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« Two Examples of How Using Cash Can Save You Money | Main | It's Still Not What You Make But What You Spend »

November 26, 2007



I can say that following those 10 will inflict you too much stress, something that would kill you faster than anything else. Probably a combination of a few of all those would work fine however... and I would definitely not cut my cable, but I would agree not to buy a pet. Just take some mone from your neighbours to take a walk with their dogs ;)

I think Sarah's post on buying a house in a small town then renting it was a good idea. She later notes that she purchased two more. Would have tried this in our small town but the economy was so weak that renters leave within 6 months, regularly. Homeowners could not keep renters so that is when we decided to sell (and we were lucky to do that) - -

Moving to a cheaper town makes sense. Just make sure that there are jobs in that cheaper town and that their pay wage is equivalent to the cost of living. Very little income, even w/two jobs, means little enjoyment in life when your low cost house still requires more than what you make. Check out the job market in the area. This is just as essential as to finding low cost housing.

I think everybody needs to save money. The fluctuating economy brings everybody in financial turmoil. A lot of people are also using creative ways to save money. Companies are too – take Gannett, Inc, for instance. Gannett runs several newspapers across the country. They were facing the decision of whether or not to lay workers off, but decided instead that they'd rather have everybody take a week of required unpaid leave. Ordinarily, this would sound bad, but the thing is that after the week off, they get to come back to work. If they have a gap in their finances as a result, they can turn to payday loans if they need them. There are a lot of responses to the recession where people are finding money saving tips.

I disagree (somewhat) with your assertion that moving to a low cost of living area will enable you to save more money, even after the pay cut. It really depends.

For instance, on how much of your salary you save. To throw out some numbers: let's say you save 50% of your $100,000 salary in a high COL area. You could move to a different area with half the cost of living, taking only a 33% pay cut. High COL area: Salary $100k Expenses $50k Savings $50k. Low COL area: Salary $66k Expenses $25k Savings $41k. Of course,not everyone saves 50+% of their salary, but for those who do, they might be able to get more surplus money by living in a higher cost of living area.

On the other hand, there are some big cities in the country where cost of living is a lot higher than salaries. That's why it really depends.

Terrific writing! Just hilarious! Great job, FMF!

Nice post.
I read quite a few financial blogs, and even i got one. But on top of everything i allways hear: Save money save money save money.

Lets say i save one milion dolars in 10 years (i invest,etc) . Now after 10 years i still have my incomes but i am one milion dolars richer. Why did i saved them?

Lets put it in a diffrent way:
How i saved those money? By cutting back from fun, by being disciplined, by being healty, by moving to a cheaper town, by not owning a pet, by investing correctly. In a word by being a very balanced person.

Now i got a milion dolars, after putting discipline in me.
What do i do with them, because i cant spend it like crazy on a bigger house, a pet, a new car, etc?
Do i leave them to my kids? So they can spend like crazy?
Do i give it to the poor? I rather show the poor how he can make money now. Giving it to him will do no long term good.
How much money do i need for retirement?
If i am now 20 at 30 i will have one milion? Do i retire then? NO

I sold my old house just before the crash hit. I moved from California (where breathing is expensive) to the Florida panhandle area where I can't believe I filled up my gas tank yesterday at $2.10 a gallon (I paid over $5 in California!). I eat at home. I've paid off my debts and am saving for a very simple little house that will cost me about as much as I'm paying in rent right now. I do have cable, but only the basic package which isn't too bad. I do have a dog and he keeps me happy and healthy. My apartment complex has a gym and I work out at least 30 minutes a day and have lost 50 pounds which translates into no doctor visits and glowing health. Americans want what we want the way we want it and when we want it and we all need to get over our childish ways and grow up.

What about getting a 2nd job? Even if it's just for a short while to put together an emergency fund. I've had 2nd jobs off and on for the last 8 years. A couple of them were long term. This may not be practical for someone who has children but it was the most logical thing for me to do. I was able to pay off a significant amount of debt and I quit my 2nd job in July.

