By Dr. Leif Dahleen of Physician on Fire, WCI Network Partner
It was a good day up north in early January.
I turned the thermostat down to 45 degrees Fahrenheit. The water heater got a similar treatment—I dialed it way down and didn’t stop at low. I left it somewhere just north of pilot.
I turned off most of the breaker switches—that’s easier than going around and turning off surge protectors and unplugging most everything else from the wall. The refrigerator was left running—I’d hate to waste food by letting it go bad—although we did give a grocery bag full of perishables away the day before. I also called USAA and asked them to put our cars on “storage mode.” We wouldn’t be using them for a couple of months.
I did everything I could think to do to save money just before getting away on a two-month family trip to Spain.
The best part about saving money on some things is that it makes it easier to splurge in other ways. I make no apologies for my frugal weirdo tendencies. These habits have served me well and helped put me in a place where work has become optional, and I’ve opted out.
On the plane to Spain, as I read B.C. Krygowski’s Spending Habits for Professionals Who Want FIRE, I realized that I’ve never put many of these habits in writing. I also realized I’m a total freakin’ amateur when it comes to thrifty spending and healthy living as compared to my friend B.C., but I do have a number of helpful tips to share.
I have shared some musings on frugality before, mainly in the first year of blogging. I even considered calling this blog Frugal Physician before I conjured up Physician on FIRE. I’m happy to see that another physician has embraced the Frugal Physician moniker and is doing a fine job with it.
In The Frugal Physician: Self-Serving or Self-Denial?, I talked about how people are wired differently. Some boast about spending lavishly while others are most proud of their bargain-hunting prowess. Either way, the day-to-day stuff isn’t as impactful as how much or little you spend on big things like cars, homes, second homes, second wives, or third husbands.
In Frugal Without a Cause, I shared how frugality has largely served its purpose in our lives, but I don’t see a need to change things up just for the sake of spending more. I did mention a few ways that loosening the purse strings could improve one’s life, and I talked about the difference between acting frugal and being cheap.
I expanded on the cheapness vs. frugality concept in We Are Often Frugal, But Rarely Cheap. It’s true!
Finally, I pontificated on how frugality and minimalism can often be at odds in the aptly titled Minimalism Versus Frugality.
What I have not done is outline some of the many ways in which we actually save money. I’d like to remedy that.
After all, the most important number in obtaining financial independence is the gap between your spending and earning. I’ve got plenty of information on how to earn more money, but spending is half of the equation.
Frugal Things We Do
Buy and Sell Used Goods
I have no problem with used stuff. When you dine at restaurants, you eat with forks, knives, and spoons that have been in the mouths of hundreds of others off of a plate that has probably served thousands. Ever sleep in a hotel? Dozens of people have slept, among other things, between those sheets.
I don’t know many people who think dining out or staying in high-end hotels is sketchy. So why should buying used have a stigma?
Between garage sales, flea markets, thrift stores, online marketplaces, and buy-nothing groups, there is no shortage of quality, used goods waiting to be had for a fraction of the original price, if not free.
I’ve gotten great, sturdy mid-century modern furniture that was actually built in the middle of the last century this way. I’m not afraid to buy broken-in jeans off the rack at Goodwill. Kids’ toys, bikes, and pretty much anything they’ll grow out of in a matter of months or a couple of years are good candidates for used buys.
I once bought a used hot tub. Twice, actually. When you pay less than $1,000, you don’t mind leaving it behind when you move.
Never Pay Retail
Never say never, but when you choose to buy new, most things can be purchased at a discount. It varies by category and item, but just about anything goes on sale at least once a year. Black Friday and Amazon Prime Day are obvious times, but end-of-season clearance goes on quarterly for all kinds of seasonal items.
I buy most of my electronics refurbished and often after the newest version has come out. Doing so often saves me at least 50% as compared to buying new.
Combining the two tactics above, I got a great deal on a refurbished camera body from the Olympus Outlet on the latest Cyber Monday when it offered an additional 20% off.
It’s not the first time I’ve done so. Is a refurbished camera body more likely to have issues down the road? Probably. But I’m more likely to leave it on a plane or playground equipment than have it malfunction. I’ve done both.
Scratch and dent sections, clearance racks, and true outlet stores that aren’t just outdoor shopping malls with normal mall prices are all good places to find new or barely-used goods at substantial discounts.
Growing up, we routinely hit up the Eddie Bauer warehouse sale. It would rent out a big warehouse and have piles of slightly imperfect coats and other clothing at 70-90% off retail. Score!
Shop at Discount Grocers
Aldi can do wonders for your grocery bill. We no longer have one nearby where we live, but I’ll admit I was more excited than I should have been when I saw one on Google Maps near our Airbnb we booked for a month in Valencia.
