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Redefining Frugality

Are rewards programs destroying your finances? All those points might be killing your budget and making you poorer. There is a better way. #rewards #miles #points #budget #travel #bonusesFrugality has changed from a few decades ago.

Growing up in the backwoods of Nowhere, Wisconsin frugality was a necessity of life. Rural communities once had strong emotions started during the Great Depression. My grandmother spoke of having one egg per week (and we were farmers—the rest were sold) which the man of the house ate because he did more physical work and needed the strength. 

We also heard stories of eating lard sandwiches and “learning to like it, too”, as Grandma Accountant used to put it. Things were hard in those days; harder than anything experienced in these parts by anyone under 100 years of age.

Frugality was an ingrained part of life. Debt was to be avoided like rabies. Old-timers knew it was impossible to survive either. A lot of good men met their end back in those days when things turned sour and the lessons were never forgotten.

Frugality was more than just not spending or bragging rights for a blogger. Spending on anything not an absolute necessity was akin to sin. And it was hard to look up at the cross on Sunday morning if you committed such an egregious sin. 

Those days are long gone. Only a few with a long memory remember grandparents warning of the perils of frivolous spending. 

It was easy to define frugality in those days. Frugality meant saving a very large percentage of your income and sacrificing at least some necessities. Frugality also meant industriousness. Flaunting of wealth was as bad or worse than foolish spending and nobody wants to be the fool.

The lines have blurred in the last decade. Frugality is easier because it is easier to game the system. We even brag about it—a social crime in the not so distant past. 

Now we can travel the world on someone else’s dime and still claim the trophy of frugalism. Websites and blogs abound in strategies to shift your spending to another’s financial statement. Gaming credit cards is all the rage. And credit cards are not the only game. There are so many moving parts in the financial system now you can drive a truck through it without hitting a frugality checkpoint.

But is this really frugal? Not by any definition from the past. Our grandparents would not consider the current state of affairs frugal. They would actually be appalled at modern behavior passing as financially responsible behavior. 

With new rules and a new world order it is time for a better definition of frugality. It is unacceptable to claim current spendthrifty behavior as actually frugal behavior. This has always led to disaster in the past and there are no indications the laws of economics have changed.

So today we will attempt to redefine frugality for a modern world with options to game true frugal living. 

 

Measuring Frugality

The problem stems from what we measure. In the past we measured frugality by spending levels, or better yet, by the savings rate. In the backwoods it was common to see 50% savings rates and higher, emphasis on “was”. People just did not spend what they earned. 

Money is no longer an accurate gauge of frugal behavior. A few quick financial maneuvers can provide points from whatever source good for cash, prizes and/or travel. The tax-free cash doesn’t count as spending in most people’s minds. That is an unfortunate belief to have. 

Travel is the worst offender. Free and semi-free travel is all the rage. It has even affected business and first-class travel as so many can now achieve such levels at very low cost. First-class isn’t what it used to be according to what I have read.

The damage to the environment is all the same. The climate doesn’t care if you think you are frugal as you dump a few more tons (or tonnes for my non-American readers) of carbon into the atmosphere without personal financial cost because you cashed in some points. Earth thinks you still did the spending; Earth thinks you are less than frugal regardless what you exclude from your budget.

Redefining frugality in a world or rewards points, bonuses and free handouts. All that unrecorded consumption affects the planet and environment while exposing your finances to new risks. #risks #finances# #frugal #frugality #spending #rewards #rewardsprograms Measuring “earned income spending” is not the truth. Your impact on the planet is still very high if you engage in off-balance sheet spending. (Yes, this is a twist of words. I know spending goes on the P&L. I used this analogy as a twist on the questionable behavior of public corporations that use off-balance sheet debt to mask their true financial condition.)

All spending counts. Better yet, all consumption counts!

Because the claims of frugality are so easy to fraudulently (an ethical crime only) acquire today a better way to assess frugal behavior is by measuring consumption. 

I’m guilty of the same crime. I avoid travel as much as possible, but have no problem if people travel to me. How is that different from a blogger taking a free trip to a conference just because they are a blogger? The environmental damage is all the same; the resources still consumed.

I’ve gone a step further (and hence have committed a higher crime). My home (and water) is heated and cooled by a geothermal heat pump. Very energy efficient. Then I plow said savings into a 3,000 square foot home with a hot tub, Jacuzzi and a two acre pond. (Save the “hypocrite” catcalls for later.)

