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The Cheapskate Next Door: The Surprising Secrets of Americans Living Happily Below Their Means
By Jeff Yeager
The Cheapskate Next Door by Jeff Yeager is an entertaining and enjoyable read for penny pinchers who want to read about other penny pinchers. I used to associate the word "cheapskate" with somebody who doesn't want to pay a fair price for something. So, to me, "cheapskate" has a slightly negative connotation. Yeager, however, uses it to describe frugal, but highly-ethical people.
Yeager writes: "…There's nothing shifty about the cheapskate next door. Well, perhaps except for the cars and trucks they drive." Yeager explains that manual transmission vehicles are less expensive to purchase and repair, and they get better gas mileage. By avoiding automatic transmissions, Yeager estimates, over a lifetime of driving, you could save 5,000 gallons of gas and about $30,000. The Cheapskate Next Door is full of interesting tidbits like this.
Cheapskates tend to purchase used cars to avoid the whopping 30% or so new-car depreciation over the first year or two. They also drive their cars into the ground. No new car every three years for a cheapskate. A theme Yeager strikes home is that cheapskates value durability. They want things that last a long time and, in so doing, provide good value. What about the status conveyed by driving a new car? Cheapskates wouldn't give a dipstick of oil for that.
Yeager explains: "Because of the cheapskates' strong sense of self-worth, they rarely covet the lifestyle or material possessions of others, and have little desire to try to impress other people or keep up appearances." Dylan Davis of Twinsburg, Ohio, wrote: 'We make more money than almost everyone we know, but spend less than all of our peers… neither of us cares about what other people think about us.'"
The book is aptly named. To write The Cheapskate Next Door, Yeager bicycled around the country and stayed with many cheapskates, so the book is filled with diverse insight and opinions. Each reader will find some useful information, but will probably dismiss other advice as downright loony. I'm not totally convinced some of the cheapskates weren't occasionally yanking Yeager's chain. For example, one lady told Yeager she saves Q-tips with earwax to detail her car.
Clothing expenditures are another area where cheapskates save big over most people. Yeager tells us: "…since I left my last full-time job five years ago in order to write, I have spent less than $80 on clothing and never once lacked for something to wear. According to the Bureau of Labor Statistics, that's approximately how much a typical American man my age spends on clothing every month. … Personally, I'm just disinterested in my appearance in general, and clothes shopping specifically."
We learn cheapskates value their time and often pursue careers they love. As one cheapskate told Yeager, there's a difference between making a good living and making a good life. Another cheapskate couple pursues a scavenging lifestyle, foraging for wild foods and dumpster diving, in order to pursue their careers in writing. (Note to self: If you ever find yourself scrounging around in a dumpster, time to stop writing and go back to science and engineering!) As the scavenger noted, "Spending nothing is the equivalent to earning something."
According to Yeager, cheapskates often calculate the cost of something in terms of how much time it takes them to earn the money to pay for it. This helps them decide if they want or need a purchase and if it will truly contribute to their happiness.
Yeager writes: "Not too long ago, we used to live—and spend money—very differently. For example, in 1981 between two-thirds and three-quarters of all housewares we purchased were to replace a worn out item. Now these figures are roughly reversed, with the vast majority of such purchases being 'wants' rather than 'needs.' The old whatever-it-is we already own still works find, but we want a new one, maybe the latest style, maybe a different color. I call this the fairly recent transformation of our shopping habits 'wantonizing our needs.'"
We learn most cheapskates prefer smaller houses. Not only are they less expensive, but they cost less to heat and insure. Property taxes tend to be less. And, cheapskates are financially astute about the true cost of financing things. They tend to pay off their mortgages early. If they ever need to refinance a house, they always aim for a shorter-term loan than the one they previously had. As with their cars, cheapskates tend to stay in their houses a long time. This makes sense if you think about it. Every time you move, you absorb costs. For example, you pay a commission to sell your house and a commission to purchase another. You probably have to rent a moving van. And, you probably don't take everything you need and already own with you to your new home. How many people who move take all their older ratty furniture and appliances with them?
Yeager tells us one of the key idiosyncrasies of the cheapskate mind is that they tend to be premeditated shoppers. They plan their purchases ahead of time and scout out the best prices. For example, they make grocery lists and are aware of what's a "good deal" and what's not. For those who can't remember what price is good for a given item, Yeager suggests keeping an index card which lists good prices. Cheapskates are aware of the regular sales cycles grocery stores have and many cheapskates tend to be stockpilers, purchasing a lot when items they want go on sale at a good price. They get rain checks if an item is out of stock.
Yeager writes: "The average American family of four spends close to $9,000 per year on groceries, or about $2,250 per person, per year. The average spent by those cheapskates I surveyed was more than 40 percent less or roughly $1,300 per person, a savings of nearly $1,000 per person, per year. Of course, individual spending depends a great deal on the size of the family (grocery costs per person tend to decrease as the size of the family increases), region of the country, and other factors."
The cheapskates next door don't always agree. According to Yeager, there is a heated debate about whether using coupons is a good idea. As Yeager writes, "To clip or not to clip, that is the question." Similarly, cheapskates are split about whether membership warehouse stores are a good value or not.
To save money, some cheapskates are do-it-yourselfers. Yeager says one of his neighbors "…cleans out his own septic tank ('All 520 bucketfuls!' he boasts proudly, as if it's a Guniness world record for poop-scooping)."
Yeager writes: "Cheapskates tend to have a strong sense of self—as in being self-reliant, self-sufficient, and self-confident, with a high degree of self-worth and self-esteem. … We like to do things for ourselves whenever possible. In response to the question 'On a scale from one to ten, with one being never and ten being all of the time, how frequently do you choose to do something yourself (e.g., home repair, your taxes, yard work, washing your car, etc.) rather than hire someone to do it for you?" approximately 95 percent of cheapskates responded with the number eight or higher (i.e., mostly or all of the time)."
While The Cheapskate Next Door is loaded with some great advice, I'd also avoid some of the advice. For example, he poses the idea that you don't need to own a whole car. Instead you could purchase a car with somebody else and share. To me, that seems a good way to wind up on the Peoples' Court.
Overall, The Cheapskate Next Door is a very cleverly written and entertaining book. And, you're almost sure to find some ideas which will help you save money.
This book is also available from barnesandnoble.com: The Cheapskate Next Door