Photo by rjones0856

This post has undergone many revisions, mostly because earlier versions were too politically-charged, or too much of a rant against one political party or the other. A dizzying news cycle also kept me from posting, because I wanted to include recent examples of our dependence on government, and that government’s lack of fiscal discipline, which has an affect on all our financial lives.

However, it became clear to me that I was taking the wrong approach. Suffices to say, both political parties are equally guilty of being fiscally irresponsible. Members of Congress have yet to fully recognize a truth many of us have learned the hard way; you can’t spend more than you have coming in without accumulating debt, and you cannot spend your way out of that debt.

While more and more people are clamoring for more protections, more benefits, and more intrusions into their lives, I wondered what the people featured in those Foxfire books would have thought. These were the type of people who didn’t eat if they didn’t work to grow and harvest the food, or raise and kill the hogs. These were the type of people who turned to their neighbors, and their family, and their churches when they needed help. They were off the grid well before, and long after, there even was a grid!

So what changed? Why did this life of simplicity not take hold? The article I mentioned in the opening cites the Foxfire Museum director as saying during tough economic times their attendance tends to increase. Why is that? Are we only concerned with taking care of ourselves in rough times? Should we not also be concerned with it in good times, so we don’t have to be worried about it in the tough times?

I’ve always been a fan of self reliance, and though I am not the most “green” person around, I enjoy finding more and more ways to take care of my family, and myself, without depending on others. But “dependence” is a tough thing to define.

I depend on my employer to provide me with a job so that I can buy food I cannot grow to feed my family. I depend on many of you, my readers, to supplement the salary from my employer so that I can provide shelter, and clothes and a other things for my family. I depend on a fire department to come if I need them to help put out a fire in my home. I don’t grow enough food to live off, and I don’t produce anything to sell for money (other than the lines I write here). I certainly don’t have the ability to stop a raging inferno in my attic. So to say that I do not rely on others is a farce.

Even those living a caveman-like existence, or a life tucked away in a remote stretch of New Zealand, rely on others for their land, food, and basic medical services, should they need them. I am certainly not advocating we all return to a life of such meager existence, though such an existence seems appealing to those of us surrounded by mortgages, car payments and sky-rocketing utility payments.

Soon we will likely see the end of this recession, and along with it, an end to a renewed interest in living a simple, frugal lifestyle. Most in our society will again find “the good times” an opportunity to spend money frivolously today, and be much less concerned with tomorrow. Savings rates will dip. Consumer debt will increase. The price to own a home, go to college, or buy a loaf of bread, will resume its steady upward march.

It is sad, in a way, that we have forgotten the lessons of our founders, and more recently, our grandparents and great-grandparents. They lived by the motto, “cash on the barrel,” avoiding debt, and buying things only if they had the money up front. They took pride in accepting the least amount of help possible, but gave generously to help those in their immediate community who fell on hard times.

My answer to what happened: debt happened. Readily available credit changed the face of our society forever. From the everday consumer to the highest levels of government. The easier it became accumulate debt, the more we sank ourselves into it. And the more we relied on institutions (banks, government, etc.) to provide those things we once took care of ourselves.

Some will argue that debt helped us grow our economy to the size it is today. Others will point out that without debt, few of us could afford to be in a home. Defenders of recent government stimulus plans and bailouts will cite a need to spend and grow deficits to reverse the recessionary trends we saw in 2008 and 2009.

My question is this:  What would have happened if we did nothing? Would we be any worse off in ten years? Would we be any worse off today?

Post by Frugal Dad

However, this time I’ll try to take a more methodical approach.  My wife and kids will appreciate this as they have witnessed far too many Saturday afternoon meltdowns when I couldn’t find something in the garage and go on a three-hour cleaning spree.  I’ve started looking for tips to simplify my life, and implementing those a few at a time until things feel more orderly.

Photo courtesy of Wolfgang Staudt

Simple Ways to Simplify Your Life

Clear a thinking space.  When our space is cluttered, our mind is cluttered.  This step is one that I have put off and sort of tolerated living without until I started trying to organize thoughts on paper.  I’ve lived with a messy office and a messy desk for quite a while, and found organization in my clutter (I usually only lost things after cleaning up).  But I have discovered writing in a cluttered environment jumbles my thoughts.  Remove anything from your space that is distracting. Clear surfaces of clutter.  File papers and documents that no longer require your attention.  Adopt a one-touch system and force yourself to take action, shred, or file something the first time it touches your hands.

