How frugality can save a marriage

A small bit of backstory which most of my long-time readers already know.

When Don and I got married in 1990, we were living in Sacramento. We both had solid well-paying jobs and were living in a nice rental house. We gave up those jobs in early 1993 and rather impulsively moved to rural southwest Oregon, where we bought a fixer-upper on four acres.

The "excuse" for this drastic move was to send me to grad school (Southern Oregon University, where I earned my master's degree in 1995). At the time we moved, we knew we were at a rare now-or-never junction: No kids, no debt, a modest savings account. We were confident our work history would allow us to find decent-paying jobs in our new location.

We were wrong. Our income went from a combined $70K per year (very decent for the time) to zip, zero, zilch, nada. During our first five months in Oregon, while I was in school full-time and accruing debt via student loans, Don was desperately getting the woodcraft business started, which turned into our primary income for decades. By the end of my schooling, I was pregnant with Older Daughter, and becoming a mom took priority over the career I hoped to enter with my master's degree.

And so we struggled financially. We accrued credit-card debt through sheer desperation. We had student loans to pay. We had hospital bills (for the births of our two babies, plus the time Don cut the tip of a finger off on a power tool). I worked outside the home in tandem with Don's schedule (which usually meant nights) so we could trade off child care and avoid costly daycare.

Money struggles drive some couples apart, but it pulled us closer together. We realized the home woodcraft business was the key to allowing us to live rural (this was before remote work via the internet was an option), and we clung to that dream through thick and thin. We never wanted to move back to the city. Ever ever ever.

So we buckled down to make it work. We learned frugality to the nth degree. We learned to raise our babies on an absolute shoestring. Amy Dacyczyn, author of "The Tightwad Gazette" (picked up frugally at a thrift store), was my guru during these years.

It took a long time – especially on a woodcrafter's income, plus whatever part-time work I managed to pick up – but gradually we dug ourselves out of the debt hole we had dug ourselves into, and breathed the light of day once more. The experience left me with something of a pathological fear of owing money as well as a deep-seated hatred of credit cards, but there you go.

It was partly due to our hatred of credit cards as well as a few sour experiences with data breaches (see here and here) that we adopted an all-cash lifestyle over ten years ago, and never looked back. An all-cash lifestyle means we aren't shocked every month by a huge credit card bill. The only reason we use our credit card (yes, singular; we only have one) is to make occasional online purchases, and we also put our monthly expenses (health care, utilities, etc.) on it. And. Then. We. Pay. It. Off. Completely. Every. Month. Without. Fail.

Even today, when our financial position is blessedly more stable (though still modest), we discuss endlessly what we would need to do to tighten our belts and reduce our expenditures should our income fall. I think a little part of us is always waiting for the other shoe to drop.

Anyway, the reason for this little backstory is because of a post I read yesterday, seeking advice. The post read as follows, edited slightly for clarity:

"I (male, 35) have been married to my wife (32) for five years, and we've been struggling financially for the past few months. I lost my job about three months ago, and while I've found part-time work, it doesn't pay nearly as much as before.

"We've had to cut back on a lot of things, but it feels like no matter what we do, we're still living paycheck to paycheck and even pulling from savings.

"Recently, my mom (65) came over to visit, and she noticed how stressed I was about the money situation. She offered some advice on how we could save money – things like cutting down on takeout, meal prepping to avoid buying groceries multiple times a week, and switching to cheaper brands. My mom has always been frugal, especially when she was raising me and my siblings on a tight budget.

"I thought it made sense, especially since we're really trying to save wherever we can. I asked if she was willing to go through our spending and show where we could cut down. My wife agreed with this.

"She made a whole spreadsheet about our spending, and we are spending wayyyyy too much on fun stuff. We don't need Starbucks every day and so on. It also became apparent that most of the fun spending was my wife's.

"To be honest, my wife didn't take the breakdown well and started arguing with my mom that her spreadsheet was wrong. She said that my mom's way of doing things is "outdated" and doesn't work for us. She doesn't want to give up buying organic produce, and she likes having variety in what we eat each week.

