Frugal Book Club #7 – The Ultimate Cheapskate’s Road Map to True Riches

It’s mid July and it is HOT.  The obvious answer to escape the heat is to head on down to your public library, find a good book, and cross off some check boxes on your summer reading program.

I just finished, and Shae had finished before me, reading Jeff Yeager’s book, The Ultimate Cheapskate’s Road Map to True Riches, A Practical (and Fun) Guide to Enjoying Life More by Spending Less.

The author, Mr Yeager, is a retired CEO of a nonprofit hostel organization.  After spending a lifetime of working in the nonprofit space, Yeager understands a thing or two about squeezing every dollar.  It follows that his take on personal finance ignores the income side of the equation and focuses purely on expenses.

The book centralizes around the concept of “money steps”.  The example given early on is that of the typical teenager who works a job to afford the car that gets them to the job.  Yeager argues that the teenager could just stay home sans car and skip earning money (and trading time in the process).  If time is money, then surely money is time.  We know that we have a finite amount of time on this earth, so why waste it trading it for money?

If you are familiar with Suze Orman then you will understand when I describe Yeager’s philosophies as the anti-Orman.  If you are unfamiliar with her, then here is the quick rundown.  Ms Orman has penned a number of successful personal finance books that encourage readers to give up small daily expenses, like the morning Starbucks coffee.  By doing so, Orman hypothesizes that the savings will snowball and secure an easy retirement.  Yeager pokes at this style of personal finance.  He pokes hard at it (yes he also uses a lot of old man sexual innuendos in the book).  Yeager’s argument in his book, where he calls her out by name several times, is that any small daily savings will simply be spent elsewhere in the day.  Even if someone has enough control not to spend that money and put it in a savings account, it’ll likely be raided at the first sign of trouble.  Instead, Yeager advocates pinching dollars, not pennies.  Each chapter in the Cheapskate book focuses on a major line item in our lives.

 Healthcare

Chapter 4, Warning: Money May Be Hazardous to Your Health, examines how many money steps the typical American goes through that end up destroying their health.

Work at job, earn money -> Eat out -> Get fat -> Work at job, earn money -> Get gym membership -> etc. etc.

I had never heard of it before, and maybe it is a Jeff Yeager original, but he details his way of grocery shopping.  His one and very simple rule is to not spend more than a $1/pound on anything at the store.  While it isn’t an unbreakable rule, the reasoning behind it is simple.  The food pyramid and cost pyramid are inversely related.  The grains, rice, and other bulk portions of your diet are easy to pick up for less than a dollar a pound.  Fruit and veggies are similarly cheap.  Red meat is a once in a while food.

As for staying fit, he writes that everybody should do as much as possible for themselves.  The yard needs mowed, that’s a great workout.  Home improvement list to knock out, that should burn off a few calories.  Walking and biking instead of having other people shuttle you around is also beneficial to your health.

Housing

Buy a Home, Not a Castle, hits on two major points.  GPS homes, a home that requires  satellite positioning to navigate, are excessive and ‘starter’ homes are bunk.

Our grandparents didn’t buy a starter home, they bought one house and lived there all their lives.  Today, many people climb the home ladder.  Buy a starter home > live there for 5 years > buy a bigger home > repeat repeat repeat.  Not only is there the financial loss (the first few years of a 30 year mortgage are primarily interest and you don’t build much equity) but there is also the societal problem of people not putting down roots and truly belonging to a community.  Why invest the time to get to know your neighbors, volunteer at an organization, or participate in democracy, when you are going to pick up and leave for a bigger and ‘better’ home in a matter of months.

Transportation, Gadgets, Entertainment, and More

These are all topics that have their own chapters.  I’d encourage you to pick the book up at your local library and read it yourself.  The 230 page book is a quick read (and humorous if you are into old man sex jokes).  Most of the points in the book, we had already been applying in our daily lives.  I guess it was more of a reaffirmation of our own lifestyle.  Yes, cheapskate can be cool and was once the norm!