George Kamel - 12 Rules for (a Frugal) Life

Episode Date: April 24, 2024

💵 Sign up for EveryDollar today. Create a free budget!  Move over, Jordan Peterson. I make the rules on this channel. These tips for frugal living can help you save money, live simply, and make smarter financial decisions. Next Steps  📗 Order George Kamel’s new book, Breaking Free From Broke.  📺 Watch: 17 Things Frugal People REFUSE to Buy Offers From Today's Sponsors  This episode is sponsored by Tello, a mobile service plan designed to save you money. Go to tello.com/George for $5 off your first month of Tello’s unlimited data plan.   🙌    🎙️ The Ramsey Show    🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💼 The Ken Coleman Show  📈 The EntreLeadership Podcast     Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

It seems like everyone is all about being frugal these days. And when you consider inflation, cost of living, high interest rates, stagnating wages, and the price of a decent cooler for your white claws, of course people are looking for ways to save money. But being frugal doesn't mean you're a cheap skate like Uncle Frank, it just means you're very intentional with every dollar. And I've been on that frugal train a long time, and I've got lots of tips for helping you be extra frugalicious.

He did not just... Did you just say that? And in today's video, I'm going to share my 12 rules for frugal living to help you save money, live simply, and become a smart spender. But before we jump in, be sure to like this video, subscribe to the channel, and share this with all of your cheap skate friends who never chip in for the K-So and try to steal salt shakers from airplanes. Put them in your purse.

All right, let's get to it. Here are my 12 rules for frugal living. Rule number one, research like your wealth depends on it. One of the hallmarks of frugal people is that they're diligent, shrewd, and wise when it comes to their research. They're never impulsive. They take the time to make sure they've got the best option, retailer, and price. And you've heard the saying that time is money.

And in this case, spending time doing some research can save you big money. For example, I've got a whole spreadsheet of mattress research I put together when I was trying to upgrade my bed on a budget. And it helped me make a delightfully soft yet firm choice. And even if you don't have the time or desire to put together a 32-page Excel file on mattresses, at least do a quick search for promo codes, coupons, and deals online. And maybe you find a generic brand on Amazon with a very good. great reviews. Maybe you're in a store and do a quick online search to find out a different

retailer has a better price on the same product. And you know what they say, you're not quite frugal if you ain't using Google. Guys, who said? Nobody, nobody says that. I may have been the first person in the world to ever put those words together. Frugal rule number two, buy quality now to avoid buying more later. Here's the spirit behind this one. When it makes sense, B-I-F-L. Buy it for life. Don't be afraid to pay more for quality when it counts. because sometimes choosing the cheapest option can cost you more in the long run. And you probably know this if you've ever bought one of those single-use disposable cardigans from H&M, which is like all of the cardigans there.

Take that back. Sometimes it's smart to spend a little more for something that will last a lot longer, especially if you can get it at a discount. And this applies to things like clothes, appliances, mattresses, tools, and luggage. And there's a really great subreddit called Buy It for Life, where people share durable quality products that are made to last. So check that out. Great resource.

And once you're in a solid financial position, like you're out of debt with an emergency fund, you've got my permission to buy the expensive boots that will last you two decades, to buy the fancy mattress that will save you from back problems down the road. My back! And a nice little side effect of buying less things, less often, is that you'll be reducing waste and living a more sustainable lifestyle. So there you go.

Make Captain Planet Proud, or Al Gore. They're basically the same person, except Captain Planet didn't also invent the internet. Thanks, Al. Frugal Rule number three. When your backs against the stall, sell the horse. Now this one goes back to an infamous call I took on the Ramsey show, where I suggested a caller named Katie should sell her horse.

There's other horses out there. It doesn't even know your name. There's more horses for you on the other side. So you're probably wondering, well, George, that felt uncalled for. Do you regret that advice? I don't regret the advice. I regret how it was delivered, which was unkind to say the least. But don't worry, I apologize to Katie or Instagram buds now.

I even got to meet her at one of our live events. Although I will say it was not on my bingo card to almost get canceled by the equestrian community. But my point was this, drastic times call for drastic measures. So if you're stuck deep in a financial hole, it's going to take deep sacrifice if you want to get out. And that might require parting with something that you really want to keep. And sometimes it just makes sense to sell the way too fancy car you bought. Sometimes it makes sense to sell the way too expensive house you got into, and sometimes it just makes sense to sell the horse.

All opposed? Comment, nay. Frugal Rule number four. Broke people pay interest, wealthy people earn it. You see, interest can make or break your finances, depending on whether you're the one paying it or the one earning it. When you borrow money, you owe interest. You're repeatedly paying someone a hefty premium for the benefit of using their money.

And this is the side of interest you don't want to be on. So avoid debt at all costs. Credit cards, car loans, student loans, avoid it all. Now, the one exception I won't yell at you for is your mortgage. But even then, it's only if you stick to a 15-year fixed-rate mortgage to pay the least in interest. And even then, pay that early to pay even less interest. So if you're paying interest, it's like using a paper shredder as a piggy bank. You're basically throwing money away every single month, and that is the exact opposite of being frugal.

