2712: [Part 1] Shifting To A Frugal Mindset Has Given Us Options. Tons Of Options. by Lisa Harrison of Mad Money Monster

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[00:00:40] This is Optimal Finance Daily Episode 2712. Shifting to a frugal mindset has given us options,

[00:00:48] tons of options. Part 1 by Lisa Harrison of MadMoneyMonster.com. And I'm your host and

[00:00:55] personal finance enthusiast, Diania Merriam. I have a bit of a longer post so I'll read the first

[00:01:01] half today and then finish the rest for you tomorrow. So with that let's dive into Part 1

[00:01:07] and start optimizing your life. Shifting to a frugal mindset has given us options, tons of

[00:01:17] options. Part 1 by Lisa Harrison of MadMoneyMonster.com. Change can be thought of as a nasty

[00:01:26] word that requires persistence, dedication and oftentimes pain. In short, change is work. It's

[00:01:33] something we can choose to do or something that can be thrust upon us whether it be changing our

[00:01:38] diets, changing our outlook or changing the way in which we handle our money. The latter can

[00:01:44] easily be the most difficult thing we choose to change. Notice I said choose to change.

[00:01:51] By definition, a habit is nothing more than a settled or regular tendency or practice,

[00:01:57] especially one that's hard to give up. That last part is what keeps us engaging in the

[00:02:02] same activity or thought pattern over and over again. But it certainly isn't impossible to change

[00:02:08] our habits, even financial ones. Sometimes the first step in changing our financial habits

[00:02:14] is to adopt a different mindset. Both Mr. MadMoneyMonster and I learned a long time ago that

[00:02:21] in order to reach our goal of financial independence, we needed to shift to a frugal mindset.

[00:02:28] Mindset. Over the course of our lives, we've had many successes and failures,

[00:02:34] but it wasn't until we tied the knot that we decided to get serious about our finances

[00:02:38] and chart a vastly different course, a frugal course. And with one almost disastrous decision,

[00:02:45] we shifted to a frugal mindset and haven't looked back. We both grew up in lower middle-class families

[00:02:52] that focused more energy on low cost of living, which is good, and less on investing and building

[00:02:58] wealth, which isn't so good. After joining Collective Forces, Mr. MadMoneyMonster and I

[00:03:04] thought it best to incorporate low cost of living with building wealth. We've had a long and windy

[00:03:11] road to get to our current frugal mindset, but we know what we're doing is the right thing for us

[00:03:17] and our financial future. With our eyes firmly planted on the ball, also known as our financial

[00:03:23] future, we'll be able to achieve our goal of financial independence within a few short years.

[00:03:29] But it wasn't just a shift in mindset that was necessary to achieve our goals.

[00:03:33] We also needed to examine each area of our lives in which money can leave our precious grasp.

[00:03:40] In other words, we needed to put our mindset into action. Here's a sampling of some areas

[00:03:46] in which we made significant changes or eliminated altogether.

[00:03:51] Number one, our home. This is probably the most important arena where it was vital to our

[00:03:57] finances to have a frugal mindset. When Mr. MadMoneyMonster and I were planning our amazing

[00:04:03] wedding, we were also planning to purchase a bigger home. You know, we wanted to move on up.

[00:04:09] I purchased the house we were living in at the time as my starter house and never intended on

[00:04:14] staying there any significant length of time. In fact, my actual plan was to eventually turn

[00:04:19] the house into a rental property and move to a bigger, more adult home. In my mind,

[00:04:25] the time had come to jettison the small house and move into a house that could validate

[00:04:30] our success. Yes, I was that person. The long and short of it is that we found the perfect big home

[00:04:37] and were ready to sign on the dotted line until we discovered the house had a mold problem that

[00:04:43] wasn't easily remedied. On top of that, we were both having anxiety over the amount of money

[00:04:49] we were about to drop on sizing up our home. We weren't just planning to buy a bigger house,

[00:04:55] we were planning to double the size of our house. Double! After about a month of anxiety,

[00:05:01] we decided to listen to our guts. Our guts were telling us to pull the plug.

[00:05:06] Thankfully, we were able to do so and still recoup our deposit because of the mold issue

[00:05:11] with the house. Since then, we've embraced our smaller home and even turned it into

[00:05:16] our dream home and we paid cash to do it.

[00:05:23] Cars

[00:05:25] Where would this post be without mentioning cars? We currently own Free and Clear, a 2012 Nissan

[00:05:31] Juke and a 2012 Mazda 3. Both of our vehicles have around 80,000 miles on them and are in

[00:05:38] good condition inside and out. We don't use our cars for frivolous travel and since Mr.