Odds are my next vehicle will be electric or some hybrid of such. The miles will be driven with a lower environmental impact. Yet, the massive consumption of an auto purchase is present.

My carbon contribution to the atmosphere is smaller than most Americans and probably on par with a typical European. This puts me well above levels of African nations and most nations, for that matter, outside Western Europe and North America. I have to be careful how loudly I proclaim my innocence.

And the free gifts keep coming. Over my adult life I received plenty of free promotional items as enticements. Blogging is no different. They even have laws now where bloggers have to disclose if they received compensation or free use of the item or service they blog about.

On The Wealthy Accountant Facebook group I have asked people what they consider spending. The vast majority confess they don’t consider credit card rewards as spending. Well, it is tax-free income so it shouldn’t count as spending then either, should it? 

But it is spending! Consumption, too! 

Measuring frugality is extremely difficult due to all the changes in modern society. Spending has been distorted and even CO2 emissions are an inaccurate way to measure frugal behavior. Each method can be gamed. A good start might be to track your CO2 emissions or equivalents with a basic calculator from the EPA. It isn’t a perfect solution, but better than mere spending as a frugality gauge.

Greenhouse gas emissions are also a problematic measuring tool. That electric vehicle might spill less pollutants into the air as you drive, but the contribution from production might be tremendously high. At best it is hard to measure.

And not all costs are included in the environmental equation. The polluting of the land, water and air extracting oil is not included in the price of a gallon of gasoline. We act as if dumping pollution into the environment is a free ride. The tragedy of the commons is in full swing. 

 

Building a Better Frugal Human

If spending and CO2 emissions do not accurately reflect frugal behavior, what does? It all circles back to consumption.

Asking you, kind readers, to track your greenhouse gas emissions would be too much. Even the accountant in me would not stay true to that course for very long.

A better way to determine your level of frugality is to measure consumption and its equivalents. If you get a better price you are considered more frugal. An electric vehicle is still better for the environment than an internal combustion engine (ICE). If you reduce costs by utilizing technology you are still frugal. 

But you also must include all the free rides from gaming the system. Using points to fly around the world first-class is still something like $30,000 or more in consumption equivalents. 

This is different from taxes, by the way. Business owners can shift personal spending to the business ledger legally. It doesn’t mean you (or I) were frugal. Deducting my travel expenses to FinCon or other financial or tax conferences, while a deductible business expense, is really a personal expenditure to be added to the frugality thermometer since their is an element of personal pleasure. 

If you are not brutal in your assessment of consumption you will inevitably game the system to your favor, skewing the results and fooling yourself into believing you are really frugal when you are actually not. 

I have been known to brag about spending only about $20,000 per year to live. This is true. But. . . 

But that is not a true picture. What is the cost—and continuing costs—of maintaining 3,000 square feet of home? The pond? Hot tub? And what about the stuff from the business? Do I acknowledge business meals as also a part of personal consumption? I had better if I want a true picture. Thousands in annual credit card cash rewards used for books for my personal library are personal consumption, even if they are business related! I would buy and read them even if not in business because I enjoy my work.

I see bloggers all the time claim serious levels of frugality. It does not take a deep dive to determine this is smoke and mirrors. Their social media feeds are filled with travel tales that paint anything but frugality. Add the actual cost of the free airline tickets as real consumption to the expenditure column and the consumption level starts to look quite hedonistic. 

 

Why Does It Matter

Why do I or should you care about frugality? Does it really matter if we don’t count the freebies of life in our frugal measurements?

Actually it does if you consider your impact on the climate and the world at large. The impact on the environment is your concern as it does affect quality of life. If you dump pollutants into the air with reckless abandon you by default give permission to others to do the same. When the herd of lemmings run off the cliff in synchronized fashion it makes a splatter spot at the foot of the cliff noticeable to all. 

Keeping spending low by pushing the cost on somebody else is a bit rude, but acceptable in our modern world. The spending shift is sometimes by design of those doing the paying; those without any real frugality concerns. These gifts are nothing more than inducements to get you—or others in your sphere of influence—to take up the additional consumption.

Overcome spending, consumption, debt and financial problems. Rewards programs are designed to get you to spend more and keep you in debt. Break the cycle with these secret tips. #secret #tips #spending #consumption #rewards #debt #financialproblemsYou are better than that. Gaming the system is not a bad thing and no worse than gaming the Tax Code to reduce your tax liability (a really good thing). I am 100% for using credit card rewards and still accept the benefits of business ownership. If my meal or travel is paid by someone else it is still an acceptable behavior as long as I acknowledge I engaged a level of consumption.

