Money Matters
Money Matters
Maximizing Value and Joy in High-Impact Purchases with Frugal Friends
Who says frugality can't be fun? Jen and Jill, the dynamic duo from the Frugal Friends podcast, join us to flip the script on saving pennies and show how it's truly about managing resources with intention. Our conversation promises to redefine your spending habits, ensuring you get the most bang for your buck without sacrificing the things that bring you joy. We tackle the big-ticket items in life—homes, cars, and daily sustenance—with a focus on aligning purchases with personal values, ensuring that each dollar spent is a step toward financial wellness and happiness.
Prepare to be armed with strategies that will transform your approach to impactful purchases. It's not just about the initial price tag; it's about the art of avoiding emotional spending and paying attention to the details that can save you thousands in the long run. Jen and Jill share their wisdom on how they saved big on vehicles and homes by researching, preparing, and staying unattached. They also get real about their own experiences and how those lessons have fueled their frugal living philosophy, from rejecting needless add-ons to strategically timing purchases to maximize savings.
As we wrap up, don't miss the scoop on Jen and Jill's Frugal Friends podcast and newsletter, which are treasure troves of financial wisdom and savvy spending tips. Their approach to value-based spending is not just about finding the lowest price, but investing in quality and utility. We discuss the pitfalls of impulse buying, especially during the tax refund season when temptations run high. Plus, they tease their upcoming book and recommend a podcast episode that's a must-listen for anyone looking to curb impulsive spending. Trust us, after this chat, you'll view your wallet and your life through a fresh, frugal lens.
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Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want – brought to you by Neighbors Federal Credit Union.
The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice.
Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want. Now here is your host.
Speaker 3:Ms Kim Chapman, welcome to a new edition of Money Matters. I am your host, kim Chapman. Today we have a special treat for you as we dive into the realm of high impact purchases and explore the art of saving big bucks without compromising on quality and satisfaction. Joining me today are two incredibly savvy minds in the realm of personal finance and frugality Jen and Jill, the dynamic duo behind the Frugal Friends podcast. They have a passion for helping people make the most of their money, just like me. Where sisters from another Mr, I imagine, these two experts bring a unique blend of humor, practical tips and insightful discussions to the world of frugal living. Welcome, ladies, and thank you so much for joining me today. Thank you for having us.
Speaker 3:Thanks, Kimberly, so so tell us who is Jen and Jill. How did this dynamic duo come to be formed?
Speaker 1:We are the co-hosts of the Frugal Friends podcast and we became friends about seven years ago when we were both in our debt payoff journeys. I was living in an RV at the time to save on living expenses and pay down student loan debt and Jen was blogging about her own debt payoff journey. And shortly after meeting we became quick friends and one year later started the podcast because we saw just some gaps in the space to be able to talk about some of these topics that might not typically come up amongst friends, and a lot of gate kept financial information with a lot of acronyms we don't understand. We wanted to make personal finance more accessible for the common person and fun, because usually there's not a lot of fun involved when you're talking about finances, but we don't think that needs to be the case.
Speaker 3:I know everybody wants to learn about it, but it just doesn't come with a lot of bling-bling. So what can our listeners learn from listening to this podcast?
Speaker 2:So we really emphasize, instead of being cheap, being frugal, and so what that means is being a good steward of your resources. So a lot of times, people will equate frugality with this race to the bottom in spending Spending as little as possible, getting as many deals as possible without actually thinking do I need the deal, or is this very little spending affecting somebody outside of me? Am I getting poorer quality because of the little amount that I'm spending? So what we want to help people do is not to look at the price tag, to not be obsessed with prices, but be obsessed with intentionality and conscious consumption and finding what you truly value, so you can spend full price without guilt, on the things you love and say strong and easy no's to the things that you don't love.
Speaker 3:So what are some common misconceptions about being frugal and what type of impact has it had on each of your lives in terms of looking at this new way of living?
Speaker 1:I think frugal has often been associated with cheap, getting the lowest price possible, pinching the penny, and really what we are trying to do is redefine frugality to mean being good stewards of all of our resources, this approach that considers our whole personhood, how we are managing our resources emotionally, physically, relationally and financially, and so in that way, it's not a means to an end, but a journey that we can all be on, regardless of our level of income, to be making really wise, informed decisions that we can feel good about when it comes to our spending.