[00:05:43] Mad Money Monster works from home, we're mainly a one car family. We maintain two vehicles because

[00:05:49] they're both paid off and we would be putting the same amount of miles on a single car if we were

[00:05:54] to only own one. Having two eliminates the hassle that we would ensue if we have an emergency

[00:06:00] with our mini monster or if Mr. Mad Money Monster needs to get to the airport at 4am,

[00:06:05] which happens every few months. We are of the mindset of buying reasonably priced cars

[00:06:11] that will go the distance without costing us a fortune. We fully intend to still be driving

[00:06:17] these cars 5-10 years from now.

[00:06:20] Number 3, buying clothes. Buying clothes is something that could be extremely detrimental

[00:06:26] to one's financial health if not kept in check. In fact, I used to spend almost 20% of my take

[00:06:32] home pay on buying new clothes. Granted, I was really young and didn't have access to the

[00:06:37] financial knowledge I do today. That's my excuse and I'm sticking to it.

[00:06:42] So just how did I spend nearly 20% of my income on clothes? I needed a new outfit for every Friday

[00:06:49] night I went out with my friends, which was every Friday night. Ridiculous to say the least.

[00:06:56] As I grew up and stopped going out all the time, I also scaled back on the constant

[00:07:00] outlay of cash for new threads. But just because I scaled back doesn't mean I still

[00:07:05] was an overspending on clothes. I would say I overspent on clothes for at least a solid decade

[00:07:11] of my life. Fast forward to a few years ago when I implemented a self-imposed clothes buying ban.

[00:07:20] My ban lasted for nearly two years before breaking down and buying a few new items.

[00:07:26] These days, I'm extremely conscious of how much I spend on clothes

[00:07:29] and how long I expect the garments to last. Ideally, any clothes I buy today

[00:07:34] will last me for years and will be basic and classy in style.

[00:07:39] Hence, my clothes can be mixed and matched to make many different outfits across several seasons.

[00:07:45] All told, we are easily saving thousands of dollars each year in comparison to our peers

[00:07:50] by forgoing the latest fashion trends. To say I have a frugal mindset in terms of clothes buying

[00:07:56] is an understatement. As far as Mr. Mad Money Monster's closet goes,

[00:08:00] I pretty much need to force him to buy new clothes on an as-needed basis.

[00:08:05] He would be perfectly happy to walk around without tread on his shoes and holes in his shirts.

[00:08:11] Thankfully, he's been this way his entire life when it comes to clothes,

[00:08:15] so no need to do any mental rewiring on his end.

[00:08:19] Number 4. Hear That on Tomorrow's Episode

[00:08:26] You just listened to part one of the post titled, Shifting to a Frugal Mindset

[00:08:30] has given us options, tons of options, by Lisa Harrison of madmoneymonster.com

[00:08:37] and I'll be right back with my commentary. Looking to part ways with complicated,

[00:08:42] expensive, and uncertain shipping? Then give your business the edge it needs

[00:08:47] with USPS Ground Advantage Shipping from the United States Postal Service.

[00:08:52] Keep everything simple with clear upfront pricing and no unexpected surcharges.

[00:08:58] Keep things affordable with some of the lowest prices out there.

[00:09:02] And keep it all reliable with on-time ground shipments.

[00:09:06] It's time to turn shipping to your advantage. Learn how at USPS.com slash Advantage.

[00:09:14] USPS Ground Advantage Simple, Affordable, Reliable

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[00:10:29] I've found that the less materialistic I am, the more idealistic I get to be.

[00:10:35] And when you feel in your bones that the best things in life are free, it becomes so much

[00:10:39] easier to deconstruct a lot of your consumerist conditioning. When you need less, it opens

[00:10:45] up the potential to spend less time working and making money, and more time with your friends,

[00:10:51] family, creative pursuits and hobbies. I've also found that self-imposed frugality is so much

[00:10:57] more pleasant than when it's imposed on you by external forces. Reducing your expenses due to

[00:11:03] a job loss or reduction in income can feel like deprivation and has a vibe of scarcity.

[00:11:09] But when I willingly chose to reduce my expenses while I was making a good income,

[00:11:14] it allowed me to tap into an abundance filled state of creativity and resourcefulness in getting my

[00:11:20] needs met. So then when I quit my job and my income dropped by $100,000, I saw absolutely no

[00:11:28] change in my lifestyle because I was already living frugally and enjoying it. And that

[00:11:34] should do it for today. Have a happy rest of your day and a great start to your weekend,

[00:11:38] and I'll see you for this Saturday show tomorrow where we'll finish up this post

[00:11:42] and where your optimal life awaits.