"I tried to explain that we need to make some sacrifices if we want to get out of this financial hole, but she kept insisting that things weren't as bad as I was making them out to be and that we just needed to "ride it out."

"My mom left at this point and we were still arguing, and she told me she can't give up her takeout. She also went on about my mom being wrong. That's when I lost my patience and said, "You're f***ing wrong. My mom is right. She managed to raise three kinds on one income, and we can't even cut back on groceries for a few months?"

"My wife got really upset, saying I am being a huge jerk for siding with my mom and that my mom is outdated. She's barely spoken to me since, and now I'm wondering if I went too far. But the way I see it, we need to be realistic about our situation, and my mom's advice could actually help us get back on track."

The poster later added: "She (the wife) works part-time and doesn't wish to go full-time. It's not good for her mental health. I'm still the primary earner even with part-time."

Don and I have discussed this post quite a bit. We remember those days of financial struggle and how we tightened our belts. Restaurant meals, takeout foods, and food delivery were absolutely out of the question during those days. We might splurge and get a pizza maybe once or twice a year; the rest of the time, we cooked at home. Cloth diapers, homemade baby food, second-hand everything – that was just the order of the day.

But here's the thing: We looked upon these frugal habits as a challenge, not deprivation. We raised our girls in a happy, stable home. We never thought of ourselves as "poor."

That's why I can't fathom the wife's attitude in the post above. Couples should work together to overcome difficulties and achieve goals, not continue to spend above one's income. By insisting on not changing her spending habits – especially if she's not willing to work full time (I saw no mention that they had children) – I don't see a happy outcome for this marriage ... which is a shame.

Frugality isn't rocket science. It's mostly a matter of an attitude adjustment ... and that includes ignoring the opinions of others or trying to keep up with the Joneses.

Frugality is such a fun, creative lifestyle that it's a pity the lack of interest in adopting thrift can cause marriages to break up.

YOLO living

Sometimes when I wonder whether to address a topic here on the blog, I go with "clusters." What I mean is, I'll see or read something and think, "Huh. That's interesting." And then, unconnected to the original source, I'll see something else on the same subject and think, "Maybe I should write something about this." Clusters.

Often, of course, the coverage is clustered solely because it's a topic trending in the news; and that's why I'm discussing today's subject: YOLO living.

YOLO, as I'm sure you know, is an acronym for "You Only Live Once." It's been trending lately as a rather despairing response to high costs of living and low wages, and the frustrations that people – especially younger adults – feel with an economy that's against them.

YOLO living is exemplified by reckless spending on unnecessary items (including travel) because, hey, you only live once. It's often referenced in contrast to the nose-to-the-grindstone attitude of earlier generations.

Consider, for example, this video about a young woman complaining about her $8 coffee while drinking $8 coffee. I can't embed the video here, so I transcribed it. She says:

"So as I'm sitting here, sipping this $8 coffee, I'm just wondering if I'm the only girl living in the delulu land, because I cannot afford this $8 coffee. I honestly can't afford s***. I can't afford my car, my house, groceries ... I mean, like, how can this coffee be $8 when minimum wage is literally, like $8? So excuse me while I just continue to live in the delulu land while I continue go get my coffees I can't afford, because I'm going to continue to live and dig myself deeper and deeper and deeper into a gigantic financial hole because it cost too much to f***ing live. Thanks for coming to my TED talk. Bye."

Don is the one who brought this video to my attention by asking, "How much does coffee cost per pound these days?"

I had just been to the city for my once-a-quarter Big Shopping, so I knew precisely how much coffee costs. "I just filled up some bags with fresh-ground coffee at Winco for $8 a pound," I replied.

That's when he pointed out this video on the $8 coffee, and we speculated how many coffee drinks could be made with a pound of ground coffee. Short answer: a lot.

But hey, you only live once, right? Why shouldn't this woman enjoy her expensive coffee? Everyone deserves a little treat now and then.

The problem, I'm speculating, is the $8 coffee is not just "now and then," nor is it the only thing she recklessly spends money on. As she admits, she's "going to continue to live and dig myself deeper and deeper and deeper into a gigantic financial hole because it cost too much to f***ing live."

