budgeting

Top Ten Frugal Tips for High-Income Earning Women

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This is a guest post from my fellow woman physician blogger, Dr. B.C. Krygowski. She's a palliative medicine physician who discovered FI & Frugality as a way of life. She blogs at bckrygowski.com, and she has ten tips that any high-income earner should try out to add more frugality to their lives.

# 1. Look into Home Exchange.

Home exchange saves me serious money because I can swap homes and cars with other families for overseas vacations.

# 2. Schedule a half-day to sit down and figure out your priorities.

Do you say you want to be mortgage-free more than anything, yet you continue to take four (or more) exotic trips a year? Your life actions say something different than your words. Maybe consider cutting the exotic trips down to one or two a year and put the money you’ve saved towards paying off your mortgage instead.

# 3. Track your expenses.

Doing this helped me to find acceptable, but less expensive ways to achieve the same quality of life.

# 4. Commit to one month of decluttering your house.

Seriously, this is guaranteed to make you spend less money. You’ll be horrified at all the stuff you toss, give away or donate during a one-month declutter binge. In the future you will stop buying so much stuff.

# 5. If you have an Aldi near you, learn to embrace Aldi.

Shopping at Aldi helped us slash our food bill The trick is to stock the car with bags and quarters so you can get a shopping cart and bag your own groceries. Aldi saves us time too: it’s the quickest grocery store to get in and out of. They also now deliver with Instacart.

# 6. Learn to cut hair—don’t be afraid, you can do this!

When my husband started to read Mr. Money Mustache, he went to Walmart and bought a color-coded, foolproof hair trimmer. It came in a plastic container with instructions. I discovered that after a few tries I could cut men’s hair. I estimate this $22 investment saved us about $6,000 over the years of cutting not only his but our two boys hair. Plus it’s saved us time because I don’t have to wrestle the kids into the car.

# 7. Stop shopping.

Send your significant other into the store instead. My husband goes in with a list and only exits the store with what’s on the list. It’s like he has blinders on when it comes to impulse purchases.

# 8.  Embrace the Instant Pot.

Not only will this fantastic device save you time, but oodles of money too!

# 9. Learn how to store food properly, so you waste less.

I have to admit though, I’m a visual person, so the mushrooms kept going bad when we’d put them into brown paper bags. Out of sight, out of my epicurean mind. I’ve taken to propping them on their side on the shelves at eye level, so they’re the first things I see when I open the fridge door.

# 10. Periodically examine your expenditures sheet with your significant other.

This falls under “What are your goals/priorities?” We sit down a few times a year to examine our spreadsheet and analyze where we should spend not only less but also more money.

Girlfriends, I have faith in you taking control of your finances—you got this!

Yours,

B.C. Krygowski

Final Thoughts on Frugal Tips for High-Income Earners

It's easy to fall into the trap of allowing a high income to dictate high spending. You certainly don't have to use all these tricks all of the time. However, by making frugality a priority in your life as B.C Krygowski does, you'll be surprised how much money you can save and invest without feeling like you're making huge sacrifices.

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Did any of these frugal tips surprise you? What do you do as a high-income earner to keep more money in your bank accounts each month?

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Why I’ll Never Say, “We Can’t Afford It”

Life Hacks post. She blogs at PracticeBalance.com about finding balance as a physician mom. She and her husband are financially independent. You can read her interview here. The other day, my 2 year old daughter asked, “Who gave us this house?” We both paused and looked at each other. “Um… No one. We bought it with our own money that we made ourselves.” This is the first time we had talked to her about anything related to money, and I’m sure it won’t be the last. As she grows up, she’ll no doubt deal with the marketing of products directly to her, comparisons to friends, cases of the “I wanna’s”… then ultimately management of her own earnings and debts.

Always creating and learning

Unlike some families where money is a taboo subject, we hope to have many money conversations with our daughter as she matures, because financial responsibility is very important in our family. We’ve worked hard over our adult years to become financially independent and free from any debt or mortgage, which has allowed us to both work part time. When I was a young girl, I never felt that my family was in a state of lack. But I also never grasped the mathematics side of money, the finiteness of it. That all changed when I became a mother. Although my husband had been equating money with life energy for many years at that point, I didn’t see it until I had this being in front of me that I wanted to spend all my time with. I had spent years, tears, money, and life energy to have her (due to infertility), yet she was priceless. Any time at work was suddenly time away from her.

