On today’s episode, I interview colleague, fellow blogger and friend Liz Frugalwoods. She’s a mother who – now in her early-thirties – is already retired. We discuss her definition of financial independence, the importance of a holistic (and realistic!) financial approach, plus tips for frugal living.
Liz is a firm believer in simple living and “smoothing out the happiness curve.” You may even be surprised at what her family’s day-to-day life really looks like.
Find out how Liz and her family became financially independent, and how you can do the same her new book, be sure to check out the bestseller now on Amazon, and elsewhere:
Read the full transcript with Liz Frugalwoods about early retirement, homesteading and simple living — as a young mom
Hey mamas, I have a very wonderful friend with me today. She’s a colleague but she’s also become a personal friend. She shares some of my ideas but she more inspires me to live such a better life on this planet.
You know her as Liz Frugalwoods. Her very, very popular blog is frugalwoods.com where she talks about her family’s experience but teaches you how to live a very minimalistic life and a joyful life. The benefits of this are financial, healthful, minimal impact on the environment. It’s a completely different mindset that I try to accommodate in my very urban life, but she does it with such grace. That’s why she has such an amazing following.
Liz, thank you so much for being here.
Liz: Thank you, Emma. I really appreciate it.
Emma: This is very heartfelt and I’m so excited to talk to you publicly. We’re also promoting your book, which is I think going to be the new classic for living lightly on this planet. It’s called Meet the Frugalwoods: Achieving Financial Independence Through Simple Living.
This is where people get to know your real name. It’s Elizabeth Willard Thames.
Liz: It is.
Emma: It’s like learning your second-grade teacher’s first name. You don’t really know that she is a person. This is like this experience for people. Even though I know you personally, I kind of don’t even really know what your real name is. I just know you as Liz Frugalwoods. That’s twisted. That’s messed up.
Liz: No, this comes up a lot. I get this a lot, where people who I am really good friends with, they say, “Actually, what is your real last name? It’s not Frugalwoods, is it?” Unfortunately, it’s not. I really kind of wish it was.
Emma: Well, yeah. That would be awesome. Just to give people an idea of who you are, I want you to tell me in one minute or less what your life looks like, every day. Your family, your home life, your day to day routine. I feel like that embodies your mission.
Liz: My husband and I are financially independent. We live in a rural homestead in the middle of Vermont, on 66 acres. We have a two-year-old daughter and another daughter due very soon. As we talk, I am 35 weeks pregnant, so we will be adding our second baby soon. My husband and I do a combination of what we call computer work and outside work. We work on projects that are meaningful to us both in an intellectual standpoint, and then also from a physical standpoint because we do a lot of labor on our land.
We used to live in Brooklyn, we used to live in Washington D.C., Cambridge, Massachusetts, we did the urban thing and we realized that – that was not for us. We wanted to radically transform everything about our lives and move to the woods. We reached financial independence last year and made the move. We’re really learning how to chart this new path through life, which is a very unconventional way of living.
Emma: Financial independence, what does that mean?
Liz: For us, financial independence means that all of our assets cover our expenses, and essentially in really simple terms, we do not have to work for money unless we choose to. We both choose to do work that brings in money because we find it really fulfilling. The key is that we have that choice. We got to this place through a combination of extreme frugality and also having good salaries living in the city.
I think there are three elements to financial independence. There’s time, income, and expenses. The more distance you can put between your income and your expenses, the more you’re going to save, the faster you’re going to put yourself in a position to be financially stable. What I always like to say is that your goal doesn’t have to be, to be fully financially independent in order to reap the benefits of this idea that you can put yourself in a really comfortable financial position. You can put yourself in a place where you’re not worried about money, you’re not in debt, and you have enough money to cover emergencies and to also enable you to do things that you’re passionate about. To take risks, and to follow the path that you like to follow as opposed to working a job you feel you have to work.
Emma: Right. When you say your assets, tell me what that means, for you guys.
