Simplicity and being cheap

Photo: Philip Brewer

People might look at how I spend money and say I'm cheap or a tightwad.  If they do, though, they're missing the point.  The fact is, I'm much more interested in simplicity than I am in saving money.  In many cases, it works out about the same:  The simple choice is often frugal.  The cheapest choice, though, is often not the simple one.

I advocate frugality on the grounds that it offers freedom.  If you spend less, you don't have to earn as much, which gives you more choices as to how you earn your money.  You can also save more, which means that you can accumulate capital--and having capital adds to your freedom in several ways.

When you think about it, though, simplicity also offers freedom.  The less stuff you own, the less stuff you need to store, insure, maintain, and keep track of.  The less of your time is committed to keeping your complex life running smoothly, the more is available for whatever you want to do--and to my mind, that's the very definition of freedom.

I keep my investments simple.  I don't own any municipal bonds, I'm not the beneficiary of any trusts, I'm not in any limited partnerships, I don't trade options.  There's nothing wrong with any of those investments--they offer tax advantages or let you hedge your other investments, protecting your upside while limiting your downside risk.  But they're not simple.  They all require careful research before you buy them, they all take extra work at tax time, and several of them need to be monitored on an on-going basis, because they have things like expiration dates attached.

My money is in a diversified portfolio of low-cost mutual funds, together with a few stocks I like, some Treasury bonds, a bank CD, plus an emergency fund with some cash in it.  I suspect that the total return will match the total return of a much more complex portfolio--but even if it doesn't, whatever I might lose in return I more than make up for in simplicity.

I rent, rather than owning a house.  This is the frugal choice.  (I don't have to pay to maintain or insure the structure, plus the heat, water, sewer, garbage, and cable service are included in my rent.)  But it's also the simple choice--I don't have to call electricians, plumbers, or handypersons.  I also don't have to spend my time on home maintenance.  I don't have to mow my lawn.  I do give up some privacy and some control, but I make it back in simplicity.

Of course, sometimes, the complexity is part of the goal. 

  • A garden is more complex than a lawn.  The fresh vegetables are nice, but I think most people who grow gardens do it because they enjoy the planning and digging and harvesting.
  • Sewing your own clothing is more complex than buying ready-made.  Well-made items that fit and match your style are nice, but I think most people who sew do it because they enjoy working with fabric.
  • Keeping a pet purely complicates your life.  People say they keep pets for the companionship, but they don't mean that there's an exchange--the owner provides food, water, care, and attention and the pet repays them with companionship.  Rather, the time and attention that you lavish on a pet is what the companionship is made of.
  • And, of course, nothing adds complexity to your life the way a new intimate relationship does, and here, too, the rewards are all wrapped up in the complexity.

To me, this is the point of a simple life.  The less time and attention I spend managing the dull, tedious, stressful, or unpleasant complexities of my life, the more time and attention I have available for the wonderful and rewarding complexities.

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Guest's picture

"The less time and attention I spend managing the dull, tedious, stressful, or unpleasant complexities of my life, the more time and attention I have available for the wonderful and rewarding complexities."

That is my philosophy completely! Unfortunately sometimes I miss out on what details are necessary and what aren't... irritating the people around me (like the intimate relation) - oops!

Philip Brewer's picture

Even when you're completely in tune with the philosophy of a simple life, it remains necessary to figure out what needs to be attended to (plan) and then actually to do so (execute).

I'm afraid I've got no magic bullets for those problems.

Guest's picture

This is the dilemna my husband and I are contemplating, now that he is reaching early retirement age and we want to relocate to a town that we love. Renting will allow us more freedom to change location if we choose and the money from selling our current home will be freed up. But giving someone money every month without building equity for us sticks in my craw.

Philip Brewer's picture

I think you just confuse yourself if you worry about your "equity."  (I talked about this a bit in Your equity was always imaginary.)

To my mind, the right way to think about the value of a house is that it is worth whatever you can avoid paying for rent.  That value needs to be adjusted for any additional expenses that you have because you own--water, sewer, garbage, insurance, taxes, interest on a morgage, etc. 

I suggest that you make those adjustments, figure out how much more it would cost to buy rather than rent, then take the difference and invest it.  Around here, that's added up to way more than you'd have made off the "equity" in a house.  Plus, you could tap it without having to borrow, without having to move, and without having to sell your house.

