Those of you who are regular readers might remember the story I shared about the big league ballplayer who lived with his parents while making a $400,000 annual salary. Reactions ranged from “it’s a great idea” to “it is time for him to move out and grow up”, with a variety of thoughts in between.

Now, along comes a story about a ballplayer who goes even further with his frugality – at least in my view (you may disagree). Yahoo! Sports had an interesting article about a major league player who took a money-saving approach when sent down to the minor leagues. He has since been recalled, but he clearly took measures to save himself some money while his major league career was on hold.

Apparently, the player had been on the big league club last year, and had leased an apartment for himself and his family (wife and daughter) in Pheonix. After being in the big leagues in 2009, and with the major league minimum salary at $400,000 this year, it seems that it shouldn’t be much of a problem for any player to get a nice rental in Phoenix that’s within his budget. On top of that, one would think that he would have plenty of money to spare, especially after earning a fat paycheck last season.

That may be the case, but nevertheless, Roberts was sent down to the minor leagues earlier this season, to the team’s Triple A affiliate in Reno, Nevada. At that point, it appears that despite having the potential to be called up to big leagues later this season -which did in fact end up happening – he seems to have pulled out all the stops to protect his cash flow.

What did he do? Well, since he already had that rental for his wife and daughter back in Arizona, he decided not to rent a place for himself in Reno. Yes, he was basically a homeless professional athlete – and by choice!

The guy apparently slept in the locker room when the team was in Reno. He had showers right there, and was able to make sandwiches from the supplies in the kitchen. Since he already had one apartment lease payment, he didn’t want to spend anything on a lease in Reno. When he was on the road, he stayed in hotels with the team.

That reminds me of a guy from my college fraternity, who described his living plans for one year as just “crashing on a friend’s couch”. Yep, no fraternity house (and fees), no apartment lease = no cash outflow for that guy. Ultimately, he moved back in to the fraternity, as one would have expected. He was actually a very smart guy, oddly enough. He just didn’t have the money, apparently.

That’s what makes this interesting to me.When a college fraternity guy won’t even do that, it’s interesting how a professional ballplayer, particularly one who spent a chunk of time earning a big salary, was able to take the step to do it.

Anyway, I think the ballplayer’s approach may have been over the top, as he might have been able to rent an extended stay hotel room instead, but I commend him for his frugality. At least he apparently realizes the value of maximizing your income minus expense gap, and is willing to make sacrifices to keep that going. In spirit, I think that’s pretty cool, even if he was excessive. Hundreds of millions of people live in far worse conditions. At least his wife and child were resting comfortably in their Arizona rental:)

What do you think? Is this a nice example of smart frugality?

They’re out there. Lurking in our midst. Frugal, seemingly modest-living people, that are quietly hiding their secret.

What’s that secret? They’re millionaires.

I came across this story from The Seattle Times that was yet another example of a stealthy millionaire. This particular example was of a lady who recently passed at the age of 98.

We often hear about people who made their millions in seemingly typical ways: business, fame, inheritance, etc. But we also hear stories about everyday people that become millionaires through frugal living. Some of these can be quite boring, yet inspiring. Work at a job, do a 401k rollover when moving to each new job, and let the money accumulate and compound. Yet other stories, inevitably, are inspiring and compelling.

This one I find to be of the latter variety. This lady did not just live within her means, it would appear, but would go well out of her way to pinch pennies:

• She bought a coat for $2, then used the zipper to lace her shoes (why pay for shoe laces?)
• She never went to a salon; rather, she cut her own hair or used a wig
• She would heat her home with wood she hauled in with a wheelbarrow, even into her 90′s; she didn’t want to pay to heat her home

What she also did, besides living within her own means, was become knowledgeable about investments. She apparently studied finance on her own, and became self-taught in the subject, though she held such hard jobs as picking cranberries, shucking oysters and filleting fish. Is a million dollars not enough? Maybe to her that’s the case!

So, this is a lady who:

1. Lived within her means
2. Worked to grow her income through investments

The result was a $4.5 million nest egg, of which she left $1.o million for the local school district and $3.5 million for her town to build an indoor swimming pool. Very interesting choice, with the pool, but I give her credit – she did it her way. Kudos to her.

I’m a proponent of trying to live with an income minus expense gap that facilitates saving, having a sound stock investment strategy, and also trying to grow the top line through career management. While there wasn’t career management involved here, she followed the general framework of saving and investing.

