I've been spending a lot of time talking with retirees -- and younger folks already planning their retirements -- about how to make some frugal lifestyle adjustments so it's still possible to stop working, despite big losses in savings. Many of their ideas apply at any time of life.
Charlie Gutz, the blogger behind Frugal Retirement, is a 32-year-old IT engineer in Omaha, Nebraska who would like to retire as soon as possible -- sometime before age 50. To do that, he saves money wherever he can, using some of his grandparents' techniques, and also earns extra income outside of his paycheck. Here are some of his ideas:
* Gutz makes his own Windex by mixing rubbing alcohol, water, and a dab of soap together. He also reuses old shirts for dishtowels.
* He makes his own lunch, or brings in a coupon to places like Burger King. By filling out free surveys, he gets a free whopper. He says that he probably spends just $10 on all five of his lunches.
* He uses coupons from websites such as www.slickdeals.net to get discounts on big items such as vacuums and electronics.
* He grows his own food, including sweet corn, bell peppers, and tomatoes, in his backyard.
* To earn extra income, he writes his blog, sells household items that he doesn't need on Craig's List and eBay, and plans to start an Etsy.com store with his wife.
Overall, Gutz estimates that these techniques allow him to save around one-third of his income.
Meanwhile, Jacob of the Early Retirement Extreme blog is 33 and has already effectively retired from his career as an astrophysicist. But he continues to write, blog, copyedit scientific papers, and volunteer. He started his blog, he says, because he wants to encourage people to reconsider whether they want to work as hard as they do to support expensive lifestyles, instead of scaling everything (including work) back. Here are some of his techniques:
* He lives in a small home in California that is within walking distance of libraries and shopping areas, so he doesn't need to drive.
* He stays healthy and fit, partly by walking everywhere.
* He owns mostly just what he has used within the last 30 days. "The best way to downsize is to put things you rarely use in moving boxes. Seal the box and mark it with a date. It's a good idea to write on the outside what's in it. Then after a year, if you have not opened the box, sell the stuff on eBay, Freecycle it, or donate it. No excuse. Do not buy anything unless you are certain you are going to use it often," he suggests.
Jacob estimates that when he was a salaried employee, he saved around 75 percent of his income. His budget is now just over $500 a month, almost half of which is rent.
