Every Sunday, The Simple Dollar reviews a personal finance book or other book of interest.
A few years ago, I reviewed Jeff Yeager’s excellent book on frugality The Ultimate Cheapskate’s Road Map to True Riches. Quite simply, it was one of the best books on frugality I’ve ever read, with a healthy dose of humor and a lot of useful tips.
His follow-up, The Cheapskate Next Door, appeared on bookshelves earlier this year and I was quite happy when I was able to pick this one up from the library, given how much I enjoyed Yeager’s first book.
This new book involves Yeager interviewing other “cheapskates” and discussing some of the tactics that others use to practice frugality in their own lives. He also draws some general conclusions about frugality that are based upon these interviews.
Sound interesting? Let’s dig in a little deeper.
1 | The Phrenology of Frugality
Yeager opens the book by defining sixteen key features that define a “cheapskate mindset.” I find most of them quite agreeable, particularly “a cheapskate values time more than money” and “shopping isn’t a cheapskate sport.” In fact, I would define these traits as being more about being thoughtful about your money than being a “cheapskate.” In fact, in my eyes, Yeager often uses the word “cheapskate” when I would use the word “frugal” – the only time he seems to veer into what I would call being a cheapskate is when he is obviously joking or being sarcastic.
2 | Good Habits Are Hard to Break
Here, Yeager discusses the perniciousness of habits that result in the spending of excess money. Everything from shopping as a hobby to buying coffee and gadgets and books falls under this umbrella. His best tactic for eliminating such bad habits? Choose your friends carefully. You often mirror your friends in a lot of ways, so if your friends engage in financially poor habits, you vastly increase the odds that you’ll engage in them, too.
3 | Money Management, Cheapskate Style
Spending less than your age? The idea here seems a little strange, but it’s actually pretty sound. The entire point is that the younger you are, the lower your salary is likely to be, and thus the lower your spending should be. Many people don’t do this and instead bank on higher earnings in their future, taking out massive loans and living a lifestyle beyond their actual income. Of course, eventually the chickens come home to roost and you find yourself in middle age with a gigantic stack of debt bills and no hope of freedom. Instead, live lean while you’re young and you’ll find that middle age affords you more money than you’ll know what to do with.
4 | The Oxygen Mask Approach to Raising Kids
“Gratification is a dish best prepared in a Crock Pot: nice and slow.” I particularly like this quote’s applications to raising children. The lessons you teach a child aren’t taught in a day. Instead, they’re built up slowly over time, and you as a practitioner of frugality are a good example of that. If you make meals at home every night (or almost every night), your children will come to see this as the normal. If you spend with reckless abandon, your kids wlll see this as normal and come to adopt it as their own behavior.
5 | Thrift: The Greenest Shade of Green
Yeager makes the case here that many frugal tactics are also green tactics – they help the environment as well as your pocketbook. I can certainly say from my own experience this is true. A big part of frugality is buying less stuff (meaning less stuff thrown away) and reusing what you have, like
6 | Clean Your Plate … and Save $,500 a Year
This almost expands on the previous chapter, as the point is clearly made that throwing away food is like throwing away money. Yeager discusses various methods for reusing food, from using basic ingredients in homecooked meals so that if you have some left over, you can just roll them into the next meal, or freezing remnants that you don’t use. Even food waste can have some valuable turning leftover vegetable scraps into vegetable stock or putting it in the composter instead of just tossing stems and leaves into the trash.
7 | Come on and Take a Free Ride
I’m not a big fan of freebies – most of the time, they’re not worth the hassle or the drawbacks to them. Yet many people swear by the value they find with them and Yeager is no exception. This chapter lists quite a few different resources for finding free things, both online and offline. I myself prefer to swap things, where I’m keeping the number of possessions I have in reasonable check while also getting things that I’d like to have.