Aldi sells quality groceries at very reasonable prices, and its cashiers are the Usain Bolts of the checkout lane. Everyone else is the Zootopia DMV sloth in comparison. There’s a reason Dr. Krygowski devoted a chapter to the chain in her book and mentions it in most other chapters.
I had also heard good things about Lidl, and I can confirm that the place is great. The same goes for the Spanish chains Mercadona and Consum. Different regions of the nation (and other countries) will have regional chains that offer fewer frills, more store brands, and lower prices across the board.
Warehouse stores like Costco, Sam’s Club, and BJs can also offer great values. They can also lure you into buying $350 worth of crap when all you needed was milk, eggs, and apples, so be smart about your shopping there.
We were Costco regulars for about five years before moving far away from one. I found that its sale items offered a great value, and the quality of its merchandise is uniformly excellent. Its Kirkland brand liquor often gets high marks in blind taste tests, as does its wine.
Cook at Home
For a few reasons, we just don’t eat out that often.
My wife and I are both capable cooks, and we can prepare most meals we would order at a restaurant just as well, in more right-sized portions and for a fraction of the cost. Home-cooked meals are very likely to be healthier, with less fat, sugar, and sodium than the same meal from a restaurant.
We’ve also got the time to cook. My wife has stayed home to raise our kids, and I haven’t missed dinner due to work since August of 2019. Even when I did have a normal job, if I wasn’t on call, I was almost always home in time to not only eat dinner but also help prepare it.
Speaking of kids, dining out with young ones can be so much fun. You bring toys, order their favorite foods, and still you’re using all the napkins at your table and the one next to it and apologizing to the waitstaff for the mess.
Brew My Own Beer
In 2010, I invested in a startup brewery. I immediately started homebrewing. There’s no better way to understand the brewing process than doing it yourself. For a detailed interview on my homebrewing setup, see my interview at The Flawed Consumer.
Although there is an initial cost in terms of equipment, the cost of ingredients is quite low. A typical batch that yields me 4+ gallons (about 7 six-packs’ worth) takes maybe $15-$25 worth of malted barley, hops, and yeast, depending on the style.
There’s also an investment of time, but it’s time spent on a fun hobby. Homebrewing can also be a great way to make friends. If you make quaffable beers, friends will be more likely to stop over. I’ve made a bunch of friends through a homebrew club, and I’ve been invited to join one in our new community, as well.
Much of the brewing equipment can serve double duty in the spring when maple sap is running. We’ve made our own maple syrup several times in the past. Again, it doesn’t save us much money, but, like brewing, it’s a fun process that yields a tasty product for consumption.
My parents make dozens of gallons of the stuff with their setup now, and we’ve got a total of four maple trees on our property, so we now source all of our syrup needs from them. We also sent the Waffles on Wednesday couple home with some of our parents’ syrup to enjoy (on Wednesdays, of course).
This may sound counterintuitive, but when you compare the cost of meeting a group of friends out for dinner and drinks vs. inviting a few families over to your home and providing the food and drink yourself, at worst, you probably break even.
Not many people are good at showing up empty-handed no matter what you say about bringing nothing but good cheer, so most gatherings end up being a potluck of sorts. Dr. Krygowski devoted a section of her FIRE book to this concept, as well. She’s fully embraced her friends’ inability to not show up with food and wine and now labels her parties as potlucks. She even threw one in our honor once, and it was a great time!
The gatherings we host are pretty informal. I throw some food on the grill, open up some chips and dips, and have a variety of homebrews on tap and sodas in the fridge. There’s usually a campfire, weather permitting.
If entertaining means catered food, a hired barkeep, private chef, or paid entertainment, it can get pricy quickly. I prefer to keep it simple because it’s more about camaraderie and conversation than anything else. I’m obviously not trying to impress anyone by inviting them over to our $90,000 home!
Our first “Doctor Home” was a new build—4,000 square feet. We put about $670,000 into it. The hospital went bankrupt, we had to move, and we lost a ton of money when we finally sold it years later.
Our next home cost us $325,000 and had about 3,800 square feet.
We moved again to be closer to family. This house set us back $270,000 and had 3,600 square feet.
Finally, we moved into the aforementioned house with about 1,100 square feet that set us back $90,000. Have you noticed a pattern here?
Having a small footprint as an early retiree allows us to easily travel for months at a time with low carrying costs and no guilt about a big, beautiful home sitting empty.
We do have a second home, a little cabin by the lake. It’s smaller than any of the houses we’ve lived in and very low-maintenance. It came in particularly handy this week as I self-isolate amid the COVID-19 outbreak after recent travels.
We spent four of the last five months thousands of miles from home. It was a glorious Spanish language sandwich with two months in Mexico, two months in Spain, and the holidays with family in the upper Midwest in between.
We travel as a family now. A hotel room can work for a week’s vacation—we did it at Disney World. But when you’re spending weeks or months in one location, a home is so much better for everyone.
