Ep. 171 – Jen Smith – Frugal Is Not a Bad Word
How in control are you of your spending? Have you ever considered living a frugal lifestyle?
Frugality is about being conscious about your spending and being a good steward of your resources. When you know what you want out of your life, conscious spending and setting boundaries become easier.
In this episode of the Secure Your Retirement podcast, Jen Smith explains how to get control of your spending and transition into a frugal lifestyle. Jen is a personal finance expert, author, and co-host of the Frugal Friends Podcast. Listen in to learn how to create boundaries that stop you from making bad spending decisions online.
In this episode, find out:
● Jen on how her experiences with money led her to start her podcast Frugal Friends.
● Frugal vs. cheap – choosing quality without taking advantage of someone else’s resources.
● How to focus on lowering your essentials so you can spend on your wants without guilt.
● How being conscious about your spending can make the transition to frugality easier.
● How to create physical barriers to stop yourself from making bad purchasing decisions.
● How to have hard conversations with yourself and your loved ones to figure out what you want in your life.
● “Frugality is being conscious and a good steward of your resources while being cheap is taking advantage of someone else’s resources.”– Jen Smith
● “When you can realize what you want from life, it can make the transition to being more conscious about your spending easier and more welcomed.”– Jen Smith
Get in Touch with Diane:
● Website: http://instagram.com/frugalfriendspodcast
● Instagram: http://instagram.com/frugalfriendspodcast
● Podcast: Frugal Friends
If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!
To access the course, simply visit POMWealth.net/podcast.
Here’s the Full Transcript:
|Radon Stancil:||Welcome, everyone to our Secure Your Retirement podcast. Murs and I are very excited today. And we get to talk about different things and we remind people that in our show, we really are trying to always break the show down into three categories. And I really think today, coming up, combine a couple. We talk about money, we talk about legacy, and we talk about lifestyle. And today, we have a special guest on, Jen Smith from a very popular podcast called Frugal Friends. And we’re going to talk about what it means to be frugal. So, that’s kind of money, but I think it’s going to also affect the lifestyle of how we deal with our lives. So, this is Jen Smith with us today. Jen, thank you so much for coming on and having a conversation with us around frugality.|
|Jen Smith:||Yeah. Thanks so much for having me. I love talking about how frugality is more than just money, that it does encompass your entire lifestyle. And that doesn’t have to be a lifestyle of deprivation, but it can just get you more of the things that matter most to you.|
|Radon Stancil:||Yeah. Hey, real quick, could you tell us, before we get into all the questions around frugal, how did you come about having a podcast on being frugal? It’s called Frugal Friends, what occurred for that to ever happened?|
|Murs Tariq:||That was going to be my first question too.|
|Jen Smith:||Yeah. Well, the simple answer is that I love alliteration, and so Frugal Friends just really rolled off the tongue for me. But I think what gave me the courage to do a podcast about frugality is that I lived the experience of learning how to become frugal. So, I grew up with a very middle-class, get everything as cheap as possible, buy the generic brands, and that to me was frugality. But then I went to college and grad school and I racked up $50,000 of student loans. And I was going to Starbucks all the time. I was shopping at TJ Maxx whenever, yada, yada, making all those decisions, but still thought I was frugal because I was buying generic brands at the grocery store.|
|Jen Smith:||And so, when I got married and we decided to pay off all of our student loans, which combined was $78,000, that’s when I started on this journey to learning how to, not just by the cheapest thing, but actually be intentional about my purchases and learn how to keep that going sustainably, and we were able to pay off our student loans in two years.|
|Murs Tariq:||Wow. Yeah, that’s incredible. That’s a really good story. I grew up like that, that classic first generation American type of story. So, my family came over with nothing and I grew up in more of that we don’t have any money type of mindset, so we got to be very careful about every financial decision we make when it comes to eating out, to buying clothes, to all these different little things. So, I grew up into a world of, we don’t have the money, so we got to be very careful with every decision we make. So, that has carried me into my lifestyle, and things are good now, but I still think about that every single time I’m going to swipe the card or something like that. So, I think it’s a really good habit to have in place.|