I suggest listening to the Dave Ramsey Show and reading his books. 'The Total Money Makeover' is a great book.

I agree with most of what you say, I take my lunch to work, both my husband and I do that and we quit smoking 4 years ago and saved over $400-$500.00 a month on that alone. I need to loss the weight from not smoking, but I am considerably healthier from just no smoking. When we bought our home, it was well within our ability to pay and $40,000 less than we were pre-approved for. Traveling out of the country for medical care....not very easy or money saving to do from the Midwest. We do buy used, Ebay, Craig's list, Thrift stores and even go for free with FreeCycle. Moving to a less expensive city - we live in a Chicago suburb, isn't possible at this time, my husband's parents are in their 80's and my career isn't one that opens too often. As for the pets, I agree 100% that they cost a lot of money and it really adds up over the year or years that you have them. That said, I have pets, more than most people do with dogs, ferrets, birds and fish. I make sure that they are treated well, they go to the vet, get their shots, heartworm tests, check-ups. We buy very good food for the dogs and the ferrets and that is an expense that keeps them in better health and keeps those monster vet bills away. I know what is best for my pets, I read about them and follow what they need to stay strong, happy and healthy. Could I find another use for that cash every bet! Could I find another way to motivate me to walk and feel safe doing it? Probably not. I come home and don't mess in stores to be sure that I get them out and fed and I usually cook dinner at home for us too. My pets are an extra expense, but not an unnecessary one for my family, they help keep us healthy, happy and loved and that's worth it to me. If you don't have any then don't get them, but if you have them or know that you are going too then take good care of them and keep the expense down.

My mother-in-law scrimped and saved all her life. Always bought store brands and you never were sure the brand that was in the name brand bottle.She had hundreds of thousands in the bank, her house and vehicles paid for, a modsest retirement, SS, and good medical and dental insurance. At about 70 yrs of age, my sister-in-law asked her why she didn't use some of the money to travel, something she always wanted to do. She said, "I'm saving it for my old age". My sister-in-law's response..."You're need to start spending it." She died two years later. Never made it to Europe...Saving money is good but there is a point at which you need to live your dreams...

Dude... the "be healthy" one is just not true. Or it CAN not be true. It's very easy to see that buying a bag of potato chips is way cheaper than buying a bag of spinach (you use the example of bon bons, but it doesn't even have to be fancy). On top of which, you can be healthy for your entire life (as i was) and still come down with cancer with not even a hint of family history (as i did). Life's a bit random.

That said, the article is a really fun read!

Great list! I feel so successful. After going through a few years of serious financial hardship I learned a lot about living within my means and keeping to a strict budget. Now the finances are straightened but the financially conservative lifestyle is so much a way of life I couldn't change it now. From the list: #10 Overall I do this. We don't have a car so I use public transport, my bicycle or my own legs to get everywhere. At 72€ for a monthly transport pass I'm paying far less than I did when I had a car. I just need to watch how much I spend on sweets .... :) #9 I moved to Berlin, Germany 7 years ago. My reasons were not to save money, but I see now that it has. I save a fortune on health care. It does cost a lot to go to the USA to see my family, but we just don't do it very often. #8 I don't smoke #7 My husband and I often buy used (clothing too!) #6 We paid an amazingly small amount for a beautiful flat downtown. Everyone wants the deal we got! I just comes from being persistent and not settling. #5 We don't have cable #4 We nearly always take our lunch to work. And since we're teachers, we can eat for 2,70€ in the cafeteria which we do once in a while. #3 This one I need to watch ... fortunately I don't like lattes etc but I love a good coffee or tea. At least that doesn't cost as much and I only do it on the weekend. #2 Keeping a pet - well I figure that since all the rest of these rules I follow, it's okay to break only one ...... I've had a dog my whole life and couldn't imagine not having one. But I buy him quality dog food in bulk from a discount pet shop, so my monthly bill for him is about 30€ (that includes 10€ dog tax we must pay here in Germany). Yearly bill for him including vet bills is about 600€ tops. For me that's worth it. #1 We just luck out in that Berlin has incredible cultural offerings, has everything that NYC, Paris, London has, but at the same time the cost of living here is the lowest of any big city in Germany. We're really spoiled living here!

