I’m giving away an autographed copy of The Ultimate Cheapskate’s Road Map to True Riches by Jeff Yeager! If you want a chance to win, please leave a comment below. I’ll use a random number generator to select someone on Friday, March 14.
Some personal finance books focus heavily on the "finance" aspect of things. This book is mostly focused on the "personal" of personal finances. Books of this nature appeal to me more, since living frugally is more of a mindset than it is anything else.
This 241-page book is both lighthearted and dead serious at the same time. Yeager has a quirky sense of humor, which you’ll find throughout the book. I have to admit, I haven’t read tons of personal finance books, but this one probably has the most toilet humor you’ll ever find in a book in this genre. There’s a few potty jokes sprinkled throughout and semi-crude language in parts, so if that bothers you, be forewarned!
The author’s basic philosophy is that it’s best to live on less.
He cites a study that shows "wealth increases human happiness when it lifts people out of abject poverty and into the middle class but that it does little to increase happiness thereafter…" (p. 10).
So, if you’re not in poverty, then having more money won’t necessarily make you happier.
Yeager tells us that if we continue wanting more money (and always wanting more than we have) then we’ll never be satisfied, and we’ll never be content.
"Because I actually enjoy stretching dollars until Washington weeps, I can be happy–indeed happier–with relatively less than I would be with relatively more," he writes on page 15.
Makes sense to me.
In Chapter 2, Yeager encourages us to try a fiscal fast. "As the name implies, fiscal fasting is the act of denying yourself the use of money for a specified period of time, usually a week or even longer," he explains on page 25.
Do we really know just how much we’re spending, and where the money is going? Probably not, unless we’ve already got a close eye on our finances.
Some benefits of this fiscal fast include: purging your system and becoming inspired, saving a few bucks, tapping your reserves and using up things you already have, and reflecting and understanding the impact money has on your daily life.
In Chapter 3, we find "Six golden rules for ruling your gold."
- Live within your means at thirty, and stay there. Don’t let your expenses rise to meet or exceed your income, he explains on page 48. If you establish your standard of living at a young age, you’ll tame the need for always wanting more. It’s hard to be content if you’re always desiring more money/better cars/bigger house/fancier clothes/etc. That’s not to say you should never earn more; rather, simply live on an amount of money and save or invest the rest. Don’t let each pay raise raise your standard of living.
- Never underestimate the power of not spending. His simple idea: "the easiest and cheapest dollar we ever make is the one we don’t spend. That’s not only because of taxes owed on the dearned dollar, but because of the costs you’re probably incurring to earn that dollar in the first place, particularly if you subscribe to the ‘spend money to make money’ philosophy." (page 59).
- Discretion is the better part of shopping. Quit buying stuff you don’t need. If you must buy something, establish a mandatory waiting period before you actually buy it. (page 64). Try paying with cash for a month.
- Do for yourself what you could have others do for you. Home repairs, auto maitenence, landscaping, haircuts…whatever you outsource to other people, try doing it yourself.
- Anyone can negotiate anything. If you’re like most Americans, you’re probably a little uncomfortable with the thought of asking for a bargain. Yeager shares some ideas for how to make this go more smoothly.
- Pinch the dollars, and the pennies will pinch themselves. You know how you’ve heard "quit buying that $4 cup of coffee everyday and you’ll save a ton of money each year"? Well, Yeager is really annoyed by that. Most people, he reasons, are smart enough not to buy a $4 cup of frou-frou coffee every day. See his take on this around page 80.
In Chapter 4, Yeager shares some ideas on grocery shopping, and shows how he stocked his pantry with essential items for less than $25 at the dollar store.
In Chapter 5, called "Buy a home, not a castle," we learn some of the ways Yeager and his wife remodeled their home. It’s a lot nicer than most of his friends expect, since they know he’s such a cheapskate. He points to statistics that show the cost of a house has gone up over the years, but so have our expectations for what a house should be in terms of size and fancy features.
"What if you bought a nice starter home when you were young and just stayed there? Or for that matter, if you’re no longer all that young, what if you moved to a starter home today?" he asks on page 122. And, he encourages you to pay off your mortgage as quick as possible.
Finally, here’s the author’s take on financial portfolios on page 201:
- Reduce your dependency on money as much as possible.
- Maintain your health, thereby preserving your ability to earn money as needed and reducing the chances of incurring catastrophic medical expenses.
- Safeguard your assets, both liquid and fixed
- Attempt to maximize the growth of your portfolio, as time and interest allow (optional).
Bottom line: This is an interesting book, and it’s worth taking a look. Pick it up at your library, or grab it on Amazon.com, or find it at a bookstore. The author is going on tour, maybe you can meet him in person. And, if you’re really really lucky, you can win a copy from me.