I sense her frustration. I sympathize with her frustration. But how will it end? The debt won't go away just because she's frustrated and angry and feel she deserves the occasional treat.

Now consider this article: "Economists are sounding alarm on 'YOLO' credit bubble." The author writes, "A growing percentage of Americans are becoming reckless with their spending, fueling what one economist calls a 'super duper' credit bubble. In a note to clients, economist David Rosenberg of Rosenberg Research warned that Americans are taking on too much debt to buy things they really don't need. He calls these people 'YOLO spenders,' which refers to the catchphrase, 'You only live once.'"

The article goes on to document the amount of credit card debt people are taking on, reaching all-time highs, and points out the obvious dangers of splurging on credit when it can't be paid off.

YOLO spending differs from survival spending. In this economy, a lot of people are maxing out their credit cards simply to pay their bills. I get that. I totally get that. In the past, we had crushing credit card debt due to the economic reality of raising a family on a very tight income. It took many years to climb out of that financial hole. In fact, those debt years left me with something of a pathological fear of owing money.

That's why this YOLO spending strikes me as irrational to the point of madness. It's one thing to max out a credit card because you're desperately trying to keep your head above water. It's a whole different thing to max out on YOLO luxuries. These spenders must know a day of reckoning will loom, right? If you can't afford $8 coffees, maybe you should buy a pound of ground coffee for $8 and make your own beverage at home...?

While I understand – and sympathize – with the frustration expressed by the young woman in the video, I can't help but feel there are better ways to go about enjoying the small pleasures of life without digging yourself "deeper and deeper and deeper into a gigantic financial hole."

Debt is terrifying enough if it's incurred simply for survival. But debt incurred simply to live it up seems like madness.

What advice would you offer this young woman, besides not buying $8 coffees?

An air of desperation

Don was scrolling through our local Facebook Marketplace buy-and-sell last night when he came across a listing for a 2023 Ford F350 truck. The seller wanted $73,000 for it.

"Seventy-three thousand!" exclaimed Older Daughter. "That's the down payment for a house! Let me guess, it has all the bells and whistles."

"Yep." Don started reading the list of amenities: Automatic this, heated that...

"That listing has an air of desperation about it," remarked Older Daughter.

And indeed it did. We started speculating why someone was selling such a brand-new vehicle, clearly barely used. We concluded the only reason someone would part with such a treasure was because of the monthly payments, which doubtless were at least $1,000/month for at least seven years. Was it buyer's remorse? Was it budgetary reality? Did the buyer just lose his job?

We recalled what Younger Daughter had mentioned when she was in boot camp in Great Lakes, Illinois: The number of car dealerships located just off base. Teenagers, newly enlisted and flush with the headiness of a steady paycheck and being away from home for the first time, would buy brand-new vehicles and then get saddled with crushing payments for vehicles they barely had time to drive before they were whisked off to another part of the world or deployed at sea. Madness.

But then, I think it's madness to spend $73,000 on a truck, too, unless the buyer is extremely well off or has a guaranteed job. It could also explain this headline from today: "Subprime Auto Loan Delinquency Erupts, Reaching Highest Rate On Record."

Whatever the reason, we hoped – for the seller's sake – he would find someone able to relieve him of this financial burden. $73,000 is an awful lot of money to owe for a vehicle, especially in these fiscally uncertain times.

Advice for economic troubles

The subject of debt has been all over the news lately. Personal debt, national debt, student loan debt, credit card debt, car loan debt, mortgage debt ... the list goes on and on. Then, of course, there's rising food prices, rising interest rates, rising home costs, rising rents, rising energy costs, rising everything.

In this economy, it's an extremely thin line between solvency and insolvency, between a comfortable middle-class lifestyle and homelessness. That thin line is getting scarily close for a lot of people, a frightening number of whom are living paycheck to paycheck.

A good friend admitted rising costs are hitting her family hard. "We figured that due to increases in everything, we have a shortfall each month of at least $2,000," she said. She says they'll be okay, but it's scary. They're ramping up some side gigs to get by.

