As creative economizers are discovering, cutting back doesn't have to mean giving up the good life

In August, Mike and Sabrina Jaffe took their two children on a five-day vacation to Cape Cod. They lounged on the beach, ate lobster at a popular restaurant, played miniature golf, and explored the tourist towns. But rather than retire each evening to a rented home as they did on their last trip there, the Jaffes slept in a tent. At $40 a day for the campsite, and with most meals cooked around the campfire, they saved over $1,000, Mike estimates, while drawing closer to nature and to one another. "We'd worried that, without a TV and computers, the kids might get bored," he says. "But they really enjoyed watching the moon rise, helping prepare the cookouts, and slowing down enough to toss a ball around." The enhanced family time was especially meaningful for Mike, a motivational coach and speaker in New York City and Great Barrington, Mass., whose World Trade Center office was hit by the first plane on Sept. 11, 2001, before he'd arrived.

Nearly four years after the start of a recession that feels suspiciously like it's still dragging on, and faced with an uncertain economic future, Americans are increasingly looking for ways to slash their expenses. Incomes are stagnant: Median weekly earnings for full-time U.S. employees in the second quarter of this year rose only 2 percent from a year earlier, while prices of everyday goods jumped 3.4 percent. And, of course, millions of Americans are still collecting no wages at all. A new Census Bureau report shows that, in real terms, household income is now below where it was in 1999. It seems clear, moreover, that healthcare costs and many other expenses are only headed up -- even as pensions and job security evaporate. Little wonder that Americans are socking away more of what they earn. Personal savings as a percentage of disposable income rose to 5.4 percent in June, up from below zero in 2000 (though that is still markedly lower than the 10-plus percent of the early 1970s).

As creative economizers are discovering, though, cutting back needn't mean giving up the good life. "You don't have to deny your pleasures. In fact, you can lower spending while raising your quality of life," asserts John Robbins, author of the 2010 manifesto The New Good Life: Living Better Than Ever in an Age of Less (Available at Amazon.com). He knows whereof he speaks, having lived on a shoestring twice in his life: after college, when, rebelling against materialism and entitlement, he refused his father's Baskin-Robbins ice cream fortune, and more recently, after entrusting his entire self-made wealth to Bernie Madoff. Robbins's book recounts how he has happily grown his own food, lived in a tiny house, and driven a 15-year-old car, content that it had been paid for years earlier.

In some areas, a few small changes yield big savings. In others, low-budget experiences offer outsize pleasure. And always, experts say, contemplating the true value of an acquisition is likely to prevent wasteful impulse buys. The shift to more thoughtful consumerism itself can be surprisingly enjoyable. "The pleasure in being frugal comes from no longer feeling like I'm wasting my money. Frankly, it's become a boost to my ego," says Leah Ingram, a freelance writer in New Hope, Pa., who began cutting back in 2007 after she and her husband had to sell their house because their mortgage and home equity loan payments had become unmanageable. She documents her newfound passion in the book Suddenly Frugal and on a blog by the same name.

Psychology research supports the notion that having and spending money isn't closely related to life satisfaction. "Unless you're near the poverty line, the effect of money on happiness is very weak," says British psychologist Robert Holden, author of the books Be Happy and Authentic Success. In fact, he says, only 10 percent of happiness is determined by life circumstances such as one's wealth. The rest comes mostly from personal choices, such as how people decide to view a situation, and genetics. Here are some ways to tighten your belt without sacrificing joy:

Become a smarter shopper.

Do you know where your dollars go? When Ingram noticed that she was making all her business and personal calls from her cellphone, she dropped her land line and started saving $800 annually.

In some cases, getting a price reduction only requires asking. Belonging to a group like AAA or AARP, for example, affords discounts at thousands of places -- and not just hotels and car rental companies. AAA members, for instance, are entitled to breaks on products and services from Dell computers, hearing aids, and drug prescriptions to flower deliveries and restaurant outings. Bank of America offers its credit or debit card holders free admission to select zoos and museums one weekend each month.

Seeking out cheaper or store brands -- 64 percent of grocery shoppers have begun doing so, according to a recent study by the accounting and consulting firm Deloitte -- is another painless way to save. "It became clear to me that consumerism is a marketing game of always making you want more. I realized I had the power to break the cycle, deciding for myself what I do and don't need," says Aaron Ginn of Dallas, 23, who recently made the decision to switch from designer labels to store-brand clothing and from high-end grocery store items to generic brands at discount shops.

