Nearly a year ago, AARP launched its inaugural Savings Challenge, a celebration of thrift and frugality that featured money-savings tips from members of the online community. It was great to see my frugal brethren come out of the woodwork, and I was reminded once again that I am not alone in my desire to spend less while enjoying life more.
The ongoing recession has definitely prompted many of you to tighten your belts as you've watched your retirement nest eggs shrink. We've all become more resourceful, either out of necessity or just out of habit. A 2010 Gallup poll showed that nearly two-thirds of Americans now say they would rather save money than spend it.
It's well-known here in the Savings Challenge community that frugality can be fun. In kicking off this year's Savings Challenge, which runs from Sept. 20 to Nov. 12, I invite everyone to join the Savings Challenge group and share your money-saving tips and stories. There will be weekly challenges where group members may win some pretty nifty prizes, like books on how to stay thrifty. Last year, weekly challenges included slow-cooker recipes and paying only with cash. At the end of the eight weeks of challenges, we'll select three overall winners based on online participation and creativity. The top prize is a $2,000 gift card.
While researching my latest book, The Cheapskate Next Door: The Surprising Secrets of Americans Living Happily Below Their Means, I surveyed more than 300 proud, self-proclaimed "cheapskates" about their attitudes toward money and life. Some lived frugally their whole lives, while others have recently discovered the rewards of being resourceful. I call those converts the "nouveau cheap."
Many of those I interviewed and surveyed were retired and living comfortably on limited incomes because of their smart spending habits. Some, like Gerald and Julia Thomson of Phoenix, Ariz, were even able to "frugal their way" to early retirement, despite modest-paying careers and the lousy investment climate.
Some of what I learned in writing The Cheapskate Next Door probably won't surprise you:
- Cheapskates hate debt and manage to live largely debt free. Less than 5 percent of the cheapskates I surveyed had any outstanding consumer debt other than a home mortgage, and 85 percent of those with a mortgage paid it off early or were planning to do so. "If you can't afford to pay for it now, you can't afford it. It's just that simple," cheapskate John Dochnahl, 57, of Ennis, Mont., told me.
- Frugalistas have a high degree of self-confidence and self-esteem, so they don't care about wearing the latest designer fashions, buying more expensive brand-name products or keeping up with the Joneses. "I grew up next to the Joneses, and the Smiths, too. Their money didn't seem to make them any happier," 55-year-old Jacquie Phelan of Fairfax, Calif., said. "I decided I'd aim for happiness instead."
- And of course, cheapskates prefer to buy many items used, rather than new, wisely letting the previous owner pay the cost of depreciation.
I encourage you to set your own short-term savings goal during the eight-week Savings Challenge, and to track your progress using AARP's savings tracker. The tool can be used by anyone who registers for the Savings Challenge group. It allows you to record your daily personal savings (for your eyes only), and shows the total saved by the group as a whole. It's a great way to stay motivated and help you reach your personal savings goal. Hopefully by the end of the challenge, saving will be second nature, and you'll be motivated to save for long-term goals like retirement.
I look forward to getting to know each of you — and sharing some cheap laughs — during the Savings Challenge. So let the games begin, and remember: The happiest people aren't those who have the best of everything, just those who make the best of everything they have.
Jeff Yeager is the author of The Ultimate Cheapskate's Road Map to True Riches and The Cheapskate Next Door. His website is www.UltimateCheapskate.com, and you can friend him on Facebook at JeffYeagerUltimateCheapskate or follow him on Twitter.