Gary Foreman on Frugal Living

“Live better for less”—that’s Gary Foreman’s motto. As a former financial planner and purchasing manager, he’s spent decades helping people save their hard-earned money and stretch a dollar. He is currently the editor and publisher of TheDollarStretcher.com, a web site devoted to helping people meet their financial goals. In this interview, Foreman explains why the “f” word—frugal—is on everyone’s lips, and he shares some insider tips on living frugally.

What’s the best way that people can get a handle on where their money is going?

I know people hate the “budget” word—it scares them—but it’s a management information tool. If you don’t know where you’re spending money, you don’t know where you can save money. The average family’s food budget or allowance is a place to find savings. Some families may be spending too much on clothing or entertainment. If you keep track of your spending for a month or two and compare it to some budget guidelines, you can get a feel for where you’re out of whack.

What are some ways people can have fun while living frugally?

My daughter and I used to go to garage sales together on Saturday mornings when she was young. It was a great bonding time. We have memories of finding bargains together.

For a lot of people, being frugal is a good opportunity to experience something you wouldn’t otherwise. If you just keep spending money and it’s date night, it’s very easy to see another movie. If you’re looking at things frugally, you might pop some popcorn at home and go out to see a sunset. Which is more memorable? Have a more romantic evening watching a sunset rather than previews for coming attractions.

A lot of people go to high school sporting events. It’s a beautiful way to spend an evening. Go out and watch a city softball game. Quite often it costs nothing and you don’t have to pay $6 for a hot dog.

What are common mistakes people make when they decide they want to live more frugally?

The most common is that people equate a lower price with a better deal. That’s not always the case. If you buy something that’s a lower quality for a lower price, it might not be a better deal. Clothing is a good example, especially if you buy something that goes out of style quickly. You’re better off buying good quality shoes, suits and dresses and taking care of them, than buying lower quality items that will fall apart.

Is living frugally a hot topic right now or are people always looking to save money?

There are three types of people who visit my site. There are those who heard the news say a recession is coming. Then there are others where it’s kind of a lifestyle for them and it’s part of who they are. The last group lost their jobs or have some financial crisis and are looking for some help. In general, people don’t seem to be overly concerned about the market, and I don’t know whether that’s good or bad.

What’s the most important part of one’s budget that should be downsized?

Look at big-ticket items—make sure your house payment isn’t too much for you. If you’re paying more than 40% of your salary on your house, insurance and all the things that go with it—either refinance or consider selling. No one likes to talk about it but it’s true. The same goes for your car. Do you have the vehicle that is right for your situation? I’m astounded by how many people will buy a big SUV to haul a boat they take to a lake once a year. You could just rent a truck once a year instead.

Once people have begun a frugal lifestyle, how can they keep their momentum going?

Pay off any debts you have. For every dollar you put into paying off debt, it’ll bring you back between $1.10 and $1.30 next year and every year after. Pay off debts as quickly as you can. Once you have your credit cards paid off and you’re down to any loans you have for your car or your home, try to set up some savings for emergencies. The truth is, if you have a house, sooner or later, the roof, the fridge or the water heater will need to be repaired or replaced. It’s not a surprise if, it’s just a matter of when. This way, you won’t be forced to pay for it with your credit card if you have money saved up.

SIGNATURE QUESTIONS

What is the belief you personally go to during times of change?

Change is what I make of it. I can look for danger or opportunity. My job is to find the opportunity and take steps to make that the reality.

"The best thing about change is..."

...that it encourages me to look at things in a different light, to break out of prior ways of thinking.

What is the best change you have ever made?

At this stage of life, it's hard to point to one single change. The best has probably been a series of changes to put faith in charge of my life. It's been a 20+ year walk that's affected everything I do.

For more information on Gary Foreman, visit www.thedollarstretcher.com.