But when it comes to consumption I have to admit I am less frugal than I pretend. As I grow this blog and other business projects I find I am on the road more often. I can call it whatever I want as long as I am honest in admitting my personal consumption is really personal consumption. It is hard to be truly frugal as a business owner of any size. Businesses spend to survive.

My personal spending is low. When I bow out of the business life a few business expenses will end up on the personal financial statement it was really on all along and some expenditures will cease. Travel and other consumption will stop or be severely curtailed. Then I may regain my badge of frugality. True frugality

Until then I need a serious reality check and so do you. You are consuming more than you admit and if you want to really be frugal that has to stop because the planet can’t take anymore. And shady personal accounting will not lower environmental pollutants anymore than shady accounting made Enron a profitable company.

 

 

More Wealth Building Resources

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

One Insane Way to Eliminate Your Debt Fast

The one insane way to eliminate debt fast! Cut your insurance premiums, rent and interest rates with one simple step.Debt can destroy any dreams you have of a financially independent future. That is why it is so important to reduce debt and maintain a relatively high credit score.

Debt is and of itself isn’t the entire problem. Excessive debt is a drag on wealth creation, but what debt does to the household budget is even more damaging than the original debt itself.

And debt can sneak up on anyone. Student loans, medical bills, job loss or a failed business venture can turn a bad situation into a nightmare even bankruptcy can’t deliver you from.

Once calamity strikes it is near impossible to shake the effects in every financial aspect of your life. A medical issue or mounting student loans can lower your FICO score which leads to higher costs in almost every other area of your life. Auto and homeowners insurance rates are higher for those with lower FICO scores. Many landlords refuse to rent to people with a FICO score below a certain level or charge a higher rent. And the interest rate you pay is higher.

Financing a home or car is an obvious way a poor credit rating affects you. But the damage doesn’t end there. Once a financial rough patch arises it is harder than ever to shake the damages and move forward. The scoring system doesn’t care about you; it is an algorithm developed to determine risk and it is a far from perfect system.

The worst part of a low FICO score involves the digging out process. Costs for everything are higher and many employers avoid potential employees with low scores. With costs higher and job prospects lower the downward spiral is hard to step off of.

The sobering fact is most people have at least one rough spot financially in their life. An economic downturn with accompanying job loss can set the spiral in motion. A medical emergency is all too common in our modern world. Physical and mental healing are only the beginning. Even before health is regained the financial pain starts to set in.

 

Rebuilding Your Financial Life

We will start by discussing the most powerful way to reduce your debt burden and increase your chances for a better job, lower rent and lower auto and homeowners insurance before we move to rebuilding your nest egg.

The largest component of debt is interest. A $165,000 30-year mortgage at 6% will create over $190,000 of interest if no prepayments are made. Credit card and other higher interest debt is even more damaging. 

Increase your credit score and lower your interest rate with this insiders secret. And generate a monthly income, too.Earning more money to pay down debt faster is a double-edged sword. The more you earn, the more income taxes you pay which begins to make you feel like Don Quixote chasing windmills.

Frugality plays an important role in reducing debt. Spending less than you earn is a requirement for reducing your debt burden. But some things are hard to apply frugality to. Those higher insurance bills and rent are hard to change until you are better off financially and your FICO score climbs. And excessive frugality is hard for many people to maintain. If you can’t stick to the plan you are lost.

It’s the old dilemma: you can be more frugal when you have more money!

It all boils down to your credit score. A lower score increases costs when you can least afford them.  

It is possible, however, to improve your credit score before your financial situation is completely fixed. The weight of medical bills takes time to work through and higher bills for everything else doesn’t help! If you can improve your risk appearance with a higher FICO score you can reclaim your life quicker.

 

It Helps to Have Friends

There is a simple (and legal) way to improve your FICO score with the help of friends or family. I discussed this at length a few years back, but will provide a short review for our discussion here.

On your own, only your reported financial information is used to calculate your credit score. Of course, a hardship may have destroyed that score that served you so well in the past.

You can rebuild your credit score before you turn the financial corner with some help. This is where tradelines come into play. 

A tradeline, in short, is a line of credit. If you are trying to dig out of debt then more tradelines seems like a crazy idea, but bear with me because this is a powerful tool to reclaim your life and then a potent source of easy income afterwards.