A compelling story, odd yet inspirational in its own way. An ordinary person who successfully saved money, and left for causes dear to her. As long as someone doesn’t hide their wealth to mislead or take advantage of others, why not be private if you choose?

What do you think? Is this inspiring to you, or just plain quirky?

One of the things I strongly believe in, when it comes to frugality, is being fair to others. In other words, I’m all about saving money, but it can’t be at the direct expense of someone else in a way that directly takes advantage of others. Do unto others as you have them do to you.

That said, there are some situations that aren’t black and white, but in shades of gray instead.

This 9th edition of Squirreling Gone Wild covers a recent situation where this gray area came into play. Some of the most popular installments of this series focused on prior coworkers or old buddies, but this time it’s me who’s at the center of the story.

So here’s the deal: I now commute to work by train, from the suburbs to into downtown. As a part of the commute to this new position, I have to have a ticket for the train every day. It costs $5 for a one-way ticket if I buy it on the train going downtown, and $8 if I buy it on the train going outbound. I just discovered this $3 premium while on the train the other day, so that motivated me to search for other ways to save while buying tickets ahead of time. As it turns out, one option is buying a monthly pass, but I’m not ready to commit to that as I will do some driving as well. The option that caught my eye was a 10-ride ticket for $40. This way, I spend $8 for one day of commuting vs $13. Clearly, that can add up, so needless to say I was happy with that discovery.

So how do you use these? Typically, the conductor walks by, and looks at each person to see if they have their ticket/10-ride card/monthly pass. If the passenger has the ticket or monthly pass, the conductor nods and moves on. If the passenger has the 10-ride card, the conductor hole-punches it for that ride. If the passenger has no ticket, the conductor sells it on the spot.

So, the other day, I board train and within a few minutes hear the conductor walk into our train car.  These conductors, by the way, look the part – full uniform, conductor hat, etc. Anyway, the conductor proceeded to say the customary line in the customary booming voice: “Tickets, Please!”

At that point, all the other passengers, including myself, brought out our respective fare denomination, whether ticket, 10-ride card, or monthly pass. We dutifully waited for the conductor to come by, as per usual.

As the conductor made his way down the train car, checking fares, he stopped at the person next to me and chatted him up loudly and with laughter. It was clear this person was a regular passenger. I was reading something at the time, so I just held my card up and figured the conductor would grab it when done chatting, while I continue my reading.

As it turns out, the conductor was so engrossed in his chat with this person across the aisle, that he moved on while continuing to look back and finish his conversation. In his state of being preoccupied with his conversation, he walked right by me and never checked my ticket. I didn’t fully realize this until he was a bit further down the aisle.

At that point, I the first thought that came to my mind was – I just got this ride for free. YES!!!

Then, my mind started doing the calculations: a free ride meant 11 rides for $40, which meant my rides were now $3.64 each instead of $4.00 each, for this 10-ride ticket. Then, I started thinking about the possibility that this actually happens once in a while, where the conductor misses you at no fault of your own, and you aren’t pretending to be asleep or something of the like:) Maybe the savings could really add up!

Let’s go back to my opening paragraph – Do unto others as you have them do to you. This is what entered my mind next. Should I feel guilty? Should I have gotten up out of my seat, approached the conductor, and told him that he passed me? Would that have been the right thing to do? Or, since it was his mistake and I was not paying attention as he walked past me, should my conscience be clear? Or, is this just a part of the disjointed commuter train experience, where you get the occasional “gift” to balance your frequent inconveniences – like delays, crowding, and the like?

I go back to the sleep well at night theory. Not that this is a tragedy or anything, but if the same type of situation arises again, I would feel better about tracking the conductor down and paying up. I suspect I might be idealistic here.

What do you think?

This article was included in Festival of Frugality at Nerd Wallet.

In the 5th installment of Squirreling Gone Wild, I’ll go back to a story about my old college buddy. While the last SGW post went away from the college buddy and covered an airport carry-on loophole, I’m thinking its time to revisit another extreme penny pinching tale from the past.

Much like some  previous examples – gas station penny trick, picking up change from under the drive through, etc – the following example is one that I personally don’t advocate for mature adults Rather, its an interesting example of how people will go to great lengths – often crossing lines of self-respect – to pinch pennies.