Just say “no.” It’s only two letters, but it is often the most difficult word to say in the English language, especially for “pleasers.”  But saying no gracefully is key to simplifying your life because it allows to focus our energy on those commitments that are most important to us.  If we dilute that energy by committing to ten different opportunities we aren’t doing ourselves, or those we commit to, any favors.

Simplify your finances.  How many credit cards, savings accounts, brokerage accounts and mutual funds do you own?  Chances are you are like me and have things scattered all over the place.  I’m going to dedicate some time in the near future to consolidating a few accounts so I’ll have less to keep up with. Here are few ways to simplify your finances:

• Scale back to one credit card and a backup.
• Unless you have hundreds of thousands of dollars and are worried about FDIC coverage, consider banking at one institution.
• Consider a target retirement fund rather than a smattering of funds that you have to manage, research and rebalance periodically.
• Put recurring charges and utilities on automatic deduction and opt for paperless statements.  It’s one less envelope to enter your home and cause distraction.

Clean out your car.  What’s the last thing you see before you walk into the office each morning?  What’s the first thing you see when you leave the office in the evening?  The inside of your car.  If your interior is littered with three stained coffee mugs, fast food wrappers and receipts, then consider taking some time to spruce things up.  For those who commute, time spent on the road is often when we do some of our best thinking.  It’s also an opportunity to decompress after a long day at the office.

Create an “I Will Do One Thing Today” list.  Of course you can do more than one thing, but name at least one thing that you’ve been putting off and do it today.  I like to fill this out a day ahead of time (an I will do this tomorrow list, if you will) by declaring a task I’ve been procrastinating on.  The last few days my lists looked like this (I have a similar list at work):

• Adjust gate hardware
• Finish taxes
• Put tomato plants in pot

Become a “90-percenter.” Are you one of those people who are always in a rush?  I used to be, too.  Then I realized that all that time I spent hurrying around was time I could have spent truly enjoying life.  At my first job I ran around like a maniac, worked a ton of hours, and basically tried to out-hustle everyone there.  I thought I had to because I was one of only a handful of team members who did not have a degree.  The hustle paid off, or so I thought.  I was soon promoted to a position that required even more work and more hours, but did not come with an equal bounce in pay.  I had a toddler at home and one on the way, and it occurred to me that all the hours spent working were hours I was missing watching them grow.  That’s when I became a “90-percenter.”

I now work hard to accomplish the top 90% of my priorities each day, but refuse to drive myself past exhaustion to get to the remaining 10% – it takes care of itself in time.  I discovered that the remaning 10% wasn’t worth getting an ulcer over, and I could spend that extra quality time with my family.

Post by Frugal Dad

That’s exactly what one U.K. man did for over ten years. Gordon Stewart, 74, was found dead in his home last Friday after apparently becoming lost in his own maze of junk and died of dehydration. Without knowing more about Mr. Gordon, other than what is told in the original story at The Sun, it is hard to know why Gordon accumulated stuff with such intensity. It is not clear what his motivations were–environmental, economic, or just plain eccentric. Either way, it was a sad end.

What Motivates People To Become Hoarders?

For some, hoarding is the symptom of some deeper psychological problem such as obsessive-compulsive disorder, or depression. Others turn to hoarding because of an anxiety that things may be needed in the future, but when the time comes they will lack the financial resources to acquire them. And then there are those who have deep sentimental attachment to things and simply can’t bear to part with them.

Aside from the extreme example of Mr. Gordon’s demise, there are plenty of other health reasons to avoid hoarding. Obviously, there are physical dangers including trips and falls, particularly dangerous to the elderly. There are more hidden dangers such as mildew, dust and rodent infestations to contend with.

A Fine Line Between Stockpiling and Hoarding

For a brief time I was enamored with coupon clipping and stockpiling. I even joined a site called GroceryGame.com where people participated in forums to show off their impressive stockpiles of 37 tubes of Crest toothpaste, 12 boxes of Cheez-Its, etc. I was impressed, and thought the idea of stockpiling household sale items, particularly things like cleaners, non-perishables and toiletries, made a lot of sense. After all, these were the days when food inflation was the scare of the season. I thought stocking up now would save us from spending more money for the same item down the line.