With Airbnb, we typically get a full kitchen, a bathroom or two, and at least two or three bedrooms. All for the same or less than the cost of one hotel room that might have two double beds and a half-fridge.
In two months in Mexico, we spent roughly $2,300 on our accommodations.
We spent time in three of the largest cities in Spain, within walking distance of the city centers. We had family visit for three of those weeks, so we booked three- and four-bedroom flats. Altogether, our lodging costs for two months added up to about $4,400.
Booking with our Chase Sapphire Reserve, we’ll get 3% back in points that are worth 4.5% on future travel bookings, so we can actually subtract about $200 if we’re looking at true out-of-pocket costs for our apartments in Spain.
Most listings on Airbnb give you a minor discount for stays of seven days or more and often a big-time discount (40-60% in some cases) for stays of 28 days or more. If you’ve never used the platform, you can get $40 off your first stay (and $15 off your first Airbnb experience (tours and such)) when signing up via this referral link).
Pack a Lunch for Work
Well, I used to, anyway.
Growing up, we’d sometimes have “hot lunch,” but usually my mom packed me a lunch with a sandwich, an apple, a granola bar, and some kind of treat.
As an anesthesiologist, I sometimes heated up leftovers, but I usually packed myself a lunch with a sandwich, apple, and some kind of treat. I replaced the granola bar with a yogurt most days, and the brown bag was replaced by an insulated soft-sided cooler. But over a span of 30-some years, not much else changed from my lunchtime routine.
In my line of work, I was often eating lunch five minutes at a time anyway, so a frugal home-packed lunch was the best option. Even if I wanted to risk running to the cafeteria and back, the odds of eating that “hot lunch” while it remained hot was slim to none.
Credit Card Rewards
Strategic use of different credit cards, both for the large opening welcome bonuses and the ongoing rewards, has served us very well.
I don’t track my spending closely and I don’t add up the monetary value of the freebies we get, but over the last five years or so, I’ve booked dozens of free or nearly-free flights (paying mandatory fees only, not fares) and have been comped a bunch of free nights in hotel rooms.
For a list of the many trips I’ve booked, see Credit Cards for Free Travel and Cash Back.
Pack a Cooler and Snacks for Road Trips
My wife is from northern Michigan and I grew up in Minnesota. I spent most of my career in those two places, and our families are based in the two states. In our 17 years together, we’ve made that 10-hour drive from one state to the other countless times.
In those many thousands of miles, I’ve learned a lot. One, it’s not possible to hold your breath for the entirety of Wisconsin. Oh, that dairy air.
Also, especially when traveling with kids, it’s a good idea to plan ahead and have their needs taken care of before they arise. Snacks and sodas at the convenience stores are a ripoff. We’ll bring those things, along with some breakfast cereal, milk, water, and anything else we might want or need ready to go for the day.
We usually have one meal packed, as well. It looks a lot like the brown bag lunch of days gone by. The trip always spans two mealtimes, so we do hit up a fast food joint on most trips. We rarely partake of it when home, and I do like to have a little Taco Bell and Culver’s in my life.
Buy Used Cars and Drive Them for Years
I’m not a car guy. I don’t care much about what I drive, and I care even less about what other people might think about what I drive.
I now go months at a time without spending a second behind the wheel, and I love it. When we travel, we’re usually close enough to walk to many of the sites we want to see, and if not, public transportation and car-sharing services like Uber get us where we want to go.
Until recently, I had never bought a new car, and I’ve had good luck with low-mileage used cars. As I finished residency in 2006, I picked up a 2006 Chevy HHR from Enterprise. I sold it years later, but somehow, as of 2020, my wife was still driving a 2006 Chevy HHR. It’s a different one, actually, and it became mine for a number of years while she drove a minivan.
The minivan was a 2008 Chrysler Town & Country that we had for nearly 10 years and 120,000 miles, bought used from a dealer, and I upgraded to a 2017 Nissan Armada I picked up from Hertz.
I believe each of these used vehicles we’ve bought had under 40,000 miles when purchased, and we’ve put on over 100,000 miles on each before moving on to the next one. That obviously hasn’t happened with the Nissan yet, but that’s the plan.
Finally, as frugality has become less important to our future—and the federal government only rewards a tax credit to the purchaser of brand new electric and plug-in hybrid electric (PHEV) vehicles—we did buy our first new car. My wife is now in a 2020 Mitsubishi Outlander PHEV.
Discount, No-Contract Cell Phone Plans
Some people spend hundreds of dollars a month on family plans from outfits like Verizon and AT&T. You can spend $1,000 or more purchasing an iPhone.
If it’s super important to you to have the latest and greatest, have at it, but for a couple hundred bucks, I get a quality Motorola phone when I need one. On the rare occasion that I ruin it before its useful life of two or three years is up, I can get another one and not fret over the cost.
