The Frugality Mentality or How to Squeeze a Nickel 'til the Buffalo Squeals

By Reita Hutson

At last, here's a book for everyone who is looking for the keys to a kinder, simpler life. It's the easiest to read manual you will ever find on slowing down, cutting back and improving your bottom line at the same time. Here is plain, straight talk about everyday finances, with down-to-earth, simple to follow instructions to help you gain control of your money and your life.

There are 21 chapters with hundreds of tips on how to bring your money and your life into balance, and say goodbye to your money problems forever.

Even though the book's title may imply it, it is not a book about scrimping and having a pinched lifestyle. It is about the wise and judicious use of money and how, by building a financial life raft, you can experience peace of mind and enjoy financial freedom. It is about being a good steward of everything that comes into your life.

Being frugal is often viewed as limitation when, in reality, it is waste that limits. If you don't believe that, just listen to the nightly news for all the tales of woe created by decades of excess spending. Those who tried to live the good life before they could afford have thrown the United States, and the world at large into a tailspin. The sad truth is that when we don't know how to manage our money, it manages us.

• Language: English
• Publisher: Reita Hutson
• Release date: Jun 19, 2012
• ISBN: 9781476139623

Reita Hutson

Prior to entering the real estate profession, Reita Hutson was a newspaper columnist, a special events coordinator and a public relations specialist. She holds a B.A. in public relations and business administration from Lake Erie College, where she graduated magna cum laude. Reita was named to Who’s Who in American Universities and Colleges because of her academic standing, community service and leadership ability. She is the founder and director of Gabriel’s Dream, Inc., a 50l(c)(3) not-for-profit organization that provides help, nurturing and support for the Lost Boys of Sudan. For her charitable work, she received the 2007 International Shining World Compassion Award. In 2008 she was given Arizona’s Hon Kachina and the National Association of Realtors’ Good Neighbor Awards. In 2011, her Findlay, Ohio high school honored her with its Distinguished Alumni Award. She is the mother of three children and nine grandchildren, and several hundred Sudanese refugees call her mom.

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INTRODUCTION

WHY YOU NEED TO READ THIS BOOK

Even though this book’s title may imply it, this is not a book about scrimping and saving. It is about making wise and judicious use of your resources and how doing so, over time, can change your life. This book asserts that more is not the answer to your problems. Better use of what you have is.

You see, I understand that in our heart of hearts, whether young or old, we all yearn for a less complicated life and more peace of mind. BUT, more often than not, that peace of mind eludes us because we fail to understand how our spending habits relate to our value system. Our value system determines how much we will waste, how little we will appreciate and care for what we have, and it controls how we measure the wealth in our lives. The economic health of our country and each individual depends more on our values than on anything else.

A weakened value system has allowed us to pollute and waste our precious natural resources, run up a staggering national and personal debt, and has left us trembling on the brink of personal, moral and national bankruptcy.

I wrote this book because I believe that we are at a crossroads in this country. In one direction lies the path of waste and self-indulgence that we have been following for years; in the other lies an alternate lifestyle—a simple thing called frugal living. It is my belief that if everyone (including our state, local and federal governments) were to start practicing frugality, we could get rid of all our debt and live freer, happier lives. Debt is bondage—and everyone who piles it up, whether our nation as a whole, or individual folks like you and me, becomes a slave to it.

This isn’t a book of theories. I have personally lived most of its concepts all my life. I believe that everything we have is a gift from God—and it’s all too precious to waste. By living with a deep appreciation for all He has blessed me with, and by practicing Biblical financial principles, I have achieved true peace of mind and been able to maintain my financial stability.

So please read on and let me help you achieve financial freedom. Let me help you get the most out of everything that comes into your life. I invite you to use and enjoy this book and I wish you freedom from financial woes.

Reita

Part I

LIVING THE FRUGAL LIFESTYLE

CHAPTER 1

THE FRUGALITY MENTALITY—LESS IS MORE

Have you ever thought about the fact that money—which is truly significant to all our lives—doesn’t come with a set of instructions? Just about every little gimcrack we acquire has a tag on it that tells how to use it—but not money, no siree.

