What being thrifty means to me

Aside from the title of this post sounding like a middle school writing assignment, here we go with my thoughts on thriftiness.

 

I have always had an inclination towards actively saving money. Not in the sense of stashing away unspent money into a savings account for long term keeping, but rather, trying to save money at the moment it’s being spent. I’ve had weak moments or even weak years but minimizing excess spending has always been at the core of my personality whether it was ordering a water when out to dinner to save a few dollars or performing my own car repairs to save a few hundred dollars. I’m thrifty.
In my view, there are four main components to thriftiness: financial awareness, planning, action, and consistency. Those four components are integral to the way Mrs. Thriftyskate and I approach our finances and our life.

VennDiagram4

The financially gooey center

 

Financial Awareness

 

Money is a finite resource that I have the power to utilize wisely and effectively. Awareness of this basic fact motivates me to optimize my financial decisions through the other three components in the diagram above: planning, action, and consistency. Because of its importance to all of the other factors, financial awareness is depicted as a grey circle encompassing the other three components. Financial awareness should be the easiest component to grasp as it requires little understanding of the government treasury system, stock market dynamics, or any other esoteric subject. However, I have seen time and again that it is a difficult concept for people because it requires taking responsibility for one’s finances and avoiding emotional financial decisions.

 

For me, becoming financially aware was one of the most straightforward parts of my thriftiness journey. It’s easy to pause for a moment and think about what I’m spending money on, however, it’s another thing to actually take action with that thought – I’ll get to that in a moment.

 

Its very possible to not have financial awareness and still make good financial choices. However, making good financial choices without financial awareness would leave me without a long-term plan or an understanding of the importance of those choices for my future. What is the purpose of creating and implementing a great financial strategy if I don’t understand the context? Why be thrifty if it doesn’t have meaning? Without that awareness, I believe the other elements lose their meaning.

 

It would make sense that my next three categories of planning, action and consistency come in order. Not true! There’s a reason I drew that nifty Venn diagram the way I did.

 

Think about about it. All of those things can exist alone, all together or in any combination. At the center is the sweet spot of being thrifty.

 

More on planning and action later. Mrs. Thriftyskate and I have plenty of that to share. Let’s end with consistency.

 

Consistency

 

Good spending actions become good spending habits. That is consistency. If I make only a handful of good financial decisions throughout the the year, I might have saved some money but the actions probably didn’t amount to very much. This is an area where I still struggle. Bringing my lunch to work everyday is a grind; it feels good to go out every so often. You know what feels even better? The knowledge that I haven’t spent money on an over-priced, high-sodium, low-nutrient, bland-tasting lunch that I won’t even remember in a couple of days. I remind myself of this frequently. Keep up the consistency until good financial decisions become habits and stay in the ooey gooey financially sweet spot center.

 

This is where our journey continues. By continuing to make positive financial decisions Mrs. Thriftyskate and I further our progress towards a future of financial freedom.

 

What about investing?

My philosophy on investing is it should be included in a budget just like any other expense. Therefore, thriftiness should also apply to investing. When I buy assets such as stock, bonds or index funds I apply the same principles above.

 

We budget wants, such as hobbies or entertainment. Investments should be at least as important as wants. Investing will allow us to be financially secure and one day financially independent. My security and eventual independence are at the core of gaining more freedom. So, yes, investing is baked into my ideas on being thrifty.

 

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Introducing the Thriftyskates

My husband and I are relatively frugal. Some have even accused us of being cheapskates due to our frugal ways. However, we like to think of ourselves as “thrifty” instead of “cheap”, so for purposes of this blog we’ll call ourselves the Thriftyskates. We are working professionals in our early 30s living in a high cost-of-living area in California.

Back when we started dating, we were both trying to improve our finances after making some minor financial missteps in our 20s. As we moved in together, got married, and combined our finances we became more and more serious about optimizing our savings and investments. Eighteen months ago, Mr. Thriftyskate made a spreadsheet to calculate how much we would need to retire and showed me that we could retire in about 15 years if we continued living in our current home or 10 years if we moved to a lower cost-of-living area. Based on this realization, we started to develop our plan for achieving financial independence. The birth of our daughter, Miniskate, in July 2015 motivated us to get even more serious about our financial goals.

Abandoning the assumption that we need to work until age 65 and questioning the conventional trappings of success has been incredibly freeing. In this blog we plan to share our own financial journey and hopefully provide inspiration for others interested in following a similar path. We will track our spending and investment performance, share our strategies for saving money, and discuss whatever else seems relevant and interesting. Welcome!

 

 

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