What kinds of people have figured out how to get a high-quality but low-cost lifestyle?

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Hipsters? Couponers? Extreme Retirees? Expats? Who’s living the good life with minimal spending?

ANSWERS:
Katie Bremer, Frugal! Me!

I’m no an expert at this, but…Successful Digital Nomads have it figured out.I’ve been making enough money through writing and editing that I can move around and live where I want, as long as I keep my spending down.In the last year, I’ve lived in the Bosque, Mexico City, Cleveland, Chicago, and now Austin.

As Paul notes for engineers, the same is true for most digital nomads. I need my phone and my computer, and, if traveling outside the USA, I need my passport. I need a week’s worth of clothes; ideally two. I need an equipped kitchen.

Seriously. That’s it. When my roommate picked me up from the airport a week ago, she surveyed my luggage and said, “Is this everything?!?!”

I separate ‘needs’ and ‘wants’. I have a high quality laptop and a high quality phone. I buy high quality footwear and ‘base’ clothes. Other than that, I do thrift store purchases, or skip buying stuff all together.

I’m new to this, and not perfect at it, so I’m curious how others make it work.


Brian Dunlap, I work on a series of tubes.
Is there a term for people like me?  Perhaps “Reformed Low-Quality, High-Cost Lifestyle People”?My story:
I was fortunate to find myself making fairly good money at a relatively early age.  Mind you, I had some years, immediately following college, that involved considerable struggling as well.Some 8 years ago, though, I was making a decent salary, with the occasional bonus and dividend but still nothing approaching remarkable.  However, my expenses were low – I was single, had no dependents, lived in a modest apartment, drove a car that was paid off.  I was comfortable.  I avoided outrageous expenses, but never really found myself wanting.Then I landed a pretty sweet job and my income blew up.  Things got to the point where I was paying more in income taxes than I’d grossed in years prior.This new job required relocating to a different part of the country, where I moved in to a huge waterfront home.  Eventually, I had 2 Porsches, traveled to Europe frequently (always flying first or business, and developed fairly snooty tastes.  And hey… it was fun.  But I was spending like wild (though still had money to spare).  Oh, I’m not wealthy by any means.  I’m not talking millions or anything near it.  But, not having kids and such, I had a decent income and a considerable portion of that income could be applied towards discretionary spending.

I think my father’s words of wisdom kept ringing in my head, though (he had always made good money, while at the same time being quite frugal)  Every time I sent off a car payment that was larger than most peoples’ mortgage payments, it bothered me a bit.  I kept thinking to myself my home was way too big and a waste of space; as silly as it was to spend all the money I was spending on cars, I’d see others’ even more outrageous vehicles and find fault with their spending (“You bought a Turbo but didn’t get the manual transmission?!  You put *those* rims on a Bentley?!  What practical reason is there to have that painting?!”).  I’d have to say my expenses were nagging me – and I almost began to resent my lifestyle more than enjoy it.  I couldn’t take compliments – if someone would say something nice about my house or comment on the view, I’d think things like, “Yeah, but you should see the utility bills! And it has no character or charm!”.

Last year, I essentially became “over it”.  I got sick of wasting money.  Admittedly, I probably got caught up in some of the election hype and all this talk of class warfare and what not, but I’d already  been progressing towards getting totally sick of spending money on useless things.  It was just a matter of thoughts translating in to action.

  • I got rid of the fancy European cars (after calculating that I’d essentially been spending $2-4/mile driven when adding up car payments, insurance, gas, maintenance, registration, etc).
  • I bought a used hybrid.
  • I started collecting and cutting coupons.
  • I joined rewards programs.
  • I started paying attention to sales, discount offers, promotions.
  • I prioritized trips to visit family over wild vacations overseas.
  • I started tracking expenses (with various apps and programs like Quicken and Mint).
  • I set budgets.
  • I seek out fee-free ATMs like they cure cancer.

Some of my friends think I’m a bit crazy for making what I do, while obsessively cutting coupons.  I counter their criticisms with the numbers, though.  Essentially, I save through coupons the cost of a pretty sweet MacBook Pro – would anyone turn down a free MacBook Pro?

My little hybrid turns no heads and sure as hell doesn’t get me laid.  I no longer get parked up front when I valet (in no small part because I stopped valeting, as well).  But I went from spending $200-$300/month on gas to around $40.  If someone came up and offered to give you $250/ month just for the hell of it, would you turn it down?  Replacing the sports cars with the hybrid literally left me with thousands of extra dollars in my pocket every month.  Beyond that, though, it had an odd effect on me mentally.  With the sports cars, I felt compelled to be the first off the line at every stop light.  I frequently found myself getting cut off because I was always racing around everywhere; I’d speed, feeling like I had to go everywhere fast and getting frustrated at other drivers who were too damn slow or kept getting in my way.  Now, though, my commutes are pretty relaxing affairs – I’m content to cruise along at the speed limit, drive in a way that maximizes fuel efficiency, and never get road rage or stressed out on the freeway.  People don’t get in my way because… well… there is no real “my” way.  What’s more, now I’m actually quite eager to get the dogs in to the car and head over to the park to play around, or just drive ’em around on errands.  With my old cars, I was always too freaked out they’d scratch the leather or get hair everywhere.