|Murs Tariq:||And especially with the younger generation, a lot of them are coming out of school with significant debt. And if you don’t find a way to tackle that, or don’t find a plan around that, it can really snowball on you. But for us, the clientele that we work with, pretty much close to retirement or already retired, they are in a different mindset of… They probably had some really good earning careers in their lives, but now they’re going through this mind shift of they got to start spending their own money. They don’t have an employer that’s giving them a paycheck anymore, so the stress starts to come in around all of these decisions that used to be very easy ones. And so, when we’re talking about frugality, one of the questions that I would like you to discuss is, how is frugality different in your mind from saying, being cheap? Because I think there’s a big difference there, so what’s your take?|
|Jen Smith:||Absolutely. And I think a lot. I mean, I’m so pleased I don’t have to sell any of your listeners on frugality. Everyone’s already on board. But it does when you’re making these big life shifts, you have to redefine what frugality is to you. And so, I’m sure a lot of people have come to this impasse, and I use the shopping at the mall or at Target or something as an example, you want to buy some new clothes. And you have the option, you can spend $50 on a t-shirt that’s sustainably made, it’s made well, and it’s going to last for a really long time, and it’s in a color that will never go out of style. Or you have the option to buy a $10 t-shirt that is much more “affordable,” but it may not be in style in two years and probably in five years won’t even be wearable.|
|Jen Smith:||And so, that’s the physical example of frugal versus cheap. We choose quality over price, essentially. So, frugal is something that will last, it will stay out of a landfill. Cheap is something that may take advantage of maybe the workers who created it or other people that you can’t see, so it’s like mooching off of people. I know some people think that’s what frugality is, is just being the person who gets all the things at the restaurant and then tries to make other people pay for it. So, frugality is just being conscious and good steward of your resources, while being cheap is essentially just trying to weasel your way out of paying for things that you’re consuming or maybe taking advantage of somebody else’s resources.|
|Murs Tariq:||I love that analogy of buying the little bit more expensive shirt, but knowing that it’s going to last. I live that situation all the time, where I like going to TJ Maxx and Marshalls and stuff, and I’ll buy a shirt. And I’m buying that shirt knowing that I’m probably only going to wear it once or twice, because what ends up happening is you try to wear it the second time, and wow, that shirt now is a little bit tighter on the arms, and you’re like, have my arm gotten bigger? But actually, the shirt’s just gotten smaller and it just doesn’t hold up. So, I think that’s great.|
|Jen Smith:||Yeah. And you don’t think about it, I mean, buying things that end up in a landfill in less than five years, it’s taking advantage of your city’s resources because that garment will sit in a landfill somewhere. It’s definitely probably taking advantage of somewhere along the supply chain getting there, it’s taking advantage of someone. So, you just have to think about the journey your purchases take before they get there and then after they leave you.|
|Radon Stancil:||Yeah. So, one of the things that we do when we first begin a relationship with somebody is we ask them to break their spending down into three major categories. One is their essential needs, so this is what you’ve got to have no matter what. You got to have a light. You got to have electricity, so we’re going to pay that bill. You’ve got to have a place to live and we’ve got to have food. So, we call those our essentials. And then we ask them to then now break apart what they want, so what are their wants? And that could be whatever it is. It could be I want a new car every five years, or I want to go on vacation, or I want to help my grand kid go to college.|
|Radon Stancil:||And then the next area is what we call giveaway money or legacy money, so I’m going to give it to the kids after I pass, or I’m going to give it to charity, whatever that might be. So, a lot of folks when they first come in, I think when people work or whatever, and they just have money coming in, and even though they’re saving, it’s hard for them to say, “I don’t really know how I spend money.” So, one of their homework things is they got to come in to us and we ask them to break it down, like what are those three? And the ones we care about the most are the essential and the wants. And that helps us to know how we’re going to build out their retirement plan and look at that spending part.|
