Frugal Hacking: Things We Don't Do

The things we've chosen do make up 50% of our financial independence strategy (working at high-paying jobs, investing in stocks, maxing out our 401(k), etc.), but equally important are the things we've deliberately left out from our life to help us expedite our path to FI. We don't just succumb to doing things because everyone around us does it and it's culturally the "right" thing to do. We evaluate everything we do under a strict lens of "does this make sense?" and "does this fit with our financial goals?"

Don't just do it because everyone else does it. Think about it first. Does it match your financial goals?

Don't just do it because everyone else does it. Think about it first. Does it match your financial goals?

Here are some of the critical non-essentials we've decided to leave behind forever:

We don't consume any alcohol, like ever

We run a clean system here at Frugal Hackers HQ. Alcohol is not required for your system, so why bother poisoning your system with crap your body doesn't need? Plus, it saves us a bunch of money since alcohol is rather pricey. These days, we just drink tap water, orange juice, and sometimes La Croix + Sparkling Apple Cider.

We don't fine dine

We prep meals at home. We only go to fancy restaurants if we really want to be part of a close friend's birthday celebration. We never go fine dining out of our own volition. Groceries are surprisingly darn cheap here in San Francisco, and cooking is next to free. Our building even covers the cost of cooking gas!

We don't eat meat or seafood, at all

Both Mr. and Mrs. Frugal Hackers are ardent vegetarians and have been so since birth. We don't really know what we're missing out on, and we certainly don't intend to find out :) Meat and seafood are rather expensive compared to veggies, fruits, rice, quinoa, beans and lentils, so we're glad this is out of our budget automatically.

If you'd like to learn why we've remained vegetarians all our life, take a stab at this Netflix documentary Cowspiracy. If you have the appetite for something more gruesome, check out some disturbing videos of how animals are being treated inside large-scale farms (Warning: that video is very disturbing).

We don't drink coffee

Premium coffee beans can be quite expensive. Beyond that, you still need to buy grinders, filters, coffee making machines, timers, frothers, etc. etc. Doesn't make any sense. You don't need any caffeine if you know how to sleep well. These days, we buy cheap powdered tea leaves from the grocery store and make chai at home on the weekends. Being Indians, we drink chai for the phenomenal taste, not for the caffeine. We're not addicted to it, and can easily go days without consuming any chai.

From a cost perspective, a single daily cup of $3 coffee bought outside can easily cost you ~$16k over 10 years (if invested instead). If you're a proud Starbucks Gold member, the only thing you should be proud of is how much money you've given away (or will be giving away) to Starbucks over the course of your lifetime. Even the cheapest lattes can significantly add up over time. If you want to call yourself frugal, buying coffee outside everyday is anything but. The only acceptable frugal coffee purchase would be this 3-pound tin of Folgers coffee from Costco for 3 cents a cup. And no, Keurig K-cups aren't considered frugal. They're not all that cheap, and look at all that wasted plastic! For someone wanting to achieve an aggressive 70%+ savings rate, cutting out all non-essentials from your life is key. Try starting with coffee — the biggest non-essential of all time.

We don't smoke

Cigarette smoking is ridiculously expensive, because of all the added taxes. It's paradoxical to try to be frugal and be a smoker at the same time. What's worse is that your future health costs are also likely to be higher. Financial independence (with a potential to retire early) is just the beginning of a long journey. After you reach FI you still need to make sure your future finances, notably your future health costs, are under control for the next 2-5 decades of your life.

We never binge shop

We're very careful with shopping on Amazon, at shopping malls, outlet malls, etc. It's too easy to spend money too quickly when you go in without a careful plan. With Amazon, we let things sit in our cart for at least 2-3 days before buying if it's anything above $10. We run our purchase decisions with one another to see if it makes sense first. We don't subscribe to retail therapy anymore.

We don't party or go clubbing

This form of entertainment doesn't provide us with any value, so we tend to skip them. The loud music is extremely harsh to our ears. Club cover fees can be quite atrocious. Even the non-alcoholic drinks there could make you go broke overnight.

We don't go out drinking at pubs/bars

We don't believe in socializing in any of these noisy/pricey environments. And because we don't drink alcohol, there's not much point in frequenting pubs and bars in the first place. Bar food can be ridiculously expensive.

We socialize over hikes and inviting people over for lunch/dinners instead. Potlucks are an extremely frugal way to socialize over.