Speaker 2:Yeah, for me in my life.
Speaker 2:I grew up in this middle class home where we didn't have a lot but we didn't have debt, but money just wasn't talked about.
Speaker 2:And so I really thought that buying the medium drink or the grande latte at Starbucks instead of the venti and buying generic at the grocery store, those were the things that made me frugal and, on this journey of almost six years of doing the podcast, really have embraced this, coming out of the scarcity mindset that so many of us have, who were raised in the 90s and early 2000s, of really looking at value, not just value based on what somebody is telling me to value or the value price that they're telling me something costs, but trying to take the pause and figure out what do I truly value and what does my budget say I can afford to pay in value for the things that I value. So that's, I mean, everybody deals with a scarcity mindset and we're trying to make frugality a way that you can free yourself from it without yo-yoing to the other side of just spending without, without you know, like you don't have consequence because of growing up with a scarcity or without a lot.
Speaker 3:I totally agree. I think I remember hearing a quote, some points that you ladies were making, saying you know, not thinking of a budget as punishment for something that you did wrong in the past, which I thought you know. I think that is the true mindset. Sometimes we think that a budget is punishment and, in order to fix that, that we have to be cheap, we have to buy the lowest things, we have to really change our habits, but, while you know, punishing ourselves in the meantime. But today we want to focus on high impact purchases. That is an explanation of what a high impact purchase is.
Speaker 2:So we really live by the 80-20 rule, that 20% of your actions are going to result in 80% of your outcomes, and it's not a hard and fast rule, it's more of a rule of thumb.
Speaker 2:But you can see it.
Speaker 2:When you look at the Bureau of Labor Statistics and their data on American average expenditures, you can see that the top 80% of Americans' budgets really come from about 20% of the categories, and so we found that that is housing, transportation and food, and so these are the three topics that we really focus on, because if you make a few smart decisions in these categories, then everything else you can afford to make not as great decisions on, or you can afford to not pay attention to them as much. I think we in frugality focus we see so much focus in this. You know they're useful, right, there's useful many in saving $3 or $4 here, saving 50 cents there on this 80% of categories. But when we shift the narrative to be focusing on these high-impact categories housing, transportation and food we really do free up a lot of our mental energy, because our mental energy is finite, daily, right, and so we want to take care of our brains so they make the best decisions possible, and really, that starts by being efficient with the financial decisions we make.
Speaker 3:So what kind of factors should consumers consider before even making a high-impact purchase? Because, you're right, those are some pretty big ones. I mean housing, transportation and I mean food. Food really defines us. I know, when I do budgeting and financial counseling, you know I put those in bold letters because those are the ones that usually define our spending habits. Over spending thousands of dollars eating out, are we being really, really frugal? So you know what are those common mistakes?
Speaker 1:Yeah, I think it's going to be important to have an awareness of what we are bringing in monthly. What does our income look like? We can't know how much we're able to spend without knowing how much we are making. So it is going to start there, but it's going to involve then working within that amount of money. For some it means, oh, I do need to earn more in order to even afford some of these basics. But when it comes to food, transportation and housing, really working within what we are able to manage financially Just to speak about food, because that is a decision that we make daily, if not potentially hourly or minute to minute.
Speaker 1:For some of us who really love food, it's important to identify kind of what are some of my triggers, my spending areas that I tend to maybe spend above and beyond what I would like to be spending and I don't feel great about it.
Speaker 1:For me, I love going out to a good restaurant. That's enjoyable to me, but that's going to cost you money because you're not just paying a higher price for the food but you're also paying tip, which we do advocate that if you're going out, do pay tip. You're being cheap if you're cutting corners on your servers. So I love going out to eat, but I can know that I can't afford to go out to eat every single day. I don't want to afford it. I don't want that impact on my savings and investing plan. So I'm going to put the time and energy into meal planning, meal prepping actually making the food that I have. Meal planned and meal prep so making sure that I'm creating those plans around something that's realistic to my schedule, the time and energy that I have for that week and eating at home more, so that I can save some of that money in my food spending plan to be able to afford some of the nights out at good restaurants and also be able to save and invest for my retirement.
