Amy Suardi, founder of Frugal Mama, deploys all of the usual tactics for managing her family budget - tracking spending, eating at home instead of going out and shopping at thrift shops or discount stores. But one of her penny-pinching tactics caught us off guard.
"I like to give things away," she says. "When I don't need something anymore - whether it's a box of books or an air conditioner - I'd much rather give it to someone than trying to sell it for a few bucks."
Amy says that giving away her things is easier and satisfying, and that in the long run, it pays off by helping to form greater connections with people and mutual support.
Wealth tends to weaken social ties, leaving people to use money to solve their problems instead of depending on each other, the mother of five says: "I love when I find a neighborhood or community where people want to know each other and then feel comfortable asking for cups of sugar or shoveling each other's driveways."
We recently checked in with Amy to learn more about her philosophy on spending (and saving) money and how it's helped her family live richer lives. Read on:
Tell us about Frugal Mama...when and why did you start your site?
I created Frugal Mama in 2009 because I wanted to be a writer and to be useful. We had three children at the time, and my husband was in medical training. The pay was very low, but it was important to us that one parent (me) be able take care of the kids and the household.
I had to be really creative about saving money, and along the way I discovered a way of life that I loved. On the blog, I always try to write about the win-wins, the ways we've saved money and also had fun or learned something or made good memories.
What's been one of the most useful practices you've learned about money management over the years (something you wished you'd learned early on)?
Record your spending. Every single dollar. It's the only way to really be aware of where your money is going. I think it's important to do it by hand, at least in the beginning, because you become more conscious of your actions as you write them down.
My husband and I have been reminding each other and tracking our spending for 14 years now. It's a habit that will be hard to give up, and that helps keep us honest and aware.
Tracking spending is the beginning of budgeting, and for some people, it's all they need to gain control of their money.
What's your definition of a simple life? Why do you advocate simple living?
Simple living was something that grew naturally out of the need to spend less. When you don't have much, you are forced to pare down to what is really important to you.
We didn't have money for after-school classes and sports, for example, so my kids spent a lot of time in parks, climbing trees and catching caterpillars. We didn't have money for babysitters, so we joined childcare co-ops and met friends who helped one another. We didn't have money for teacher gifts and big Christmas presents, so we hand-wrote letters and made memory books that have become family favorites.
What do you think is the difference between being frugal and being cheap...why is being frugal the better route to follow?
Cheap is a quick fix. Frugal is a way of life. It's like the difference between dieting and changing your lifestyle. Diets may help you lose weight fast, but it usually doesn't last. Finding a great deal is exciting, but it's not going to change your bank account.
What does change people's bottom line (and waistline) is adapting habits that are fulfilling in other ways too. For example, teaching my kids to help me clean the house and take care of the younger ones is probably not something I would have gone through if we had a lot of money. But working together in this way has taught my kids responsibility and self-reliance, and it has really brought us closer together as a family.
What are some of your go-to ways for saving money every day?
These two words help me save money in every situation: plan ahead.
It can be as simple as keeping the fridge stocked with food to eat at home or finding out when to register early for the free preschool. And, of course, this strategy has huge rewards when you apply it to long-term goals like buying a house or building a nest egg for retirement.
It doesn't take more time to save money this way; it just means looking ahead and anticipating what you're going to need. It's like making bread - you have to make the dough ahead of time, but while it's rising, you can do other things.
Money gets wasted when we aren't prepared and we have to spend to fix the problem.
What types of things do you tend to splurge on?
As we do better financially, I find myself spending more on food - healthier and better quality food. Instead of buying the cheapest yogurt that is full of sugar, for example, I'll buy the kind that tastes better and is more wholesome.
I'm also passionate about our house and making it into a beautiful and cozy refuge for us, so I don't cut as many corners there. I still try hard to find the best quality at the best price, but I won't buy the cheapest faucet or chair anymore. I want things that last and don't go out of style.
Any advice for creating a practical family budget?
I'm a fan of reverse budgeting. The way this works is that you sock away as much as you can toward a savings goal or debt-repayment at the beginning of the month. (I recommend automatic transfers into a savings account that is difficult to access.)
After savings are whisked away, the rest is yours to spend - on essentials or fun stuff - without worrying about setting up categories and enforcing spending limits.
What advice do you have about teaching children about money?
I highly recommend offering a segmented allowance, which shows children how to organize their money and how savings can build up over time. For example, we give our children a monthly amount corresponding to age ($12 for a 12-year-old, $6 for a 6-year-old, etc.), on the condition that 50 percent goes into savings and 10 percent is set aside for giving to a cause they choose. The remaining 40 percent is theirs to spend as they like.
Another great teaching tool for older children is giving them a set amount to spend on clothing. Parents can guide them to make sure they are getting essentials, but ultimately they learn by comparing prices, calculating balances and balancing needs with wants.
We've started doing this with our middle-school daughters, and now they finally see the virtues of thrift stores and TJMaxx!