One of the lessons I really want to teach my daughter is the idea of value. Value is relative and individual, as one person’s prized possession can be another’s throw-away item. Likewise, the way we prefer to spend our time (which ultimately equates to money) can vary drastically from person to person. I cringe when I hear people use the words, “We can’t afford it.” Kind of like saying, “I can’t eat that cupcake” or “I don’t have time to do ______”, it’s rarely true in a literal sense. You can if you want to, but you choose not to, for whatever reason. It’s a mistake made often by people in all financial situations, both wealthy and poor.

What harm is done in saying “we can’t”? It sets a tone of scarcity vs. abundance. The scarcity mindset keeps us from feeling we have choices or control over our financial situation. It places issues in a negative light, such that we make decisions out of fear and compare ourselves to others. On the flip side, being valueist means that we see the potential abundance in things. We make decisions from a place of optimism, because again, anyone can afford anything they inherently value.

Taking time to find the rainbows

Affording anything, however, must come with financial sacrifice in other areas of our lives. We’ve all seen examples of people driving around in very fancy cars despite meager earnings. I’ve been to third world countries where a family shack contains a large screen TV. Everything we buy is a choice and is conversely a choice in the opposite realm (against saving or spending on something else). How much is an extra hour a day with your child worth to you? Is it worth not having a cleaning lady, taking a 30% pay cut, moving to a smaller house? In addition, there are degrees of choice here; you can choose to NOT buy the nicest item you can afford. The common belief that everyone buys the nicest things “they can afford” leads to a false evaluation of success based on material goods.

Of all the things I value, time with my family sits at the top of the list. I hope someday my daughter will understand this concept when she wants me to buy her something that I choose not to buy. The best thing we can do is to live our lives in alignment with our respective values and provide an example for our children.

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YNAB saved my life

YNAB aka You Need a Budget. I bought this in Dec 2014 on some Christmas sale when it was still only available in the desktop version. Now it is a fancier web driven app.

Before using YNAB, I, like many, was a regular ol' excel spreadsheet gal. I made myself feel good by having all the budget categories add up nicely to my monthly paycheck. If you recall, I never saved any money and always ran out of money before the next paycheck.

My spending kind of went like this – do I have money in my checking account? Yes, I'll spend it. Meanwhile, I wasn't paying attention to the other categories I needed to set aside money for. I needed some serious help!

YNAB is not super easy to use right out of the box. I can almost promise you that you'll have some growing pains. The good news is that YNAB has a robust support center and tons of educational videos and webinars to teach you how to use their software optimally. When I switched from YNAB desktop to web version, they changed a few rules and I was emailing with their support team quite a bit.

My first few months with YNAB were interesting. I still went over budget, but each month got better and better. I slowly re-trained my spending habits. Remember that $20,000 credit card debt I used to have? Not only is it gone but I pay my cards IN FULL every month.

I can also confidently say today that I no longer go over budget and am saving quite a bit of money now (becoming an attending helped that part for sure). Learning how to use YNAB efficiently helped quite a bit as well.

Living within your budget revolves around clarity of the budget presentation and self-discipline. YNAB is a vital tool with which I feel I am able to keep disciplined and focused.

People ask all the time whether they should use YNAB vs. Mint. They are completely different programs. It really depends on what your needs are. If you are already great at spending within your means and budget (if you have one) – then Mint is a good option for you.

Mint gives you a snapshot of how you did. If you need serious help (like I did) and need to literally re-train yourself about budgeting and spending, then there is nothing better out there than YNAB.

YNAB is forward and proactive budgeting. You will know whether you can actually afford something in real time and not worry that your money will be taken away from other necessary categories. YNAB focuses on your cash flow. You can also add loans and investments for tracking purposes, but I don’t believe this function works too well. I’d recommend sticking to what YNAB was made for – cash flow. I use Personal Capital to get a more complete snapshot for all my accounts. We use eMoney with our FA as well.

I hope you're in a better place than I was when I first started YNAB. Even if you are I’d recommend checking it out. It is free for the first 34 days. Use this link to get 1 month free.

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