the art of frugal living

I’m no stranger to economic recessions. I graduated from school during the recession of the 1980s, followed by another recession a decade later. As a young, aspiring artist with a capital A, I was the antithesis of affluence. In my circle of artists, punk rockers, anarchists, and neo-hippies, having less was cool for all the right reason: it demonstrated detachment from materialism, plus you stuck it to the Man by eschewing a consumerist lifestyle. Truth is, I didn’t need or want any of the trappings of the middle class.

Fast forward about 15 years. A few things have changed in my life, but my core value has remained the same: less is more. Whether by design or by circumstance, I’ve managed to live small, allowing me to indulge in the things that mattered most to me. To me, thrift is a responsible choice.

Over the years I’ve found my personal formula for financial happiness. This is not meant to be a recommendation or advice on personal finance, but it works for me.

Rent
San Francisco, where I live, is rent controlled. I moved into an inexpensive — ableit tiny — apartment in a working class neighborhood 15 years ago and stayed put. So did my rent. Economist Paul Krugman claims that rent stabilization leads to the creation of less housing, thereby raising prices on available units. While I can understand the economic implications, San Francisco’s Rent Stabilization Ordinance exempts all units built after 1979, so not every landlord gets screwed. On a personal level, I’ve put a lot of sweat equity into preserving my unit. I stripped 30 years of old paint and renovated my kitchen cabinets at my expense. I regularly paint the place and freshen it up. My partner, an electrician by trade, rewired the wonky wiring, which saves up almost $10 a month on our PG&E bill as well. I like my place, warts and all, and I want to hang on to it.

Public Transportation
Owning a car is a huge money drain. Aside from escalating fuel costs, the cost of auto insurance in a city tends to be significantly higher. Some folks opt to rent a garage, which can cost at least $100 a month. Park in the street and risk a smashed window, vandalism, or parking tickets. I had a car when I moved to SF in 1989, but promptly got rid of it after weighing the plusses and minuses. Obviously, living in an urban center with public transit makes this choice easy. I’m a block away from the subway and several bus lines. But even if I rented a car every weekend a year, it would still cost less than owning a car.

Never Pay Retail
Years ago, I attended a luncheon with the founder of the internet company I worked at. She was a mover & shaker at CNN, well-connected and very successful. I sat next to her at lunch and complimented her on her stylish wrap dress.

“Thanks! It’s by Diane Von What’s-her-name. I paid $30 for it.”

Here was a woman who could afford the best in life, but she didn’t. She didn’t even care who Diane Von Furstenberg was. It was more gratifying to get something of value for less — a lot less — than pay full price. Clearly, each person’s idea of frugality is different. I could skimp on expensive clothes and dining out, but don’t bat an eye when plunking down $100 or more on a good pair of shoes (but not heels, I’m done wearing ankle breakers.)

Save for a rainy day
My father was 59 years old when I was born. That’s not so unusual these days, but when I was a kid, having a old fogey dad was not the norm. That said, he came from a generation of people who had lived through the Great Depression and knew what it was to live a hand-to-mouth existence. No matter how well you were right now, it could all change. He harbored a mistrust of banks and believed credit cards were at the root of our society’s ills. “If you can’t afford to pay cash, then you can’t afford it. Remember that, kiddo,” he used to say. My father kept $50,000 in cash in the false bottom of a drawer, “for a rainy day.” This mortified my mother, who feared a house fire could take it all away. When he bought a new car, which he did about every 2 or 3 years, he’d walk in with a wad of bills and pay for it in cash.

While I wouldn’t keep a stash under my mattress, my father’s personal finance philosophy stuck with me. Unlike dear old dad, I do have a credit card but I never carry a balance. I’m the kind of customer credit card companies loathe because they never make a cent off me. I used my it to build a substantial line of credit, “for a rainy day.”