Speaker 3:And, of course, I know over the years it's been a lot of your experiences, just like myself, in terms of shaping what we think what, and you know the lessons that we learn. So can you share a personal experience or an example where you learned a valuable lesson about high impact purchases?
Speaker 2:Yeah. So last year our family decided to upgrade to a minivan because we were having another kid and we, you know, we thought, hey, it's time, it's a good time. So we went in and said we are going to buy three to five years old, because that's where a lot of the first three years is where a lot of depreciation happens. We don't want to buy a beater because we want something safe for our family, for our children, that we can, you know, drive for a long time, not into the ground, but we want to be able to drive it for a while. So that three to five year, used like space, was really where we wanted to stay. And then we kind of looked in there like what are the best, highest rated minivans in those particular years? And so we went to carcomplaintscom and kind of took an inventory of which minivans were the best, and that's where we started, and so that those are good tips, just in general, to take with you.
Speaker 2:But when we got to the dealership is when things, things could have gone awry. Your best made plans always fall awry when you get to the dealership. Right, of course, right. So we had too many vans that we wanted to compare. One was the one I really wanted. They were both the same price but for different reasons. So one had the luxury features a few more miles. That's the one I really wanted. Other, lower miles, not as many features. So when we get to the one that I really want, we test drive it and we spend hours in there negotiating and I had already test driven the other one, just because I wanted to say I was make a decision based on facts, not emotions and so. But you know, I really wanted that nice, the nice minivan.
Speaker 2:But we spent hours in that dealership negotiating and what we found was that this particular dealership was adding on a lot of fees, so much so that these too many vans that were advertised at the same price online this one that I wanted became $4,000 more, even after negotiating off on the actual price of the car. They just wanted to give me less for my trade in and had a lot of fees that they wouldn't negotiate off. So I had to make a decision Do I spend $4,000 more for adaptive cruise control or do I go to the other dealership and forgo the hours I spent negotiating that sunk cost that I felt like I was taking this guy's time, like I felt so bad, like, if I leave, like what do I do? And so finally we decided that if I wanted to add the feature to my car, it would be less than $4,000 to add it and I wouldn't pay $4,000 for that single feature and I probably wouldn't use all the other features. So we left that. We left the sunk cost that we had already invested in all that negotiation and all that time. We left it, drove straight to the other dealership and got that other minivan and saved $4,000 with that one decision.
Speaker 2:And that's what we're talking about with high impact spending decisions. This one decision saved me $4,000. I could never, probably in my life, make that many decisions to save on lattes. Right, I would have to make hundreds, hundreds and hundreds of decisions versus just making this one decision. It's almost like girl math. Now I can buy $4,000 worth of lattes and they're basically free because I made the right decision one time.
Speaker 3:A great way to look at it. $4,000 worth of lattes, but you're absolutely right in terms of doing that homework and being able to look at apples and oranges and really, really making a good decision. So what about you, jill?
Speaker 1:Yeah, I think some of it really. I love Jen's example here because it's creating that pause before making that massive decision For us when it comes to housing, so a category we haven't yet covered for us. My husband and I bought our home three and a half years ago and we were approved for a certain amount of money and of course, you're going to get shown all of these other houses that are maybe pushing the envelope on what you could be approved and even our lender said but if you found something for $25,000, $50,000 more, we could probably fudge it and make it work for you guys. That is tempting. We bought in Tampa Bay, florida. There's a lot of homes here with pools. I'd love to have a pool, that'd be nice but at the end of the day, when you compare, it seems like not a big deal. It's all going to get wrapped up into the mortgage if you spend $25,000, $50,000 more on the price of the home. But then to actually do the math on that, at the time, thankfully we got a really good interest rate on our house, but you look at adding $50,000 more to your home and the interest on top of that over the course of whether you're taking a 15, 30-year mortgage out on it is going to equal tens of thousands of dollars extra.
Speaker 1:So again back to Jen's point us choosing middle of the road.
Speaker 1:We, I think, bought a home for $20,000 less than what we were approved, now saving ourselves quote, unquote girl math at least $100,000 over the course of this housing loan.