On the other hand, earning interest is the key to building wealth, especially compound growth in your investment account. Now, here's what that word compound means. When you invest some money and earn some interest, then that bigger pile of money earns even more interest, than that even bigger pile of money earns even more interest. And that leads to exponential growth. And if you invest consistently over a long period of time, eventually your money starts making more money than you do.

Now, the best way to harness this magical power is by investing in mutual funds and index funds within tax-advantage retirement accounts, like 401Ks, Roth IRAs, or even a health savings account. And investing aside, even a normal high-yield savings account with 5% interest can create some serious compound growth. So if you really want to live a frugal lifestyle, eliminate your debt ASAP so you can stop paying interest and use that freed up money to invest so you can start earning it.

Frugal Rule number five. Always be knowing where every dollar is going. I had to defy the laws of grammar to make that rhyme, but it's worth taking the creative license here. This one is all about budgeting, and it's a huge part of living that frugal life. By tracking your income and expenses, you'll have a clear understanding. of where your money's going and where you can make adjustments. And this way, every single dollar has a job. So nothing gets mindlessly spent on big dumb cups or grande, ice sugar-free vanilla lattes with an extra shot of espresso and a splash of coconut milk.

Extra hot whipped cream, double-sleeve, no cup. Unless you pre-plan for it in the budget. Then it becomes permission to spend instead of impulse. Now, if the word budget makes you throw open your mouth a little, just think of this as an intentional spending plan. And check out the every dollar budgeting app, which makes this super easy to create and track all of your transactions. And if you forget this entire video, remember this one acronym, ABB, always be budgeting.

I forgot. Frugal Rule number six. If you fall for the trends, you'll fall for the traps. There are all kinds of financial traps out there. Car loans, helox, even buy now, pay later. But one of the most prominent is credit cards. Yeah. And it's more than just a piece of plastic.

It's a straight up psychological money mind game and I ain't playing it. And here's why. even if you pay it off perfectly, every study shows that you spend more when you use a credit card. And honestly, you might not even realize that you do. But get this, in 2021, researchers at MIT conducted a study using fMRI technology to examine brain activity during the moment of purchase. And they focused on the reward center of the brain that releases dopamine. And here was their conclusion. Quote, shoppers with credit cards are willing to spend more on items, check out with bigger baskets,

focus and remember more product benefits rather than costs, and make more indulgent and unplanned purchase choices. Doesn't sound very frugal to me. So don't fall for the trends like credit cards and rewards programs or else you'll fall for the traps. Before we move on to the next frugal rule, here's a bonus rule for you. Frugal people don't overpay for their phone plan.

They use a mobile service provider like Tello, which is a sponsor of today's episode. Tello offers crazy affordable phone plans that get you the same reliable coverage and features as the big guys. In fact, they use T-Mobile's towers, so you know it's legit. And right now is a great time to switch because Tello's offering more data and lower prices on every single plan for new and existing customers. And no worries, you can keep your same phone and phone number, no switching required.

And Tello pricing starts as low as five bucks and goes up to 25 bucks a month for the unlimited everything plan, which includes 35 gigs of high speed data. And if you know gigabytes like I do, it's a lot of data. And here's the cool part. You stay in the driver's seat of your phone plan. No contract, no writing a handwritten note to change your plan. no tomfoolery of any kind. You can upgrade, downgrade, whenever the heck you want. And because I love frugality, they gave me a special link that saves you even more.

So go to tello.com slash George to get five bucks off Tello's unlimited data plan for your first month of service. That's tello.com slash George. I'll also drop the link below if you don't like typing things. Okay, back to more frugal rules. Frugal rule number seven. Pay cash now or don't buy it now. This one is all about living below your means. If you can't afford to pay for something without going into debt, even temporarily, then you can't afford it.

And I'm not saying you can never buy something expensive, I'm just saying never use debt to do it. Instead, use a sinking fund. This is where you save for money over time by socking away a little bit each month until you can afford to buy it. That's called discipline and delay gratification. And this works great for things that are too pricey to pay for in a single month's budget, like new tires or Vegas vacation. Another option is just to find a more affordable alternative. For example, maybe instead of going to Vegas, you go to Branson to see a nice family-friendly, patriotic dinner show the way the good Lord intended. Either way, living on less than you make and practicing delayed gratification are key components of being frugal and building wealth.