What I discovered was that the line between stockpiling and hoarding blurs pretty quickly. After all, how many $1.49 toilet bowl cleaners does one family really need? I dedicated an entire shelving unit in our garage to our stockpile, and soon it was taking over an adjacent shelf.

Inside the house we used two metal racks to hold our food finds, but we were never good at rotating stock and lost a few items to expiration. We concluded that the mental energy required to manage all this stuff was not worth the cost savings to acquire it. In the future if we needed a can of cream of mushroom soup we would go buy one (or two or three–still good to have a backup of some things). If we happen to have a coupon and can save a little extra, great. If not, we don’t sweat it. We control our stuff, and we don’t let it control us.

Post by Frugal Dad

Have you ever known someone who hoarded stuff?  They have collected mountains of things, often spending a small fortune acquiring and storing their possessions.  We’ve probably all suffered from “stuff-itis” to some degree, and where do you think we learn the idea that less is not more?

I Want the Shiny One

Explaining the value of something to kids is a difficult task, especially when they are very young.  Kids do not inherently understand the values we place on things, and instead instinctively desire things that are pleasing to them.  For instance, if you asked a toddler to choose from three coins, a dull penny, a new nickel and a shiny dime, they would likely choose the nickel.  Why?  Because the nickel is shiny, and bigger than the dime.  They don’t understand that the dime is worth twice as much.  Now ask them to choose between a quarter and ten pennies.  They’ll usually take the pennies simply because there are more of them.

Old Habits are Hard to Break

We take these same lessons with us into adulthood.  Sure, we’ve all heard that good things come in small packages, but for the most part we want bigger and better.  A bigger house, a shiny car, more money, and newer gadgets.  Most people crave these things without stopping to think about their real value.  It’s not entirely our fault.  Since the time of hunters and gatherers humans have always valued quantity.  Whether it is storing berries for the winter, or adding to our expansive collection of DVDs, human beings perceive a larger quantity of something to be more desirable.  However, if you stop and consider the stress the accumulation of these things creates in your life, you may be able to reverse this thinking.

More is the Mantra of the Ego

Dr. Wayne Dyer had a great line in one of his recent PBS presentations, Change Your Thoughts, Change Your Life.  “Our ego tells us that who I am, my identity, is with what I accumulate.  So we become accumulation masters.  More is the mantra of the ego.”  He went on to explain that the more we accumulate, the more we worry about our possessions.  We worry that they may become stolen, or lost, or coveted by someone else.  We worry over their storage, and their insurance, and their maintenance.  All these worries create stress in our lives.  So how do we go about ridding ourselves of this stress, and our possessions accumulated from years of feeding this ego?

Give It Away

Dr. Dyer recommends giving it all away.  I’m a little more practical, even though I understand the psychological benefit of simply giving away your stuff.  As a compromise, I recommend selling some of it first, either in a yard sale, on eBay, or by locally advertising larger items.  Use the proceeds to pay off debt, or add to your emergency fund.  What you don’t sell can then be given away to family members, your church, a charity, or to a complete strangers.  Imagine how good it would feel to hand over your prized DVD collection to a shelter, or to donate your Xbox 360 and 15-game library to a local Children’s Hospital.

In a recent post I told the story of selling my prized possession, a Chevy Silverado truck that I had fallen in love with at a local car lot.  The experience forever cured me of car fever, but the profoundness of that experience did not stop there.  As the new owner handed over the cashier’s check (with a loan attached) I could literally feel the stress transferring from me to him.  He even looked a little anxious about completing the purchase, probably because of the new loan he just took on with his bank, and knowing that his insurance, property tax, and gasoline expenses were all about to increase.  On the other hand, I was the one eliminating a car payment, reducing my insurance expense, and dropping the cost of an annual car tag.

Whether you ultimately decide to sell your excess things, or give them away, the value of having less “stuff” to worry about is worth far more than your collection of things.  I challenge you to look around your own home and find things adding stress to your life.  Free yourself from these burdens and enjoy the benefits of a much simpler existence.

