Transcript Frugal Workshop Podcast #9 - The Frugal Road to Wealth

Good Monday morning to all my listeners. I hope your week is off to a great start. I'm your host, Belinda Richardson and I want to welcome you to the Frugal Workshop podcast. I'm so glad you decided to join us.

Today’s main topic is going to be about the frugal road to wealth. 

Considering you are listening to a frugal podcast you are probably already on the straight and narrow path to wealth. You’re actively living the frugal lifestyle and doing what is necessary in order to make that happen. 

Know this, however, there is no quick road to wealth unless you receive an inheritance or win the lottery and the odds of either one of those happening are pretty slim. 

There are many ways to accumulate wealth slowly, but they require hard work and discipline. The more effort you are willing to put in and the more disciplined you become, the sooner you will begin to see wealth happening for you. 

Having a list of goals to work towards is one step that will guide you on the road to wealth. Having a plan to pay off debt for example will help motivate you to become debt free. Not having goals towards paying off your debt could lead to even more debt, which is the last thing you want. 

When my daughter was in second grade, I explained to her that learning math was important and every year she would learn something new and that she would be building a foundation. 

If she missed any of the steps in between she would struggle with math later on in school because she had missed out on an important step. So, it was very important to pay attention and learn all the steps, so she would have a solid foundation in math. 

Having goals will help you on the road to wealth and should be considered important building blocks on the journey. 

Know this, if you have credit card debt, you are traveling away from wealth and not towards it. Is that the direction you want to be heading? You can always change direction and start moving yourself toward wealth and the frugal life will help you along the way. 

You may not even need to know the methods to living the frugal life because you already have them memorized. If you remember anything from my podcast today I hope it is this: Frugal living is a pathway to freedom, which puts money in your pocket, so let it guide you on the road to wealth.

There can be so many roadblocks when it comes to living the frugal life. Amy Dacyczyn said that you needed to have made all the right choices in the years beforehand. As we’ve discussed before, many people believe it is perfectly normal and reasonable to finance things they don’t need and that credit cards are an acceptable way to borrow money when expenses outpace their salary. 

So many people are left poor because they are extravagant with their money needed the latest and greatest of items. 

Frugality means spending your money wisely and avoiding unnecessary expenses. Remember we need to be using our resources wisely and that includes both money and time. 

Do you ever eat out when you could cook, buy new clothes when the ones you already have are fine, or buy expensive electronics you don’t really need? This undermines all the hard work you do! To build wealth you must save the money you earn.

There are no shortcuts to building long term wealth. Delaying gratification may be one of the biggest factors to overcome in order to build wealth. People are wise to realize that delaying gratification in the short term can lead to a much bigger payoff in the long term. It will take discipline, but resisting the urge now will be rewarded later and ultimately bring more peace of mind. 

Studies have shown that those who accumulate wealth tend to be more frugal and live less opulent lifestyles than their peers, even though they can afford it. 

While it is never too late to get started, the one advantage of starting at an earlier age is time. Millennials could enjoy the added benefit of the power of compounding interest over a longer period, and so build lasting wealth. 

Even when armed with the best frugal knowledge, you will still need to have that frugal mindset to change your behavior and make it stick.  Keeping your children in the loop and make them feel like they’re a part of your frugal journey, which will help give you the motivation to keep going. Before you know it, your frugal journey will become a new habit.

Let’s discuss taking your lunch to work. I know I mention regularly in my blog that I pack my lunch for work all week. That doesn’t happen without some pre planning on my part. I have to make sure I make time to spend in the kitchen to get ready for that. I like to do that on the weekend or at least the night before. I might have to make tuna, egg, or ham salad for sandwiches. I might be taking a salad and will want to make that up in advance. 

Let’s discuss your automobiles. In order to obtain wealth on a less than average income you’ll need to have less than average expenses. 

One of the biggest expenses in our home are our cars. The cost of the car, yearly license plate and registration fees, gas, oil changes, regular maintenance takes a big chunk out of our budget. 

Some of the ways we can lower these expenses include shopping around for the cost of insurance, doing car maintenance ourselves, and driving less. 

Remember when families used to go on Sunday drives? Yea, we don’t do that here.  Going out to eat? Stay home and cook a meal there and save yourself the money spent eating out and the gas and wear and tear on your car. A win-win situation. 

Other habits that could compromise your path to wealth include cable tv, smoking, drinking, video games, etc. Many of these habits stand between a person and the road to wealth. 

Real wealth comes from spending less than you earn, again and again, month after month, year after year. It’s a slow and steady process. It isn’t always exciting, but it is a sure fire way to reach your financial goals.

Did You Know?

According to Business Insider, the cost of college textbooks has risen over 67% in the last ten years with some students spending as much as $500 per semester just for textbooks.

How did the college textbook publishing industry become so expensive you ask. 

Almost 80% of the textbook industry is dominated by five major publishers, and they're doing everything in their power  to make sure that students continue to buy new textbooks.

When I went back to college in an effort to save money I bought used textbooks. Many college students started doing this and also renting college textbooks as both options were cheaper than buying them. 

Publishers took notice of this trend and started bundling new textbooks with special codes, which forced students to buy new textbooks at the full retail price if they wanted access to this online information. 

One study reported that 67% of students skipped buying textbooks altogether because of rising prices and restrictive codes, and that's not the only thing publishers have done to get students to buy new textbooks.

There used to be a new edition update every five years, but now, the production cycle has been shortened to two or three years. New editions have reordered chapters or changes in page numbers, making it harder to use older editions, and they can cost up to $150 more, but students have some other options to consider if they want to avoid expensive textbooks.

Some schools are starting to use open-source educational materials instead of traditional textbooks. That way, students can access open license texts, digital media, and other learning materials for a fraction of the cost, but the movement is still in its infancy.

So far, only 6% of schools are using these open resources. It may be awhile before we see textbook prices drop, so for now, you may have to shell over $150 for a textbook you may not even read.

Don’t Throw Macaroni at Your Neighbor

The other day while I was subbing in math, the teacher had me correct student papers as we went along, so they could correct them. I was grading one student’s paper when another student at her table came to have her paper graded. 

Immediately I suspected this student had copied her answers from the previous student because all of her answers were correct but they were all shifted down to the wrong line under the next question. So, I looked at her and very gently asked her if she had copied her answers from someone else and she told me no. 

So, I explained to her that they are supposed to show their work and she hadn’t done that. She told me she threw her paper away. I told her that was OK and to go get the paper she threw away.

She then told me she erased the answers before she threw the paper away. I told her that was OK to go get the paper anyway. She then started to change her story again to say her friend had actually helped her with the answers.  

Needless to say, this girl had cheated, so I simply moved her to a different table and explained to her again that she needed to show her work. She would have saved herself a lot of trouble if she had just admitted she cheated when  originally asked her. 

Christmas is 99 days Away!

I know that Christmas is still a few months away, but a little bit of advanced planning now will save you money by the time Christmas rolls around. 

On that note, I bought four Christmas presents this past week. I had $30 in credit from Amazon, so I used that for two of the gifts. 

Also, I have one week off for fall break in October at which time I’m planning to make/sew a couple of other gifts. 

If you’re wanting to make vanilla extract for gifts for the holiday you’ll need at least two months for the vanilla to cure. 

In Conclusion

I hope that this podcast has been helpful to you and I want to thank you for taking the time out of your day to listen. I hope you have a great week and we will see you back here next Monday. :)

Belinda ~ Living within our Means ~ My Linktree