Speaker 1:What other one singular decision can you make that is going to save you that amount of money? Now, we're not impulse purchasing homes every day, we're not making home buying decisions every day, but all the more important to be doing the math, creating the pauses, looking at the realities of it, certainly taking your emotions into consideration. But now if we wanted a pool, we could spend $30,000 to $40,000 to install a pool here, rather than spending the $100,000 more, in the grand scheme of things, to get a pool that's already installed, probably won't ever get a pool installed here. I'm going to live in contentment, but highlighting the importance of looking at what could this one decision save me? How can 20% of my input give me 80% of my output and the savings that can come along with that and all the other decisions that aren't going to mean as much for me, because I've saved so much on this one big decision?
Speaker 3:So, when it comes to high impact purchases, are there certain times of the year that are more favorable than others? Because I'm thinking here you're talking about the pool. I imagine turning away the idea of getting that pool would be a little bit easier in the winter, versus if it's the summer and you can just see the pretty blue water as you're touring the house and you can just see you and your kids sitting by the pool side. It makes it a little bit more tempting. So are there certain times of the year that are better than others? I used to always have my own little theory that buying my car at the end of the year because the dealership wants to really make those deals, to make their bottom line looks good. It worked out for me, but maybe that was just a coincidence.
Speaker 2:No, you're absolutely right. So these good times of year quote unquote to buy things, they do offer some savings. The savings over time are negligible versus the amount of the home you purchase or the amount of the car you purchase for sure, but they do give you a little edge. So yes, for a car purchase, end of the year or end of the month does give you a little bit more negotiating room on the price of the car. So they definitely have more incentive that last weekend of the month or last day of the month to give you a little bit more. And for a house, anytime that you really wouldn't want to be moving is a really good time. It can get you a little bit more leverage in your negotiation.
Speaker 2:So right around the holidays, in the dead of winter, if you're living up north, stuff like that the times that people don't want to move are typically times where the buying season is slower and you're going to see a large uptick in buyers over the summer months. So that's usually not a great, not the best time. But again, it's the price of the car and the price of the home where you're getting the biggest bang for your buck. These times of year just give you a small edge and it's the same for food. Like, ultimately, meal planning, not buying what you don't need, not wasting things you do buy. Those are going to be the biggest ways to save money on food, but when you're shopping produce seasonally, you do get that little edge on your purchase.
Speaker 3:And, I imagine, still the store when you're hungry. So, in terms of impulse purchases hopefully nobody's impulse purchasing a home, but of course sometimes cars and definitely food that can happen what are some strategies, what are some daily things that we can do to be mindful to avoid making those impulse purchases?
Speaker 1:We all do it. We all make impulse purchases and we all make emotional spending decisions, and that's not entirely wrong. I think it's important to consider our whole personhood when it comes to finances. We can know something in our minds, but then our behaviors can be wildly different because of a variety of factors our upbringing, our relationship with money, the type of day we had, who we might be in a fight with all these things. So it's definitely going to start with understanding yourself and where you are most likely to impulse buy.
Speaker 1:We love to encourage people to look back over their 90-day transaction. So that's pulling up your credit card statements, your bank statements, and literally reviewing the last three months and seeing what am I spending on the most and what of these purchases did I not plan to be spending on? Is it food? Is it takeout? Is it coffee? Is it clothing? Is it late night Amazon purchases? So getting a good handle on what the types of purchases are is going to be helpful, and then identifying what are going to be the strategies that work for me. So identifying what are the triggers, what came before that purchase, Was it I wanted to celebrate? Was it emotions that are deemed positive and beneficial? Was it.
Speaker 1:I was having a hard day. Is it just I'm bored? Or I'm up at night and I can't sleep, or I was previously scrolling social media and I was feeling bad about myself and I thought if I bought all this stuff online I'd feel better. What type of coping mechanism is this impulse purchase serving for you, and are there ways that we can replace that need with something that's going to be more beneficial for our wallet? So we never want to just straight deprivation this thing and just say no and that's it.
Speaker 1:It's not going to work in the long run. We have to identify new patterns of relating, new habits that are actually meeting the need, because oftentimes we're impulse buying because of something and we need to honor and value that. So if the impulse purchase is happening because I'm bored, is there something else that I can do that's going to provide me some stimulation but isn't going to cost me money? Can I go for a walk? Can I get fresh air? Can I call up a friend? Can I work on my hobby? Can I do the project that I've been putting off for a while? Do you name it? Replacing that behavior with something else is going to be vital to actually seeing a shift in this habit of impulse purchases and from there just identifying what do I actually value, so that then we can free up some of that money to spend on the things that are actually important to us and not find ourselves just willy-nilly spending on things that we don't actually value or care about.