Liz: For us, we have a rundown of fairly standard assets. We had a rental home in Cambridge, Massachusetts, it used to be the house that we lived in, in Cambridge. We bought it in 2010, with the intention of one day turning it into a rental. As you know, living in the city, properties in the city are very expensive but can be turned into lucrative rental properties if you’re in the right market. I always caution that becoming a landlord is not always the right decision. It really depends on the market.
When people come to me, “Should I rent out my house?” I say it totally depends. You want to do your research. You want to find out what the tenant pool is like, what vacancy rate you can expect. You need to think about having a maintenance reserve. You’ll need to decide if you’re going to have a property manager or not. You need to look at the numbers. What’s the return on your rent going to be every month, versus your expenses?
Emma: That’s one way, the rental property. Is it investments? Cash investments?
Liz: Yes. It’s the rental property, that’s a passive investment. We have a property manager. Then, we have investments in the form of low fee index funds. We have taxable accounts. I use Fidelity, so it’s FSTVX. Then we also have traditional retirement accounts, 401k from our traditional employers back when we had regular W2 jobs. We also have a donor-advised fund, which is invested in low fee index funds. This is a way of donating to charity in a tax-advantaged way. I won’t go into too much depth on that.
Emma: Yeah, because we want to really hear about like, what do you guys eat?
Liz: What do we eat?
Emma: Yeah. Here’s the thing, let’s talk about the extreme frugality part of your life. What does that look like? Because that’s when people are like, “Peace out, this isn’t for me.”
Liz: I know. For us, extreme frugality is not a question of deprivation. It’s not a question of spending zero money. It’s all a question of spending only in service of our long-term goals. We asked ourselves, “What do we want out of life? Where do we want to be in 10 years? In 20 years? And how does our spending either help us in reaching those goals, or thwart us?”
A lot of times, my husband and I found that we were spending money on stuff that ultimately is totally meaningless. $120 haircuts. Lattes. Dinners out all the time when we lived in the city. I mean, it’s nice, right? And it’s fun. In the moment. It wasn’t advancing any kind of long-term goal for us. It also ensured that we would have to keep working these cubicle jobs, basically forever.
When you are spending at such a high rate, you can’t have that savings. You can’t really put yourself in a position—
Emma: That’s what your life used to look like. What does your life look like now?
Liz: Now, we save at a fairly high rate. In order to get to this point, we saved between 70 to 80 percent. For us, we consider our lives to be luxuriously frugal. I think that we often have a choice to perceive our surroundings are abundant or deprived. I really see my life as very abundant. I get to do what I want with my time every day, all day long. Well, I have a toddler, so there are limits on things that I actually want to be doing versus things I have to do as a parent.
Emma: You have the luxury of owning your own time.
Emma: You live somewhere that you want to live.
Liz: I live where I want to live, with who I want to live with, in an environment that is really wholly of our design. We really chose this lifestyle. We did a lot of research on parts of the country and areas that we want to live in. We really cherry picked this location. I think having that ability is transformational in being able to craft a life that makes you happy.
In terms of what our life really looks like day to day, we consider that we have smoothed our happiness perfect. In the past, we had these spikes of happiness. We’d go on that vacation. We’d go out for this really expensive dinner. And it was fantastic. But then, Monday morning comes and you’re in a gray cubicle under fluorescent lights, wearing clothes that are not comfortable. I’m sorry, pantyhose do not work. And you’re doing things that you don’t want to be doing. It was these huge highs, followed by this crash. Every, single, week. What we decided is, let’s make that graph a lot smoother.
Instead of spending money on these highs, let’s just bring ourselves to a level of ongoing contentment and fulfillment. We do what we want, every day. We don’t spend a lot of money. What we find, is that we really don’t need to spend money in order to be happy.
That sounds like a total cliche until you really start doing it. You realize most of the things that I really derive a lot enjoyment from, don’t actually cost that much money. Spending time with family. Going hiking in the woods. Hanging out with friends. These are all free activities and they all bring us lasting fulfillment. Doing work that’s meaningful to us. Same thing. Doesn’t really cost a lot, brings a lot of fulfillment.