We don't own a car

We live in San Francisco so we don't own a car. This easily nets us between $300-$650 every single month. If you don't need a car for work or to get to work, you should probably sell it. Cars are fairly expensive from a total-cost-of-ownership perspective. There's plenty of cheaper on-demand rental options these days for the weekend like ZipcarGetaround, Lyft, and Uber. If you have easy commute options to work, stop driving to work! You'll save a ton on insurance, gas, wear & tear, and expensive parking. Lastly, if you must own a car, only buy a used car, ideally with cash. If you must lease or get an auto-loan, try to negotiate an interest rate as close to 0% as possible.

Walking, public transit, and biking are some of the most frugal commuting options to get to work. We use a combination of all three.

We don't travel during peak periods

Traveling during long weekends is crazy since those flights tend be quite more expensive. We normally sit tight at home during long weekends because everything is so crazy out there: flight tickets, lines, crowds, delays, etc. We normally fly right after a long weekend because air seats are on sale then. Similarly for flying on weekends. If your job is flexible, you should be flying on weekday afternoons.

Same thing holds true for flying during the holiday season. It's crazy! Flying between the 25th and the 31st might be acceptable since seats are actually usually underpriced then but they're still more expensive than flying during true low season, i.e. mid-Jan, April, and September.

We don't book guided/packaged tours when traveling

We plan our own trips from scratch and organize day-trips when we get there, because booking day trips locally is way cheaper and you can price-compare + negotiate across different providers. Guided + packaged tours are ridiculously expensive (oftentimes a 100% extra premium from our experience), and almost always, it's easy to simply copy the itinerary that these guided/packaged tour companies provide online and just do it yourself.

We don't buy gifts

We stopped buying gifts for each other. We've even decided to stop buying gifts for other people. No more birthday gifts, anniversary gifts, Christmas gifts, Father's Day gifts, Mother's Day gifts. Gifts are a huge money sink since you have no idea if the other person truly needs something or not. And if two people gift each other something of equal value, it ends up net neutral — at that point they would've both been better off just buying what they wanted for themselves in the first place since there's no risk of receiving a gift you're unlikely to use.

We don't buy books

We rent all our books from the nearby library for free. The closest library to us is only a short 10-min walk from home. The library also gives free memberships to residents of the city. All we have to do is plan our reading schedule a bit in advance and put a "hold" on the book whenever we're ready. Within a few days, the book gets delivered to our local neighborhood library for free, ready for pickup! If you're okay with e-books or audio books, they can be obtained for free as well, and don't require a site visit since they can be downloaded online.

Normally books cost between $10-20 per book and if you read a book a month

We don't buy expensive furniture

How many IKEA products can you spot in this picture?

We don't go shopping online or at fancy places like Crate & Barrel, Pottery Barn, EQ3, etc. We buy all our furniture from IKEA instead. And after we buy it once, we never replace anything. We just use it forever. Bonus points if you can manage to acquire all your IKEA furniture 2nd-hand from Craigslist.

We don't subscribe to gourmet groceries

We don't shop from Whole Foods because it's ridiculous pricey. And we're not sure if the value-add is worth the 82% premium. Instead, we buy all our groceries and household products from Costco, groceries from Foods Co. (a low-end discount store in San Francisco owned by Kroger), and occasionally private-label products from Trader Joe's which are also reasonably priced.

We don't frequent concerts/theater/live shows

We don't go out to concerts, operas, live theatre, live comedy, or live sports anymore. The most we'll do is one show of Cirque du Soleil per year. Shows can easily be a huge drain on your finances without your realizing it. Instead, here's what we do for low-budget entertainment:

  • We watch movies at home on the cheap
  • We go cycling around the Bay Area
  • We go walking/hiking/trekking/camping/backpacking
  • We play cheap $20-30 board games with friends (one-time investment) for entertainment
  • We buy cheap movie tickets from Costco and watch movies occasionally

There's no shortage of cycling routes in the SF Bay Area <3

What things/activities are you willing to cut-out from your life to fast-track your goal to achieving financial independence? Which areas are the biggest financial drain on your entertainment income?

Mr. Frugal Hacker

Born in India. Grew up in Dubai for 15 years. Studied and lived in Canada for 8 years. Backpacked in Europe for 2 months. Lived in Toronto for 1.5 years. Working in San Francisco for the past 4 years. Runner, cyclist, software engineer.