Not all suggestions are for everyone, however, heeding as many as possible is a great idea.

The anywhere is better than the US for health care is moronic.

#9- you have to be careful where you go for health care, though. and I think a lot of people don't like this one cause they imagine cheaper with developing countries and lower quality, but that isn't always the case. Take S. Korea- developed, 11th largest economy, good health care for reasonable prices. In fact, the healthcare tourism is a booming business! And what astounded me about US health care (I'm Japanese) is that some things that we take for granted (and free) here in E. Asia, like ambulances, you have to pay for! I heard you could pay about 30,000 yen- $300 for the ambulance!
and the stuff about buying a house you can afford, making your own lunch, cutting small expenses and cable... isn't that common sense? I can't see why it would be hated...

and #1... well, I suppose it is hard especially with jobs and all, but if you work for a big company- domestic or multi-national, couldn't you ask for- or at least let it be known you're interested in working in another branch in a different city/country? and as for wages being adjusted, that might be true for places like I don't know... Thailand or China, but in my experience, if you go overseas, your wages are usually higher (or at least seem higher cause of the lower-cost-of living) and you get benefits like the company pays for some or all of your kids' education (and if you enroll them in international schools, they aren't cheap!!!), health insurance (well duh, but if you're overseas, you usually can't apply for insurance in the country as a foreign resident, or at least we couldn't in Korea...), company membership in a foreigners' club- (ex- in Korea, Seoul Club, in Japan, the American club), and even housing expenses- from rent, to even the electricity, water bills! So sometimes, going to work overseas is really nice, not to mention it's a great learning experience!

haha forgot to mention- i know it seems weird that your wages would be higher in a overseas assignment especially in a lower-cost-of-living place, but usually (again, my experience, as well as my friends, and my dad) it's kind of a compensation- like "sorry for making you leave your country, thanks a lot" or it's possible (especially if you were doing pretty good in the company already) that they'll place you in a higher position, like General Manager of that overseas branch. or both.

Wow I'm REALLY sorry for posting again, last time, promise, but also wanted to mention that going overseas,etc, does not mean worse schools, or less opportunities. International schools, for example, are for the most part pretty good, especially since they are private schools, and are similar to private schools in the US, I believe. Although depends on what curriculum they follow, but for the most part they usually follow the US curriculum. Of course, like with any other school, you should research. But usually, if you look around, you can tell- is there cultural diversity? how good is the extracurricular program? etc, etc. But, especially if the school is an IB school (since they're reviewed every so often and undergo strict examinations to become on in the first place), international schools shouldn't be any worse than schools in the US.

Make your own homemade wine at a cost of $1.00 or slightly more per bottle. Small start up costs of one air lock costs about $5.00, an old water bottle, five gallons or less, sugar and juice. Its easy and fun to make the savings are considerable.

Make your own laundry detergent at a cost of $1.00 instead of $8.00 s or more per bottle. Its easy just use borax and arm and hammer washing soda not baking soda you will also need bar soap for fragrance and color. The recipe can be found on the internet (the simple dollar). Its fun and easy to make ,it takes about fifteen minutes the savings are considerable and the clothing gets very clean.

