Celebrating Financial Independence

3. Think twice about discretionary expenses, and don't accept that "fixed expenses" are always fixed.

Most people can make major progress toward getting their finances in order by simply reining in their discretionary spending. That means limiting spending on unnecessary items, including so many things we later regret purchasing. Try waiting a week between the time you're tempted to buy something in a store and when you go back to buy it. I'll bet that at least half the time you'll lose interest and never go back to buy it.

Also, review your routine monthly expenses — like insurance, phone service and even rent or mortgage payments — every six months, and look for creative ways to lower those so-called fixed expenses. You'll be surprised how much you can save by comparison-shopping for such services, or even calling your current providers and asking them point blank to help you find ways to lower your monthly bills.

4. Most important of all, avoid debt like the plague and, if you have debt, make paying it off a top priority.

Being a professional cheapskate, I'm often asked, "What's the single biggest thing you and your wife do without because of the frugal lifestyle you choose to lead?" The answer: debt. That's right. Like most frugal folks I know, we've never had the pure, unadulterated joy of paying nearly as much in interest and bank charges as the typical American pays. (Yes, I'm being sarcastic … but honest).

Data recently compiled by the website CreditLoan.com shows that the average American will pay more than $600,000 in interest over his or her lifetime! The solution is to adopt the financial philosophy your grandparents probably happily lived by, recognizing that if you can't afford to pay for it now, you simply can't afford it.

Pay off your home mortgage as quickly as possible, preferably before you retire. Consider enrolling in an accelerated mortgage payment plan, paying additional principal each month, or take advantage of low interest rates to refinance your home for a shorter term. Paying off your mortgage sooner will likely save you thousands of dollars in interest.

Trust me, there's nothing finer than a steak grilled over a mortgage-burning flame.

Jeff Yeager is the author of three books, The Ultimate Cheapskate's Road Map to True Riches, The Cheapskate Next Door and Don't Throw That Away! His website is UltimateCheapskate.com and you can friend him on Facebook or follow him on Twitter.

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