The cell phone service is where they get you. For years, I was on Republic Wireless. It's got great, low-cost plans that cost us $15-25 a month depending on how much data we used. It uses Sprint towers.
When we started traveling extensively, we made the switch to Google Fi and it’s been fantastic. In roughly 200 countries, the phone finds service and starts working before you get off the plane. Texting from anywhere is free, data is $10 per GB anywhere, voice service is cheap, and calls on Wifi are free.
Board the Dog with Family or Friends
It’s wild to think about spending more to board a couple of dogs than it costs for a family of four to stay in a nice Airbnb apartment, but that’s a reality for many.
We no longer have a dog, but when we did, we had family and friends that would take our dog into their homes. We returned the favor when our friends were out of town. A dog-watching exchange like that can save you hundreds of dollars per week.
Now, we’re on the other end of those transactions. We watch animals for people looking for a family to care for their animals while away. Rover is like Uber for pet-sitting, and we give our kids responsibilities and the proceeds from hosting pets.
Another option that I’ve explored but haven’t done just yet is housesitting.
Housesitting is kind of a hybrid between staying in an Airbnb and making money watching pets on Rover. Instead, no money changes hands, and you stay in someone’s place while usually caring for their pets while they’re away. It seems like a great way to live like a local while keeping travel costs way down, and there are sites like trustedhousesitters.com ($119 a year but 25% off with this link) that have sitting opportunities all over the world.
Installed a Whole House Fan
In the spring of 2021, we purchased a home that had no air conditioning. It didn’t even have ducts or vents in the home because the heat system was all baseboard heating fed by a basement boiler.
Rather than pick up a few window air-conditioning units, floor-standing portable versions, or the more expensive mini-split ductless option, we didn’t install air conditioning at all.
Instead, we opted for a whole house fan that does a wondrous job of sucking in fresh outdoor air at night. The unit uses less than 10% of the electricity that a central A/C system would use.
Haircuts at Home
I’ve been cutting my own hair since I left residency and the walk-in haircut place that cost less than $10. I don’t have to make an appointment, sit in the waiting room of a barber or stylist, or make idle chit chat over the buzz of the clipper.
I’ve also been the primary barber for my boys. I give them buzz cuts when they want one, which is a few times a year. My wife or mom will trim their hair up in between as needed.
What about my wife’s hair? On one of our first dates, we discovered that we had both been getting our hair cut by the same guy at the same walk-in barbershop. I’m not going to say that’s when I knew she was the one, but I’m not going say it wasn’t, either.
A few years ago, she asked if I would cut her hair.
She wasn’t joking.
I watched a YouTube video or two. I cut her hair. It took two minutes. She was happy. I was relieved.
So now I’m a hairdresser every four to six months.
I could butcher the job and she’d still look good. She possesses a natural beauty that I can’t mess up.
That also means she almost never wears makeup of any kind. We also plan to age as gracefully as possible. Trying to fight it is rarely a good look, and it can be one expensive losing battle.
Speaking of haircuts and good looks, I always look forward to these annual Hockey Hair roundups. You’re welcome.
Pay No Interest
As interest rates continue to drop lower and lower, being debt-free loses some of its frugal luster, but it still means we pay no interest to anyone. I wanted to be debt-free by 40, and I reached that goal.
We don’t finance anything. We pay cash for cars and our last three homes (and our cabin) were cash purchases, as well.
People who have paid off their mortgage feel richer without that monthly payment. They have more money to invest and can focus more on bigger goals like complete financial freedom.
As I mentioned, with interest rates at historic lows, it doesn’t necessarily make good financial sense to pay down all debts, but it makes a world of sense to ensure you’re not overpaying on the debt you are servicing.
If your current mortgage is more than six months old (at the time this is published), I can almost guarantee you can secure a substantially lower rate by refinancing. Look to the WCI recommended lenders for quotes across the country.
The same is true of student loan debt. Readers are refinancing with variable interest rates under 2% and fixed rates under 3%. Updated rates and cash back offers can be seen below. As always, if pursuing PSLF, do not refinance. Most others stand to benefit substantially with a refi.
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Frugality is relative. I’ve guesstimated that we spend about $80,000 a year. It might be a bit more. It would be a lot more if it weren’t for our frugal weirdo tendencies. People who are truly frugal will view us as spendthrifts. They’re not wrong. Our spending is well above average for the U.S. I’d say it’s a “fatFIRE” lifestyle, even if we don’t find a way to spend six figures in an average year.
Most of my physician friends are going to see us as frugal weirdos. That’s cool. They also see us globetrotting, spending our days exploring the world as a family, and wanting for nothing.
You can’t put a price on a luxury like that.
What are your frugal weirdo tendencies? Have they served you well? Comment below!