We frugalize every aspect of our lives. What I tell people is, if you want to start following a frugal path, you need to track your expenses, and you need to go through every single line item. You need to look at every dollar you spend, and you need to ask yourself, “It this advancing my goals? Is this bringing me closer to where I want to be? Or is this just a distraction? A road bump in this journey that I’m trying to make?”
Even things like utility bills, unless you’re in an environment where your landlord pays your utility bills, or it’s a fixed rate, you can lower just about everything. We assume that there’s all these fixed costs. My groceries, I can’t possibly lower that. Yes, you can. My utilities, I can’t spend less on electricity. You probably can. It’s really a holistic approach for us, and then that translates into what you were talking about earlier, Emma. Our impact on the earth.
Frugality becomes environmentalism. Frugality also becomes the way in which you want to interact with your world. We have a philosophy of consuming a lot less, wasting a lot less, spending a lot less, and giving a lot more. It’s a question of what can I create, instead of consume?
I think, to be successful, it’s a holistic lifestyle transformation. You’re already thinking how you consider money, how you consider needs, what your wants are, what you really need in your life in order to live the “good life.”
Emma: It’s such an exercise in gratitude. Like you said, when you are appreciating like you guys live in a beautiful part of the country, and you choose hike because it’s free as opposed to going to a movie, which is now like $20, which is ridiculous.
Liz: Is it really? Oh my gosh.
Liz: I haven’t been to a movie in a decade.
Emma: Well, you’re not missing anything. It’s $20. It’s insane. Like you said, it’s a mind shift, because you’re appreciating that it’s free. Everyone likes to get something free, even if you’re filthy rich. That’s a little kick. But it’s healthy, it’s exercise, you’re breathing fresh air, you’re teaching your children healthy lifestyle and you’re teaching your children to appreciate nature. Then, you’re baking in something that is constant and you want to preserve that. Then you start to make choices where you are protecting this precious resource, which is our environment. It’s just this huge, cyclical mindset that we can all stand.
You can’t sit there and scream about EPA policy in this country, or scream about poor air quality, or poor water quality for our children if your favorite hobby is shopping. Do you come back from Walmart with a huge heap of crap that is going to be in the landfill within a year? You are lying. You are lying because you’re not living within your values.
Liz: Absolutely. Really, for us, is a whole holistic lifestyle thing. I know that sounds a little bit vague. Honestly, you have to think through everything that you do and how is this impacting my world? It is the things that we choose to buy and choose not to buy.
I always like to say if you buy used, you are circumventing all of the embodied carbon costs of buying something new. Buying something new is just a tremendous drain. Think of the packaging. Think of the manufacturing. If you buy used, all of those costs have already been assumed. You’re also keeping something out of a landfill. Anytime you can sort of interrupt that cycle of waste.
Same goes for food. How much food do people throw away? Let me tell you: a lot.
Research demonstrates that food in landfills is one of the biggest producers of methane, which contributes to climate change. It’s people throwing out food that the buy and then don’t eat. Thinking really carefully about the way that you use these resources is frugal, but it also gives you a broader sense of your role in the world.
Emma: You had a great anecdote that you shared with me recently about you guys needing a stroller. It’s like people love going online and spending hours researching these high tech strollers. Strollers are what? $200, $300, $400? It’s embarrassing.
Liz: At least.
Emma: Tell us the story of how you guys found your stroller that you needed.
Liz: What I think, too, is that frugality removes that paralysis by analysis. When I go online, especially kids stuff, I don’t know what it is, but trying to research it and read the reviews on what’s safest and what’s best; you just keep escalating your price point. You start out thinking you’re going to get the $100 stroller. Then you start opening up more tabs and thinking, “You know, I could get the $1,500 stroller. It has a cup holder.” You make yourself crazy and then ultimately probably whatever you buy, you’re not happy with it. You’re going to question if you really got the right thing. Did you really get your money’s worth? Then you put your kid in it and they’re going to spit up in it the first time you go out. That’s what will happen. Then you’re like, “This is a brand new stroller. How could you do this, kid?”