People need to remember that these are just tips to keep a little money in your pocket (or your savings account). Nobody is telling you how to live your life, just that if you want to cut back on expenses here's some ways to do it. Some more practical than others, some come down to a matter of priorities. Some people won't just up and move to cut on cost of living, because their line of work might be pretty scarce in other parts of the country. Others will have pets because the cost is worth the benefit. Find a system that works for you, that keeps you happy. If you're ok with an ever increasing stack of debt, and you're still happy go for it. If it means you live in a single bedroom rundown studio apartment, because the rents cheap and you'd rather save money for *insert desire here* and you're happy, be my guest. The only advice I could offer is don't consent to a life of misery to be happy, "someday." Figure out what you want, and find a means to obtain it that lets you live a life you're content and satisfied with. The ironic thing about life is that you could spend the whole thing worrying about "someday" that you watch it pass in front of your face, and you never even see it go by. Don't be 65 years old, with five million dollars in the bank, while being physically unable to do the things you wanted to do (i.e. maybe bicycling across Europe was a dream, and due to various age-related medical problems, bicycling is out of the question). But don't be so caught up in the "now" that you end up 65 years old, wishing you could retire, but having to work until the day you die. Just find a balance of what you want, and find a way to keep achieve those goals while keeping you happy in the meantime.

On GHTV viewers get to see where people put their money. As we pay 2009 prices and earn 1980's salaries, we come off as 'spend thrifts' when the majority of the population wants to have a nice life while they are on the planet.

I watched my former in-laws live in 'depression style.' Rice mixed with potatoes to make 'them stretch,' moldy bread used in stuffing, coupons ruled what was bought that weekend, not a single vacation that wasn't going to see grandma until they retired and then it was Elderhost, staying in dorm rooms, off season travel. One time when she was invited to a wedding I gave her some nice indian silk so she could make her skirt - never saw the material again, she made a skirt of something she alread had, it had ducks as an imprint, looked like men's 1950's sport shirt material. An evening skirt with ducks!

So what was the reward for living so miserly? 4 messed up kids. One married the neighbor's daughter to get out of the house, the other finally got over his trauma at age 59, the daughter is an old maid who has money in the bank as she lives like she was taught, and the eldest son scrimps even more than his parents did.

What a nice life - right? Not for me, I love going out to dinner every so often, I love the feel of new clothes, shoes included, I like fresh food to cook at home, I moved to a lower cost area which grew around me and I am now living in Millionaire row; after watching my father lose the sight of one eye and barely have the second saved I would not trust my eyes to surgery abroad when we have the schools where some excellent or good 'local' doctors come to study.

About living abroad, we did that for 20 yrs. It felt so good to come home where we were part of the community, were not the 'gringo's - exchange that word for 'pattsy who can be overcharged, clothes, food, household item stolen from constantly' - it feels so great to walk down the street without fear that your chain or watch will be snatched off of you at noon. You don't know until you've been there, just ask yourself why do so many illegals crash our borders if they are already in 'heaven'? Enough said but one question left to ask. Who are you saving the small pleasures in your life for? Death taxes?

Ok I don't understand how some people compare pets to children. I have pets. I love my pets. I have two cats and a dog. Now my mother moved in with us and it has expanded to 5 cats and 3 dogs. Aside from having to clean outside, change litter, and vacuum up pet hair more often, we love having them (husband not so much), but I would never compare my pets to my children. I also don't treat them as if they are children. Having pets and having children is not the same.

Response to CHUBBYCHOPS!

Adding up the fares, the hotel, the cabs, and the price of the surgery not always results in good savings. I assume you either didn't have any insurance so of course you're looking for same service lower price, but we never get information on procedures gone bad. Enough mistakes are done here, where you can get legal help if warranted, but in foreigh land? It's a huge risk. Believe me I've read the nice websites, the quotes of great savings. Did you know the ones who can afford it in their own countries mostly travel abroad to get their surgeries and treatments? Many come to the US, as did the head of OPEC when he got cancer, so have other famous names. We are 37 on the list of quality of medicine and No. 1 as to cost. It means we have to change those numbers around, that is what that means.

Healthcare is one area that I hate hearing people say, "I can't afford it," or "It was outrageous, I can't believe they want to charge that much." You're alive. If you get shot down at one hospital because you don't have health coverage and no job, then find a local non-profit hospital where they can't refuse treatment based on ability to pay. I've never had a problem paying a medical bill, in fact most of the time it's done with a smile. After all, thanks to that bill, I'm still breathing. There are just some things you can't put a pricetag on, and my good health is one of them.

hey, need to leard geography. Mexico is not in Central America. Belive it or not. Mexico is in North America!

