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Retirement Is Possible for Cheapskates

Start now by downsizing your expenses so you can retire comfortably

I come from a long line of proud cheapskates.

The Yeager family crest bears the inscription "Spartica Homo Erectus," which is Latin for "Cheapskate Who Stands on Two Feet," so I was never prone to out-of-control spending.

See also: Want to be a cheapskate, too?

My wife, Denise, and I have been married 27 years. Early on in our marriage, we made a pact. We agreed to establish a "permanent standard of living." We agreed that we were both perfectly happy with the lifestyle we were leading at that point in our lives and we agreed to keep our lifestyle at more or less that same level even as our incomes rose during our careers.

Instead of escalating our lifestyles to absorb every pay raise or year-end bonus we received, we put that money into savings or used it to pay off debt (specifically our mortgage). As a result, we paid off our mortgage in 16 years, rather than the original 30-year "life sentence."     

Ten years ago, when Denise became miserable in a job that grossly underappreciated her and her skills, I reassured her that she could leave that job the next day and not a single thing would need to change in the way we lived. Our permanent standard of living would continue just fine on a single salary.

Retire, Cheapskate style

Jeff Yeager at his home in Accokeek, MD on March 29, 2011.

A few years later — while still in my mid-40s — I quit my last "real job." I decided to roll the dice and attempt to write for a living — a form of what I call "selfish employment." I plan to continue being "selfishly employed" as a writer long after we begin drawing Social Security.   

We still live in the same house and we drive a car that most of our friends would have put out to pasture years ago. More important, we live entirely debt free. We also do spend our money and sometimes even expand our permanent standard of living to include traveling abroad for a month or two each year. Not bad for a couple of cheapskates who both had modest-paying jobs in the nonprofit sector for most of their careers.

So, are you interested becoming a cheapskate-in-training for retirement?
Whether you're already retired or still planning for it, we hope you'll use the Savings Challenge Group as an opportunity to share your favorite dollar-stretching tips and learn some new money-saving strategies to incorporate into your life.

If you're approaching retirement, it's a great chance to think about and start implementing at least some baby steps in the retirement rightsizing process.

According to a recent Gallup poll, nearly 60 percent of those surveyed have changed their retirement plans because of the economic downturn. Record numbers of Americans say they'll need to work longer than planned or now believe that they may never be able to afford retirement.  

If you take to heart even a couple of the financial tips we'll be discussing, I can guarantee that you'll save some money and maybe even decide that you can be just as happy in retirement by spending less rather than more.

Remember: The best way to double your money in this economy is to fold it in half and put it back in your wallet.

Stay cheap.

See what one couple did to rightsize >>

My friends Chuck and Doris had a financial epiphany about two years ago when the Great Recession made them rethink what a comfortable retirement would look like.

"Everything we'd always been told about retirement planning and investing seemed to be a lie, or at least it wasn't working out as we'd planned or hoped," Chuck told me. "It wasn't until we really started looking at the spending side of our finances that we began to feel like retirement was once again something within our reach. We realized that if we can simplify our lives, we can still retire very happily and on less money than we ever thought possible."    

Like a lot of Americans, the Great Recession hit Chuck and Doris' retirement and other savings pretty hard. During the recession, Americans lost more than $2 trillion in retirement savings — that's more than a third of their prerecession savings — not including the drop in the value of their homes.

Even though Chuck and Doris are still a few years away from retirement, they decided to start what I call the "retirement rightsizing" process. The idea is to begin reshaping your lifestyle — and particularly adjusting your spending — to more closely reflect the life you plan to live in retirement.  It's a sort of retirement test drive. It's a chance to see how you like the retirement lifestyle you have in mind and make any adjustments before you actually retire. Plus, scaling back now will allow you to sock away that much more in your retirement nest egg.

In their mid-40s, Chuck and Doris got busy "retirement rightsizing." They sold their 4,000 square foot home and moved nearby into a smaller place. They have one car and Chuck has started to work at home a couple of days each week, mirroring the part-time consulting schedule he hopes to continue in retirement. The local university provides countless free or inexpensive activities, including bargain greens fees at the campus' golf course.

"When we sold our house, we realized how much stuff we owned that we never used and didn't need," Doris told me. "We sold tons of stuff [the proceeds from which went into their retirement savings], and we don't miss any of it. … We now think long and hard before we buy anything … not because we can't afford it, but we ask ourselves if we really need it."

The important life lesson Chuck and Doris learned is that how much you spend is as important as how much you earn or have in savings when it comes to financial security and happiness.

Jeff Yeager is the author of The Ultimate Cheapskate's Road Map to True Riches and The Cheapskate Next Door. His website is and you can friend him on Facebook at JeffYeagerUltimateCheapskate or follow him on Twitter.