Frugality is… holding onto your dreams loosely

This is the first post in a series called “Frugality is…” There are a lot of frugality tips available on the internet and your local public library (my favorite frugality tool). But choosing which ones to use is the fun part.

Personal finance is personal because there’s no standard way of achieving financial goals. And practicing frugality is especially personal. The main reasons for frugality are to maximize opportunity, choice, and flexibility in your life. Practicing frugality is most powerful BEFORE an emergency arises.

Image courtesy of sakhorn38 /

Image courtesy of sakhorn38 /

I was inspired to write this post when a good friend of mine called this week. Last year she decided to get serious with managing her personal finances. So since then we’ve been talking about ways to save and invest. Like most people our age (we’re millennials), she and her husband have student debt and car loans.

For a while their plan was to take out at least a $60K mortgage to build a home for themselves and their future children. They already own several acres of land as a gift from relatives. Her husband is also a talented professional builder – so essentially they would only be paying for materials.

This sounds like an ideal situation for a newlywed couple. However, during this week’s call she told me that a friend of the family offered to sell his cabin for $15K. He had harvested the materials and built the cabin himself. He would help break it down and rebuild it on their land. She said no without seeing it and her husband agreed. She thought that a home that she and her husband did not design could never have fit her dream. She wanted to hold onto the image in her mind of how her future home would look. That was a month ago.

Then her husband had second thoughts. This could be a good fit for them. He suggested they go see the cabin. As soon as she saw the cabin she fell love with the open floor plan, kitchen, and wood detailing. An inspector they hired had nothing but good things to say.

“Do you think this is a good idea?” she asked me.

Here are the numbers:

  • A $60K, fixed-rate, 30-year mortgage at 4.00% APR (annual percentage rate) would cost them $43,121.70 in interest by the end of the loan.
  • This doesn’t include closing costs, which would probably go for about 3% of the loan amount: $1800.
  • Then they would have to continue renting an apartment for two years while building. The average rent in their area is $500/month, or $12,000 over two years.

All together, the $60K mortgage would cost them about another $57K with interest, closing costs, and the cost of continuing to rent — or $107K in total.

I am happy to say that she held loosely to her dreams. They decided to buy the $15K cabin. They will also be able to use the money they would have spent on the mortgage and renting toward paying off their student loan debt and car loans earlier than they had planned.

The main purpose for a home is to have a place of security for you and your family. My friends realized that having a different floor plan would not change that. And I know that they will be just as loving, responsible, and present in their children’s lives with this house than any other. By making the frugal choice, they’ve actually ensured a more secure future for themselves and their children.



  1. Glad to have ya back writing! I was beginning to wonder if you decided that the non-blogging life was easier and the way to go!

    That is great that you were able to help your friend out with such an important (and potentially costly) financial decision. Over $100k is nothing to sneeze at. I would compromise on my vision for a dream house if the difference was that much money.

    Can’t wait for more of the “Frugality is…” series to come!

    1. Thanks 🙂 I definitely missed the blog while I was away. I had written this post a few weeks ago but my friend didn’t want me to post it until the purchase was finalized. I’m so glad she made the “frugal” choice. I think looking at the numbers (100K!!!) settled it!

  2. […] Frugality is…holding onto your dreams loosely. […]

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