We're also facing the potential loss of one of our income streams. This plays into one of my dark fears: Debt. Debt terrifies me, absolutely terrifies me. We spent many years in the hole when our girls were younger, and I never ever ever ever want to go back there. Accordingly, faced with a potential reduction in income, we're taking the usual steps we've taken during past times of economic hiccups: Decreasing our spending, boosting our other economic irons in the fire, tightening our belts. We've been through this before. We're black belts in frugality. We'll be okay.

But I thought this might be a good time to open up comments and encourage people to give their advice for handling tough economic times. While financial advice cannot be one-size-fits-all guidance, there are some universal principles everyone should consider. In addition to the usual suggestions of paying down debt and building up an emergency fund (excellent ideas but hard to do), here are some ideas:

• Get lean. Stop spending on anything except necessities. No dining out, no ordering in. Plug the financial leaks.

• Develop side gigs. Multiple income streams are safer than a solitary income stream.

• Start a written budget. It's important to know how much you're bringing in and how much is going out. Only by having it in black and white can you fully assess your financial situation and take the next step.

• Don't take your job for granted. Things can change in the amount of time it takes your boss to hand you a pink slip. Pretend you're about to lose your job and behave accordingly.

• Sell some things. We just had a humongous yard sale. So can you. Obviously any money you bring in should either go toward paying down debt or building up an emergency fund.

Please chime in with your own experience and advice on how to prepare for economic troubles. You never know who might benefit.

What would you do?

I read a post this morning which I found it both horrifying and heartbreaking. The post went as follows (edited slightly for clarity):

"AITA ("Am I a Total A******) for not helping my parents when they are homeless?

My parents are terrible with money. When I (27-yr-old female) was little, my father gambled away all the savings, about $100,000, in risky penny stocks which got wiped out in 2008, and we were forced to move into a single-bedroom in a house for the three of us.

Then my mom fell for an MLM [multi-level marketing] and you can imagine what happened; they lost the down payment to the house they were saving for. I begged them not to sign up for it, since I saw it was clearly a scam, and showed them evidence that it was, and they just laughed at me and ignored me. They lost about $28,000 from that.

Then recently they fell for a college signup scam and lost $32,000. They weren't signing up for college; they just needed a loan and tried to go through a "private broker" who promised to get them a school loan that they would use on whatever they wanted. I went with them to see the broker and told them it was a scam, and they ignored me.

So basically they were trying to scam the government, and got scammed instead. I actually tried to pry the pen away from my father's hands when I got desperate, as he was writing his bank info and SSN [Social Security number], and he screamed at me that I was embarrassing him, and [signed] anyway.

Again they lost money, and now they are homeless because their credit is cr*p and they can barely afford even cr*ppy apartments. They probably can't get that money back since they have little documentation on the broker and what he promised. Now they live in their car and are begging me for money.

I have about $100,000 saved waiting to buy a house, and they know about it because I stupidly told them I was saving for a house, and now they are calling me and showing up at my apartment asking for money. They also want to move in in the meantime, but my roommate and I agreed visitation from friends or family is [maximum] a week, to prevent resentment; and if my parents move in, they probably will refuse to move out.

They are going to food pantries, and honestly I can't find it in myself to be that sympathetic, since they don't listen to me until they need my money. AITA?"

In a later post, someone asked, "How did you save $100,000 by age 27?", and the young woman replied: "Saving every penny, no eating out, [wearing] clothes from high school, having roommates, no car, only taking public transportation or riding my bike. I'm traumatized from growing up with no money, so I penny-pinch like crazy."

Responses to this post were universally in favor of letting her parents stew in their own juices. Some people strongly suggested she lock down her credit in case her parents take out loans or credit cards in her name (since presumably they know her SSN). Everyone agreed she should not let them move into her apartment.

I read this post out loud to Don, and we discussed the ramifications of such a situation. It's easy to give harsh financial advice, but not so easy when it's dealing with the strong emotional bonds of one's own parents and watching them living on the streets. Clearly the Fifth Commandment tells us to honor our father and mother; but does that include bailing them out of self-made scam-laden mistakes? In short, there is no easy answer to this dilemma.

