Profiles

Talking Money with Cheapskate Jeff Yeager

How-to-Retire-the-Cheapskate-Way-by-Jeff-YeagerJeff Yeager  is a cheapskate and proud of it. He’s the official savings expert for the AARP and the author of four books about saving money, including “How to Retire the Cheapskate Way.” His how-to video series, “The Cheap Life,” are on AARP’s YouTube channel.

Having worked in nonprofit management for 24 years, Jeff “retired” in his 40s to focus on writing. His 2nd-stage career is humming, but Jeff’s focus on frugality means he can quit at any time.

We spoke with Jeff over the phone (via a landline—he doesn’t own a cell phone) about the cheapskate lifestyle and saving money in—and for—retirement.

How do you define cheapskate?

To me, a cheapskate is the polar opposite of a conspicuous consumer. Cheapskates, in my lexicon, are people who are too self-confident and frankly too smart to spend money on things they don’t need and probably don’t even want if they stop to think about it. It’s about trying to figure out what’s really important in life and skipping the rest. I don’t think it’s something you practice just when times are tough. Most Americans would actually be happier and the quality of their lives would increase if they would only spend and consume less.

Is it possible to be retired like a cheapskate in an expensive place like New York City?

No matter where you want to live and what your lifestyle is, you can choose to spend more or you can choose to spend relatively less. There’s not always a real correlation between spending more and how much you enjoy that activity or that place or that lifestyle.

Do you have any tips for enjoying some of the perks of New York City on the cheap?

Volunteering in retirement is a great idea, not just for altruism but because a lot of times it has some pretty nice perks with it. Volunteer to be a theater usher and you’ll be able to see some free shows. I was surprised that even a lot of the big film festivals and music festivals offer free admission to volunteers. So once you have that freedom with your time, you can reduce your cost of living even further on things like entertainment.

What mistakes do you see seniors making with their finances?

Some seniors may need to come to grips with their spending. It seems to me that most Americans are in denial about the spending side of their finances – how much they spend, how much they waste, how they can cut corners. As I say in the book, everybody needs to be their own CFO – Chief Frugal Officer. The tough work of figuring out what your priorities are, what really makes you happy and how much or how little it costs to get you those things falls to you. You can’t punt on it to a financial planner.

What are some sneaky ways seniors can cut expenses?

Some things can really add up, like  – depending on your particular situation – dropping your life insurance as well as your disability insurance. A majority of retired folks should take a look at those costs and see if they can do without them.

In retirement, it’s certainly possible to use your time to reduce your expenses by doing more things yourself. Cheapskates tend to have as their hobbies things that can save and even make them money. They love to cook, so it’s a little wonder that they spend only a fraction of what typical Americans do on dining out. They like to garden, so they’re usually growing and even selling some of their own produce. They tend to be very good with their hands. If you can, direct your attention toward things that can reduce your cost of living and maybe even earn you some money.

In your book, you call this “selfish employment.” Can you explain?

There’s a chapter in my book devoted to what I call selfish employment, as opposed to self-employment. It encourages people, once they retire, to start a very low-risk or no-risk side business; maybe turning a hobby or passion into a cottage industry; maybe trying to do something that they always wanted to do that always seemed impractical.

Many of my cheapskates try to earn as much as they can without decreasing their Social Security benefit. It varies, but you can usually earn $10,000 or so without decreasing it. This kind of part-time work after retirement is becoming the American norm. What I find with my cheapskates is that the vast majority are doing it not because they necessarily need the income but as a way to fill their time.

In my book, I give 50 ideas for selfish employment. Many would make sense in an urban setting. For example, personal concierge services are going to be big and make sense to try if you are healthy enough to do the job. I also think that as more of us age, there’s going to be a call for personal trainers and fitness advisors who are actually the age of the people they’re instructing as opposed to 22 years old; personal coaches, as well. Every personal coach I’ve known has been 24 and still lives with his parents. I don’t know what life experience they have to teach anybody. For seniors to consider trendy career options like these could make a lot of sense. I’d certainly respect the advice of an 80-year-old.

It sounds like the cheapskate mindset fits nicely with our mission to “age with attitude.”

Yes. Cheapskates tend to be very self-confident. We’re oblivious to what other people think of us, and if you think about how unusual that is in our society, that’s a real attitude. We have no aspirations to keep up with the Joneses. In fact, as one of my cheapskates famously said in my previous book, “As far as I’m concerned, the Joneses can kiss my assets.” Cheapskates also tend to be very self-reliant. They tend to have a set of life skills that allow them to do things for themselves rather than pay other people to do things for them. Oddly enough, though, I found that Cheapskates are anything but selfish. On average they donate twice as much to charity as the average American.

How can we use technology as a cheapskate?

The Internet can help save money because of the ease with which you can comparison shop. So if you rely on it just for comparison shopping, I think it can be very valuable. But I’m always cautious of special promotions and coupons and that kind of thing. I read a study that showed you’re more likely to buy something on impulse on the Internet if you don’t really refine your search for the item you’re looking for. So if you’re looking for a Samsung DVD player, you want to search specifically for that item. You don’t want to search for “electronics.” You may end up buying something that you never set out to buy. In that way impulse buying on the net is just like impulse buying in person.

I’m a notoriously low-tech person. I hope to go the rest of my life without ever having to own a cell phone. It’s really about quality of life.

What’s your new AARP YouTube video series going to cover?

It’s called “The Cheap Life,” and I’m really excited about the project. It’s a free, three- to five-minute weekly webisode running throughout 2013 and covering a wide range of money-saving topics. We’re going to show you how to save money on everything from travel to energy in the house. Our first episode was on eating your giblets out of your turkey.

Well, there you go—you’re using technology right there.

I often describe myself as the Amish guy of technology. The Amish, who allow some technology into their lives but not all, ask the question, Do we want to allow this specific piece and how will it impact our lives.  It’s an attempt to say, Gosh, just because something is available doesn’t mean that I need it. I argue that cell phones have radically changed our lives more than anything else other than the computer, and I’d argue that they’ve impacted our lives negatively.

But then I’m an audience of one on that issue.

Photo: © James A. Parcell

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