Some of us were lucky. Our parents knew the art of stretching dollars, and they preached frugality—or we absorbed it by osmosis. Unfortunately, from what I have observed, many people either weren’t home schooled in financial matters, or they weren’t paying attention. Sound financial management is a rarity in many households.

As a real estate agent, I have seen more than my share of homeowners who lost their homes due to money mismanagement. My heart always aches for these dear people. Most are in denial. They don’t want to accept what is happening, and I have had the unhappy task of giving them a dose of the truth. Swallowing it can be hard because, very often, those who do have some equity in their home have creditors in line for it, so they are left with nothing.

Some of them made a fortune but spent their way into financial ruin. Most of their problems could have been avoided if they had managed their money carefully.

Being an economizer is a learned skill that requires operating by a set of proven principles. If you tried to learn to drive without acquainting yourself with the rules of the road, you would likely end up crashing into something. The same is true of money. You have to know what you are doing. It is, beyond a doubt, THE most valuable life skill you can acquire. It can make the difference between having a decent life and living with constant struggle. Money problems ruin more relationships, and cause more unhappiness than anything else under the sun.

If you have financial issues in your life, and are just hanging on by your fingernails, living from one paycheck to the next, I wrote this book with you in mind.

Some years ago, I started making a list of all the ways I knew to cut costs. I thought the list was something I could give to folks when I heard about their financial difficulties. My list kept getting longer and, very soon, I knew a book was taking shape. I believed it would be a set of money management instructions to teach financial strugglers how to stretch their dollars.

Saving money has always been easy for me. When I was five or six, my mother got coin banks from the savings and loan for my brother and me. We started saving what little bits of money we earned. I still remember the excitement when the teller unlocked the bank and pile of coins tumbled out onto the counter. It taught me that putting just a little away on a regular basis could truly add up.

My parents grew up in poor households and had survived the Great Depression. That made them thriftier than average. Waste not, want not. A penny saved is a penny earned. Save the pennies, and the dollars will take care of themselves. These were constant messages in my household. Rationing during World War II helped to further ingrain this philosophy. My mother could stretch everything farther, and make do with less than anyone I have ever seen.

Most people lived frugally prior to the end of World War II. It was a way of life. They had to do it to survive. When the war broke out, women went to work to support the war effort, and their families. However, when Johnny came marching home, the idea of two paychecks (or two chickens in every pot) was difficult to resist, so they kept working.

Credit cards became available in the 1950s, and Madison Avenue marketing gurus seized the opportunity to indoctrinate people with the idea that success and possessions were partners and that things were a solution to their problems.

The consumer movement began, and in recent years has manifested itself as a sickness. Nothing is ever enough, and as soon as we get something, we start looking for the next trendy thing. This compulsive behavior has invaded all aspects of our lives. It has even influenced our eating habits, making us the fattest culture on the planet. Everything has to be bigger, whether it is vehicles, houses, or the burgers, soda and fries we eat. And we eat those because we are so busy with our lives, working to pay for our stuff and rushing to play with the toys we’ve bought, that we no longer have time to cook or eat properly.

Busy is the new status—a condition I call busyitis.

STAYING AFLOAT ON THE ROUGH SEA OF LIFE

Those economic lessons I learned as a child have sustained me throughout my life. By being a faithful steward of all that God has given me, and by committing myself to time-honored Biblical principles and those my parents taught me, I have been able to build a financial life raft that has carried me over many rough seas. I have been able to remain calm, no matter how severe the storm.

My thrifty habits have seen me through many ups and downs in my life, as well as those in the economy. Among other catastrophes, I managed to survive a one-two-three punch that would have knocked most people out: a divorce, a job loss and major back surgery—all in one year. The back operation, the result of being bucked off my daughter’s horse five years before, occurred while I was getting divorced. Just as I got back on my feet, literally, I received the news that my office was being closed due to the economy. I had three dependent children, one of whom was in college, the horse that threw me, and no job. Even if I could have found work, I wouldn’t have been able to pass the required physical exam. To make it more difficult, the job I lost was one I had worked toward all my professional life. At the time, I was the School/Community Relations Coordinator for one of the largest school districts in northeastern Ohio. A budget deficit, caused by a severe recession in the rustbelt in the late 70s, had forced the school board to eliminate my position. Along with the job went my benefits. Particularly hard was losing school board contributions to my retirement fund. I had not been employed long enough to qualify to keep it.