|Radon Stancil:||So, how would you say to somebody as you’re talking things through if they’re looking at it… Because let me just say this, sometimes we have a person that’s sitting in front of us and let’s say that they say, “Hey, here’s how much money I’m spending, this is what I want to spend and I really want to go ahead and retire early.” And we say, “Well, when we run the numbers, you can’t afford to retire and spend that much. So, you have a couple of choices. One is, is you get a part-time job or a job. Maybe it’s not the same career you’re in now, you retire from that. And then the other category is, you look at your spending plan and you lower how you’re spending money.” And so, sometimes it comes down to lifestyle, like nope, I have so much stress right now, I need to stop working at this particularly stressful job, and I’ll cut my spending in order to do that.|
|Radon Stancil:||So, what are some of the things that you think about when it comes to saying, because I know that you talked about these times where maybe you weren’t frugal and now a person is frugal, so can you talk about that shift? What does it mean to say, “Oh, I was just spending money without thinking, that where now I’m going to put my mind to work and I’m going to actually be frugal?”|
|Jen Smith:||Yeah. As adults, we hate the idea of being told what to do, that’s for children. And so, sometimes people want to spend what they want to spend, because they don’t want a budget or a person or anybody telling them what they can and can’t spend on. But when you are looking at it in a way that is, I’m actually buying my freedom and I’m telling myself that I want this more than I want to spend on this, then it can become a little easier to make that shift to frugality. And I love how you described it as essentials and wants, because sometimes they hear it as fixed and discretionary. And we try to tell people, no expense is fixed. Any expense can be changed or lowered. It may be last resort, maybe I don’t want to leave my house and lower my mortgage, but it’s still a possibility. So, I love that it’s essentials and wants.|
|Jen Smith:||And when you can focus on getting your essentials to be lower, maybe the things that you need to live but you don’t really value, so that you can spend on your wants without guilt and that you actually know what you want, and it’s not just scrolling late night on Tok-tok or Instagram or Amazon, and letting advertisements and your friends, other friends that you met one time tell you what to want. When you can realize what you want from life, it can make the transition to being more conscious about your spending easier and more welcomed.|
|Murs Tariq:||Yeah, I think that’s a good point. And I was going to bring up in the world of social media. And our clients are on Facebook and Instagram every single day too, because they’re keeping up with not only their friends, but their kids, and grandkids, and what they’re up to. But that’s the plus side of it, the social media aspect of it. But the other side of it is all the advertising that is now following us around and leads to this somewhat. And I’ve experienced it too, this impulse to just go buy it because it’s on our favorite, we’re following this person and they’re wearing it, or they’re using it, and it shows up all the time, every time we log in. So, how do you combat that when we’re trying to be thinking about what we’re doing and being frugal, if you will?|
|Jen Smith:||Yeah. I mean, there’s no secret. It’s just kind of like developing systems and habits to put barriers between you and purchases. So, the number one thing that we tell our listeners to do is figure out your core values. What do you value most? And for us that’s, I mean, not necessarily like family and friends and stuff like that, but it’s just like, who makes you, you? Everybody wants to have relationships, everybody wants to value their family. So, yes, but how do you show up there? And so, when you can really identify your core values, then it becomes easier to say no to things that maybe lie outside of it. Where it becomes a little harder is when we become maybe emotionally triggered or we’re stressed and we’re not at our best, we’re not making our best decisions. And so, in there, it’s just putting up actual barriers.|
|Jen Smith:||So, I took Facebook off my phone. I’m about to take Instagram off my phone. It’s not going inside stores that have things that I really, really like when I’m maybe stressed or upset. So, it’s just saying no, and creating these actual physical barriers. And there are apps, like the iPhone can prevent you from opening an app after a certain time or after so many hours of being on social media. So, it’s actually putting these barriers into place that can stop you from making bad decisions when maybe your willpower is depleted at certain times of the day.|