Guest's picture

Philip, you always write things in such a way that it's easy to understand. In the past two weeks, I both sold/gave away about 95% of my stuff, moved in with my boyfriend temporarily until I leave for a 2-month trip, and have tried to explain recently why I made the decision I did to simplify my life. My thoughts echo what you've written here, and this will help me explain to him and my family.

Linsey Knerl's picture

You speak of this in a way I couldn't quite explain before... I have rented and loved the hands-off approach of not having to deal with repairs, etc. It was simple. Now I live rent-free in a family-owned farm home that isn't mine (but may be someday as part of an inheritance.) I try to keep it up, but have to mentally cap the amount of time and money I spend on it, because it isn't mine (but again, may be someday.) I never want to spend more than it is worth in rent, but I also don't want to live in disrepair. It's a delicate balance.... very similar to the point of your post, I believe...

Keep up the good work, and enjoy your travels!

Guest's picture

I LOVE the simple life! I'm giving away (and more importantly, not getting) lots of stuff. I do less in just about every way. The problem is that my children/teens do not understand this way of thinking--they think I've gotten old and BORING. They are at a point in their lives where they want to do more, much more! It's all very exciting to them to be going, going, going! Let's go here! Let's do that! Wouldn't that be neat to have! I hate to say NO NO NO all the time, but it doesn't interest me any longer. Talk a delicate balance...

Guest's picture

Just discovered your blog. Kyle, from Green with a Gun, blogger and reader of my blog quoted you in one of his comments.

Love your focus. Practical, and getting to the heart of things. The pocketbook. Also helping people struck by increasingly high gas and food prices.

Guest's picture

What a great, concise post. We are going through a process in our household of evaluating "How long does that take? How much does it cost? Would we rather be using that time for something else?" It's a big challenge. For instance, the tax deduction aspect of owning a house is consequential, when rent would cost nearly as much as our mortgage. And our child's opinions, while not running the decision, are influencing us indeed. Great points - thanks.

Guest's picture

I would think that a lot of this has to with how we spend out time as a whole. Being conscious about time helps one understand what you actually value. We just published an article on this subject at:


Guest's picture

All around I am pretty simple. My 401k is in growth, international and index funds.

My saving is ING and we have a checking acct at an local credit union.

That's it. I also own 2 individual stocks

Guest's picture

Thanks so much for this post. I have been trying really hard to simplify my life for years. I also agree about renting, I feel like our culture pushes you to own and I agree that it is not always worth it, especially with all the economic crisis going on now. the simple life give me time to do the things I like and not worry who's going to fix the toilet (or the roof) and how much it's going to cost me!! I really do enjoy your posts!

Philip Brewer's picture

Thanks, everyone, for the kind words.

This is really central to how I think about things, but I've only very recently begun to understand how it affects my decisions:  I make frugal choices, but really only when they're also simple choices. 

Guest's picture

I always enjoy your posts and the different way you present of looking at what is or is not simple living. I had friends who thought simple living was living off their own land. They worked 12+ hours a day to make it...

Me? I enjoy living in a small place without a yard (I hate that gardening stuff) and while I own it, I own it because it is 4 times more expensive to rent a place with comperable space.


Guest's picture

Great Post Phil. Its inspired me to write something similar this week. Enjoy reading many of your posts!

Guest's picture

excellent points, Philip. I couldn't agree more about the freedom frugality gives you.

regarding equity and rent being "money down the toilet", I felt the same way when I bought my first house. five years later I needed to move and sold the house. I sat down and figured out how much I had spent in closing costs, interest, property taxes, and fixing up the house over the years. I was shocked at the amount and now agree with the idea that owning is not always better financially than renting.

In fact I plan not to buy another house until I'm able to settle down permanently. I took the money I got from the sale of the house and invested it, I'll let it grow until I'm ready to buy again.

One thing I really dislike about renting though - having to get after the landlord if something needs fixing. When I owned, I could just pick up the phone and hire somebody to get it done now and done right. Or do it myself if it was something I could handle.

Tisha Tolar's picture

Just caught this article! And am very glad I did. We rent our house now. We love it and besides the fact that we can't have a dog, we wouldn't change a thing. It's nice to see that someone else appreciates the fact that renting can fit a famiy's needs, instead of serving as a shameful substitute for those people who can't buy a house.

We had a house in another state and gave it up when we moved closer to family. What a pain in the you-know-what! Now, we never worry about house insurance, foreclosures, or repairs and that is good enough for me!