So there I was—no job, no husband to support me, my benefits wiped out, a serious health problem, three kids and a horse to feed. However, because I had a financial life raft to keep me afloat until I could work again, I was able to move forward. I moved slowly, of course, because of my back surgery. I used to joke that: just when all the pieces of my life were falling apart, I couldn’t even bend down to pick them up.

While I was unemployed, I finished a college degree that had been in the works for several years, and planned a large outdoor arts and crafts festival for the following summer. It was something I had always wanted to do. While rain and the economic climate in Ohio kept it from producing a profit, it kept me occupied and using my skills while I was unemployable.

After the festival, I decided to move to Arizona to get away from those bone chilling Cleveland winters. At that point, there was nothing to keep me from making the move. I was now single, my children were grown, jobs were still impossible to find, and I wasn’t about to risk a downpour on another event. Besides, I had heard that the economy was terrific in Arizona.

So I packed up and headed west, where I produced another festival—and guess what? It rained again! Yes, it rained in Arizona, where it never rains. After that I decided to get a real estate license, which seemed liked a sure thing, because the market was sizzling. But just when I passed my test, the recession that had visited Ohio found its way to Arizona, and the bottom fell out of the real estate market.

I wasn’t born with a silver spoon in my mouth, and I’ve had my share of misfortunes. I’ve never made a lot of money—and for a twelve-year stretch I had little income, sometimes none. However, no matter how unglued my life has seemed, I have always been able to sleep at night because I knew I could pay my bills and make my mortgage payments. I have been bucked off a lot of things in life (besides my horse), but I have always had a safe landing because I had a financial cushion.

Having that cushion, or life raft, didn’t happen by chance. I had to work, plan and sacrifice to get it. If I hadn’t, I would have lost everything during those lean years.

Not only did I keep myself afloat, I managed to prosper. My net worth increased over the years in spite of those rough times. In the past few years, I paid off mortgages on three properties, paid cash for my home in Scottsdale, and I have no debt.

On September 9, 2001, I was watching a TV program about the Lost Boys of Sudan. Tom Brokaw was interviewing young Sudanese men who were victimized by the longest civil war in history. In spite of the horrors they had experienced, one told Tom, I am a lost boy in the world, but I am not lost to God. I felt God tugging on my heart, saying, I want you to help my sons. Four thousand refugees, named for the orphans in Peter Pan, had been resettled in the United States. Of those, 400 arrived in Arizona to begin new lives.

It was some thirteen months later that I met one of the Lost Boys, Gabriel Kuany, who was working as a cart pusher at a local supermarket. As we developed a relationship, and I took him to the dentist for a checkup, he confided that the only things he wanted in life were his education and teeth. His tribe had removed six lower teeth, canine to canine, during an initiation rite. I began to help with college tuition, and found a generous dentist who offered implants and another braces. Some of the Lost Boys took notice of Gabriel’s new smile and asked, Can we have your mom’s phone number? It was not my intention to become so involved, but since they all needed their education, and new smiles, I started a 501(c) (3) foundation called Gabriel’s Dream. I became ‘Mom’ to hundreds of the bravest, most wonderful, young men I have ever known—and subsequently, to many Sudanese women and children. Initially I was able to continue my real estate practice, but as time went on I had to put most of it aside, sacrificing approximately $600,000 in income from then till now, as I write this book. If I had not been a faithful steward of my resources over the years, I would have missed one of the most rewarding experiences of my life. To learn more about this organization, please visit our website, gabrielsdream.org.

That’s enough about me. I wanted to tell you a little of my life history so you would understand that being a frugality practitioner has served me well during life’s challenges and blessed me beyond measure.

DEBT IS BONDAGE

Our society uses money for just about everything other than its intended purpose. We use it to pump up our wounded egos, medicate our troubled psyches, enhance our self-esteem, increase our popularity and fill our empty souls. Much of our money is spent for psychological reasons rather than to address a real need.

