Updated on 02.27.07

America’s Cheapest Family: Chapters 1 – 5

Trent Hamm

America's Cheapest FamilyI have a soft spot for books on frugality, so when I spotted America’s Cheapest Family on the new releases shelf at my local bookstore, I had to read it. Are there a lot of good ideas inside for how to reduce your financial footprint, or is it a bunch of self-promotion and hot air? This week, I’m going to dig into this book and find out whether it’s worth your time.

In each chapter, I’m picking out a “best” tip. This isn’t the most money-saving item in the chapter, but the one that stood out to me as being quite interesting.

Chapter 1: America’s Cheapest Family
The first chapter is basically just an introduction to the book and to the general idea of frugality and how it fits into the overall scheme of personal finance. Some of my readers eschew the concept of frugality for various reasons, mostly because it’s not fun and it doesn’t get you “rich.” Well, if you’re interested in getting rich rather than getting your finances healthy first, this book probably isn’t for you. As for the “not fun” part, I agree with the authors that it can be quite fun if you turn it into a game where you win if you figure out ways to save a bit of time or a bit of money, and all of those little wins add up to some serious cash over time.

Best tip in the chapter: If you actually buy a book to learn from it, don’t be afraid to mark the thing up, take notes, etc. I generally find that if a book is good enough for me to want to do this, it’s a keeper, one that I’ll probably return to several times in the future, and it becomes more valuable for me if I do that. This book has huge outer margins so that you can scribble notes all over the place, something I actually did in places.

Chapter 2: Groceries – Savings by the Bagful
The real frugal advice begins in chapter two. An average family of four in America spends $8,513 a year on groceries, about $709 a month, or $177 a person. If that same family could knock out 20% of their food bill, they could bank $1,702 a year.

It turns out that the biggest money gobbler in the grocery store is impulse buying – things that people buy that they didn’t plan for when they walked in the door. Their biggest tips for reducing that are to reduce the number of trips you take to the store to as little as once a month (they recommend starting off with just weekly visits), careful meal planning so that you know what ingredients you need, the development of a shopping list from that meal plan, selecting coupons that match the shopping list, and making and utilizing leftovers for future meals. As for us, we actually use Excel for our meal planning and ingredient listing, but we often end up assembling our actual grocery list by using Remember the Milk.

Best tip in the chapter: Buy bread at a bread outlet store and stock up big when it’s cheap (even freezing excess loaves). I wish we had a good bread outlet nearby; we have one, but every time I visit they’re either basically empty or their prices are almost the same as the grocery store, so it’s not worth the time.

Chapter 3: Budgeting – The Cornerstone of Family Finances
I basically believe that religiously following someone else’s budget plan is a sure way to failure, and I basically advocate that when people start out on the road to financial recovery that they not create a budget for a while, but instead look at ways to reduce spending and also record every single dime they spend for a while. Thus, when I read the title of this chapter, I expected to disagree with much of the content. Interestingly, the authors actually agreed with my philosophy for the most part – they don’t present a ready-made budget for people to follow, but instead guide people towards how to create your own budget. It’s very straightforward, but it’s a good “how-to” for budgeting if you’ve never built one for yourself before.

Best tip in the chapter: If you make “guesses” to estimate how much you spend on a category in a given month, it’s usually way off. I know this was true for us – we overestimated our food spending, but vastly underestimated our entertainment spending. It became clear very quickly where we needed to trim some fat.

Chapter 4: Cars – Cutting Car Costs
It boils down to this: buy a late model used car, pay cash if at all possible, and never lease. Basically, the general philosophy is that you keep driving a car until you can write a check for the next one, then sell off the old car (don’t trade it in). This method basically ensures that you’ll maximize your dollars with a car and you’ll always have flexibility and options. For me, I have no personal qualms with driving my current vehicle into oblivion, and until then I’m parking some cash away to pay for the next one.

Best tip in the chapter: If you’re trying to sell your own car, park it on a busy street corner with a “For Sale” sign in the window and contact information. It’ll sell quickly. Just make sure it won’t get towed.

Chapter 5: Housing – Home Sweet Home
The first part of this chapter deals briefly with the home purchasing process, but the meat of this chapter is written directly for homeowners, juggling property taxes, home improvements, and the like. Their general advice is to pay off a home as quickly as possible, something I find myself agreeing with more and more as our home purchase draws closer. Owning a home and no longer having monthly housing payments makes life a lot easier and gives you a lot of flexibility.

Best tip in the chapter: If you’re looking at getting central air installed, the best time to bid is in the late fall, when business is really slow for air conditioning dealers. You can often get an amazing deal because it’s so out of season.

America’s Cheapest Family is the seventeenth of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.

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  1. Xtine says:

    I don’t know when you might ever have a chance to address this…but making one’s own bread is nice.

    I realize it’s not for everyone, but with bread machines, it’s definitely more of an option.
    When I moved into my own place, my parents loaned me their breadmaker long-term. And oh, I used it. My bf and I buy only bagels, english muffins, and a luxury bread – hazelnut poppyseed bread.

    It pains both of us to pay money for a loaf of bread vastly inferior to what we can make at home.

    And it takes ~5-10 minutes to assemble the pan.

  2. gp says:

    One visit a month to the grocery store just doesn’t seem realistic. I have no problem bulking up on dry goods and frozen items, but how do they store fresh fruit, veggies, and milk?

