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I admit to being more micro frugal than macro frugal. I actively seek out sales, clip coupons, and try to find deals on pretty much everything. I also find money in other people's junk - yard sale stuff gets resold at a higher price (or something 'free' I sell later). I also scrap aluminum, copper, and other metals. So I've got the "micro" aspect down.
The macro aspect I'm less precise with, and I'm often reactionary. I look at my electric bill and say "Damn, I should have turned the air conditioner up." However, I deliberately chose a vehicle that saved gas (and drive conservatively, too). The penny-pincher often shows through, but I admit I could be better and save more.
Part of it, I think, has to do with upbringing. I always had to pay for my own tires and insurance when it came to cars, growing up. Meaning that I didn't turn them over any more than was absolutely necessary to get the car going. Likewise with a clean driving record because I couldn't afford to get picked up for speeding.
I know a colleague who is on and off various state-sponsored risk pools for insurance because she has more than a dozen tickets and three or four accidents on her record (she's only 28). Her insurance premium is something north of $4,000 a year. Talk about pound foolish.
Pride and self respect, though, DO stop me from that. Along with a comforting measure of laziness and the pleasure of being in control of the finite hours of my life.
Nobody on his death bed ever said "I wish I had spent more time at the office". But there are plenty who have said "I wish I had never bought that sailboat".
Well if they can't afford it or used their credit to get it I see your point. But otherwise I think it depends on the person. I'm not into that kind of thing but a lot of people are.
Except that's not how sales tax works (or at least here). Sales tax applies to items per dollar. That's why so many things are $X.99 - to avoid having to apply tax to an extra dollar.
We have 6% sales tax. Something that is $10.00 or $10.99 (or anything inbetween) is going to incur a 60 cent sales tax. If you bump up the $10.99 item to $11.00 then you're going to incur a 66 cent sales tax - or, the other way, if you drop down to $9.99 then you are only going to have to pay a 54 cent sales tax.
It also allows some places to avoid having to charge sales tax, if the item is sold for $0.99 or less.
Also, stores don't keep the sales tax anyways, that is what they have to pay as tax for selling the item. The cost just gets passed on to the consumer. That's why they try to cheat the system by charging $10.99 for an $11 item, saves them from having to pay an extra 6 cents in tax (and also saves the customer from doing the same).
*Edit: Also, there is no sales tax on food items (or at least here) so not sure if a grocery store is the best example.
In TN at least it's not done that way a $.99 item is still $1.08 (or maybe $1.09 now) after taxes, same for something that's $.50 it's like $.55 after taxes.
In TN at least it's not done that way a $.99 item is still $1.08 (or maybe $1.09 now) after taxes, same for something that's $.50 it's like $.55 after taxes.
Not how it is done here either. What I have seen more often is something priced say 93c so that with the 7c sales tax it comes to an even $1. Mostly Ihave seen this at farmers markets etc.
It takes both micro and macro to make this budget work.
Last edited by Aqua Blue; 09-26-2012 at 08:03 AM..
Reason: to clarify they tax at increments here, not whole dollars
Both with a caveat: I buy the best that I can afford for long lasting big ticket items and take very good care of them. When I say afford, I don't mean jumbo mortgages, McMansions or luxury cars. Our housing might need work or updating but they are normally older with the old time craftsmanship and detailing that are located in great or gentrifying areas, with good classic bones. Our cars are always bought used in good condition, lower mileage and are solid reliable brands. Our sailboat was used. It just needed some elbow grease and new lines. BTW, I'm really glad we bought it. Household furnishings are solid and well made (I tend to buy antiques) rugs (high knot count orientals) appliances (classic styling, easy to clean and maintain, high efficiency) and the like. I really despise planned obsolescence so we buy mid range tech items and small appliances on their third or fourth iteration or tech brands that offers continued support such as Apple. I don't go in for trendy in anything which becomes dated and tiresome too quickly.
Micro: We like good food so I learned to cook beyond the basics that I was taught as a youth. Same for good coffee, we grind and make our own with a second hand vintage pump machine that I found at a yard sale. With $25 in new gaskets and seals and some scrubbing I have an $800+ machine for $55. We grow a lot of our fresh veggies, fruits and herbs, initial investments that pays over and over. I shop on Craigslist, tag sales, auctions, overstock, occasionally ebay, and second hand, used, thrift, junk, consignment, antique shops, flea markets. It's purely amazing what people decide to get rid of. I trust my eye for good quality implicitly.
We buy staple food and household products at the warehouse and shop weekly sales at regular grocery stores. I really love the clearance meat bins where we often find good to expensive cuts of fresh beef and lamb for 30% off. We will be splitting the cost of a beef cow with my brother this year. Who needs magazine or newspaper subscriptions anymore when the content can be had online? We switched to largely LED lighting as bulbs burned out and haven't had to buy another lightbulb since the conversion, Though initially expensive, it's another investment that is noticeably paying off over time in lower bills and frustration of lightbulbs that burn out in months if not weeks at times. We ditched cable TV, the home phone, keep the heat down, buy gasoline on rewards plans. We occasionally eat out but it's not a priority for us, nor is going to the theater or concerts. Sometimes we do, but it is a fairly rare treat. Our real passion is travel so we go steerage or travel independently and we really enjoy our trips. It's worth every penny to us.
We've learned how to build, clean, repair or refurbish about anything. We use it up, wear it out and often do without until we find what we want at a reasonable price. Someone wisely mentioned healthcare which can devour a bottom line. The small extra expense in healthy food, a decent multi-vitamin supplement/s, exercise (and there is no need for machines or health clubs) fresh air, decent sleep, avoiding bad habits and moderation in all things could save many dollars in the future. No guarantees but the law of averages are on our side. I am preaching to myself on that last one.
We are retired and decided to redistribute some income downward by working odd repair jobs and gardening for a very wealthy person, dignity fully intact. We work as much as we want to and enjoy the work.
We have saved quite a bit but the majority is locked in our 401Ks and we are too young to take distributions for another 5 years. All in all living below our means has really helped us to achieve what we want out of life and I owe that to a couple of folks that I really heard and grasped what they were saying when I was young as far as goal planning and how much of the rat race is necessary to engage in to succeed along the way.
Good topic.
Very wise! I see my priorities and practices are similar to yours. It's important to understand what is one's priority in life and not conduct ones life by trying to 'keep up with the Joneses'. I haven't the need to impress anyone with a fancy car or designer purse. For me, having a luxurious home filled with antiques and being able to travel are high priorities. The car and clothes mean nothing.
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