8 | We Can’t Retire. We Went out to Dinner Instead
Dining out might seem like a normal routine for some, but if you add up the costs of it over a long period, it adds up to a lot of money. If you eat out twice a week for $30 when you could eat at home for $5, guess how much that adds up to over ten years? $26,000. If you can trim those meals eaten out down to once a week, there’s $13,000 you didn’t have before. Figure out ways to eat out for less or cut back even more on dining out and you put even more money in your pocket.
9 | The Joys of Horse Trading
Bartering and swapping can be a very wonderful thing. It allows you to connect with someone else, give them something that they’ll value more than you do, and receive something you value in return. It’s pretty much a triple win. I barter quite frequently, using services like PaperBackSwap or simply going to farmer’s markets or swap meets locally (I really miss some of the swap meets I used to go to near the end of my college days).
10 | Break the Mortgage Chains that Bind Thee
Cheapskates tend to buy smaller homes (averaging around the size that was the national average home size circa 1970) and buy below their means (meaning they don’t take out every dime they possibly can in mortgages). On our home purchase, we certainly checked off both of these boxes, though we may someday build soemthing different and slightly larger when we can afford it and pay cash for most of it.
11 | Bon Appe-Cheap!
The fine art of cooking food for yourself at home isn’t lost on Yeager – he spends this chapter discussing home food preparation, particularly ways to do it for less. There seems to be some difference of opinion in this chapter among different frugal folks about how to maximize your dollar, but Yeager ends the chapter with a summary of many of the points people do agree on, such as shopping for food only once a week and “laddering” your produce (eating stuff that goes bad quickly early in the week and saving the hardier stuff – like apples – until later in the week).
12 | Don’t Laugh. It Gets Me There … and It’s Paid For.
You should always pay cash for a car. If you can’t pay cash for that car, you shouldn’t be buying that car and should be looking for a less expensive model. Ideally, you’re buying a used car with a good track record for reliability and then driving it until it’s nearly worn out. Doing much beyond this plan will ensure that your car becomes much, much more of a money eater than it already is.
13 | Cheapskates Come out of the Closet
Practicing organization and premeditated shopping in the form of an ongoing “clothes I need” list. Hitting thrift stores instead of new clothing stores. Buying new only if you see deep discounts. These are the tactics of people who spend very little on their clothes budget and yet still manage to dress professionally and respectably. I know that I was surprised the first time I started shopping for used clothes. I expected to find mounds of threadbare stuff – instead, I found mounds of practically new stuff mixed in there for pennies on the dollar.
14 | Insurance: Betting on Yourself
Most of this chapter simply advocates for the power of shopping around for insurance. This isn’t just a “do-it-once-and-forget-it” kind of thing – it’s something that’s worth doing regularly, and you can sometimes get great deals by switching insurers. Yeager does get a little bit political here, advocating for universal health care, so if that bothers you, skip by it.
15 | Cheapskates Just Wanna Have Fun
How do cheapskates have fun? They participate in things. They make up their own fun. They choose activities that are social and active rather than passive. They pick and choose the expensive activities they engage in and rely on a backbone of very inexpensive or free activities. When they travel, they often travel in groups and go off the beaten path for unusual experiences and better prices.
Is The Cheapskate Next Door Worth Reading?
Yeager’s first book, The Ultimate Cheapskate’s Road Map to True Riches, was a very enjoyable collection of frugality tips. This book, however, seems to largely be an add-on to the first one that also incorporates a lot of interviews with people who are committed to frugality. It has the same sense of humor, but much of the advice is just an expansion of what appeared in the first book.
In fact, in many places in The Cheapskate Next Door, Yeager seems to actually say this. He refers quite regularly to his first book, doing it so often that, at times, I felt compelled to just go back and read the first one again.
I would recommend this one to anyone who enjoyed The Ultimate Cheapskate’s Road Map to True Riches and want to read more of Yeager’s stylings on frugality. If you’ve never read the first one, go back and read that one first and decide whether you want a second volume of that material that largely just expands on the first.