Post by Frugal Dad

These days there are a lot of arguments being waged on the benefits of paying down debt, buying used cars, paying off mortgages early, and building savings.  All of these are noble financial goals, and generally receive positive reinforcement from financial planners in the media.  However, there is an element that disagrees with this logic, and they are quick to point out where the mathematics don’t support these life-simplifying steps.  This post is aimed primarily at that audience, and for the rest of you, perhaps it will provide some comfort when dealing with these types.

Excess Material Possessions + Excess Financial Worries = Stress

Since I know how much you “financial nerds” love formulas, I’ve provided one for you to chew on.  I once wrote a post about homeowners paying off their mortgage early, and it was generally well-received.  However, I received a number of emails from “financial experts” out there who disagreed with the idea.  They were all-too-eager to tell me about the various ways that same money could be earning more in the markets.  Maybe so.  But their fancy formulas didn’t account for the one variable most important to me at this stage in my life–simplicity.

How to Live More Simply

That stress I referred to in the equation above is the result of constant worry over reconciling balances, watching payment schedules, and fretting over the never-ending accumulation of interest, which has a way of cheapening future earnings at a rate faster than inflation.   Add to this financial stress the worry of excess things and their storage, protection and maintenance, and you can easily see how too much stuff and too many accounts can lead to an ulcer.  So how does one prevent such complication in their lives?

• Learn to be content.  Contentment is a powerful ally of the frugal-minded individual.  When we are truly content we have very little that we desire, in terms of material possessions.  This contentment keeps us away from stores, catalogs and advertisements.

• Stop trying to impress other people.   Millions of dollars are wasted each year by those trying to play up to the ideals of others. Those who incorrectly believe that material possessions are a symbol of true wealth are on a never-ending quest for something bigger and better, and more expensive.  They constantly upgrade their cars, homes, jewelry and clothing in an effort to impress strangers at a red light, many whom they will never meet again, and are likely trying equally hard to impress them.

• Rid yourself of things acquired merely for status.  So you’ve made a decision to live more simply, but what about that Jaguar in the driveway and the “his and hers” Rolex in your sock drawer that are contradicting your new way of life?  Get rid of them.  I don’t care how you do it.  Sell them, give them away as gifts, or donate them to a charity.  Just get rid of them.  You will be amazed how freeing the experience can be.  While I’ve never had a Jag or Rolex to give away, I’ve eliminated some “extras” from my own life and feel much better for it.

• Consolidate your lifestyle.   Do you have six Roth IRA accounts with five different brokerages?  Are your insurance policies scattered around three or four different carriers?  While there is some benefit in diversification, by going overboard you are adding stress to your life just from the effort required to manage all the various accounts and policies.  Consolidate a couple of those accounts, and move your insurance policies to the same provider (assuming you have researched the provider and are confident in their stability).  As an added benefit you may find discounts waiting for having multiple policies with the same carrier.

• Recognize the difference in stockpiling and hoarding.   It is prudent to stockpile necessities, particularly when you find a good deal, or receive a discount when buying bulk quantities.  However, too much of a good thing becomes problematic when you have to spend time, money and energy just to store the items.  After I returned home from school to live with my grandfather we stored a bunch of our stuff for $50-$60 per month in a storage unit.  After several months went by it occurred to us that we had not used anything from the storage facility.  We saved $600 a year by simply getting rid of the stuff.  One less bill and a lot less worry!

Excess Material Possessions – Ego = Simplicity

Much has been written about wars with our own egos–I know I’ve lost my share of battles.  But when I stop and think about the real reason why I want something I often find that I am simply feeding my own ego.  I want others to know that I am successful.  I don’t want others to think I am struggling.  I fall into the “I work hard, so I deserve it” line of thinking that is a recipe for financial disaster.  However, once you are aware of this condition you can begin to take steps to resist the urge to give into your egotistical desires.  Try to find the same joy that you once found in things in other areas of your life.  Learn to appreciate the beauty that surrounds us and is freely available to anyone willing to look.  Go for a walk in the woods, or a barefoot walk in your own backyard.  Read a great book.  Spend time playing with your children.  Volunteer your time to a cause you believe in.  Seek out some of life’s many other simple pleasures. All of these things will fill your life in ways things used to, and they can all be done for next to nothing.

A challenge:  Find one thing you’ve been holding on to because it is a status symbol, or a luxury item that you don’t really need.  Give it away to a loved one, or a complete stranger, and enjoy the freedom of a simpler life.

Post by Frugal Dad