When you get something used, free, or cheap, you don’t have any of those concerns. I needed a jogging stroller with really big wheels to get around our property. I found one at the thrift store for $5.
Emma: And how much would it have been retail, new?
Liz: Oh my gosh, at least $600, I think. It’s old. It was kind of dirty. I cleaned it off and it works fantastically. When we go through mud, or she spits up on it or smashes a carrot into it, I’m still not sure how that happened but these things happen, you don’t have that stress. You don’t imbue this object with all of this importance. It’s a thing. It doesn’t really matter. You don’t want to be getting upset with your kids for accidentally coloring on the couch because I guarantee you, it’s going to happen. If you have a free couch or a cheap couch, you’re going to feel a lot better about it.
Emma: By the way, here’s my little pro tip about when kids scribble on things. You know what gets everything out? A scrubby dish sponge. You know the yellow with the green scrubby sponge? With any dish detergent. I’ve gotten mounds of ballpoint pen ink out of a white couch. You name it. It gets everything out. Don’t buy expensive cleaners. Dish soap and a scrubby brush.
Anyway, the stroller is such a great analogy. You talk about the environmental impact that you mitigated and $5 versus $600, but, you needed a stroller, you walked into the thrift store and got a stroller. You didn’t waste time. You don’t have buyer’s remorse. Buyer’s remorse meaning comparing this stroller to the other $600, $700, $500 strollers, right? It reduced time, it reduced energy, it reduced negativity. Then there’s the environmental and financial impact too. It’s just a completely different way of living.
It takes a lot of work to get there. Right? You were fighting the system every single day. There’s not a lot of social support for this. Your friends are not going to be on board. Bitchy moms at the pre-school are going to be judging your dirty stroller.
Liz: Well, actually I think this might depend on where you live, too. I live in rural Vermont and there’s a very frugal ethos. More often than not people are also like, “How can I also get a $5 used stroller? Please tell me. Tell me where you got this. Take me to the thrift store with you.” I think it does depend on where you live. I think it depends on the people you surround yourself with. I think it also depends on how you contextualize it. For me, it’s not a dirty, cheap, stroller. It’s a freaking awesome stroller with huge wheels. My friends are like, “This is amazing. This goes through all the trails.” We hike together with our kids. If you don’t perceive your life as deprived, nobody else will either.
Emma: Yeah. That is so true. That is so true.
Liz: Totally how you frame it. My kid wears all hand-me-downs. I don’t go around saying, “Oh my poor child. They’re hand-me-downs.” It’s all about how you feel about it.
It’s also true that you don’t have to tell people. If you are not comfortable divulging your extreme frugality, there’s no need to. People looking at us, they don’t know we’re frugal. It’s not like you wear a sign that says, “Extremely frugal” across your chest.
Emma: You don’t look like a hobo.
Liz: Thank you. I appreciate that. Since you see me in person, I was hoping that you might come around to that.
Emma: We’re doing a video, and I can see your house in the background. It looks totally charming.
Liz: Thank you. It’s also true, who cares? Can I just say, the only person who cares how you live your life, is you? If you are living your life to impress other people, to meet other people’s expectations, you’re not going to be happy. You’re never going to achieve happiness living for external validations and for other people. You need to do what works for you. You need to confident in it. You need to embrace it. You will be so liberated and so much happier. I guarantee you. This was the change that I made. I used to live totally for other people.
Emma: I want to talk about the early retirement movement of which you are part. You retired. You have enough money that you don’t have to work. You choose to work. I have a lot of beefs with this movement.
Liz: Oh no.
Emma: Liz and I know each other from the financial blogger community, which is wonderful and is a huge part of my life for better or worse. Any of our lives for our real-life friends or anyone in my zip code. It’s a thing. It’s a hot thing. You guys have an acronym, I forget what it is.
Emma: Which is what?
Liz: Financially Independent, Retired Early.
Emma: You guys are in your early 30’s. You’re young, and you’re retired.
Liz: I’m about to turn 34, so, mid 30’s.