Frugal rule number eight, never spend just to save. Now, there's nothing wrong with sales and discounts and promo codes. I love those things. I'm not afraid to do a little work to figure out how to pay less for that pepperoni Magnifico at Marco's Pizza. In fact, here's a little bonus hack for you. promo code TW30 gets me 30% off every order, baby. Hashtag not sponsored. But Marcos, it's time to make this happen. What are we doing here? What is this, will they or won't they, charade we're playing? What's this? What's happening? What's going on? So here's the key. Only

take advantage of offers if you're saving on something you already planned to buy with money you already budgeted. Discounts and big blowout sales with sign flipping and wacky waving inflatable arm flailing tube men are usually just marketing tactics to get you to spend more money. And guess what? The reason they do that stuff is because it works. It can. It can't. gets your attention. So always think about how much you're spending, not just how much you're saving. And here's a money hack for the ages. Everything is 100% off when you don't buy it. Frugal Rule number nine, save for the future, but don't lose your mind. Sometimes people get so intense with saving money and paying off debt, they look up years later and realize

they're miserable. Being frugal doesn't mean you never have fun. And yes, you can hunker down and live off rice and beans for a while to reach a goal, but this extreme lifestyle is not a long-term plan. People following the Ramsey baby steps, they get out of debt in 18 to 24 months on average, and they get the emergency fund in place within another six to 12 months. That's two to three years of sacrifice so that the next 20 to 30 years can be spent enjoying life to the max. And Dave Ramsey said it this way, live like no one else, so later you can live and give like no one else. So yes, save money and invest for the future, but also be outrageously generous today. Be prepared for emergencies, but don't be a hoarder. You don't need food.

five crates of freeze-dried beef stroganoff, Gary. It's disgusting. Well, that felt unnecessary. Set aside some fun money in your budget every month, and don't be afraid to splurge every once in a while on something that brings you joy, like a new weird al-Chiapet or a trip to the world's largest pistachio in Alamalgordo, New Mexico. Whatever flips your flops. So TLDR, it's good to prep for the future, but it's also important to enjoy life in the now. Frugal Rule number 10. You can't save your way to wealth. It ain't going to work. Saving money is an important part of building wealth, but it's not enough on its own.

Now, the key delineation here is the difference between frugally saving money on purchases versus investing consistently into tax advantageed accounts like a 401k or IRA. And over time, the goal is to increase your income, which also means increasing the amount you're investing every month. These two levers are going to do a lot more for you than saving a few bucks here and there using coupons for your key lime pie flavored yogurt. I mean, think about it. There's a limit to how much you can save, but there's not really a cap on how much money

you can make and invest. And we've already covered the incredible effect of compound interest on your investments over time. So yes, it's good to save, but frugality alone won't lead to wealth. So don't focus all of your energy on cutting back and clipping coupons for rump ross. No more clipping coupons. Even parking money in a savings account won't be enough to keep up with inflation or retire

on. So if you want to build wealth, increase your income and start investing. How much? Invest 15% of your gross household income every single month. and invest even more once you pay off your mortgage early. And regardless of what the economy is up to, just keep investing. Frugal Rule number 11. More stuff won't make you more complete.

That is a great quote from my friends The Minimalists that I'm stealing for this frugal episode. Don't get caught in the trap of keeping up with the Joneses. Before you make a purchase, my friend Rachel Cruz says to ask yourself this question. If no one ever sees this, would I still buy it? If the answer is no, abandon cart immediately. And this one really comes down to motive. and lifestyle and comparisons. It's fine to have things and enjoy them.

Just don't look to things to make you happy. And there's a reason minimalism is so popular right now. When you learn to live with less, with more contentment, and focus on the things that truly matter, you can live a more intentional life and reduce your expenses. And that's what being frugal is all about. Frugal Rule Number 12. Solve for Freedom.

I borrowed this one from my friend, Dr. John Deloney. In 2024, solve for freedom. Clean up your life, get rid of clutter, old clothes, and junk, honor your mind and body exercise for the right reasons prioritize sleep eat well go to therapy surround yourself with good people respectfully let the others fall away do not owe anyone anything pay off your debts never borrow money and finally no more complaining practice gratitude this year you become free i love this and i think if you do these things you'll naturally live a more frugal life because at the end of the day being frugal isn't just about money it's also about having freedom with your time your most

emotional energy, your brain calories, and the options you have in life. So when you're faced with a decision, financial or otherwise, choose the one that leads to freedom. And for me and my house, that's a debt-free life now and always. All right, those are my 12 rules for frugal living. But wait, there's more. Here's a bonus rule for you. Be generous.

It is truly the most fun you'll ever have with money. Because what's the point of frugality if you're not going to use your money for good? One of the best reasons to create financial margin through frugality is to have to have more to bless other people and causes with. Now, the truth is, if you hoard everything you save and don't give any of it away, you'll be miserable. Remember, being frugal is not the same as being a cheap skate. It's being intentional with your money.

So make intentional giving a part of your frugal lifestyle. And speaking of a frugal lifestyle, there are 17 things frugal people apparently refuse to buy. Check out this video to see how you stack up against the frugalist of the fruggs. Thanks for watching. We'll see you next time. That was good, guys. That's a wrap. P.S. I want to run this idea by you.

I want to write a children's book called The Frugal Googler. What do you think? About a guy who searches for deals online and then finds out he's actually a wizard. Just me? Whatever. You're not the target demo. It's for children.