Money was only meant to be a tool, invented as a means of exchange for goods and services. It can be your friend or your worst enemy, but as far as money itself is concerned, it doesn’t know or care how it’s used. It will serve you however you choose. It can work for you, or you can spend your whole life working for it. The choice is yours. Depending on your choices, money can accomplish beautiful things, or it can bring about disaster.

Before anyone achieves financial freedom, there has to be recognition of why it eludes so many. To me, it’s elementary. Two thieves rob us of our future security: overspending and overleveraging.

Most of our indulgences—whether it’s more house than we need, a luxury car, a big-screen TV, or whatever else—produce only temporary satisfaction. It is our nature to become dissatisfied and want more. Adam and Eve were the first examples. They were in Paradise, surrounded by everything they needed, but could not be content. They just had to have that piece of fruit, which cost them everything.

Few of us, in spite of all we have, are content either. We quickly adapt to improvements in our lives, and immediately move to the next, latest, greatest thing. As a result, we have to continually knock ourselves out to earn more money.

What we fail to understand is that, in reality, we are buying into someone else’s standard. In order to keep up, we jump into the vicious and exhausting cycle of earning more and spending more. This Eden-like quest to possess is fueled by an advertising-driven culture, and can only end with us applying the brakes.

Consider, if you will, our country’s inspiring mottos: Shop until you drop, A woman’s place is in the mall, and He who dies with the most toys wins—to name a few.

Yes, we’ve trapped ourselves by going for the bait that someone else placed in front of us. Let’s call the trap consumerism, and inside this beautifully designed trap are all your material desires. We go for the bait and SNAP! It’s got us—hook, line and charge card.

But how could we resist? After all, everyone else was doing it, so how could we avoid being seduced into all this debt? Wasn’t the message from the media, particularly the advertising industry, that we would be happy if we just bought this gizmo or that gadget? Deep down inside we never believed it, but we were so frequently bombarded with the message—brainwashed, you might call it—that our resistance crumbled.

We have, for the last twenty-five years, enjoyed a period of unimaginable wealth, but we spent it all on stuff. In the process, we created so much stress that one could say we are no longer making a living, but a dying. The result was the sacrifice of our freedom and the selling of our souls. Our conditioned response has led to innumerable financial disasters. Buy now, pay later, so the saying goes. Well folks, the time has come to pay, and if you look at the mess we are in as a nation, you will see that the cost is very steep.

While we have been worshiping at the altar of materialism, we’ve been piling up a national debt that will burden generations to come. Bankruptcies and foreclosures are at an all-time high, and so is our personal debt. Consumer debt was $100 billion in the early eighties, $770 billion in the mid-90s and hit a staggering $2.48 trillion in November 2011.

Millions of Americans are unemployed and many are only one paycheck ahead of catastrophe. Many of our corporations have filed bankruptcy or are slumping under the weight of heavy debt. Cities and states across the nation face severe financial troubles as well.

It is estimated that most Americans have a negative net worth. Only 2 percent of our retirees are prepared to survive financially. The average 50-year-old has just $2,000 in savings. As a nation, we are doing a poor job of saving compared to the rest of the world. According to the Investment Company Institute, the United States has one of the lowest personal savings rates in the industrialized world.

Most of us don’t understand this concept, but personal saving is essential to our nation’s economic health. Here’s how it works. When a lot of us save, our money goes into a savings pool, which banks lend to industries to use for expansion. When corporations grow, we have more jobs; producing a downward pressure on inflation and interest rates, and presto!—like magic, the economy improves.

It appears to me that in our race to get ahead, we have fallen behind. We thought we could spend our way into wealth, when in reality we spent our way into poverty. We have more of everything than our grandparents had. Supposedly we have made considerable progress, improving our lives since they were young. We would like to think we are happier, but if you look around, there isn’t much evidence to prove it.

LACK OF FINANCIAL DISCIPLINE

BREAKS MANY A HEART

Money is like a child without proper discipline: It can quickly get out of hand. It’s easy to fall into the trap of believing that if you just had more, all your problems would vanish. Like, you would become financially responsible if you earned more or won the lottery. Unfortunately, it doesn’t usually work this way. Psychologists and researchers have studied people whose incomes moved up, and sure enough, their spending expanded to consume the extra income. Many lottery winners go through their winnings like a house afire. There is a basic reason for this. Remember that I said that the road to financial freedom is made of work and self-discipline. Well, if you don’t have restraint with $20 in your pocket, you won’t behave any differently if you have a million.