In this case, lets go back 20 years, to undergraduate days. By the way, as a side note -  just typing 20 years makes me realize how time flies, and things move fast. Anyway, back to the story. At the school at which I did my undergraduate work, sometimes people would grab lunch at the main library cafeteria. Depending what your class schedule was, or if you needed to be studying at the library, this might be your only choice to grab a meal or snack if you weren’t carrying your own. Needless to say, as college students, most people weren’t carrying their own food!

This cafeteria offered standard fare: sandwiches, pizza, snacks, drinks. I would occasionally go there and would often run into the same friend who invariably would have popcorn and a soda as a snack. No big deal, but what was interesting  was how he purchased them. A box of popcorn cost $0.50, and a drink cost $0.75.

He would first get a tray, the standard cafeteria-style offering. Then, he would go the popcorn bin, grab a popcorn box (much like at a theatre), and fill up the bag with popcorn. But he didn’t just fill up the bag with pocporn – he showered the bag with popcorn, as if it were a popcorn hurricane. The aftermath was a cafeteria tray that had a mound of popcorn, with a popcorn-filled box buried within the larger mound.

Next, he would get a 32 oz fountain drink (or about 946ml for our Canadian friends). He would fill up the cup with diet coke, would take a straw, but would not put a lid on the drink. Rather, he would go to the cashier line – usually 3 or 4 customers ahead of him, and look for the “stamp of the day”. So, what was this mysterious stamp? Well, it was a stamp that the cashier would apply to a 32 oz drink lid, so that the customer could get a $0.25 refill that day if he or she wanted. The stamp was only valid that day.

After going to the cafeteria long enough, this guy noticed that there were 4 possible stamps, and that the cashiers used one specific stamp per day. The stamps seemed to rotate somewhat randomly by day, but you never knew for sure what stamp would be. So, what he did was he saved the stamped lids from prior cafeteria visits, and then kept them in his backpack. As he got closer to the cashier, he peered over the customers ahead of him to see which stamp the cashier was using that day. Then, he reached into his backpack, and pulled out an old lid from a prior visit, which happened to have today’s stamp. Then, he put the lid on the drink, and ultimately paid $0.25 for the drink as if it were simply a refill, instead of $0.75.

Devious? Yeah, I think so. I couldn’t do it. But it was funny to see someone else do it, and do it over and over. Even funnier was his delight at gaming the system.

So, basically, instead of paying $1.25 for a drink and box of popcorn, he paid $0.75 for a drink and the equivalent of two boxes of popcorn. He would eat what was in the box (you know, the one buried in the popcorn avalanche), and then refill the box with the rest of the popcorn covering the tray and take it to go. He looked at this as paying $0.75 for a $1.75 value.

Extreme penny pinching that went too far, but could be excused as youthful immaturity. What I find interesting are more “grown up versions of extreme penny pinching. Do you have any examples from either yourself or someone you know, in terms of adopting offbeat yet above-board ways to save a few dollars or cents?

I have had a few conversations lately with people I know, as well as several in the media, regarding extreme frugality.  Some examples that I see are inspiring, many are entertaining, and some just way out there and over the top. Some, as I have alluded to, cross the line by taking advantage of others or causing one to lose self-respect. So, there is a spectrum when it comes to extreme frugality, ranging from very good to very bad.

That said, stripping away the inspiration, entertainment, and morality issues related to some of these tactics, a key question remains: Is it worth the time? Is it worth going to extreme measures to save money – even pennies – when it costs time to do so?

This is where it appears many people are not fully thinking through the value of their time. I have certainly fallen into that at times, and I’m guessing we all have at one time or another. Its important to keep in mind the value of our efforts in terms of the precious time we spend on such time saving efforts.

To illustrate, lets take the example of a person with the following hypothetical employment situation:

Wages: $50,000 annual salary

Work Day: Standard 8-hour day. 

Days Worked: 250 days per year (factoring in 5-day workweek, plus holidays/vacations)

For this person, his total imputed hourly rate is $25 ($50,000 / (8*250)). Thus, before taxes and other deductions, this person sells time to an employer at a rate of $25 for every hour on the job.

Lets say that this person’s employer came back to him and said that they wanted him to work overtime on a special project. This project would not lead to a better performance review, nor would it provide a leg up for promotion. Additionally, it wouldn’t provide experience that could benefit your career, nor would it impact his job security. All this said, the employer would pay him $5 if he spent an extra hour working on this project each week.

Would this employee, who normally gets paid $25 per hour, jump for joy at the possibility of making $5 more if he works that additional hour on this non-value added special project? I suspect that this employee might evaluate this, and think: “Why should I get paid $20 less – or 20% of my regular pay – to do this? It’s not worth my time!“

Its something to think about as we spend time devising ways to save money.

