenses and also getting exercise. Win-win.

    If you must drive, be as efficient as possible. Don’t hit the gas to jockey for position when pulling up to a red light. If you have a manual, keep the RPMs low. I have mine in 4th gear when I’m only going 25 mph all the time (make good use of the downhills).

    A well maintained car will last at least 200K miles. If you spend your miles wisely, your car (which you hopefully bought used) should last you for decades.

    Reply
  • Britt September 21, 2013, 8:14 am

    I never play any lotteries often described as taxes on people that are bad at math. But in the case of powerball lotteries above $385M the expected value actually does become positive. Nonetheless, assuming a polynomial regression, accounting for splits, and then incorporating taxes, virtually all lotteries are futile for players. That’s the math, then add all the above relevant comments on the psychological and emotional negatives and the case is clear. I have included a link to a full analysis for any that are interested in exercising (torturing) their brains a bit.

    http://www.businessinsider.com/heres-when-math-says-you-should-start-to-care-about-powerball-2013-9

    Reply
    • PW September 21, 2013, 3:44 pm

      Here’s the lottery math as I see it. You’re chances of winning, rounded to the nearest sixth decimal place, are 0%. Sending the money to me would give you the same odds, so why not try that?

      Reply
    • LLBigwave July 1, 2014, 2:30 am

      Business Insider did a poor analysis. Here’s a much better one (third question down on the page).

      http://wizardofodds.com/ask-the-wizard/284/

      Reply
  • Will September 21, 2013, 8:14 am

    I agree with the “don’t buy bottled water” part as far as buying it for regular consumption. However, I do have 4 cases of bottled water on hand for “emergency use” in case something happens which results in our water supply being cut off. No crazy “end of the world” scenarios or anything, but things do happen, plus it is on sale at Costco atm!

    Reply
  • heinz234 September 21, 2013, 8:32 am

    I just saved a bunch of money, buying in season vegetables, which reminded me that buying fruits and vegetables in season is THE way to get highest quality for lowest Euro/Dollar!

    Reply
  • Dude September 21, 2013, 9:48 am

    Go vegan. Price of cheese now irrelevant (beans and the like do not have such price fluctuations), and it has the added benefit of no casein to give you cancer (expensive in the US!) and doesn’t contribute to torture and suffering of thousands of cows, either. Win-win!

    Reply
    • Laura September 24, 2013, 6:02 pm

      Ditto. We are vegan, too. $30/week grocery bill – no meat, no dairy – not even soy. Except for the gourmet dog’s food. Starchivore’s naturally save $.

      Reply
  • SwordGuy September 21, 2013, 11:13 am

    “You don’t pay to have your shit stored!”

    We cleared $10,000 at a yard sale one day.

    We didn’t collect $10,000 from the sale, but we avoided spending $10,000 to add on to the house to store our stuff and still have room to move around in the house.

    Fun stories or quotes from our “priced to get rid of it” yard sale:

    Person: “How much is that piece of tupperware?”
    Me: “That piece of tupperware is $2. However, if you buy every single piece of tupperware on the table, the total price is $0.50.”

    Two guys show up, obviously out to furnish their first pad:

    Guy: “How much are those chairs?”
    Wife: “The chairs are $5 apiece. But if you want to buy them, you have to take the exercise bike, too.”
    Guys: “?!?!?!?!”
    Wife: “You can SIT on it!”
    Guys: “Uh, ok.”

    That was sweet! That bike was darned heavy and I wasn’t looking forward to loading it up and donating it…

    Elderly Man with accent: “How much is that?”
    It was the end of the day, this would be the last sale, so…
    Me: “Name your price and I’ll accept it.”
    Man: “No, how much is it?”
    Me: “Name your price and I WILL accept it.”
    Man: “$0.50″
    Me: “Sold!”
    Man: “Wait! $0.25!”
    Me: “Hey, this wasn’t hard. You named your price. It’s $0.50!”
    The guy just couldn’t deal with this. I guess it offended his old world bargaining upbringing.
    I ended up taking the Israeli shekel he offered me just so he would go away. Still have the shekel somewhere.

    Reply
  • smiling vulture September 21, 2013, 11:57 am

    I think it’s about choice,I sacrifice the big house for smaller flat,so I can whack heating full on winter,and go to nice restaurants

    Reply
  • PawPrint September 21, 2013, 12:17 pm

    I so wish I could convince my husband of #5. We “had” to rent a storage unit ($35 a month) for the boxes of china (never use it), family papers and miscellaneous family stuff (his father’s old briefcase, his father’s Shriner’s sword, etc.) that we’ve been carrying around since 1986. We moved out of state for the next 4 years, and have no storage capability in the apartment we’re renting.

    Reply
    • Christof September 29, 2013, 2:45 pm

      Get the $1700 the storage is costing in $1 bills, put them on a pile on the table and declare proudly that you organized the storage rent… Maybe that is making him realize how much money he really spends…

      Reply
  • Jon September 21, 2013, 12:22 pm

    Well, at long last you said something that I can’t agree with, and I know a lot of crooks that will love you for suggesting it: Setting your bills to be paid automatically.

    I pay my bills online to save the time and the stamp, but I NEVER automatically pay any bill. I look at every one of them, which is how I have caught mistakes in bills and some ‘products’ that scammers added to my phone bill.

    I never let someone else take control of my money.

    Reply
    • Kenoryn October 8, 2013, 7:38 am

      To be fair, he didn’t say to stop checking over your bills. :)

      Reply
  • Emma September 21, 2013, 12:30 pm

    I read this post and cannot agree more. I wonder if Mr. MM would ever do a post about a couple like my husband and myself. We are kind of doing it backwards. We both worked full time and I then had three children back to back. I always thought I would be a working mom, but I decided to quit my full time job to stay home. We live VERY frugally so I can be home. This means no cable, no eating out, no extras of any kind. We live on cash only with NO debt. I will return to work in one year when my youngest enters school. Then we will begin the mad race to catch up on saving for retirement ( we do have lots stashed away already for kids’ college and retirement). What happens to those of us who may have to return to work after many years of staying home to raise kids? How does one make up for years of lost time and income? A future post maybe?

    Reply
    • Marcia @Frugal Healthy Simple September 21, 2013, 7:20 pm

      “How does one make up for years of lost time and income? A future post maybe?”

      It depends on what you mean.
      You don’t, really. If you lose those years and income, then you miss out on:
      compound interest during those years
      experience and raises during those years

      And you never really get those back.

      But that’s not the end of the world. Because you are used to being “frugal”, this will be a big help when you have more income coming in. The big deal will be not increasing your expenses like eating out and such (though you may have after school expenses depending on what type of work you get). That may be hard to avoid completely.

      Keep living your current standard is the big tip.

      Reply
    • CincyCat September 23, 2013, 11:18 am

      MMM has actually written an article about what he and Mrs. MM would do if they lost their entire ‘stash, and had to start all over. (Don’t have the link handy, though.)

      Reply

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