Meet the Frugalwoods: Achieving Financial Independence Through Simple Living by Elizabeth Willard Thames
I am really glad that I read this book. Seriously, I think it has reinforced the way I think about money – as a tool for comfort, but not happiness itself. Of course, it’s easy for me to say as a member of the upper-middle class, that money isn’t everything. I am blessed and fortunate, and I want to maintain financial stability and frugality as I get older and move into adulthood.
5 Big Takeaways
- Eliminate necessary expenses – like do you really need to eat out twice a week?
- If you can do it yourself, do it yourself – for example, Elizabeth and her husband sanded and painted their kitchen cabinets themselves instead of hiring a contractor.
- Buy second hand if possible – I think this is such a good idea! It’s better for your wallet and the environment. (I like to use Poshmark, but ThredUp is nice too). Elizabeth relied on Facebook Marketplace and eBay. One piece of advice she gave that I thought was genius is to ask sellers if they have anything else that they’re selling. For example, you’re buying a couch from a couple because they’re moving. Ask them if they have anything else that they’re selling. Maybe they have matching armchairs that you’d like. I think this is a super smart way to shop second-hand.
- Avoid lifestyle inflation. Lifestyle inflation is when you “inflate” your lifestyle to keep pace with your salary increases. For example, you get a $5,000 raise and then you (likely subconsciously) decide that you should get Starbucks lattes every day when you previously made your coffees at home.
- Get off of the conveyor belt – Stop worrying about the “should-dos”. You don’t have to get married, buy a house, adopt a dog, have kids, and work a 9-5 cubicle job. You can do whatever you want! Elizabeth talks about “living for the weekends”, meaning that you spend the work week waiting for the weekend when you can do what you really want to do: (for me) crocheting, hiking, reading, watching sitcoms, and more. You should do what makes you happy and engineer your life so that is possible. This was the biggest takeaway for me – that if you’re living for the weekends, then you need to change your life.
The Power of Extreme Frugality Coupled with Compounding Interest
$75 per month on cable, $900 per year on TV. Invest in a low-fee index fund with a 7% return over the long run. 7% is on the higher end, but 5-6% is average. Keep the original $900 invested and add to $900 to it every year. “In 30 years, your annual investments of $900 would’ve grown to $91,865.74.”
I think this following excerpt encapsulates the book best:
“That is the power of frugality (coupled with diligent investing) to transform your net worth. When you turn your money over to someone else, a cable company for example, you’re not just giving up that dollar amount, you’re giving up all of the potential gains that money could have for you. In other words, the opportunity cost. And that was an example using just one useless monthly bill totaling a measly $900 per year. Imagine what the total would be in thirty years if you eliminated haircuts, movies at the theater, manicures, new clothes, new furniture, takeout, new cars, lattes, and everything else that’s a drain on your monthly expenses. The heart of extreme frugality is the knowledge that the compilation of seemingly piddly amounts of money yield tremendous dividends over time” (198-199).
I read this book shortly after I finished Everything that Remains by The Minimalists. I thought these books complemented each other wonderfully. They both expose the fact that more stuff – fancier or more expensive stuff -isn’t going to make you happy. This brings me to one of my two bones to pick with The Frugalwoods.
First, I do believe in spending money on quality items. For example, of course, you can get a wonderful bed second-hand, but you don’t have to furnish your entire house in used items such that your house looks like a glorified consignment shop. I think there is some merit in buying certain items new, for example, I would never buy used shoes, but that’s a me thing.
Now, this is my biggest complaint with The Frugalwoods, they’re not middle class! Elizabeth’s husband aka Mr. Frugalwoods makes slightly over 200k annually! That is not a modest salary! Of course, they were able to achieve financial independence quickly; they were making sizable salaries! Now, I’m not one to judge, but I think they misrepresented themselves – often they would say “we’re middle class” then they would say “we’re upper-middle-class” – it just didn’t feel like they were being very transparent. I think when you’re talking about personal finance and basically encouraging other people to act like you and manage their finances like you do, then you owe it to them to be transparent about where you’re starting from.
All that being said, I still do think this is a great read! I think it really does show the benefits of living frugally. This book is part of the reason why I’ve decided to try to become financially independent by the time I’m fifty. Here’s a blog post with more on that.
I hope you all are well and staying safe. Remember, it’s always ok to ask for a break!