12 Easy Ways to Automate Frugality

The transformation from mainstream consumer to Frugal Fringer is difficult. Why? Mostly, it’s because the process smashes up against so many entrenched spending habits. You have to exchange comfortable routines for those that are new and unfamiliar. If, for example, you always wash clothes in warm water, for each frugal wash load you have to remember to set the dial to cold and use a cold water detergent. And if you regularly buy products without first reading online reviews, it’s hard to adopt the savvy step of researching those purchases ahead of time. And if, for a last example, you’re addicted to dining out, it’s very tough to get addicted to cooking in. Spend Less Now! confronts expensive habits head on. By using checklists whenever you spend, you break out of costly ruts and ease yourself into a more frugal lifestyle.

But not all overspending necessarily stems from entrenched habits that require enormous efforts to overcome. In some cases, rampant overspending can be reversed with a single move—a simple step that you perform just once, but which nevertheless yields savings for years and even decades to come.

Here’s a checklist of twelve basic moves that can automate much of your frugality. None of them requires a major investment of time. None of them requires much work. None of them requires you to alter existing habits.  With each of these tactics, you make a single change and never lift another finger. Over the long haul your nest egg grows—and it grows automatically.

1.  Install CFL Light Bulbs.
How many mainstream consumers does it take to screw in a CFL light bulb? Answer: in most cases, just one and it takes only a few seconds per bulb to get the job done. How much gets saved? provides a great light bulb calculator that you can access by clicking here. For example: if you replace ten 75-watt incandescent bulbs with CFLs that cost $0.80 each (my supermarket sells them for as low as $0.50), over the life of the new bulbs your savings will total $493. See Spend Less Now! (SLN!) at 22.4.1.

2.  Install Low-Flow Shower Nozzles.
An $8 showerhead can save you as much as $1,600 over the next decade. To read a recent post that reports the details, click here. Time required: about 10 minutes. See also SLN! at 22.3.3.

3.  Lower the Water Heater to 120°F.
This provides plenty of hot water for less and simultaneously cuts your risk of scalding (so that’s twice you don’t get burned). Consumer Reports estimates that turning the water heater down by ten degrees can save up to five percent on your water heating bill. Time required: about five minutes. See SLN! at 22.3.1.

4.  Fire Your Dry Cleaner.
Use inexpensive home dry cleaning kits from Custom Cleaner, Dryel, or FreshCare. On Amazon, starter kits sell for as little as $11. This one tactic saves me about $85 per year. See SLN! at p. 6 and 8.1.3. Time required: less time than you spend dropping off and picking up clothes at the strip mall.

5.  Pay Commuting Costs With Pre-Tax Dollars.
Many employers allow you to pay public transit or parking costs with pre-tax dollars. Over the course of five years, this tactic saved me about $3,600 and all it took was a single phone call. See SLN! at 20.2.8.

6.  Remove Junk From Your Trunk.
The average household spends about $2,655 on auto fuel per year. Since carrying an extra 100 pounds around cuts gas mileage by as much as two percent, cleaning the heavy stuff out the car saves you up to $53 annually. Time required: about ten minutes (and less time if you regularly lift weights). See SLN! at 39.5.2.

7.  Switch to “No Annual Fee” Credit Cards.
Many quality credit cards with good reward programs are free to use so long as you pay them off each month. If you pay annual fees, make a change. Time required: about 15 minutes per cancelled card. See SLN! at p. 280.

8.  Schedule Bills for Autopay.
If you miss payments, many companies assess interest charges or late fees. These can add up fast. Arrange to have your monthly bills paid automatically from your checking account or a reward-rich credit card (but only if you pay the card off each and every month). Time required: about fifteen minutes per bill. See SLN! at p. 279.

9.  Convert Consumer Interest Into Deductible Mortgage Interest.
If you currently carry large amounts of credit card debt, investigate how much you can save if you pay off the cards by taking out an additional loan on your home. This move creates two separate savings streams. First, you save because interest rates on home mortgages run about ten points lower than rates on credit cards. Second, if you itemize deductions on your tax return, you save because home mortgage interest is deductible (credit card interest is not). Time required: about 10-15 hours, but well worth it. Paying off $10,000 in credit cards running at fifteen percent interest produces savings of more than $3,300 over the next three years. See SLN! at 20.2.4.

10.  Cancel Private Mortgage Insurance (PMI).
In most housing markets, home values have been on the upswing. If you pay for PMI and the principal balance of your mortgage has dropped to less than 80 percent of your home’s value, you can probably cancel the coverage.  According to the federal government, on a $100,000 mortgage with a ten percent down payment, dropping the PMI saves about $480 per year. Time required: less than five hours. See SLN! at 45.5.3.

11.  Cancel Unused Services and Subscriptions.
If you currently pay for anything you don’t use, you’re wasting money. Cancel, cancel, cancel. Likely candidates for the ax: subscriptions to magazines and internet sites, premium television channels, health clubs and other memberships, telephone landlines, premium cell phone services, life insurance (especially life insurance for kids), and any insurance for small losses than you can afford to pay yourself (electronics coverage, appliance repairs, car repairs, tow trucks, windshields, and so on). Time required: about 15 minutes for each cancellation. See SLN! at 10.1.8, 12.4.1, 25.5.1, 26.1, 26.3.1, 30.2.4, 31.2.

12.  Schedule Direct Deposits to a Roth IRA.
As you transition from mainstream consumer to Frugal Fringer, you save all kinds of treasure. Consider dumping a large chunk of that newfound wealth into a Roth IRA so that your savings can grow tax free. Sign up with your employer for automatic withdrawals out of each paycheck. See SLN! at 20.2.1 and 20.2.2. If you manage to put away $3,000, in the first full year alone you save $54 in taxes (assuming a 6% return and a combined federal/state top marginal rate of 30%).

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So let’s wrap up.

Based upon the examples discussed above, a mainstream consumer adopting each of these tactics would save about $3,000 per year. Assuming a six percent annual rate of return, by January 1, 2034—twenty years from now—those automated savings will have ballooned to about $110,000.* And remember, all that wealth originated from a dozen measly steps that were taken back in 2014 and followed thereafter by nothing but hammock rest.

The bottom line: in the long run, frugality pays off big time and much of it is easy to do. Why not start 2014 by taking some of these basic steps towards financial freedom?


*  For the supporting calculations, see the attached .pdf spreadsheet.



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