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The Ultimate Cheapskate's Road Map To True Riches - Book Review
I just finished a great book on living frugally to gain true wealth. The Ultimate Cheapskate's Road Map to True Riches by Jeff Yeager was an informative, quick and enjoyable read. Jeff Yeager is a very cheap man, but he has truly benefited from being cheap and he is perfectly happy about it. If only we could all be this content.
Jeff Yeager has a very good question on page 15 "When do you have enough?" Yeager made that decision when he first started working and stuck with that decision. I believe that this is how he got ahead. Many years ago when he was making very little money he decided that if he could only make $40,000 a year he would then have enough. The time came when he and his wife were making more than $40,000 a year and at that time he started taking every bit of money over this $40,000 to pay off their mortgage faster or put into savings.
Because he continued to live within his means he was able to pay off his mortgage pretty quickly and accumulate large savings and retirement accounts. This is his gold nugget number one. "Live within your means at thirty and stay there." Don't always increase your standard of living just because you get an increase in salary.
Gold nugget number two is to "never underestimate the power of not spending". Ben Franklin had a saying "A penny saved is a penny earned." Jeff Yeager says that a penny saved is a penny you don't have to earn again. Gold nugget number three is "discretion is the better part of shopping". If you think long and hard about purchases before actually spending the money, chances are good you will realize that you don't need to spend the money on whatever the latest thing you want is.
"Do for yourself what you could have others do for you" is gold nugget number four. I have to agree with this nugget the most. We have saved thousands, upon thousands of dollars doing things ourselves over the years. Everything from changing the oil in our cars, to cutting hair, painting, building fences, finishing basements and moving ourselves - we have done it. Most things really aren't that hard. The internet is a wealth of information and between that and your library you should be able to do just about anything.
Gold nugget number five is "anyone can negotiate anything". This is probably what I do worst. I even have a hard time negotiating at a garage sale, which in our culture is the most common place you will find negotiations going on. I do agree that it can save you a lot of money if you are willing to do it and have the courage. Especially when purchasing vehicles. Yeager has three rules for negotiating - never go first, be nice and never try it on a Monday.
Gold nugget number six is to "pinch the dollars, and the pennies will pinch themselves." Yeager thinks that the whole latte factor is ineffective. He believes that if you didn't worry about spending that small amount of money in the first place then you won't worry about saving that small amount on money. This is interesting to me. For many people those small amounts really do add up to a lot of money each month. However a person that spends a lot of money in many small ways is going to have a really hard time cutting back consistently enough to really benefit. They might resist that $4 cafe latte on the way to work, but then splurge on pizza after work.
Yeager also makes the point that these are single-expense transactions as opposed to recurring expenses such as cable TV or a car payment. Yeager believes that if you can concentrate on the major expenses of life like housing and transportation then you can have a worry free financial life for years to come. He does not think that people should move up in house over the years. Just a few decades ago there was no such thing as a starter home. Now you have a starter home and gradually work your way to a McMansion.
Yeager believes, and I agree, that if you finish in a starter home you will be much better off financially. Having moved twice myself in the past few years, I have to agree. Moving itself is very expensive, even when done yourself, and resetting your mortgage each time you buy a new home just prolongs your mortgage payment. If we had never moved from our starter home we would be almost halfway through paying off our mortgage. Instead we have over 28 years left.
There are also chapters on buying a home, not a castle (a reminder we all could use some time or another), entertainment, fiscal fasting (a great plan to stop the cycle of spending), your nest egg and thinking like the Amish when it comes to the digital age.
In the first chapter Yeager talks about what he calls "the money step". According to him it is the little dance of earning and spending that we do all the time.
Earning money, to spend money, to get what you want (or at least what you think you want). p 6
He advocates skipping the money step whenever possible.
Jeff Yeager is all about "enjoying life more by spending less." He constantly advocates living below your means and spending less. But he definitely enjoys himself while living cheaply it seems. This book is very funny and also practical. As someone who worked in the nonprofit sector for over 20 years he definitely knows how to spend less and gives lots of tips throughout this book. The Ultimate Cheapskate's Road Map to True Riches is a very worthwhile read.