2713: [Part 2] Shifting To A Frugal Mindset Has Given Us Options. Tons Of Options. by Lisa Harrison of Mad Money Monster

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[00:01:09] Foods Market. This is Optimal Finance Daily Episode 2713. Shifting to a frugal mindset has given us

[00:01:16] options. Tons of options. Part 2 by Lisa Harrison of MadMoneyMonster.com. And I'm

[00:01:23] your host and personal finance enthusiast, Diana Merriam. Today's post is actually a continuation

[00:01:29] from yesterday. So if you're new here, it'd be best to listen to yesterday's episode first.

[00:01:35] But if you're all caught up, let's hear part 2 and continue optimizing your life.

[00:01:44] Shifting to a frugal mindset has given us options. Tons of options. Part 2 by Lisa Harrison

[00:01:51] of MadMoneyMonster.com.

[00:01:54] Number 4 Watching TV. I do love this category. In the not so distant past, I was one of those

[00:02:01] people who had the ultimate HDTV package to the tune of close to $200 a month. Yep,

[00:02:08] I really felt like having the best cable package was in some way a status symbol.

[00:02:14] Fortunately, Mr. Mad Money Monster never cared much about TV or sports. So when I suggested we

[00:02:20] try to scale it back, he didn't fight me. In fact, his immediate response was, cancel it. So I did.

[00:02:27] In reality, even though we had all the channels anyone could desire, we rarely watched TV.

[00:02:33] There would be entire weeks that would pass where we wouldn't even turn the TV on, let alone

[00:02:38] need the ultimate package we were paying for each month. Taking that $200 a month and investing

[00:02:44] it into low-fee index funds gives me a much bigger rush than having 500 cable channels at my disposal.

[00:02:52] We do maintain a Netflix lifeline, and it's been more than enough to satiate our television

[00:02:57] viewing desires. And if there's something else we want to catch, we try YouTube.

[00:03:02] So far, we haven't been disappointed. The best part? Many hasn't even noticed.

[00:03:08] Number 5 Entertainment. We've always been very good at entertaining ourselves with little

[00:03:14] to no outlay of cash. We're fortunate to live in an area that offers plenty of parks,

[00:03:19] trails and free events for us to indulge in. We're not averse to hiking in all kinds of weather.

[00:03:25] We're hosting friends in our home for dinner and a movie. Entertainment doesn't need to cost money.

[00:03:31] Sure, hosting friends isn't free, but it's certainly much more cost-effective to do so

[00:03:36] than to meet out at a flashy restaurant to buy overpriced food and drink because it's the

[00:03:41] expected course of action. We started bucking that trend years ago and couldn't be happier.

[00:03:47] Do we even notice our entertainment deprivation? Not at all.

[00:03:52] Number 6 Our Food. My biggest past financial downfall was eating out. I absolutely love to go

[00:04:00] out to eat. Everything about it appeals to my senses. I love the food, the atmosphere,

[00:04:06] the social aspect, everything. This was an area that we had to curtail in order to reach our goals

[00:04:12] faster and to be honest, we still struggle with it. There isn't a week that goes by that we don't

[00:04:18] stop ourselves from going out to eat and begrudgingly prepare a meal at home. Alas, we know

[00:04:24] the importance of scaling back on eating in restaurants both for our wallets and waistlines.

[00:04:30] In order to meet this goal, we do our best to plan out our meals in advance

[00:04:34] and make certain there are plenty of leftovers for work lunches. Interestingly,

[00:04:39] saving money on meals was our biggest money-saving hack after our housing and cars.

[00:04:45] Number 7 Education. Mr. Mad Money Monster and I did it right when it came to getting an education.

[00:04:52] We both worked our way through school with little or no debt on the back end.

[00:04:57] While Mr. Mad Money Monster chose a state school and had his employer pay for most of it,

[00:05:02] I chose to do two years at a community college and then transfer to a private school that offered

[00:05:07] a healthy academic scholarship to offset the sticker price. I was also able to obtain my graduate

[00:05:14] degree free of charge thanks to my employer. This was one facet that we tackled completely

[00:05:19] independent of one another and still came out ahead. Thankfully, we both made financially savvy

[00:05:25] decisions when it came to college education when we were younger. Number 8 Vacations.

[00:05:32] Finally, we come to vacations. We love vacations, but not so much that we're willing to ever go

[00:05:38] into debt to go on one. Neither one of us grew up taking fancy family vacations. The best either

[00:05:44] of us got out of our childhoods was a quick jaunt to the Jersey Shore which was three hours away.

[00:05:50] I'm not complaining of course. I'm just stating that we're fully aware that we can

[00:05:54] live a fabulously rich life without fabulously expensive vacations. Now that we're all grown up,

[00:06:01] how do we handle vacations you ask? We plan for them and we pay cash. Even our not-so-fruge

[00:06:07] Disney vacation was paid for with cash. And because we splurged so much on that vacation

[00:06:12] last year, this year we're doing a more reasonable vacation to the beach. Other options for not

[00:06:18] overspending on vacations? Engage in a staycation. Our family has done two staycations in the last year

[00:06:26] and had a wonderfully memorable time each time. I highly recommend them if you need a break,

[00:06:32] but don't have the money for flights and hotel rooms. And number 9 Options. This is obviously

[00:06:39] not an exhaustive list where you can implement a frugal mindset, but it definitely covers

[00:06:44] the heavy hitters and provides a starting point. Shifting to a frugal mindset was the start of a

[00:06:50] wonderful life and a bright future for our family. By doing so, we've been able to invest the

[00:06:56] difference to reach our ultimate goal of financial independence. By making a mental shift

[00:07:02] to incorporate frugality into our lifestyle, we happily discovered that our options increased

[00:07:07] dramatically. And having options to do more of the things we actually want to do with our

[00:07:12] lives is worth every bit of perceived deprivation we partake in. With each month that rolls by

[00:07:19] where we keep our expenses low via a frugal mindset, we get closer and closer to having the

[00:07:25] option of not having to work a W2 job at all. That's not to say we will immediately quit

[00:07:31] our jobs when we reach our magic number, but it certainly is nice to have the option.

[00:07:40] You just listened to part two of the post titled Shifting to a Frugal Mindset

[00:07:44] has given us options, tons of options by Lisa Harrison of madmoneymonster.com and I'll be right

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[00:09:43] Learning to live frugally and actually enjoy it is probably the number one way I've improved

[00:09:49] my finances. And this is a topic that bears repeating because we've been conditioned since

[00:09:54] birth to be consumers. So it takes a lot of intentionality to push back against that.

[00:10:01] From a financial perspective, reduced expenses can create a double whammy scenario where you'll

[00:10:07] have more to save towards financial independence and retirement. But also, since your lifestyle

[00:10:12] is cheaper to fund, you'll have to save less and therefore you'll reach financial independence

[00:10:19] sooner. I first built my frugal muscles by slowing down and being really mindful about

[00:10:24] the money I was spending. When I paused long enough to question my assumptions around what

[00:10:30] was a necessity, I was often surprised by the answer and delighted by my own creativity in

[00:10:36] getting my needs met. Another way I've pushed back against my consumerist conditioning is by

[00:10:41] understanding the concept of hedonic adaptation which states that people tend to return to

[00:10:47] a sort of set point of happiness after positive or negative events. So if I buy the new shiny

[00:10:54] thing, it's going to feel good for a little bit and then it just becomes a part of my new

[00:10:59] normal and has diminishing returns on my happiness. And that's another episode of Optimal Finance

[00:11:05] Daily in the books. I'll be back with more for you tomorrow. So have a great rest of your day

[00:11:10] and I'll see you again tomorrow where your optimal life awaits.