I was recently interviewed by a reporter and was asked how much money I save per year by living frugally? This one stumped me as I had never tried to quantify the savings I earn by making across the board frugal choices.
At first I thought it would be $10,000 per year, but as I gave it more thought I realized the number was more like $15,000 – $20,000.
The numbers, (which I pulled out of the air and estimated on the low end) broke down as such:
- $300 per month for food — $3600
- Clothing — $500
- Vacations — $3000
- Gifts — $500
- Furnishings — $300
- Gardening — $200
- Entertaining — $500
- Entertainment — $1000
- Energy Conservation — $200
- Buying used vs. new — $4000
- Minimal Driving — $500
- Home haircuts/ free beauty school for me — $300
- Not eating out — $1000
- Using the library — $250
- Bringing own lunches to work/ school — $1000
Additional savings:
- Public schools — $10,000 per child
- No day care — $12,000
I’m basing this amount, ($16,750 before the additional savings) on normal middle class spending, as compared to people I know and have talked to.
These numbers would be significantly higher if I actually compared myself to someone who was truly living a conspicuously consumptive life. (Especially if that person sent their kids to private school, employed a nanny, and drove a BMW.)
How much do you think you save by living frugally? Less than me or more? Or do you think I got it all wrong? Please share your responses in the comments section below.
Katy Wolk-Stanley
“Use it up, wear it out, make it do or do without.”
{ 15 comments… read them below or add one }
Yeah, that question is a tough one to answer. I’d be more interested in what you spend than what you “save” because that’s… well, a bad question.
First, really it’s all relative. It depends on what you’re comparing to. For example, I’ve saved a fortune by not buying a mansion and yacht! And while it’s easy enough to compare specific things like line drying versus using an average dryer, the rest is less clear.
Second, what does it really mean to save? Mrs. Micah wrote an interesting post on the subject called “When do the savings kick in?” (http://www.mrsmicah.com/2008/01/20/when-do-the-savings-kick-in/) . For me, saving is what happens at the bank, not at the cash register. In other words, you don’t save $1 using a coupon if you still spend that $1. (Of course, even savings at the bank is temporary, but having the money there for a longer time period allows you to use it differently, e.g. for unseen emergencies.)
So, what many people call “saving”, my husband and I try to remember to call “cost cutting”, because that’s really what it is. And that we compare to our past expenses, though it’s an ongoing process with moving goals and comparisons. Fortunately, we’ve been able to cut our total living expenses quite a bit over the past year and a half and I look forward to them being much lower still.
Yeah, that’s a hard question to answer. When it comes to grocery savings I always like to think of it in terms of how much I spent instead of how much I saved(how much I saved completely depends on what I’m comparing my prices to!)
I can say that if pressed, we could live on $2370 a month. If I compared that to someone who lives on $10,000 a month, then one could say I save a lot by living the way I do. If I compare that to someone who lives on $3,000 a month, then I’m not saving much.
Here are a few concrete savings:
Vans brand shoes for my 13-year-old — $3 instead of $42.
Craigslist dishwasher — $50 instead of $600. (And my husband installed it.)
Pizza from scratch — $3 instead of $10.
Lunch from home instead of the hospital cafeteria — $1 instead of $5.
An afternoon spent going to “Free Comic Book Day” events — small amount of gasoline instead of $20 to go to the movies. (Plus we’ll use the comics as party favors for my son’s birthday in a couple of weeks.)
Columbia Sportswear fleece jacket pulled from a free box for my son — free instead of $25.
The list goes on and on.
How’s your list?
Katy Wolk-Stanley
The Non-Consumer Advocate
I like Meg’s comment about seeing the savings at the bank. We are planning on taking a year off to travel the world, so my frugality is for a cause. We save 25% of our take-home pay (after 401(k) and standard savings) for the trip. Which means less eating out, owning only 1 car that is paid for, and bypassing things other people take for granted, like a daily coffee from Starbucks. We decided how much we wanted to save per year and mapped our frugality around that number. The money comes out automatically for savings, so I have to adapt to whatever is left.
I’m pretty sure I won’t regret missing those things when we’re living our dream!
Hmmm…what an interesting question.
Since living frugally is all about living within your means (and your means is unique for each individual) I’d say that it all comes down to a simple equation.
I will make the assumption that people who are living “normally” (i.e. the baseline to compare yourself to) spend 100% of their income. I think that’s reasonable b/c we all know that many people spend MORE than 100% of their income.
The equation:
How much I save per year by living frugally = total income (including interest, investment income, etc) – total expenses.
IE – how much I save each year by living frugally is exactly that: How much I SAVE each year.