Improve your credit score and pay less interest with this insane insider's secret! End debt worries today with the financial secret the wealthy use.Your credit score is low because you have too much debt compared to how much credit limit you have and/or bad marks on your credit report. 

You can’t wipe bad marks away regardless what you’ve been told or read. Avoid the scams! The only cure for late payments and bankruptcy is time. The more time that passes since the bad marks on your report the less affect they have on your overall score.

However, you can increase the number of good marks on your credit report with tradelines. A tradeline can also increase the amount of credit you have compared to the outstanding balance (the utilization rate). The second point is one of the most powerful tools you have to increase your credit score in as short as a few months.

Having a friend or family member share a tradeline is the cheapest way to solve your problem. You add a tradeline to your credit report by having a tradeline from someone else included in your credit score. It works like this:

Say you are recovering from a job loss and finally are back working or recovering from medical bills. (For any of this to work the bleeding has to stop. If you are still digging the financial hole tradelines will do you no good.) You probably have some late payments and hold account balances close to the credit limit on your credit cards. This crushes your credit score.

The bank is unwilling to extend more credit with a higher credit line and the interest rate is killing you. A really good friend (or family member) could add you as an authorized user of their account. They will not actually give you access to the account! (They want to keep their good credit score.) 

When you are added as an authorized user of a personal account, their payment record (they should have no late payments nor a high utilization rate!!!) is added to yours. This means their clean payment record and credit limit with low utilization rate is used to calculate your credit score. 

Let me reiterate. You will have no access to their credit card or information! You are merely added as an authorized user. 

For this to work best you want the account your friend is using to help you with to have a few characteristics: an account open for at least several years (the longer the better), a high credit limit and only a small amount of usage.

Ideally the account you are added to should have at least one usage a month (so it reports to the credit bureaus) and is paid in full each month.

 

Real Life Example

I used my knowledge of tradelines to help an employee recently. She does good work and I wanted to keep her working for me. However, she was struggling with financial sins of the past. 

Student loans she acquired to start a new career were an anchor around her neck. This lead to high interest credit card debt and a high interest auto loan. She used her head to stop the bleeding and get her life back in order. (This also makes her a better employee.)

Her credit score was scraping the basement. She didn’t have many late payments (maybe two or three a few years back, but she always found a way to pay her bills no matter what).

Her credit card and auto loan interest rates were killing her. To rub salt in the wound she also paid higher insurance rates. 

Once I was comfortable she would stay the course I added her as an authorized user to one of my personal credit cards. (She has zero access to this card so there is no risk to me.) I had a small ($69.50) bill on auto-pay going on the card monthly and the credit card was also on auto-pay so I was never late paying the credit card bill. The utilization rate was low, the credit limit high, the account open for years and the payment record pristine. 

In less than two month my employee enjoyed a credit score approaching 100 points higher. She immediately shopped her auto insurance and cut her premiums nearly in half. Her other credit cards also lowered her interest rate when she asked.

The lower interest and insurance premiums allowed her to pay off her debt faster. She now also owns a home with a locked-in low interest rate mortgage and a bright future. She is paying off the debt she has faster and she is getting married in two months so she is a very happy young lady knowing she is going into her marriage with her finances under control.

Talk about a tax-free fringe benefit!

 

Looking for a Friend

Unfortunately, many people with financial/credit problems don’t have a friend or family member (or employer) who can help. There is a growing industry helping people with such a need.

You can actually buy tradelines to get the same benefits we talked about above and enjoy the experience my employee had. 

I researched a large segment of the industry a few years back and when I was satisfied with the policies and procedures of one company I decided to promote their work. As with anything, not all businesses are reputable. I ran across plenty of those, too.

The goal is to buy clean tradelines to turn your financial situation around. (I’ll share the name of the company in a bit.) The goal is to derive more benefit than the cost.

 

Example: Let’s assume you are paying an extra $400 per year in auto insurance, $50 more for rent and your interest rate on credit cards or auto loans hover at 10%. The extra interest you pay per year due to a poor credit score we will assume is $1,000. This totals $2,000 in extra expenses per year and you get nothing extra for the pain.

You could always dig your way out slowly. That could take years. Or, you could buy a few tradelines for a heck of a lot less than $2,000 and see your credit score improve in a month or two. Realistically you can see enough credit score improvement in a few months where you can get your insurance premiums reduced and interest rates lowered.

