My Story of Frugality: Breaking My Economic Dependence on My Job

Our staff was packed together in the conference room, listening to our charismatic chairperson critique our performance. We hung on his words of wisdom. Suddenly, he leaned forward and said intensely, “All of you are dependent on your jobs.” He paused. “I want you to think about that.” 

I was shocked—and humiliated. I loved my work, but I knew that our organization was in danger of being eliminated. It bothered me that I was dependent on my job. I loved doing my work, but hated having to work. It was 1993. I didn’t know what to do about it.

Several weeks later, I came across Your Money or Your Life by Joe Dominguez and Vicki Robin. I read it, bought, it and followed the basic tenets of the program. I saved money, paid off my mortgage in 1998, and accepted an agency-wide early retirement offer in 2004. 

I’m telling my story here in hopes that it inspires you. You can change your relationship to money and gain just a bit of freedom from the endless demands to earn it. By rethinking some of the ways we do things, we can walk the path to what Juliet Schor calls “plenitude,” an economic model based on fewer work hours and more time for friends, family, and hobbies. 

What I Did

These are the things that I did, followed by details:

• Set up a system that tracked my progress toward paying off my mortgage
• Organized and decluttered my home
• Learned to track my credit card use
• Tracked my daily spending and reviewed it each month

Set up a system that tracked my progress toward paying off my mortgage

My key goal was to know that my home would still shelter me if I quit my job or was pressured to leave. This meant paying off my mortgage. I developed a system to track my progress. Each month, I added up the money in my checking account, the money in my savings account, and the cash in my purse. Then I subtracted my mortgage and my credit card debt. I called this my “debt total” and watched it sail down.

I deposited my entire paycheck in a savings account that paid interest. Then I transferred my spending money into a separate account. This made it seem like I had less money—and so I spent less.

Organized and decluttered my home

I reviewed my home possessions and kept those that I was using. The others I sold or gave away. I sold my childhood stamp collection, put some old crystal on consignment, and sold my other home goods to a man at a flea market. I didn’t make a lot of money from this, but my apartment became spacious and relaxing.

Learned to track my credit card use

In their book, Dominguez and Robin suggest paying cash rather than using “plastic.” Research shows that paying cash lowers spending. However, credit card points were part of my income. I didn’t want to give that up.

So I put a small notebook inside a checkbook cover. Every time I used my credit card, I wrote down what I spent and added it to my other expenditures. When I paid off a credit card, I crossed out each expense I paid off. Then I added them up again. My credit card register functioned like a checkbook. The bottom line was the amount of debt that I owed to the credit card companies.

Tracked my daily spending and reviewed it each month.

This habit is the heart of the program. “Keep track of every cent that comes into or goes out of your life,” the authors suggest. They say it’s a spiritual discipline. “Instead of watching your breath, you watch your money.” This activity changed the act of buying. I became aware of the moment I wanted to buy something. And sometimes that awareness made me think—and not buy it.

Each month, I reviewed my spending, divided it into categories, and asked myself, “Is this expense in accordance with my values? I thought of ways I might save that money in the future. Many times, as I looked at the total of certain expenses (such as snacks), I had to face my bad habits. The review caused me to change my behavior on an unconscious, automatic level. I would simply realize that X expenditure wasn’t a good idea and stop being tempted. I developed many ways of saving. ( I’ll share some of them in my next post.)

Making the Break

In 2004, my employer offered an agency-wide early retirement. I went to the retirement office to find out how much money I would get. Although it was 40 percent of my salary, I knew that I could live on it. My careful tracking of expenses proved that I could afford to retire. I accepted the offer. Only 18 people accepted the offer in the entire Department of Labor.

Following a modified version of the plan in Your Money or Your Life gave me my freedom. It was a challenging task, but very worth it. Even if you feel overwhelmed by the idea of paying off your mortgage, consider tracking your expenditures and reviewing them each month. You might find that you can save more money than you thought. And I found that frugality made my life more balanced. 

Here’s what I wrote three years after I started: 

“By financially empowering myself through frugality, I have reacted better to the inevitable problems on my job and am more self-confident. My life is more balanced. Before, I was always thinking and working very hard. The life of a frugal person is more concrete: I chop food, sew pockets, and concentrate on the chores of daily life. I have discovered the world of exchanged favors where we help each other rather than buy services. And I have calmed down. I am confident of my ability to live at a lower level—and thus am not as scared of losing my ability to make a living.”

Next week, I will describe some specific strategies I developed to save money.