This is a guest post from Jeff Yeager, author of the newly-published The Cheapskate Next Door. Yeager calls himself the Ultimate Cheapskate — and his wife agrees. Yeager is also a contributor at Wise Bread and on the Early Retirement forums.

The Cheapskate Next Door“Sure, we could afford to spend more, but why would we? It wouldn’t make us any happier.” — Those are the words I’ve spent the last two-and-a-half years traveling the country to hear. It’s a simple but rare statement, given that nearly half of all Americans say that they literally live paycheck-to-paycheck and have little if any savings.

How can some people live not only within their means, but substantially below their means — even when their incomes are often less than the national average? And here’s the biggest question of all: How can some of those same people insist that they’re happier — joyous, really — because of their thrift and frugality?

I traveled thousands of miles — nearly 3,000 of them by bicycle! — and surveyed more than 300 of my beloved “Miser Advisers” to find the answers. In my new book, The Cheapskate Next Door, I share what I discovered about people and families — many of them just like you — who not only know how to stretch their money, but who are more content and happier because of it. The book also includes hundreds of their practical, money saving tips — ideas that anyone can use every day.

Some of what I found may not surprise you. These frugal folks:

  • Despise debt and have found creative ways to eliminate it from their lives.
  • Differentiate between “needs” and “wants,” and between “affordability” and “borrow-ability”.
  • And, yes, most own and still wear at least one article of clothing dating back to the Carter administration (or earlier).

But other findings surprised even me, The Ultimate Cheapskate.

For example, only about 10% of the thrifty people I talked to have a written household budget (“we live our budget — it’s second nature — we don’t waste time writing about it,” one cheapskate said). While they have savings in the bank, less than 15% have a formal “emergency fund” (“an emergency fund is for people who don’t have their financial house in order otherwise,” another cheapskate said). And more than nine out of ten say that they think, worry, and stress-out about money less — not more — than their non-cheapskate peers.

The Cheapskates Next Door are 100+ times more likely to have a dog or cat adopted from a shelter than one purchased from a pet store, are far more likely to own a crock-pot (or several) than an IPod or flat-screen TV, and they divorce at less than half the national average.

These aren’t your miserable, Scrooge-like cheapskates. These are folks who know what’s important in life, and they skip the rest. Here’s a glimpse inside the mind of the Cheapskates Next Door:

  • Cheapskates say, “The Joneses can kiss our assets.” Cheapskates are highly self-confident and proud of their frugal lifestyles, caring very little about what others think of them and even less about things like buying designer brand names and keeping up appearances with the Joneses.
  • Cheapskates are immune from buyer’s remorse. Most shoppers eventually regret nearly 80% of the discretionary items they buy; but cheapskates are “premeditated shoppers” and, because of it, are largely immune from buyer’s remorse. Nearly 90% of the cheapskates surveyed say they “never” or “rarely” regret a purchase. And they don’t shop for “recreation” or “therapy,” which is one reason they prefer shopping at thrift stores (with a more certain selection of merchandise) than wasting time shopping at yard sales.
  • Cheapskates appreciate appreciation (and depreciation, too). Other than when buying a house, most people usually don’t think about whether something will increase or decrease in value after they buy it. Cheapskates are tuned into appreciation/depreciation, often preferring to buy antique furniture (like the Amish do) that will retain/increase in value, and buying everything from cars to computers to clothing used, rather than new, so that the first owner pays for most of the depreciation.
  • Cheapskates know that the best Things in life aren’t things. Social science has shown that Stuff tends to disappoint us over time, but experiences — how we spend our time — is what adds true value and meaning to life. Cheapskates value their time, and the things they can do with it, more than money, and the things they can buy with it.
  • Cheapskates answer to a higher authority. For most of the cheapskates polled, it’s truly not about the money. Nine out of ten cheapskates say that their decision to live a more frugal life isn’t about trying to amass a big savings account; rather it’s primarily grounded in some higher ideals, such as religious beliefs or environmentalism. That’s why, of the cheapskates polled, they donate nearly twice as much to charity as the average American.

While most of the cheapskates I surveyed are lifelong devotees — having practiced frugality since long before the recent recession made it more fashionable — I kept asking myself while I was writing the book whether or not thrift is truly here to stay, particularly for the nouveau cheap. Will conspicuous consumption spring back to life faster than you can say “bailout” or “liar loan?”

I’m not at all confident about the answer. But the very last question in my survey was a hypothetical: Someone drops a million bucks on you tomorrow, how would it change your life? More than 9 out of 10 cheapskates, in so many words, said that it wouldn’t change their lifestyles in the slightest.

“Honestly,” one couple told me, “it would just serve to reinforce what we have already learned — that we have Enough right where we are, and we realize that is a gift most people don’t ever choose to receive.”

J.D.’s note: Though I haven’t had a chance to read The Cheapskate Next Door, I liked Yeager’s earlier book, The Ultimate Cheapskate’s Road Map to True Riches [my review].

Also: By a happy coincidence, Mr. Jeff Yeager, the Ultimate Cheapskate, passed through the Portland area on his cross-country bicycle book tour yesterday. He and I spent a couple of hours cycling through the Oregon countryside while chatting about frugality and other related subjects. Here’s a poor-quality photo of us crossing the Willamette River by ferry:

J.D. and Jeff Yeager, geeky bicyclists

Dig my gigantic helmet and my awesome reflective vest. We sure look like a couple of dorks!

GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, and more.