And Katy, in your case I would actually base your working income off of what you’d make if you chose to work full-time. This gives a numeric value to your life’s energy which you’ve chosen to “save” by living frugally.
Last month I “saved” $110.00 by taking my lunch to work half the time. Of course that also means that I spent that much on lunch, but I’m doing much better than when I would eat out every day. I don’t work in an office, so taking leftovers isn’t always the most practical option.
Recently:
3 magazine subscriptions…Dwell, People, Coastal Living for $0. Got them with frequent flyer miles.
Chico’s top $2.92 Family Thrift ..probably $49.00 at Chico’s
Gap jeans $3.99 Savers..probably $50.00 at Gap
1 True Delights granola bar $0..free sample in the mail
Living large on little!
@WilderMiss That seems like a good way to think of things! I know we used to spend more than our income, so anything we put in savings is clearly a result of our cost cutting.
My hubby and I used to spend as much as $400 on utilities. Now we’re spending about $50.
We also are paying about 1/3 for groceries now.
We also cut out our gym memberships as well as cable. That’s about $200 just there.
Interesting question. I’m doing the Compact this year and writing a blog about it and a friend suggested I have a sidebar listing how much I was saving. But that’s so hard to measure. I might not have bought an item even if I wasn’t doing the Compact.
I think for me I would estimate how much I’ll save this year doing the Compact, instead of comparing myself to what other people with my income might spend…
These will be conservative estimates:
groceries- $1200
clothes- $1000
gifts-$600
Christmas-$600
Buying used instead of new-$600
That’s a total of $4000, which is probably a very conservative estimate. I think the amount I save by living frugally in general is a lot more than that.
I’m with Angela. How much one is saving is tough to track. Today for instance, I got a free appetizer at Fridays (9.44) and free piece of KFC Grilled Chicken ($3.00). I also purchased Centrum Cardio (usually $16.00) for $8.99, used a $2.00 coupon and had a $10 rebate on the purchase. So I guess, just this afternoon, I saved $28.44. WOW- I did pretty good!
I should note I don’t usually buy such expensive vitamins. But this was an excellent deal!
Great post Miss Katy- Keep it up!
Far more important for me is the amount of time that I have saved. I no longer have to work a 40 hour week with a 2 hour, daily commute. Now I work 20 hours a week, 36 weeks a year at a lower paying job (-70%) that I love. It’s also just a 10 minute walk from home.
If, however, I hadn’t been frugal when I was working the other job, I never would have gotten to where I am today. Under-employed and seriously content with my lot in life.
I always hate this question, too. I “save” by taking lunch to work…but I couldn’t imagine doing anything else so I don’t save the money as I would never spend $8 per lunch every work day so it was never in my budget.
Living frugally allows to do other things with our money: My DH doens’t need $15 unlimited texting, but we can afford it because of other frugal living. He spends $250/year to get a special NFL subscription on DirecTV. Which also means we have DirecTV at $35/mo–if it weren’t for that, we had utter basic cable for $13/mo….which is terribly non-frugal but again, it’s because we’ve saved elsewhere so we have the money for things like this.
It;s the wrong question to me. The right one is, “What do you do that you couldn’t do if you didn’t live/spend frugally in other areas?”
That’s it, time more than money. Not spending all the money means you don’t have to spend as much time making more of it, the money I mean. So I say you double your gain by living frugally. You gain once from working less, and you gain twice by spending less.
Great point AnnMarie!
For my husband and I, being frugal has meant that we’re able to spend more money on things that we really love. For example, we significantly dropped our spending on eating out and convenience foods. As a result, we can now buy fresh whole foods (often organic), fair trade chocolate, delicious fruit wines, the best meat in town, wonderful cheeses, organic milk, fresh ground peanut butter, locally made jelly, etc. Sure, our grocery bill could still be a lot less, but it’s totally worth ~$350 a month for the two of us to feel like we’re eating like kings. And it’s nothing like what we used to pay for lots of boxed crap.
I like eating food I’ve prepared better than eating out, so I “bag it” for lunch almost every day. I buy all my clothes and home goods at thrift stores except for socks & underwear. For those of you who are squeamish about wearing used shoes, on eBay last week, I bought a pair of $150 Cole Haan Nike Air Mary Janes for $30 from a woman who said they didn’t fit her and she didn’t have the receipt. You can tell by the soles she wore them once, like she said. Last summer at a garage sale, I got a pair of new (probably $100 or so) Sorrell winter boots, in my size and one of my favorite colors, purple, for $10. And on Michigan Cheapcycle last week, I got a Dyson bagless animal vacuum for half of the $500 the seller paid for it six months ago. So, you need not sacrifice quality to be thrifty!