Having a dog helps lower the amount of antidepressants I have to take. So, not sure which one is more expensive or makes me worse for the wear...

The being healthy thing is catch-22 because what foods are cheapest... yes, the non-fresh, high carb, high calorie foods. The expensive foods are fresh fruits and vegetables.

I don't smoke, I don't drink alcohol, I live in a house I can afford (it's only a few dollars more than my apartment rent was)...

We have too much tv. I admit this. But we live in a tiny town and in the winter, there is nothing to do. Forty below without the windchill is not condusive to anything but sitting on the couch wrapped up in a blanket.

I would agree with the savings of living in a low-cost city as I am able to knock my rent out in one paycheck and still have money left... but after four years of living out here, my sanity and happiness are in serious decline. The only entertainment out here is a movie theater that tends to only carry what they feel will be an instant success (usually family movies and the ultra-gender-targeted megabudgeted films).

I would also completely agree with "flipmode" that as a former Systems Admin, the opportunities in the boonies can be quite limited. I'm doing a job now I can't say I'm fond of as it is the only thing I can find that pays a halfway living wage. Six figures out here is kind of laughable unless you're in a profession that is known to pay that kind of money (like a doctor or lawyer... and some of the doctors can look a little threadbare).

All in all, moving here (middle of nowhere, Montana) has given me a nice quiet place to work on my education (four years down, five more to go), but my girlfriend and I really wish we wouldn't have left the city.

This one can go both ways. I would also make sure one has a job lined up before up and moving...

I'm 22 and have already been working to set up a big fat cash cushion. As far as your tips go,

10. Be healthy -- I'm very healthy. I'm well within my appropriate BMI and I exercise regularly. I haven't had red meat, soda, or coffee in at least 10 years.

9. Move to a foreign country (or even visit for health care) -- I've really been wanting to move to a foreign country, though not necessarily for money's sake.

8. Quit smoking -- I've never smoked, so no problem here.

7. Buying used -- I buy some things used, but I don't go out of my way.

6. Buy a house you can afford -- No house yet; I plan to buy with cash.

5. Cutting your cable -- I get my cable for free with my rent and never watch commercials. Even still, I've never bought a tv (mine was a gift), and at the last place I lived I didn't pay for any tv service, so I know I can do without.

4. Taking your lunch to work -- I never buy fast food or restaurant/deli food. Everything I eat is from home.

3. Limiting small spending -- I limit this except for a few allowances I give myself.

2. Not buying a pet -- I had two cats living with me but gave them to my parents. I absolutely love them, and they brought me a lot of joy, but they definitely took a big chunk out of my bank account. Now I get to see them whenever I want without actually having to pay for them.

1. Moving to a lower cost-of-living city -- I live in Houston, which has a very low cost-of-living, but I hate the thought of living in one place for so long, so I'm already planning to move away at the end of the year.

So I don't hate any of your ideas. They're all very reasonable.

See, this is the problem I keep running into. All of these financial 'gurus' spew out 'money saving ideas' - supposedly revolutionary ideas that if you just change your lifestyle a little, you can suddenly have tons of extra money! The problem? They're all ridiculous and don't apply to me and my life.

10. Be healthy - Come on. Every idiot knows that a diet of Mac and Cheese and Ramen is unhealthy... but it's also the cheapest, most money-saving diet in existence. Let's put it this way - I can buy a bag of fresh veggies for the same price as I can buy twenty packs of ramen, five box dinners, and two pounds of pasta. When money is tight, which one do you suppose I'll be choosing?

9. Move to a foreign country - with what money? Does this guy even know how much it costs to move a family?

8. Quit smoking - never started.

7. Buy used - Duh. Already do. And I get free stuff off Craig's list. That hasn't made money magically appear in my bank account - and it isn't going to improve my finances right now because it's something I already do!