Keep in mind – there is a certain unwelcome aspect to these lifestyle changes.Certain people expect you to live a certain way.  Sometimes, I feel my counterparts at a business meeting are a little less impressed when I pull up in a modest hybrid, as opposed to some high-power import.  Certain people interpret frugality as weakness – perhaps I’m not cost-conscious so much as just broke and struggling?  If you circulate among a certain type of people, the expectation could be that everyone spends lots of money (“Hey!  Let’s go to the Keys next month!  Let’s meet for dinner at Joel Robuchon [ Traditional French Cuisine : MGM Grand Hotel & Casino ]”).  You don’t want to cut off relationships, but must also refrain from certain indulgences your peers are eager to engage in.

I don’t like to think of myself as cutting out all the fun and being a miser, though.  Rather, I characterize my lifestyle changes as prioritizing experiences over possessions.  So I’ll still spend money that one more cost-conscious than me might prefer to save or invest, but I’ll do it on Christmas gifts for loved ones rather than an Oriental rug for the dining room.  I’ll visit family and stay in the guest room rather than that nice hotel in town, further making the most of even more time spent together by taking everyone out to dinner.  I’ll still travel, but focus on what gets done while abroad and making the most of the experience, rather than wasting money on outrageous hotel rooms or freely drinking $15 sodas out of the minibar.  And when in that strange, foreign city, I’ll walk everywhere and take in the sights, rather than spend money on a taxi.

“Just because you have money, doesn’t mean you need to spend money”, my father would always say. It took awhile, but I finally picked up on that.I could lose every possession tomorrow, but memories of fantastic experiences aren’t going anywhere.  Practically, spending wisely now is an investment in the future as well.  I may not have a partner’s social security to supplement years from now, and I definitely won’t have adult children who’ll help look after me in my old age.  As an unmarried gay man, preparing for retirement is entirely up to me.


Michael O. Church, NYC machine learning functional programming.
Material needs and desires tend to exhibit a Maslovian Hierarchy of Needs.

  • Survival. Food, clothing, shelter, electricity, ability to get to work, health care.
  • Leisure. This is “freedom-to”, such as travel, interesting books to read, access to live entertainment, and the ability to eat at restaurants on a fairly regular basis.
  • Comfort. This is “freedom-from”, which involves not having to do your own cleaning, flying first-class if you travel frequently, and having a nanny so you can have kids and a social life. It also usually requires getting a job where you actually enjoy going to work, because typical jobs are themselves uncomfortable.
  • Status. Most people lack the talent to max out Comfort without getting some kind of social edge that makes them “important” to other people. They need jobs with low responsibility and, in effect, access to the private social welfare network (limitless investment for stupid ideas, corporate board positions, sinecures) that rich people have. This requires playing a social status game that outsiders find pointless and destructive (and they’re right).
  • Power. This is the ability to improve or decrease others’ Status, once you’ve shored up your own and you’re bored and need something new to screw with. You need millions to play at this level in a material way.

Survival, Leisure, and Comfort all have hedonic returns, with decreasing importance for each. Leisure is more important than Comfort because most people can’t stand to be bored and would rather tolerate transient pain and discomfort in pursuit of something they enjoy (as on a long bike ride). Comfort becomes important when people start wanting to “purify” experience, because they’re no longer satisfied with the coarser experiences most people have (bland hotels, coach air travel). While important, Comfort is hard to max out because people just find increasingly trivial things to get pissed off about.

When you start chasing Status and Power, this pursuit makes you unhappy. The well-connected, stressed-out businessman shouting “I’m going to rape your shit for breakfast!” at a subordinate or even a client on the other end of his phone has Power (the capacity to intimidate others) but he’s not happy.

The reasons why so many rich people are miserable (and need more toys to retain even an acceptable level of happiness) is two-fold:

  • Money is other people, most people are useless parasites, so Money’s influence in your life is always to your detriment. This is true whether the issue is that you have too much or too little. Your best way to live well is to limit Money’s injection into your life as much as possible. This, unfortunately, means you need to have quite a bit of it, and be at a level that most people would consider “rich”, but it also requires that you spend it cautiously and make sure no one knows that you have it.
  • The quest for Power is endless. People who have that itch will never be satisfied. There are plenty of Kefka types out there who won’t stop until they’ve reduced the world to charred husk and are the last one to perish.

So, to answer this question: I’d say the best strategy (if you’re not rich) is:

  • Find something you enjoy doing, that pays well enough to build savings. You have a psychological need to work. Not working will wear on you. The only difference between being poor (meaning Silicon Valley poor, as in “has to work”, not actual poverty) and rich, then, is how much direction you have over what you work on. So keep looking until you find something that you’d do even if you had $150 million in the bank.
  • Save. A great job is nice, but shit changes. Managers come and go, companies get new executives and turn to shit, and sometimes you just want to change careers outright. You need savings so you aren’t worried about the day-to-day nonsense and insecurity that exist even in good companies.
  • Get rich slowly. Most of the VC-istan nonsense will just make you miserable, because most of the winners don’t deserve it and good people lose all the time. Most people who get “fuck you money” pass the event horizon slowly, through degrees.

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