Expert Interview with Frugal Babe on Financial Independence

Some things are more important than things.

And for family finance blogger Frugal Babe, financial independence is more important than shopping at department stores for the latest fashions or outfitting her home in brand-new furniture.

"Our couches are 20 years old, and nearly everything we own comes from thrift stores, but our non-retirement investment account recently crossed the six figure mark, and to us, that's far more important than new furniture and clothing," she says.

As her family's income has grown over the years, they've managed to keep their expenses at the same level they did when they had no money at all - and that with the addition of two kids.

Here, Frugal Babe shares how she's been able to live a rich life without money:

Tell us about Frugal Babe...when and why did you start your site?

I started my site in 2006, when my husband and I were nearly finished digging our way out of the debt we incurred to start our business. We own an insurance brokerage, which we started in 2002. By 2004/5 we had about $38k in debt, most of which was direct business expenses. It took a few years for our income to grow enough to get out of debt, but we've had no debt other than our mortgage since 2007.

What got you interested in frugal living? Why are you so passionate about it?

My parents have always been frugal, and I grew up shopping at garage sales and thrift stores (which were nowhere near as awesome as they are today). To me, it seems obvious that the less we spend, the more we get to save. And the more we save, the less we need to work in the future. Keeping our expenses to a minimum seems like the best way to achieve financial independence - which is the eventual goal - and it just makes everything about our life less stressful.

Right now, our income far exceeds our expenses, so we're able to save a lot. But by living frugally, we have the peace of mind that comes with knowing that we could withstand a significant drop in income without having to alter our lifestyle at all - we just wouldn't be able to save as much. Peace of mind and a low-stress lifestyle are priceless!

What have been some of the biggest investments you've made toward long-term frugal living?

  • For the last two years, we've been a one-car family, and we're planning to keep it that way.
  • We've avoided non-mortgage debt ever since we paid off the business debt back in 2007.
  • Our mortgage payment is only $850/month, even though our house is worth about $260k. We bought our first home in 2003, and we always made additional payments on the principle, even it was only $10 or $20. By the time we sold it in 2009, we netted enough money to put a 20 percent down payment on our current home, and then we continued to pay extra toward the principle. That meant that when we refinanced into a 2.44 percent loan (15 year) last year, the outstanding balance was low enough to get our payment down to the level it's at now. We'll pay off the whole thing in 2018, but for now it's only costing us about $200/month in interest, which makes a big difference to the overall budget.
  • We selected our current house because of the yard - it's on a 3/4 acre lot. We put in an orchard and a large garden, which means that a lot of our produce during the summer months is fresh from our yard.
  • We finished our basement ourselves, and in the process, we created a home that will work for our family (including two parents who work from home) for many years to come. We've learned a lot of various DIY skills that help us save money in all sorts of ways.
  • Our shared cell phone only costs us $10 a month. We don't have a data plans, and we have no plans to get one.
  • But I would say the number one thing we've done is develop a mindset of contentment, and we're working hard to teach our boys the same thing. We don't need new stuff, fancy trips, or bigger and better do-dads in order to be happy. That's been the key to avoiding lifestyle inflation for us, and it continues to serve us well and allow us to save a good chunk of our income.

What have been some of your favorite money-saving techniques?

Hands down, my favorite is second-hand shopping. Other than consumables, we purchase just about everything our family needs second-hand. I haven't been in a mall in years, and the only online shopping I do is on eBay (other than food, which I do order from several places online in order to get bulk discounts). If we need something specific, I turn to Craigslist or eBay. Otherwise, I buy everything in our local thrift stores or at garage sales. We're lucky to live near a large town with a well-to-do demographic, so the things I find in the thrift stores are outstanding.

What about some you tried and later ditched?

There were a few times that I briefly tried coupons at grocery stores, but I never stuck with it because it's just not worth it to me. We only eat organic food that we cook from scratch, with basically no exceptions. Coupons are few and far between for fresh produce, grass-fed meat and pastured eggs (for the last year, I've been buying eggs from a local family - they have 20 hens that run around in a field all day, and their eggs are amazing...and they only charge me $10 for three dozen, which is less than half the price of store-bought pastured eggs).

What advice do you have on scoring great thrift store finds?

Be willing to dig around a bit, and ditch the mindset that thrift stores are full of your grandmother's cast-offs or worn out jeans. Scout out all the thrift stores in the area - you might find that one is better for household items while another is better for clothing.

If you don't live in a large town or city, save up a list of all the things you need, and then when you do make a trip to the city, include the thrift stores on your errand list. Once you get to know the stores in your area, you'll know where the great deals are. One store near us sells all of their women's shirts for the same price, regardless of brand. So the Lululemon top that I got for $3 a few weeks ago was in between a Champion top and a Danskin top, both of which were also $3. But there's another store in town that puts higher price tags on higher-end clothing, so the really good stuff at that store isn't quite as much of a deal.

Most stores run deals based on how long items have been in the store. But some stores just put everything at half-price every couple weeks. Some stores also run coupons online - ask at each store to find out when the sales are and whether or not there are any coupons available.

What's the strangest/coolest/most unique thing you've found second-hand?

Basically everything we own is second-hand.

I tend to gravitate toward high-quality items, and I've found an amazing assortment of stuff. Huge collections of Playmobil and Lego and Thomas the Train for our boys, clothing for myself from PrAna, Athleta, Lole, Lululemon, Patagonia, etc. (my husband is pretty easy to please...button-up short sleeve shirts, t-shirts, and cargo shorts are his year-round uniform. But I do find him high-quality versions of those items in thrift stores). I also got nearly everything we needed for our basement bathroom second-hand.

What are your favorite resources for learning DIY hacks to save money?

I'm a big fan of blogs. I like food blogs because they inspire me to cook all of our food from scratch. Even though our grocery bill is high, I know that there's no way we could get the same sort of quality if we didn't cook from scratch. And our restaurant bill is nearly zero, which helps offset the grocery bill. Mr. Money Mustache is my favorite blogger - if you're not already reading his stuff, I highly recommend it.

What are the most common questions your readers come to you with? How do you answer them?

I get all sorts of questions. I've been blogging for eight years, and in that time we've had two babies, sold a house, bought a house, grown our business, finished a basement, created a giant backyard orchard/garden... There have been a lot of questions!

People ask about cloth diapers, gardening, starting a business, working from home, earning extra money on the side, etc. Reader questions are often the inspiration for new blog posts, as I often feel like other people probably have the same question. Browse around in my archives and you'll probably find the answer. If not, let me know and I'll see if I can answer it for you!

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