Downsize.

In September, Ginn, who works for a company with an online tool that helps consumers get a handle on their medical expenses, made the biggest change yet, moving from a downtown high-rise apartment to a bedroom in a suburban tract house shared with friends. Not only did he slash his monthly rent from $1,100 to $500, but he also gained a camaraderie he didn't have while living alone. "Whether buying a home or renting an apartment, people can save thousands of dollars by downsizing even a little," says Gregory Paul Johnson, president of the Small House Society, an advocacy group for greener living in Iowa City.

While a handful of extremists are finding satisfaction in newly built "micro homes" of just a few hundred square feet, most people are scaling back more modestly. The average newly built U.S. home has shrunk slightly in the past three years, falling from a 2007 high of 2,521 square feet to 2,392 in 2010. That's a significant saving, Johnson says, given that construction costs run from $120 to $200 per square foot and smaller homes typically mean lower taxes, less expensive maintenance and repair, and lower heating and cooling bills.

Rediscover lost pleasures.

It's no coincidence that what's become known as the "slow" movement -- Slow Food, Slow Craft, Slow Design, and the like -- has taken off since the recession. From growing and cooking your own food to decorating more sparsely, these shifts to a slower, more old-fashioned lifestyle not coincidentally usually save money, says Robyn Griggs Lawrence, author of Simply Imperfect: Revisiting the Wabi-Sabi House, which is based on the Japanese approach of finding serenity in simplicity. Modern homesteading -- going back to basics by growing and canning your own food, raising chickens for eggs, even making your own clothing and furniture -- has become increasingly popular; one website forum, Homestead.org, has more than 6,000 online members.

With Americans expected to spend $362 billion eating out this year, cooking can offer especially impressive savings. Earlier this year, Toni Dolce, a New York City vocalist and voice-over artist, and her husband Andrew Bove, a music producer, began cooking at home several days each week rather than eating out nightly, after calculating that their monthly restaurant expenses had risen higher than their city apartment's rent. Because they especially favored international fare, they gathered recipes and now experiment widely, cooking to the accompaniment of the particular culture's music. "My favorite part is when I'm cleaning the dishes and my husband whirls me into the living room to dance to the ethnic music," Dolce says. As an added bonus to saving about $500 a month, they each have painlessly lost 10 pounds by avoiding restaurant food.

Families are also rediscovering the lost slow art of free play and doing nothing, observes Susan Caruso, director of Sunflower Creative Arts, a nonprofit toddler-to-teen creativity-based program in Boca Raton, Fla. "Parents increasingly tell us they're guiding their kids towards self-directed play, both because it's less expensive than electronic toys and because they realize this was something from their own childhoods that kids today are missing," Caruso says. This could mean encouraging kids to wander freely around a park, choose unstructured free time over a schedule filled with pricey lessons, recycle egg cartons and other household materials into art, and take apart old appliances to learn how they are constructed.

Embrace what money can't buy.

"There are so many things you can't put a price on," says Holden. When you expend your time and energy on things like family, friendships, creativity, spirituality, and laughter, he says, you enhance your life while saving money. Last year, rather than exchange presents when her extended family gathered in her mother's hometown of Brookfield, Ohio, Sherry Richert Belul and her 11-year-old son, who had flown in from San Francisco, dreamed up a "Holiday Hoopla" carnival. The event included such offerings for the dozen attendees as a variety show, a dress-up photo booth, and -- hokey but well received, she says -- a "validation booth" where each visitor received personalized positive comments. It was such a success that she and her son plan to offer an experiential holiday gift again this year.

Similarly, a "wabi-sabi" philosophy of home improvement would emphasize finding joy in silence and serenity rather than in a renovated kitchen, Griggs Lawrence says. If you're interested in considering a different sort of upgrade, she suggests putting a bench in the backyard, a comfortable reading chair in a corner of your bedroom or, if possible, claiming a room of your own. Griggs Lawrence recently converted a bedroom in her townhouse to an area where she can meditate and write. The space, she says, feeds her soul at least as much as a luxury vacation would.

 

 

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