You can apply the same strategy when planning a purchase. If you are looking to buy a car or home you can increase your credit rating a few months in advance to qualify for a lower interest rate loan. The money saved with a lower interest rate will pay back the tradeline costs many times. Tradelines can make a very profitable investment!

 

The company I use to sell tradelines (you might actually get one of my tradelines if you use the company I recommend since I sell my tradelines there) is Tradeline Supply Company. They have great articles to help you decide which tradeline will work best for you. (Be sure to say “Hi” to the guys over there. I was part of their growing process a few years back and when I run across them at conferences we catch up. It’s good to hear success stories.)

 

Final Notes

Tradelines are a legal tool to regain your financial life. This is not credit repair! Prior sins are still prior sins. What you are showing is that you have turned the corner with your financial problems. You can’t keep digging the hole and expect tradelines to bail you out. Tradelines are a tool to improve your life when things go horribly wrong. Use your second chance wisely!

 

Turn Tradelines Into a Massive Income Stream

Now that you turned the corner with your finances you can pay it forward by selling tradelines with Tradeline Supply Company. You might pay a few dollars to jump-start your finances, but now that you are making progress you can sell tradelines even if your credit isn’t perfect yet.

The extra money you earn selling tradelines can help you pay off debt even faster and help you build a sizable nest egg. I published on selling tradelines for profit here. Many readers of this blog have tradelines paying their entire mortgage and more. Now you know how you can join them. Call Darren at Tradeline Supply Company at 888-844-8910 to get started earning up to $1,000 per month and more.

You can thank me later.

 

 

More Wealth Building Resources

Credit Cards can be a powerful money management tool when used correctly. Use this link to find a listing of the best credit card offers. You can expand your search to maximize cash and travel rewards.

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

Planning a Spending Fast

A spending fast is as vital as a food fast, rejuvenating your financial muscles. Personal finance and financial independence require a spending fast. #spendingfast #spending #personlfinance #earlyretirementFasting is a refreshing way to reset your body’s internal regulation. The benefits of fasting include weight loss and energy gain. Intermittent fasting can give you the same benefits of longer term fasting without shocking your body so hard.

Fasting is necessary for most people due to awful eating habits. Processed foods and sweeteners wear the body down, requiring a fast to cleanse the toxins out. Periodic long-term (multiple day) fasts are punctuated by several shorter fasts. Continuous intermittent fasting can train your body to burn fat while reducing cravings and increasing energy.

Bad habits are solved with a reset. You start small so success is higher. Starting with a four-day or longer fast is certain to end in failure for all but the most determined. The longer fasts also require medical supervision. Starting with intermittent fasting or a one-day fast makes a lot of sense. The timeframe is reasonable and most people can stick with it, therefore, the benefits are received.

As much as the body needs cleansing, so do your financial habits. Spending fasts have been around as long as money. Spending fasts were a natural part of money management until modern times where spending opportunities are everywhere.

Mass media and opportunities to spend at every corner (and most spots in between) encourage the growth of terrible spending habits. Left unchecked, these habits will be a cancer on your financial life. Dreams of financial independence and early retirement will burn with the bad habits. The natural cure is a spending fast and you don’t even need a doctor’s note.

Ground Rules

Like regular fasting, a spending fast has different levels of commitment. The idea is to start small, building your financial muscles before advancing to the next level. As your financial skills increase, you can engage in some truly historical spending fasts. And the good news is you get to keep all the money.

Before we begin I must point out spending fasts are not about frugality or cutting spending. The fast is designed to train you mentally and socially to live a normal life without money as part of every step. Enjoying a walk in the park with a significant other is an awesome and free experience. You can leave the wallet at home. Another lesson to learn is to walk out of a retail store without buying anything (or stealing it) if the item you were looking for wasn’t available. Shopping for the sake of finding a “good deal” is the mother of poverty.

I will outline 5 spending fasts starting with a simple financial purge all the way to the hardcore. I recommend starting small and working up. If you never manage a Level 5 Spending Fast in your life you are still a good person! Not everyone can handle a dietary fast of a week. Most will never manage it. Your health may not allow. The same applies to money. Anyone can manage the first few lower levels, but struggle as they approach the highest level. You may not want to attempt Level 5 in the same way you may never attempt to go without eating for a full week. It’s okay. Each spending fast level will help you recharge your financial muscles worn out by the constant bombardment from mass media. All fast levels are beneficial!

