Frugal Living Advice

Tawra Kellam of LivingOnADime.com

Tawra Kellam is widely known on the Internet for her frugal living advice and expertise. She created and maintains the frugal living web site, www.LivingOnADime.com, has written several books, participates in group discussions on simple living and frugal bulletin boards, and advises people daily how to make wiser financial decisions, save money and get out of debt.

For over 20 years, Tawra Kellam has lived the frugal lifestyle. She has offered her expertise to DrLaura.com, The Dollar Stretcher, AOL Smart Money, MSN Money and Woman's Day online, and recently sat down with LoveToKnow.com to share her thoughts on frugal living and offer advice on how you can reduce your debt and save more money.

Frugal Living Advice Interview

How would you define frugal living?

For us it's making the most with what you have and with what you can afford. We were able to pay off $20,000 in debt and medical bills in 5 years on $22,000 a year averaged income living within our means. It' doesn't mean you don't have anything nice or live like slobs. A perfect example is when I wanted to decorate our daughter's new room but didn't have much money. We were able to make a very nice princess room for her for under $40 using what we had and thrift store finds. Here's the link showing how I did it.

Is it possible to live frugally in a material driven society without feeling like you are being deprived?

Yes, I think it is easier now than ever! People want new stuff all the time so they get rid of the "old". My family wears name brand clothes like Gap, Land's End, and Eddie Bauer. The only catch is I pay about 5%-10% of what the original owner paid for it. I am able to have the "good stuff", live on a "low" income, and still pay off our debt.

Should the entire family be involved in the budgeting process?

Yes, people want their kids to learn about money, but they don't ever give them a chance to deal with it. Kids need to have learning experiences such as giving them $5 to spend on treats like fruit snacks at the store. They learn how to find the best deals when they either have to spend their own money on it or have a set limit.

How can a family who has never lived on a strict budget find a plan they can stick with?

It really has nothing to do with budgeting. It's easy to put the numbers on the paper but if you don't change your attitude and decide that it's not worth fighting over money, working two jobs when you don't want too, or if you are a mom who is "having" to work, then nothing will change. You have to decide you aren't going to live like this anymore and then it will change. It's not about budgeting it's about your attitude toward your budget and money. One trick that worked for my husband was he started calculating how many hours he would have to work to pay for something. He made $9 an hour at one point. Was it worth it for him to work over 2 hours to pay for one delivered pizza? No way! We made $36,000 last year. Is it worth it for him to work an entire year to pay for a brand new SUV? No way! Start calculating how many hours it takes to pay for something and that will help with changing your attitude.

Do you have any frugal living tips for people who want to save money on the basics (groceries, mortgage/rent, utilities, etc.)?

The main tip is to just get started! People spend all their time thinking "I need to start saving" but never get around to do it. Each day or each week find at least one thing to save more money on. If your heat is set at 72, lower it to 68. If you are spending $600 on groceries this month, cut it back to $550. If you are spending $200 a month on clothes, cut it back to $50 this month.

If someone is budgeting in an attempt to save up enough to buy a home or start a business, but has a large amount of old unpaid debt, where should they put the bulk of their money first-in a savings account or towards the unpaid debt?

Unpaid debt. It's stupid to be paying 21% interest on your credit cards and earning 4% on your savings. That just doesn't make sense! You need to be completely debt free including your cars before you do anything else. A lot of couples and families earn enough money that if they lived frugally they could not only pay for a down payment for a house, they could pay for a house with cash in 5-7 years. You should start your business with a clean slate. If your business fails then you are not only going to have your business debt you will have your regular debt you started with.

Do you have any final tips that you can offer to people who need to find a way to live on less?

Book image of Dining on a Dime

First, you can do almost everything for less. The trick is to just look for a way to do it. If you are buying clothes at the department store, then buy the clearance items instead. If you are buying new clothes on clearance, then start shopping at the thrift store and yard sales. The trick is to always try to find some way to pay less for things.

Second, buy used as much as possible. We buy about 90% of our items used. By doing this we were able to live on $36,000 last year and pay off $6,000 in medical bills and a car.

Frugal Living Advice