Expert Interview with Kathleen O'Malley on Frugality for Mint

Kathleen O'Malley learned to save the hard way - by making mistakes. As the head of Frugal Portland, she offers a new perspective on saving and stretching a buck. She shared her point of view with us in this interview.

What are some common misconceptions you see about debt?

Credit is necessary to buy things you can't afford right now. It's okay to buy things, even when you don't have the money for them. These misconceptions can and will derail you. You'll start carrying a balance, and you'll treat it like "just another bill," and it becomes normal.

But just because credit card debt is normal doesn't make it something you should have. Strive to be weird in this circumstance: Never get into credit card debt. And if you're in credit card debt, get out of it, and never look back!

What led you to choosing a minimalist lifestyle?

I've moved several times in my adult life, and I've never liked the process of moving. I noticed that sometimes I would move packed boxes to the next apartment, two years after moving in. So, I'm constantly going through my things, trying to whittle my belongings down to just the essentials. Now, I'm living in a small condo with my fiance and there's no way we could have combined homes without both of us embracing minimalism. I like the idea that we can live a simple life, with just a few things. Minimalism helps keep our home clean and organized.

What surprises did you uncover as you paid down your debt?

Honestly, the most surprising thing I realized is that getting out of debt is not a goal. It's step zero in building a financially secure life. When I finally paid off the last of my debt, I expected to be a different person. I expected some flowers or some sort of celebration. Realizing that getting out of debt put me at the beginning square of the game, instead of somewhere far behind the game board, made me understand that I needed some new goals, AND FAST.

If somediv needs to start cutting down their budget, where do you recommend they start?

The big rocks: housing, transportation and food. If you can find a cheaper place to live, a cheaper way to get to work and cheaper ways to keep yourself fed, you'll see huge differences. It's easier to move the big rocks than it is to try to cut back on absolutely everything from the beginning. As with any habit, change one thing. And if you're in debt, understand that every single purchase is something you can't afford.

How do you balance occasions like holidays with a frugal lifestyle?

Easy! Holidays are frugal by nature, except gifts. I love gift-giving. For the last seven years, I've sent out "Kathleen's Homemade Christmas," which is always well received. I make salted caramels, candied nuts and some other non-edible craft. I use birthdays as opportunities to spend consciously. Frugality is NOT the opposite of generous, and it's not just another word for cheap.

What's the future of frugality? How will we be saving money on what we buy in the future? Will we buy less?

Flip this argument around. My mission is to save 50% of my income this year, and I'm encouraging others to do the same. If you save 50%, you have no other choice but to be frugal with the rest. Unless you're a bank CEO or something, in which case, you have very little interest in frugality anyway.

Frugality focuses on spending, while the Save 50% movement focuses on saving more of the money you bring home. The more you save, the shorter amount of time you have to work for other people. Saving is empowering. Frugality feels limiting, especially the way it's portrayed today.

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