|Radon Stancil:||So, I guess if we had to think about this, let’s say I’m trying to think about all this and I’m thinking about my values and I’m using what you’re talking about. Do you have, I don’t know, a strategy or maybe what’s my first steps to start thinking that through. So, if I’m trying to move toward being more frugal, I’m trying to move toward this free spending, and I just don’t know how I even spent all my money this month, but it’s all gone, but I now need to observe it and think about it. Because that’s honestly our client, our client is not necessarily spending all their money, but they have money coming in and they’re not scared, because they have a paycheck coming in next week. Then all of a sudden, they become retired and go, “Whoa, if I don’t do this right, I’m going to run out of money,” and who wants to run out of money when you’re not at the end of life. All right.|
|Radon Stancil:||So, people always tell us jokingly, “I want to die and bounce my last check on that day.” Well, I mean that’s kind of their thing. But nobody wants to be broke and still alive, because now it’s like, okay, now I can’t do anything. And the number one fear a retiree has more than any other fear is running out of money. So, they’re very conscious about how do I do this. So, I’m just saying, what are some suggestions you have for a person to actually start doing an analysis of their spending and start to look at the picture in a different way?|
|Jen Smith:||Yeah. So, we have something that we call the radical middle method, and it’s because everybody else likes to use extremes. It’s either extreme non-spending, eating beans and rice, couponing. Or extreme spending, where it’s just make all the money you can and hoard it all up and just work forever. We like to be somewhere in the radical middle because it’s not popular. It doesn’t make things go viral, but it is more sustainable. And so, the first part of that is, actually, it’s not making a budget, it’s actually figuring out what you want from life. So, it’s creating a life plan. And I’m sure you go over this with your clients, but it’s figuring out not just what you want, but what does your partner want, if you have one? What do your kids want and your grandkids? So, that you can align your life plan, because you can make a plan and be like, oh, I want to spend all this time with my grandkids, but if your kids want to become digital nomads and travel, then that throws a wrench in your plan.|
|Jen Smith:||So, it’s having these conversations first with yourself, maybe hard conversations. If you’ve been living a life maybe to please other people, or if you’ve really invested in your kids and now they’re out of the house and you have to figure out what you like to do, or having hard conversations with yourself to figure out what do I want from the rest of my life and then conversations with the people who you want in the rest of your life. And so, after having those hard conversations, we promote a lot of journaling. Journaling is really healthy to sit with your thoughts and dig in, and then correlate all that with your core values. And so, I think my favorite question we ask people is, what do you want your obituary to read the day after you die? What do you want it to say?|
|Jen Smith:||Because that’s going to be a big indicator of what your core values will lean towards and maybe what you want out of your life. And then just start subtracting things that don’t align with that. That’s the easiest way. You don’t have to dive head first into making your life perfect, but just start subtracting things that you know are clearly out of alignment with where you want to go.|
|Murs Tariq:||Yeah. I think it’s a lot to think about and not a transition that I imagine happens overnight. But Jen, thank you for your time today. I think this is a really, really cool topic and we appreciate you coming on. If someone wanted to learn more about maybe your podcast, your teachings, tell us how they could do that.|
|Jen Smith:||Yeah. So, we release a podcast episode twice a week, just helping people get control of their spending, because people who feel like they’re in control of their life tend to live fuller lives. And so, this is just one area that we can help people, is get control of your spending and spend better. And you can find us anywhere you listen to podcasts, just search Frugal Friends podcasts.|
|Radon Stancil:||Very good. Well, we’ll make sure that we put all the information on our webpage where we have this hosted as well as in our show notes and wherever people find us. So, thank you so much, Jen. We certainly appreciate you taking time out of your day to talk to us about a great topic and that is being frugal.|
|Jen Smith:||Awesome. Thanks for having me.|