Speaker 3:And I have to ask, of course, because it's a high impact purchase. We always fraud and scam every corner of the earth, everywhere we look. So, when we think of high impact purchases, are there any specific red flags that you would want our listeners to know, in terms of getting ready to buy a car from getting ready to buy a house, even if I'm looking for that sensational deal for groceries that is a red flag that says, hey, this kind of the old adage, if it sounds too good to be true, it is. Are there any things that you see more and more, especially in this particular area where there may be scam, or things that our listeners should be aware of?
Speaker 2:Yeah, anytime somebody asks you to use, you know, theoretically, the side entrance or the back door, that can be a red flag. So whenever we are giving money to something, always want to use the front door. Now, when it comes to jobs, we always say, you know, use the side door, always use a connection or something when it's to earn money. But to save money, we always want to use the front door, because people are always trying to take your money under the guise of hey, everybody else is doing this, but I can get you this better deal over here. If you know, you come around to the back, so always use the front door.
Speaker 2:So a lot of text message scammers that has been a real, that was a really big thing in 2023, people getting text messages saying your package wasn't delivered or some, yeah, whatever. And so when you get something like that or an email or something going straight to the website of USPS or FedEx or something like that, when you have a, you know you want to buy a car, maybe on Facebook marketplace or something, be sure, if you can't get it from a dealer, you go take that car to a mechanic, you know, and make sure that it's on the up enough before any money is changed and then just doing things the right way, the boring way. There are very few things under the sun that are new or unique right in finance and, but there's always something going viral that seems new and unique, and so always question the reality and go through the front door to save money is your best bet to avoid scams.
Speaker 3:Absolutely Sounds like some good sound advice. And before we wrap up, of course, we've talked a lot about high impact purchases, but you ladies have so much more information to share. Tell us a little bit about some of the other topics that our listeners can find on your podcast.
Speaker 1:We love to talk about values based spending, how to spend well. How spending is a skill that many of us were not taught, and so looking at impulse purchases, the way that our emotions, relationships, impact our spending decisions, changing up those habits and routines in beneficial ways is a very common topic for us. We also touch on minimalism and simple living and eco sustainability how to make the best decisions on some of these purchases. Food is a huge topic.
Speaker 1:If you want help on food we got all of it on meal prep, meal planning. Really, if it touches finances, we're going to talk about it. Investing for retirement saving strategies, all of it.
Speaker 3:And it's not just a podcast. So if it's somebody that, hey, I'm not a podcaster, but I want this information, you have a newsletter. So here's an opportunity. Tell us where we can find the podcast. Tell us a little bit about the newsletter as well.
Speaker 2:Yeah, so we release a newsletter three times a week. It's completely free. It's called the friend letter and we go into free food promos, savings hacks, deep dives into products so that you are an informed consumer who can buy based on quality and durability and value versus brand or price, because we know paying a little bit more upfront saves money over the long run in most things, but that doesn't mean you have to buy the most expensive thing when you make a purchase. So we really educate readers on that. And then we're also writing a book that's due out in January 2025 on values based spending. So on Fridays we share a little bit of what we're writing and pondering based on that. So that's available at frugalfriendspodcastcom and the podcast is available wherever you're listening to this podcast, just search for frugal friends. And if you're looking for a good episode, to start with, episode 378, the psychological reasons why we impulse buy is a really good one. We go through several of the reasons people impulse by, with some helpful strategies that you can use to combat that type of impulse purchase.
Speaker 3:Sounds like a whole nother podcast that we'll have to do. Well, I definitely want to extend my sincere gratitude to both you ladies, jen and Jill, for sharing your expertise. This was some really, really good information. I mean, especially this is the time of the year where sometimes people getting those refund checks and they want to make those high impact purchases, so I think the timing is just great. So, again, thank you so much for sharing your information and I'll definitely have to have both of you back again.
Speaker 1:I love that. Thanks, Kimberly. Yeah, thanks so much.
