Clare K. Levison (pictured at left) is a CPA and author of Frugal Isn't Cheap. She is a financial-literacy spokeswoman for the American Institute of Certified Public Accountants. Here are excerpts from Kiplinger's recent interview with Levison:
Isn't frugality a synonym for deprivation?
Some financial gurus make frugality all about abstinence, but I think it's about being smart--prioritizing and taking responsibility for your choices. It's not so much "I won't" or "I can't," but "I'd rather." Ask yourself: What is most important to me? Where will I put my discretionary dollars? What will I truly enjoy? What will enhance my life? The goal--to quote my book's subhead--is to "Spend less, save more, and live better."
See Also: How to Save $1,000 by Black Friday
How can I spend less?
I encourage people to find one thing each day that they can do to save money. Get out of the habit of spending when you're bored. Stay out of the malls, discount stores and online shopping sites. Call up a friend and have a chat, take your dog for a walk, go to the library to see what new books are available. Take care of the stuff you already have. Clean out your bedroom closet. It doesn't sound like fun, but no one who does any of those things says, "Gosh, I wish I hadn't done that."
Should I cut up my plastic?
No. We're moving away from a cash-based society. Online banking and other tools make it easy to check your accounts so that you're aware of what you're spending. You probably check Facebook and text messages every day. Just add this to your list. When you reach your spending limit, stop!
What do you think of tactics such as extreme couponing?
It's a version of hoarding, and it doesn't provide as good a return as it should. You spend all your time clipping coupons, and you accumulate 500 jars of mayo that you can't consume in a reasonable time. "But it's free!" you say. No matter. If you don't need it, it's no bargain. And you clutter up your life.
How can I save more?
Put your saving on autopilot. Have as much as 20% of your paycheck direct-deposited to savings. Save 80% of any raises or bonuses. And make it exciting. Saving is liberating, because you're not beholden to a bank, credit card company or your parents. You'll have money when you need it, which equates to independence and freedom--and that's exciting. Think of fun things that motivate you. Saving for retirement may sound difficult and boring, but how about saving for a condo on the beach when you're x years old?