KNS Financial

Personal Finance From a Biblical Perspective

When Extreme Frugality is the Only Solution to Your Money Problems

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These days, a certain amount of frugality is probably common in most households. Even if you make six figures, the high and rising cost of living forces making choices all the time. But there is frugality, and extreme frugality, and both have their time and place.

Frugality is largely a money management tool that we use to get more for less – as in, more of everything for less money. But when you have extreme money problems, extreme frugality may be the only solution.

This will move you beyond clipping coupons, eating home instead of in restaurants, or forgoing the annual family vacation. It’s the kind of frugality that could see you making major lifestyle changes. There is a time and a place for this kind of frugality, but even then, many people shy away from it.

Financial Crisis

Accepting Reality

Perhaps more than anything, extreme frugality requires accepting reality at the deepest level. If you’re in debt – to the degree that it threatens not just your lifestyle, but possibly even your survival – extreme frugality has to be on the table.

In order to get to that place, you have to embrace the idea that your situation is bad and getting worse. The only way you can fix it is through extreme methods. Many young people are prematurely facing just such a crisis due to outsized student loan debts.

Unfortunately, many people try to get around a debt problem by taking on more debt. It may be using consolidation loans to lower monthly payments, or simply getting more debt to allow you to make the payments on your existing debt. Either strategy is a recipe for disaster.

Getting Yourself Out Of Your Comfort Zone

In order to implement an extreme frugality strategy in your life, you must get out of your comfort zone. That’s not easy – many of us are deeply rooted in the suburban lifestyle. That lifestyle carries the expectation of a nice home in the suburbs, a car that fits our self image, and a lifestyle that, well…looks reasonably close to what we see on TV.

That lifestyle, while very comfortable, will not help you deal with a debt problem. The first order of business with extreme frugality is a willingness to let go of all of that. It’s freeing up your financial resources to the greatest degree possible so that you can fix the biggest financial problem you have.

Making Hard Choices

Very few people practice extreme frugality because it is a hard way to live, especially when compared to the suburban lifestyle. In order to make it work, you have to be prepared to embrace at least some of the following lifestyle changes:

  • Moving out of a house, and into an apartment.
  • Moving out of a house or apartment, and into a shared living arrangement with family or friends.
  • Trading a late-model car with monthly payments, for a “beater” that you own free and clear.
  • Giving up a car in favor of a bike, public transportation, or even walking (and moving to an area where you can).
  • Disconnecting yourself from the popular culture, because you know that it entices you to live beyond your means.
  • Giving up some high cost friends.
  • Giving up high cost hobbies and past-times in favor of simple pleasures.
  • Selling off possessions you can no longer afford to keep – including reducing the number of possessions so that you can live in a smaller space.
  • Buying what you need secondhand.
  • Taking a second job, or building a side business to increase income.

Each of these steps require making major changes in your life. They clearly move you beyond clipping coupons and canceling your cable TV service. But there may be times in your life when you need to make changes that are this radical. You certainly don’t have to do all of them, but just two or three could make a significant difference in your finances.

Embrace It – It’s Only Temporary

It’s easy to see why anyone would go to great lengths to avoid the effort that will be required in extreme frugality. But it may help if you see the situation – both the financial problem you are facing, and the steps you need to take in order to deal with it – as temporary. You will be making extreme changes in order to deal with extreme problems.

The Chinese have a saying – what doesn’t kill you, makes you stronger – extreme frugality won’t kill you either, and if it will enable you to solve your financial problems, it will definitely make you stronger. Two major benefits will come as a result of this effort:

Living on the cheap can be empowering. Once you realize how little you actually need to live, you’ll begin to see life in a very different way. This realization will be magnified by the indoctrination you get from TV. We see this glittering lifestyle that we feel compelled to live, but when you realize that you don’t need any of it, and you can survive and thrive, you’ll feel better about yourself and life in general. More tangibly, as you begin to overcome your financial problems, you’ll be able to save money and buy the things that you need and want without going into debt. If that isn’t empowering, than I don’t know what is.

And so will solving your own problems. These days, it seems as if everyone who has a problem is looking for a bailout. But anytime you can fix your own problems, your confidence and self-esteem grow in leaps and bounds. It’s a matter of developing self-reliance – and when you solve your own problems, that’s exactly what happens.

Implementing extreme frugality may not be pleasant, but if you view it as temporary you’ll be able get through it. And if you can see to the end, it can actually be empowering.

Would you consider extreme frugality if you absolutely needed to?

Re-Purpose Your Used CDs And DVDs And Save Money

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[The following is a guest post brought to you by Music Magpie]

Reusing and re-purposing are the new watchwords of the season. Throwing something in the trash is passé. Re-purposing something into a new something is a great way to save some money. Recycling, re-purposing and up-cycling all have similar yet different meanings.

Re-Purpose Your Used CDs and DVDs

Re-purposing your used CDs and DVDs into something new again can save you a little money and create great personalized gifts and craft projects. Damaged or scratched CDs aren’t worth much if you can’t listen to them. Creating fun crafts and party favors are a great way to add interest to a dinner table or themed event.

Re-Purposing Used CDs and DVDs – For the Crafty Person

Place Cards

Create stylized and entertaining place card holders for a musically themed or movie themed party. Choose among your damaged or duplicate CDs with artists and titles that suit your guests’ personalities. Create CD labels using free software and purchased CD labels. Label each one with a guest’s name, affixing it to the damaged media side of the CD. Place the CDs with artist side up at each place setting.

As the guests arrive and through the cocktail hour leading up to the dinner, have them review the potential seating arrangements. As dinnertime approaches, have each guest pick a first and second choice as to who they think the artist is that most represents them.

When it is time to sit, enhance the game by having each guest stand or sit at their selected artist location. If they are right, they stay seated and if they are wrong, they change places with the correct person identified on the back. Continue until all guests are seated correctly. This activity should take approximately five to ten minutes depending on the quantity of guests and their level of participation!

This is great fun and interesting dinner conversation.

Trivia Napkin Holders

CDs and DVDs have holes in the center, not large enough for a napkin but certainly large enough to slip a ribbon through and tie a pretty bow. Fold napkins in a fan shape, secure with a ribbon in a simple knot and slip the tails of the knot through the center of the CD from the back.

Tie a pretty double bow to secure the CD to the napkin and place at each place setting. Prior to attaching to the napkin, do a little homework on each artist, such as living or dead, DOB, birth place, most famous song, number of hit singles and other interesting facts. Put all these facts together on a CD label and affix to the media side of the CD. During dinner, guests share their artist trivia.

It makes for wonderful dinner conversation, especially when some of the dinner guests are new acquaintances.

For the Not so Crafty Person

CDs can add life to simple place settings or dessert plates. Use damaged CDs at each place setting as an interesting music themed coaster for wine glasses (you can try this with damaged money, but it probably won’t go over so well). For more formal dinners with sorbet or a chilled first course, use CDs as doilies for serving plates.

Used CDs and DVDs can also double as mini place-mats for ice cream or other frozen desserts served in stemmed goblets. No crafting is required, but your guests will be impressed with your ingenuity.

If you are looking for a few extra dollars to help flush out your holiday party budget, gather all your CDs and sell them. There is definitely no crafting involved here. Check online for buyers, pack them up and ship them off.

The newest way to thin your collection and make a few bucks, selling CDs online, can be a very profitable venture if you have the time to create the ads or develop a website. You will be a musicmagpie CD selling success in no time.

photo by Giovanni Sades

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