Also, use common sense. Turning off the heat in January in northern Minnesota is not a spending fast; it’s stupid. The idea of the fast is learn money doesn’t buy everything, even the most important things. Your geographic location will determine additional rules from those presented here. Safety first! If you require medication, you follow doctor’s orders. Don’t do anything that risks your health or that of your family or anyone else. Got it? Good.

Let’s get started.

Level 1: The Starter Fast

Breakfast (break the fast) is so named because it is the first meal of the day after not eating since dinnertime, 12 or more hours in the past. Technically you engaged in a mini-fast every day.

A spending fast doesn't have to be a lonely road. Discover all you're missing when you put your credit card down. #spendingfast #spending #creditcard #frugal livingYour starter fast should be just as simple. Brown bag lunch to work. Better yet, leave your money at home one day per week. Driving is still technically spending, but you will plan ahead and avoid the need to buy gas the day of your fast.

The Starter Fast is short-term and in most cases less than a day. You need identification and/or driver’s license when driving or away from home, but cash, credit/debit cards and the checkbook stay at home. You can still pay regular bills as always. The light bill still gets paid. The idea is to strengthen your financial legs; learning to say no to minor spending habits. The first step is to stop spending at least a few days a month at work. No office pools, dining out or other crazy spending that takes place where you work. Work can be darn expensive and it destroys your financial goals! Your work should support your dreams and goals, not suck the financial life out of you.

Level 2: Serious Spending Fast

Level 1 is the training wheels level. Everyone should practice Level 1 fasting often, in fact, virtually every day.

From this level on we will engage in a full day or longer spending fast. At Level 2 you are allowed to plan ahead. Fill the car with gas beforehand. Stock up on staples to take you through the fast. Your habits will not change much yet at this level. The cable is still ticking away; so is the electric bill. You pay those bills timely; late fees are considered spending at this level and are punished with a stern look. Your spending fast at this level is more a shuffling of expenses. Gas is paid for before and after the fast, but the consumption is still the same. The real benefit is avoiding foolish spending. Lunch at work comes from the home fridge. No tavern detour on the way home from the office. Office coffee instead of a Starbucks detour

Level 2 can start at a full 24 hours and move up. Try one day where no spending is allowed for a full day. This is more than just a “leave your money at home when you go to work” plan. Online shopping is not allowed. Money is stripped from your daily lifestyle. Now is a good time to see what’s hidden at the bottom of the freezer. Past spending will fuel your daily needs. If you run out of something, you find a substitute or do without. The exception is safety related issues. Medicine is still purchased if necessary. If injury requires medical treatment you get said treatment. Yes, it’s spending, but this program is to teach financial skills, not harm you.

Once you start building your financial muscle, work from one day to two, then three, until you can handle an entire week spending fast, including weekends. Yes, even at Level 2 the challenge starts to make the muscles sore. That only means its working. Once you can do a week at Level 2 it’s time to move to Level 3.

Level 3: The Power Fast

Now we get serious. Once again we start at a single 24-hour period and move up to a week or longer. Pre-paying for certain items isn’t allowed. For example, driving the car is an expense regardless when you fill the tank so biking or walking to work is the only option.

Ideally, you want this fast to go for several days. The light bill and cable will still operate, but most everything else will require consuming only what you have at hand. The fridge and freezer will be your food supply. The rent or mortgage payment of course still get paid; the same with other debt. In fact, since you are spending on nothing else it might be a good idea to bury that money in debt reduction. Most people at this level will not have debt so the money will go to the First National Bank of Wallet, aka, your index fund. Saving isn’t spending; neither is paying off debt. Interest accumulating on debt is spending so I recommend taking an ax to it.

Level 3 is a lifestyle change. At this level you will start to learn how to live without money. Money becomes a tool only, instead of a means of distracting you from life. Acceptable spending is limited to minor recurring bills like utilities (phone, light, heat, Netflix).

Level 4: The Lifestyle Fast

Remember all the stuff you didn’t buy in Level 3? Well, I bet you found a way around the spending problem by shifting it to somebody else.

At Level 4 you are not allowed to accept spending from others. You might have accepted a meal from a co-worker as a work-around. If the weather was hot you might have used that as an excuse to enjoy air conditioning in a public building. Shifted spending ends now! The shifted spending mindset is the same one that tells you to steal all the soap from your hotel room, justifying the action by claiming it’s a minor thing. Unfortunately you are stealing and it is a form of shifted spending we don’t tolerate around here. Getting someone else to foot the bill is still spending! All you’ve done is shift your spend thrifty ways to somebody else’s pocketbook. Good friend you are.