Is it worth $5 to spend an hour round trip, to shop at a cheaper grocery store?

Is it worth $5 to spend an hour driving to buy that printer that’s cheaper at the store which is a 20 mile drive from here?

Is it worth $5 to use that coupon to buy a new pillow at the store in the next town over, when I could spend just buy it at the store right around the corner?

Is it worth $5 to hunt for bargains online for an hour, when I could just go to the site I know and buy my product in a matter of minutes at the price offered?

When you frame these “savings” in terms of opportunity cost such as in these examples, it provides another perspective on frugality: Sometimes it not worth our time to focus excessively on extreme frugality.

Of course, I’m presenting this as a purely dollars and cents argument here. Sometimes people feel great pride in finding a bargain, and take on frugality as hobby – the thrill of the chase. In that way, if it works for someone, so be it:) Its also understandable that if frugality becomes a habit – a way of life – then this mindset can provide benefits in other decision scenarios.

I’m all for sensible frugality. It’s a great practice! That said, on an individual case-by-case basis, its worth thinking about the value of time when trying to save money. Every little bit helps, but if it costs us all of our time, it makes sense to re-evaluate that investment of time. Because while money can always be made, new time can’t be made!

This article was included in Festival of Frugality #229 at Prairie Eco-Thrifter

The first two “Squirreling Gone Wild” stories were examples of extreme ways to pinch pennies, both by an old college buddy of mine from 20 years ago, with whom I am still friends. This third story in what is shaping up to be a periodic series, is yet another example that involves – you guessed it, the old college buddy!

This one, on the other hand, is a bit different. A bit more opportunistic, and again, not for everyone. Nevertheless, some good can come from it in our modern day application of these approaches.

So, what else did he do, besides the gas station penny scheme and food couponing I illustrated in the first two “Extreme” posts? Well, he looked for money in strange places. Mostly, it was for effect and shock value, as he knew that it would get a laugh out of us or push some people’s buttons. But he did, on occasion, try to search for coins in offbeat places.

Here’s where he looked:

1) Under the Drive through window. Yes, he really did this. I was with him only once when he did this, but I know he did this other times. Anyway, he had previously worked at a major fast food chain while in high school, so he came to find out about the idea that loose change can be found under the drive through window. Apparently, enough people would drop a coin or two here and there that there was often a decent collection of change by late in the day. He claimed he could pay for his meal with what he found by the window, and I recall him coming close on that occasion.

2) In vending machine coin returns. He would quickly reach down and check them periodically, sometimes finding a quarter here and there. As a corollary to this, he would look at vending machines to find instances where a bag of chips or candy bar was hanging down, having not fallen down when someone before him had put money in. He would then put money in to buy one, and get two for the price of one, as he got the one hanging plus the one behind it which he paid for.

3) In parking lots. For this one, I actually just remember one instance, where he found a $10 bill laying in the lot. He grabbed, held it up, and said “YES!” with the look of someone who found treasure. Pure satisfaction for him, I still remember his reaction.

4) At a movie theater concession stand or fast food restaurant, on the floor by the counter. He probably found some pennies or other loose change here and there.

5) In front of parking meters. Yes, sometimes people drop coins by the curb and don’t pick them up. He told me about this, but I never saw him do it.

You get the idea.

Juvenile? Yes, I certainly think so. What adult wouldn’t think so?  I’m not even sure if its ok to take loose change like that from private property – I wouldn’t do so. Regardless, it was all part of this guy’s shtick, and I theorize that it was partially a way for him to draw attention to himself and partially an aspect of him truly being frugal.

Besides being a story of extreme penny pinching (or something of the like), its also a lesson on how money can show up in the most unusual places, often there for the taking like low-hanging fruit, so to speak. As adults, here is something we can do with money we happen to find (not his way!) or obtain as a total surprise or through luck: GIVE IT AWAY.

Yes, give it away. Whenever we come across something unexpected – whether its finding a $1 bill in a public park, or winning something in a free-entry contest – why not give it away? Accumulate it through the year, then at the end of the year, give it to a charity or organization that will make sure that a needy person or family will benefit. Keep loose change/bills found like this in a charity jar, other items in a special container, and then donate toward the end of the year.

A little giving is always a good thing:)

This post was included in Money Hacks Carnival #113 at learnsaveinvest.com