Emma: Yeah, okay, whatev’. As my nine year old would say, “Whatev’s”
You’re a living example of this. It’s usually a combination of early high income. A lot of people sell a business for seven figures–
Liz: Okay, we did not do that, to be clear.
Emma: But I’m talking about the movement overall, just to get people who are not clear. So, FIRE, that’s powerful. You had good jobs, and frugal living, socking away your money, and wise investments. These are the components of it. Here’s my beef. It sounds great, right? I’m 30 and I’m retired. Oh, yay, you’re so— In my old age, I’m 41, I will own that, I have come to believe that people need to work. They need to get up in the morning and have a purpose.
Liz: I agree.
Emma: And when people do not have financial incentive that need is severely compromised. Evidence one, there’s evidence that people that are trust fund kids, drug addictions, underperformance, etc. These are not universalities, but there is research behind that. People, that win the lottery, right? Very high cases of bankruptcy and suicide. I am a student of women and money, and there is a lot of research about how women hold themselves back financially and professionally inside of marriage. Anecdotally, I can see that women with high earning husbands, despite the women’s earlier education or professional accomplishments, hold themselves back. They are less present in their professional pursuit. When you take the financial incentive out of a person’s life, which can’t always be done, because some people are just born filthy rich, or you fall in love with someone that’s a super high earner or win the lottery, or whatever, your needs to get up in the morning and bust your ass, which I very deeply believe is the path to ultimate fulfilment.
Maybe this is my protestant upbringing that I have rejected. My midwestern, Protestant, Calvinist ideas of what is human nature. I believe that people need to work. When that need, when that financial need is taken away, all shit breaks loose, and people self-destruct. There is a reason we do not have generational wealth in this country because people blow through their money. People self-sabotage. We are not conditioned to sustain wealth.
The other thing I could say is that if you are so driven to retire by the time you’re 30, or even 40, or even 50 is young, if you’re going to live until you’re 85; if you’re so driven and disciplined, you have that type A personality, you’re not going to be happy just sitting around with your thumb up your ass, sitting on a beach. That is a miserable existence for people. Those people are either going to self-sabotage, or they’re just going to start another business.
Three years ago, before you guys invented FIRE acronym, it was just called you’re an entrepreneur. You built a business and maybe you’re rich, but then you’re just rich. You’re not a FIRE, you’re just a rich person, right? That’s my beef. That’s my beef. Argue with me.
Liz: I actually totally agree with you. What I like to talk about is that you have to retire to something. You cannot just approach financial independence from the angle of, “I super want to quit my job.” You have to be going to something.
For my husband and I, it was a very clear decision to move to a homestead. When you live on 66 acres, let me tell you, there is no shortage of work to be done. I cannot even tell you how much manual labor goes into maintaining this property, growing our own food, preserving food, canning food, keeping wild animals out of the garden. There’s a great deal of physical work outside, which we chose, and we love. Then there’s also, this work that we’ve chosen to do between ourselves and a computer. I wrote a book.
You wrote a book. As you well know, this is a lot of work.
Emma: Just say the name of your book. Give it a plug.
Liz: The name of the book is Meet the Frugalwoods: Achieving Financial Independence Through Simple Living; it was not easy to write. I chose to do it. I did not need the money from it. I chose to do it because I’m passionate about it. As a side note, I actually make a higher income now than I did when I was working my W2 job. I believe that that’s because I’m doing what I’m actually passionate about.
My belief is that financial independence allows you pursue the career or the trajectory that you are best at. When I was working my 9-5 job, I was very good at it, but it was not my deepest passion.
It was not where I was meeting the worlds greatest need. I now work on what I really care about, which is talking about money, talking about managing your money, talking about being smart about your money. That is my calling in life. I’m able to do that because I don’t need the money from it, so I can take risks. I can decide to write a book, which is not an easy thing to do, and not really a great way to make money, side note. It’s having that freedom.
For us, it’s not at all about not working, because we actually work a lot harder now. I have to say, managing the land is a great deal more work than just going to an office and sitting behind a computer.