What would you do?

Earning more vs. spending less

I had a conversation with a friend recently, who was inquiring about our upcoming move.

During our discussion, the subject of finances came up, and I mentioned that our financial strategy has been to spend less rather than earn more. I mentioned our average monthly bills (besides the mortgage) come to about $500 (not counting food, hardware store purchases, and other variable expenses). The monthly bills include electricity, telephone, internet, FedEx (for our woodcraft business), home/car insurance, credit card payments (we have certain revolving charges on the credit card, such as the website hosting our ebook sales, etc.), health care premiums. Non-regular expenses include such thing as car registration, propane tank fill-ups, LifeFlight membership, Costco membership renewal, taxes (we pay quarterly), etc.

We're spending a bit more than we normally do as we renovate the house (paint, flooring, etc.), but those are mostly one-off purchases. But in general we continue to tweak and adjust our lifestyle so these costs are either maintained or decreased over time. Just this week, for example, we decided to give up our merchant services account (for accepting credit cards). Since our woodcraft business is now exclusively wholesale and we're no longer doing craft shows, our customers usually pay by check or PayPal rather than credit card. Our merchant services account charges us a base free of $35/month, plus a percentage of whatever charges we run through it. Closing that account means that's another monthly charge, gone.

This "spending less" strategy is fun. We enjoy the challenge of finding ways to reduce our expenses.

Anyway, this strategy seemed doubly smart when I read an article headlined "Celebrity surgeon went 'all in' on $180 million Bel Air mansion; then came the high-end housing glut."

The article begins:

When celebrity plastic surgeon Raj Kanodia started building his 34,000-square-foot mansion to flip for a profit, his real estate friends gave him a warning.

"They said, 'You're way out of your league,'" Kanodia recalled. "They told me, 'You'll run out of money and you'll be forced to sell it to service your debts.'"

Four years and well over $70 million later, Kanodia is feeling the weight of their advice.

The modern glass palace he built in Los Angeles' Bel Air neighborhood has been sitting on the market for more than a year. Rather than rolling in profits, Kanodia is now performing as many plastic surgeries as possible to fund millions of dollars in loans and the high costs of maintaining the empty house and grounds. After failing to find a buyer, he's now offering it for rent at $1.5 million a month and says he would consider offers of more than $120 million — marking a $60 million price cut.

The reason this caught my eye is because Mr. Kanodia is, presumably, older than we are (one website says he has "48 years of experience," so I'm guessing he's in his late 60s). At a time in life when Don and I are interested in downsizing and living on as little as possible, Mr. Kanodia is well and truly stuck with a level of debt unfathomable to us. The line that struck me most powerfully is this one: "Kanodia is now performing as many plastic surgeries as possible to fund millions of dollars in loans and the high costs of maintaining the empty house and grounds."

This is why we're looking forward to purchasing our next home without a mortgage – to be free of as much debt as possible.

Truly the Bible has it right in Proverbs 22:7: "The rich rule over the poor, and the borrower is slave to the lender."

At a time of his life when Mr. Kanodia might otherwise look to a comfortable and peaceful retirement, instead he is well and completely enslaved, arguably because of greed (his hope for a huge profit when flipping the house).

I pity him.

Financial management 101

If there's one benefit to raising kids frugally, it's that they learn to be frugal when they grow up.

We've had a number of critics over the years who warned us our girls would go crazy when they got out on their own. These critics pointed out the disservice we did to our kids by homeschooling them in a rural area under humble financial circumstances. We were told they would explode into a dark and nefarious lifestyle once they escaped what evidently they assumed was the jail-like environment in which we raised them. (I don't know why homeschooling critics always assume the worst of how we raised our kids, but there you go.)

I'm happy to report these critics are beyond wrong. Both our daughters have settled into their chosen careers beautifully, and are living responsible lives – and that includes financial responsibility.

Which leads to an interesting story Younger Daughter told us recently.