  3. Xtine says:

    That’s what the farmer’s market is for.

  4. plonkee says:

    I agree with the comment on the difficulty of storing fresh goods. In fact, I find it difficult to store anything much (think 3ft wide by 1ft deep in cupboard space for groceries).

    I’d be interested in knowing whether they suggest any solutions or whether its aimed more at a larger sq. footage household.

  5. Debbie says:

    Groceries – learn recipes that use cheaper ingredients.

    Housing – I’m sorry to say that even after your house is paid off, you still have monthly payments: taxes, insurance, and utilities.

    The best time to replace a roof is during a drought. I am going to hold off on remodeling until the next economic downturn.

  6. db says:

    Debbie, of course you will, but your yearly outgo will be significantly diminished. So significantly that you could either save tons more money than you would otherwise, or opt to do work that pays less if you’d enjoy it more.

    Owning a home outright would be a marvelous achievement. My parents are there and it’s made all the difference in their lives.

  7. walter says:

    we use ingles to buy our beef–they put their sirlon tips on sell$1.74-$1.98 a pound–they weigh average of 11 lbs.—they will cut them into roasts–steaks–cube steak—hamburger–the meat is so lean there is very little grease in the pan and they taste better than that other stuff they call hamburger? put into freezer bags –we use a food saver and they will last a year or better—-

  8. Aileen says:

    I buy the majority of my groceries once a month and unfortunately, because of the perishability of fresh goods, I end up buying a lot more canned veggies than I would like. The heartier the veggie though, I blanch and freeze. It also helps if you have an extra deep freezer. I buy family packs of beef, pork, chicken which I break down into dinner-sized packs and go to the international farmer’s market here in Decatur, GA where they have fresh (swimming) fish that I can get cut up for me and freeze when I get home. I also buy 4 gallons of milk (1 for each week) and freeze 3. I store the meat and milk in my deep freezer which leaves the refrigerator freezer open for the frozen entrees and vegetables. So far, this has worked for me. Luckily, I also have an extra closet/pantry where I store all of my dry/boxed goods. Some months are better than others, but we’ve made it work for a family of 6 for about 3 years now.

  9. Kim says:

    I myself can’t get into planning a month of meals or going to the store once a month. But our family of 5 averages $750-800 per month in groceries. I shop at several stores at different times of the month to get the bargains. Walmart has great prices. And discount food stores if you watch the dates are great bargains too. I also will travel to Lancaster, PA to get great deals on meats that will last me months with our upright freezer. I like to hit really good sales at Walmart of Kohl’s for clothes for the kids and I’m not at all too prideful to shop at a Goodwill store or a consignment shop. I love to find a bargain and this way of living is a rush for me. Have fun bargain shopping!

  10. barbara says:

    Buying groceries once a month is nice if you have the room. Instead, never shop when you are hungry, always make a list, plan your meals on the sales ads for the stores closest to you and use coupons. By the way; none of this is new information.

  11. Alison says:

    It looks like a fraud. They don’t live on $35,000/yr. That was their income in 1985. With a NY Times Best Seller, the royalties alone are probably more than $35,000/yr.

    Spending hours of time cutting coupons saves $1700 a year according to Trent, but if you simply got a better job, spent your time organizing for better pay, or worked a few extra hours you could make another $1700 in less than a year.

    And after all that time and effort, the food you have to buy is disgusting. Out of date meat, bread with high fructose corn syrup and transfats, processed cheesefood rather than cheese. I tried freezing real cheese and it makes it almost inedible.

    I’ll stick with my $700/month grocery bill.

  12. Tristan says:

    $709 a month on groceries? OMG I raised three children and never spent anywhere near that. That’s crazy.

    Alison, you can get perfectly healthy food for not much money. You shop sales, buy bulk and eat less meat. Veggies don’t cost that much. I buy, freeze and eat real cheese too.

  13. Julie says:

    I probably spend close to $700/month for groceries for our family of 6 (and baby). I do the majority of our shopping at Costco and supplement with grocery trips for produce and milk and misc. items that come up. I never used to watch what we spent and was very wasteful. This is all new to me and I am loving it! I am finding that buying in bulk and cooking from scratach and freezing a lot makes a huge difference. I’ve never frozen milk before, I’ll have to look into that!

  14. Margaret says:

    Buy cheese on sale, grate it in a food processor, throw it in a ziplock back, freeze it. If you don’t mind a little extra work, you can freeze it on a cookie sheet before bagging it, which keeps it a little looser, but I don’t bother. It is fine for pretty much anything that calls for grated cheese (pizza, adding to sauces, etc). I don’t care for frozen cheese if I plan on slicing it up to eat — it gets all crumbly. But I love having bags of grated cheese ready to use, and I love taking advantage of when my preferred brand goes on sale.

  15. tonto says:

    You cab save $ this way. My hubbie and I store canned and boxed goods that were on sale/clearance anywhere we have extra space; under the bed. We even added a pantry shelf in our bedroom closet to add more goods in the unused space! By the way, some say you should take that extra time and just work more in those hours spent budgeting/couponing. That may be true for some, but, these tips work for those who may be staying home with their children and they can do this around the time spent caring for them. That saves more money than paying for child care just to go to work(work expenses: child care, gas, clothing, lunches, etc.). I think this book works for those who don’t mind the extra time it takes to save some cash.

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