6. Buy a house you can afford - Really helpful advice for renters who can't afford a house yet. Yeah. Helpful.

5. Cut off your cable TV - Ooh! That would be such helpful advice if I got cable TV!

4. Take your lunch to work - are you kidding me? How many things are going to be on this list that poor people like me ALREADY DO? This list claims that it will help people save money - but it assumes that we already do all sorts of money-wasting things like eating out, having cable TV, etc - yeah, it'd be NICE if we did those things! But we ain't got the money for it! How is this list helpful, again????

3. Limit small spending - oh, yes, those $5 lattes which I haven't had in about three years now. Cutting those will make such a big difference to my finances!!!

2. Not buying a pet - okay, guilty on that one. We have a dog. BUT - his $1k a year estimate is, I'm certain, based on an average across best-case to worst-case scenarios. And those people who take their pet to the vet every two months. Buy dog food at Costco, don't panic and dash off to the vet every time Rover sneezes, and guess what? A pet DOESN'T cost $1k a year!

1. Move to a lower cost-of-living city - Granted, this one could happen. However, we're already in a suburb, and in the cheapest area of that suburb we could find, so that we're still in range of our family, friends, church, and other community elements we need to be close to. I mean, if we move twenty miles further away for a fifty dollar cheaper rent, we'd be saving $50 a month, but we'd more than make up for that in the gas costs of driving to the places we need to go!

Oh, and what was that cost of moving a family again? But no, I'll get the cost of moving a family by cutting out those lattes I never buy and the cable TV I don't have! BRILLIANT!!!

#11 that people don't want to hear...Drive the speed limit! People complain constantly about the cost of fuel, but refuse to adhere to a 55 MPH (remember the 70's fuel crunch? What did the government do? Reduce the speed limits!)

You really should do your homework before making comments in #9 like "in many cases the care is even better". Please give us the name of these top of the line health care providers in these foreign countries. Opps, you can't do it. Your statement is not just a stretch but a bold face lie. The fact of the matter is we DO have the best health care in the world, notice I said health care and not health care system. You are telling people to go to other countries and that the health care is better (like many politicians try to tell you in refering to Canada, France, etc...) yet when those people get sick, truely sick, where do they go? They come here, because by far we have the best doctors, nurses, etc... in the world. They go to school here and they stay here because this is where the money is at. While you may save money going to South America, or Central America to get medical care, you will NEVER receive the kind of care available here in the U.S. and that is a fact. Listen to the Idiot who wrote this article if you'd like, the only thing you might be betting is your life, which in my opinion is maybe the one thing you might not mind spending a little extra on.

Love it. Most I won't do although I agree with. I credit the owning of my home today (worth about $500K) with quitting smoking and drinking. Took less than 15 years.
Was able to double up on some payments and pay lumps at end of year due to savings.

Late to the party--I only just discovered your blog via an article on I have to say to those skeptical of offshore health care, or living offshore part time, get over yourselves! I've lived in Latin America (Barranquilla, Colombia; Merida, Mexico; Panama City, Panama; and most recently Cuenca, Ecuador), and not only is the health care excellent, it's cheap. A routine office visit costs roughly 20% of what I pay here in DC. Specialists (I see a cardiologist, for MVP) are even more reasonable. Shall we talk about the cost of prescription meds?

And just so you know, people over 55 are given preferential treatment in Panama, as a matter of course. I've already bought my retirement home--an ocean view condo--and plan to live in Playa Blanca at least six months of the year. Come on, fifty-fifth birthday!

Jason --

I have done my homework. For instance, check out this post that notes more and more insurance firms are approving overseas medical procedures: (Be sure to look at all the links and the links within links.)

And if you want to see what the NY Times says about it, check this out:

Or, if you prefer, Google "medical tourism" and you'll find that the US does not have a monopoly on good health care.


Cyndi B, as stated at the very beginning of this article, FMF has come up with over 700 tips on saving money. You could read those tips in order to find some more applicable to you. This very short list is only the top ten most controversial pieces of advice. Clearly the ones that make the most people happy wouldn't be listed here.

This was funny.





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