Younger Daughter, as you recall, joined the Navy in 2017. She graduated from boot camp just before Thanksgiving and spent the subsequent year undergoing training as an electronics technician. She is currently at her first overseas duty station and will go on her first deployment in about a month or so. (She flippin' loves being in the Navy!)

She's getting a reputation for being a "clean" sailor – a straight arrow, hard working, not given to excesses, etc. She also took up all the financial opportunities the Navy offers its members, including setting up a retirement account and savings account. She set herself an aggressive savings plan (in part, she hopes, to purchase some rural property when she gets out) while allowing herself some play money, since she'll be seeing parts of the world she's only dreamed about.

This clean and responsible reputation was confirmed when a fellow sailor asked Younger Daughter to help him draw up a budget. It seems this young man had $12,000 in credit card debt and needed to get out from under that burden.

YD asked him if he would trust her to look over his online banking records, and he agreed. So, drawing on the frugal lifestyle she grew up with as well as the financial management classes she received after boot camp, she sat down with the other sailor and worked out a plan that would get him completely debt-free and with $5000 in the bank by the end of next year … IF he follows the budget. Based on his income (which, in the Navy, is regular and predictable), she had him focus on paying down the debt first, then he can start aggressively saving by the middle of next year.

The sailor asked for a few concessions. While allowing him a certain amount of spending ("play") money on a monthly basis, he wanted extra funds available at some of the foreign ports they would be visiting so he could party ("If he makes it back without getting in trouble, I shall be genuinely surprised," wrote Younger Daughter). So YD budgeted that request accordingly, with the stipulation the spending money had to be in cash so he couldn't "accidentally" go further into debt. Once the cash was gone, no more partying.

We talked to YD a few days ago, and she said the other sailor was apparently following the budget she'd drawn up – to the letter. As a mom, I was very proud that other sailors thought YD was responsible and mature enough to trust her with their sensitive financial issues.

Which leads to an article I read recently entitled "Five (Potential) Misplaced Financial Priorities." In addressing the question of why people get into financial problems (outside of insufficient income, of course), the author, Trent Hamm, finds a lot of people spend money on "misplaced priorities" because they value the short-term more than the long-term.

Hamm writes:

[A]ssuming there isn't anything that can obviously be done to raise one's income or bring in some more money, the number one reason for financial problems is misplaced priorities. People spend money on things that should be a lower priority, and then find themselves struggling to pay for things that should be a higher priority."

This comes back to the "important" and "urgent" dichotomy that serves as a really powerful time management insight. Everything you need or want to do in a day fits into one of four categories – it's either important and urgent, important but not urgent, urgent but not important, and neither important nor urgent. Signing up for your 401(k) is important but not urgent. Taking your sick child to the doctor is important and urgent. Answering a ringing phone is urgent but not important. Channel surfing is neither urgent nor important.

We all do things each day that fit into each of those categories, but the biggest mistake we make is giving too much credence to things that are urgent but not important (answering a phone call) and too little credence to things that are important but not urgent (signing up for a 401(k).

Hamm lists five areas in which people overspend their money (go read his article for detailed explanations of each category):

1. Over-prioritized entertainment spending

2. Under-prioritized emergency fund

3. Over-prioritized food

4. Under-prioritized debt repayment

5. Over-prioritized college savings (this category was not a factor for the sailor in question)

Hamm concludes, "In my view, someone who is carrying a credit card balance month over month and doesn't have an emergency fund while going out to eat multiple times a week and carrying a cable bill is creating their own financial prison. That's a cavalcade of misplaced financial priorities, and they're adding up by the thousands each year, and yet it's a common story for many Americans." [Emphasis in the original.]

This is some of the basic stuff Younger Daughter tried to impart to the sailor who requested her help.

The ironic thing about both our daughters' financial management is because they've avoided debt and are aggressively saving their income, they're able to "play" and indulge in fun stuff a lot more than other young people their age who are mired in debt (credit cards, student loans, car payments, etc.) and feel hopeless to escape the trap.

I'm grateful our girls grew up frugal, and I sincerely hope the young sailor sticks to his budget.