Plan your spending fast the right way and start living the good life. Control your finance; control your future. #spendingfast #frugal #frugalliving #freedom #money #moneyfreedonOnly the barest of necessities are allowed at this level. If you truly emptied all food sources in the house you may consider (I said consider) buying the most basic of food. This will be the healthiest and most basic stuff. I’m talking lentil soup folks. Maybe beans, the ones you soak all night and simmer all the next day. You’ll live.

The ultimate goal is to power through a month at Level 4. I encourage multiple food fasts at the same time. This is about living life at its most basic, where the real living takes place.

Level 5: The Insanity Spending Fast

This level is so diabolical my fingers are bleeding as I type. Level 5 requires a minimum of one week and ideally a full month. And everything goes.

Cable and Netflix are gone and unless your local climate doesn’t allow, you pop the main breaker to the house. No heat, air conditioning or electricity. This is brutal! Electricity is the ultimate shifting of spending. Electricity is cheap and versatile. For this fast you will learn to live in harmony with nature rather than forcing the world to your demands on the back of energy resources.

Once again, if your climate or health doesn’t allow for such extreme fasting, then don’t do it. You still need to take and fill prescriptions. If it’s well below freezing you still need to heat the house to above freezing. Broken pipes are spending! But don’t use climate as an excuse for your minor discomfort. A cool house (or humid and warm in the summer months) is no excuse to fudge on the fast. Beginners might want to plan this spending fast around a time of year where they experience the least discomfort and where utilities are least needed.

In addition to the fasting from Level 4, you will need to adjust to nature. When the sun goes down; you go down. Artificial lighting has given us a false sense of reality. This fast will break that illusion. Without electricity, TV and the computer will no longer occupy a large part of your day. You will rediscover library books and books from your personal library. You’ll also rediscover the lost art of communicating with neighbors and friends. If you have a significant other she will buck this fasting idea you have until she discovers you pay more attention to her. Real, undivided attention. It’s not a brave new world, just the one that existed from the beginning of time until the advent of modern society a hundred or so years ago.

Recap

A final recap of each fasting level is in order.

Level 1:

  • A simple short-term fast similar to intermittent fasting
  • This is more a “leave your money at home” fast for the workday.
  • Most spending is still allowed.
  • Driving to work is allowed; the stop on the way for Starbucks coffee is out. Drink office coffee. You will not die.

Level 2:

  • The minimum is one-day for this fast and ideally a week or more is needed.
  • Fill the car and stock the fridge because when it’s gone it’s gone.
  • Medical is always allowed since we practice safety first.
  • You still have Netflix and/or cable to entertain you.
  • No stops at the tavern on the way home from work.
  • You can accept gifts that are disguised as spending (co-worker buy lunch) if you must.

Level 3:

  • Stockpiling is out except for food for home preparation.
  • Burning gas still in the tank is de facto spending so walking or biking to work is your only option.
  • You always pay the rent and mortgage because late fees and penalties are spending. You also still pay your taxes on time since interest and penalties are once again spending.
  • You are encouraged to use the extra money you’re not spending to reduce and/or eliminate debt. If no debt, then invest in your index funds. Investing isn’t spending.

Level 4:

  • Level 3 is still in effect.
  • Shifting spending is out. Someone else spending on you is shifting your consumptions habits to others. How rude!
  • Basic, simple, nutritious food only is allowed. Stock piling doesn’t help at this level. Lentil soup and other simple and healthy fare is your diet during this spending fast.
  • You are reaching Stoic levels.

Level 5:

  • Level 3 and 4 restrictions still apply.
  • Cable and Netflix are out.
  • If climate and health allow, pop the circuit breaker for the house. Electricity is still spending.
  • Ideally you want at least a week to a month for this fast.
  • Learn to live in harmony with the environment.
  • Read more.
  • Spend real, quality time with friends, family and loved ones. Spend real deep emotional time with your significant other. Without the distractions of modern life she will be the center of your world. I bet you’ll love what you find.

There is still one unmentioned level: Level 6. I’m numb just thinking about it. If you think you are ready for an even more rejuvenating spending fast you’ll have to take lessons from this guy.

 

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