It is a mystery to me how we ever developed the national belief that more is better when we see and hear plenty of real-life examples to the contrary parading before us in the national news. You’d think we would catch on. Nevertheless, we pursue the idea with increasing fervor.

Consider the Enron, Tyco, Bernie Madoff and other financial scandals, all of which involved extremely successful companies with highly paid executives. When you saw the life these people had—with multiple homes and flashy cars—you might have thought, Gosh, wouldn’t it be great to have all that? You were probably puzzled about why they would risk it all to get more. As it turns out, their palatial mansions and zippy autos were simply a testimony to their greed.

One can’t help but wonder if they were so preoccupied with trying to accumulate more that they failed to enjoy what they had. Did they ever take the time to revel in their beautiful surroundings? By most standards they had it all—but they too fell for that insidious belief that seems to occur, irrespective of one’s income, that if they just had more...

Perhaps these wealthy criminals have a God-given role to play in our society: to teach us that happiness doesn’t have anything to do with getting, having or doing more.

I have often thought the same about Hollywood stars. These rich, beautiful, celebrated people seem to have everything—fame, looks, fortune, gorgeous bodies, adulation from thousands of fans, lovers and exciting lives. Yet beneath all the trappings and tinsel lie broken lives—drug addiction, divorce, depression, loneliness, alcoholism, and problem children. Too bad we aren’t smart enough to learn from those who have been willing to share their wretched experiences in their autobiographies. They are shining examples that having it all, in the material sense, does not guarantee happiness.

Perhaps having it all should be redefined to mean: exercising control over your thoughts about money, and accepting that money has no power to cure your psychological ills.

THE ROAD TO FINANCIAL FREEDOM

So what would financial freedom feel like? Think of the peace of mind you could enjoy and all the ways your life would change. Wouldn’t it feel fantastic to be free of the financial woes that drag you down, that sap the joy right out of your life?

What would it be like to know you aren’t dependent on any person, job, or company pension to take care of you? Think of the possibilities! Maybe you could leave your present job and start a new career. Perhaps you could move to another state, write a book, take some time off and do what you want instead of what you have to do. Maybe you could spend more time with your family doing things you love, instead of being stuck in the nine-to-five grind. Maybe you could at least pay all your bills and save a little.

Sounds marvelous, doesn’t it? Well, it’s all doable, but before you read on, I will tell you that it requires discipline and work, and it’s not for sissies. So if you are into quick, painless solutions to your problems, this book simply won’t help. Our society has conditioned us to believe in quick fixes and immediate gratification, but the road to financial freedom is long, hard and paved with perseverance and self-discipline.

So, while this is a self-help book, it is not an immediate remedy. It’s a book that you do, not just read—and it takes practice, lots of it. It’s not that you won’t enjoy some immediate results; it’s just that, if you have financial woes, you didn’t arrive at them overnight. They can’t be eliminated without changing your attitude, habits and values. I’m hoping it was my catchy title that prompted you to pick up this book—but I have to tell you that the squeezin’ nickels part was more to get your attention, and make you chuckle.

THE FRUGALITY MENTALITY

Many people have a misconception about what it means to be thrifty or frugal. They think it’s all about having a pinched or limited lifestyle, or that you must lack something, as suggested by the words penny pinching or tightwad so often associated with frugality. Frugality is often viewed as limitation when, in reality, it is waste that limits. If you don’t believe that, just read or listen to your daily news for all the tales of woe created by decades of excess spending and waste. We have become possessed by our possessions, and our mere souls have been consumed by consumerism. In our pursuit of things, we sacrificed the enjoyment of life and we lost the things we’ve spent our time working for. Contentment and I want cannot coexist.

Frugality is the opposite of wastefulness, for it is all about preserving, appreciating, protecting, enjoying and loving what you have. And when you do that, everything increases. When you conserve your financial resources and plan for the future—instead of feeling pinched, you will truly feel