4 steps to a simpler (and more frugal) life
By Sheyna Steiner • Bankrate.com

Frugality is not a quaint pastime from the pre-credit card era, but it is something of a lost art for some people.

Though frugal living can conjure an image of a Dickensian miser grimly squeezing every penny for all it’s worth, it doesn't have to be like that.

"Being frugal to me is about valuing your life energy," says Mark Zaifman, owner of Spiritus Financial Planning in Windsor, Calif., and a contributor to an updated version of "Your Money or Your Life."

A central tenet of the book is that most people must expend their energy to make money during their finite time on earth. Frivolous purchases waste that time and energy.

That concept is a lynchpin in the voluntary simplicity movement.

What is voluntary simplicity?
"Voluntary simplicity is about coming into alignment with what's more important -- more material possessions or more time. It is about having more time and more choice, because the essence of it is financial independence," Zaifman says.

The simplicity philosophy is a template for doing more with less -- something that financial planners heartily endorse.

"I believe the definition of being 'rich' is no longer a large dollar (figure). I define it as an excess of both time and money. For frugal individuals, this can happen long before retirement and is not dependent on your income level," says Trent Lickteig, a Chartered Retirement Planning Counselor in Scottsdale, Ariz.

Wealth is a relative concept, after all. If your income is over six figures and so is your spending, then that equals broke.

"The two most important assets you can have in the current economy -- and it's not gold, and God knows it's not stock and it's not your house -- but in my opinion, the two greatest assets you can have are no debt and, maybe most important, the ability to live very happily on very little," says Jeffrey Yeager, author of "The Ultimate Cheapskate's Road Map to True Riches."

4 steps to simply doing more with less

Identify goals Chart assets and liabilities Make a choice Clean house

Make a choice Everything you spend money on is a choice. When every dollar has a purpose, purchases become much more meaningful. On a larger scale, people are not only misspending their money, but their time as well, says Duane Elgin, author of "Voluntary Simplicity: Toward a Way of Life That Is Outwardly Simple, Inwardly Rich." "People are trading off time and opportunity: let's say, traditional advancement for more time with the family, more time with the community, more creative time and so on," he says. With respect to finances, simple living often means consuming less: breaking the habit of shopping simply for the sake of an afternoon activity; buying a smaller house; living closer to work and even eating less processed foods and meat and more vegetables, legumes and whole grains. Yeager says he tries to only buy foods that cost less than $1 per pound -- and he's not a vegetarian. "When people hear that, particularly as grocery prices have gone up, they think it's crazy. But it's not if you really look at what kind of foods we should be eating the most of -- fresh fruits and vegetables and whole grains and legumes. When you shop -- if you shop smart -- you can find all kinds of things in those categories that cost under $1 a pound," he says. By spending less money, you have more money to save and in due course can work less. "What we are selling is our time, some limited number of hours we have on earth, and we're choosing to consciously spend those hours in exchange for money so we can get some stuff," Yeager says.

What's your experience with investing? Share your story.

-- Posted: Oct. 27, 2008