Emma: I appreciate that perspective, but the other argument that is my truth, and I see this in the women that I interact with, single moms who are divorced, or out of their relationships. My story is that the financial need, I came out of a marriage where I was for all practical purposes a stay at home mom. My husband had a high income, and that all went away. The marriage went away and the high income went away and I knew I was solely responsible for my kids. That drove me to do great things. That fear was so useful and I’m so grateful for that fear. If I knew that I could count on a big fat child support paycheck, which I did for about a year, I would not have been motivated to do the work that I’m doing.
Like you, I work very hard. I feel like I met my calling like I see in you. I feel like I am serving. You are serving people. You are helping people see a new way, a better way. I will say it, your life is better than most people’s, and I want people to live like yours. So, it can go either way. But, I also see so many people, again, women, who are financially dependent, and they are not living their best life because they are financially dependent.
Liz: Yeah, and what I would say, I am not financially dependent. When we were both working, my husband and I both made good salaries, and I had advanced very far in my career. For us, we’ve always independently pursued revenue-generating ventures. I think that in some cases, you can certainly become dependent on your spouse, and it goes, either way, a man or a woman.
Liz: For us, we’re both very driven people. I’m just very motivated to continue working on the things that I am passionate about, and I think that there’s also a lot of privilege that goes into this, which I address in the book. Just being able to have this conversation, just talking about, “What do you really want to do? What are you passionate about?” That’s a very privileged standpoint.
Emma: Thank you for saying that.
Liz: For a lot of people who work minimum wage jobs, who perhaps don’t have a college education, don’t have access to banking, the list of disadvantages and challenges goes on, and on, and on. It’s not to say that you can’t transcend that environment, but for me, it was a lot easier. I don’t come from wealth. I don’t have a trust fund. Let’s just be clear about that. I’ve always worked for non-profit organizations, as did my husband.
We were making good salaries, but we were not investment bankers, we were not lawyers, we did not sell a business. However, we are profoundly privileged and were from the day we were born.
Emma: And you have to acknowledge that. I don’t care if people want to talk about it in terms of white privilege, which, I’m right there with you.
Liz: I have that.
Emma: I’m right here. Again, I grew up, you could say poor if you look at the income, but I was raised by college educated people. I was taken to museums. I was expected to go to college. If you’re not comfortable saying white privilege, I don’t really care, you are a person living in 2018 that has access to the internet that you’re listening to this podcast on, that’s privilege. By saying that, I’m not saying that to shame you— Well, I do. I am actually trying to shame you, but I’m trying to shame you into being grateful. To focus on the abundance, because that takes away all the excuses.
Liz: I say that on my blog. The fact that you know how to read, and you have access to the internet, and you’re reading this blog right now, already gives you so much advantage over so many people globally. Just being in a safe environment. I think that the compounding layers of privilege, I think it’s really easy for people, especially people in the FIRE movement to say, “Oh I’ve made all these great choices. It’s all up to me.” Yeah, sure, my husband and I made some good choices, but we’re also really lucky. We were so fortunate. We went to college. We happened to go to a cheap college and didn’t have debt, and then we graduated right before the recession and we got jobs before the recession, and somehow did not get laid off. It’s this continuing arc of luck that I think is really important to acknowledge.
Emma: It is. Thank you so much for saying that.
Liz, pimp your book. You’ve got some really cool promotions, tell people what’s what, how people can find you.
Liz: You can find me at frugalwoods.com or on Twitter, Facebook, or Instagram @frugalwoods, very consistent. If you order or pre-order my book by March 13, 2018, I will send you a signed bookplate in the mail, for free. You can find the details of that on my website, and the book is: Meet the Frugalwoods: Achieving Financial Independence through Simple Living. Published by Harper-Collins on March 6th, 2018.
Emma: This was a pleasure. Thank you for the work you do, it’s important.
Liz: Thank you for the work you do.
Find out how Liz and her family became financially independent, and how you can do the same her new book, sure to be a bestseller, out now on Amazon, and elsewhere: