What do eating miniature cubes of beef, cheese, and pickles have to do with launching a successful startup (and, for my husband, landing a dream job)? Maybe more than you think.
First, some terminology. There is debate about the linguistics and application of terms frugal (righteous, maximizing value), cheap (unrighteous, miserly), thrifty (a hands-on DIY version of frugality), and stingy (self-focused, uncharitable). I’ve likely been a mixture of all four at various points in my financial history, but I like to think I come down squarely in the “frugal” camp most days.
We all have unique priorities for our money and identifying what’s important is a key component to financial success (retiring at 40 will take different efforts than, say, aiming to eat out once a month at a fancy restaurant). Here’s where frugality comes in – looking for the least expensive way to maximize an experience or opportunity.
My husband and I are part of a growing trend – working professionals that look for meaning and purpose in a landscape with transient positions; gone are the days of 30-year jobs (complete with a pension). Our generation studies longer, assumes more debt, and changes jobs with a frequency unheard of among our parent’s baby-boomer peer group. Some of this is a product of the modern world, coupled with our determination to extract purpose and joy from our careers. For those of us fortunate enough to be picky, it’s generally unthinkable that work be a faceless void serving only to pad our bank accounts – it must fulfill, challenge, and reward. That’s a tall order but we all seem to be pursuing it relentlessly.
University further blurs the lines. What if you have an advanced degree in International Relations (one family member), or are a microbiologist with an MBA (another family member). What are your options? Better buckle up to navigate them all.
With either of these backgrounds you could be a manager and work up to a C-level position; you could specialize in a specific area of your broader field or launch a non-profit. You could become a university professor, go to law school and join a firm, or enter politics. Have a natural penchant for traveling – what about becoming a full-time sponsored influencer? Many choose to pad their tech skills, and why not take some coding classes on the side? If all else fails, what about dabbling in professional poker – I met someone in university who dropped out to do this full-time and Maria Konnikova’s done alright for herself. (Compare this to being a dental hygienist [another family member]. If you move to a new city, take a wild guess at what job you’re likely to look for in the local classifieds).
Many people look to forge their own trail; we may be tired of hearing about the trajectories of Elon Musk, Jeff Bezos, Bill Gates and other self-made million/billionaires who followed their passion, but their stories are undeniably fascinating. We watch people make it big selling fragrances and makeup, custom planners, and flattering underwear (why hello, SPANX). You name it, someone has done it, marching to the beat of their own drummer…and beating the entrepreneurial odds.
Some of these entrepreneurs come from money. The money that funds Harvard educations, weekend homes in the Hamptons, fridges full of champagne (I saw this on an episode of Columbo last week so it must be true), and no need for a paid summer work.
But what about those folks (most of us/them) without a big influx of cash?
My father still loves to reminisce about his summers spent working at a local dry-dock. In less than 4 months he made enough money to fund his entire upcoming year at university (tuition and board). Whenever he talks about this I detect a measure of pride in his voice, followed by resignation that no such job exists for students these days.
So how do we make it all work? How do we pursue something we’re passionate about without accumulating crushing layers of debt? I’d argue one of the most important elements to a successful entrepreneurial trajectory (or just general financial independence) – a lynchpin that supports work ethic, raw talent, and divine intervention – is careful stewarding of money.
I had an unfair advantage – my parents, living most of their life on the salary of a rural Baptist minister – put money away from the time I was an infant. Small amounts (again, rural Baptist minister) but it compounded over time. Birthday money, $10/month into a registered education savings account, random coins found on the sidewalk. With scholarships and summer work placements, I managed to come out of university with money in the bank.
Despite this leg up, we started married life in a tiny apartment, one of the cheapest we could find; we laid towels across the bottom of the door to stop the smoke that floated down the hallway from entering our little space. We rescued art destined for the garbage to adorn our walls. We scoured weekly sales flyers to find the best deal on groceries and those itty-bitty diapers our newborn kept blowing through at an alarming pace. When we spotted reduced produce at the grocery store, that bruised bell pepper became the base of a soup and overripe bananas became bread.
Our clothes came (and still come), almost without exception, from second-hand sources. We started a business with grand dreams and no real idea how to fulfill them. We worked on the side, me in environmental consulting and student services, my husband fixing electronics; at any given time our apartment hosted stacks of computer towers, phones, and laptops in various states of repair.
I’m not going to lie. It got hard. Not single-parent-don’t-know-where-our-next-meal-will-come-from-hard. I don’t know that hard. But as many of our peers bought homes and drove new vehicles, we put our heads down and trudged forward.
A baby meant we qualified for a larger, subsidized apartment. This one had its own entrance and no smoke curling under the door; this time it leaked into each room through ceiling vents. We closed those and opened windows. Shift workers – or that’s what I assumed them to be – living above us scrapped chairs over tile floor each morning at 3 am. Their kitchen was located directly over our bedroom. When our son developed a milk allergy requiring specialized formula, we were pulling $400 a month from our business or, more accurately, $392 after our measly contribution to the government coffers. We weren’t doing much to remedy the local potholes. We qualified for grants to help with his food. In terms of the black-and-white of our bank account, we were living below the poverty line. Yet, we saved. We researched purchases, haggled deals, and bought things in cash.
And we found creative ways to make more money, including stints as human guinea pigs.
First, we participated in a research study at a local university that was examining how people empathize with a partner experiencing pain. John was texting me about these painful shocks he was undergoing in the adjacent room and they recorded my text responses. I literally laughed out loud – it was clearly ludicrous that in 2010 they would be shocking my husband in a university research lab (they weren’t). I didn’t play along, called their bluff, and we walked out with $15/each. Somehow I doubt our material made it into their final report. Or maybe it did – me as the villain, a heartless and cold wife who didn’t care about the agony her husband was being subjected to in the next room.
Another time I ate probiotic powder every day for 6 weeks and was assessed on my memory skills in an assortment of word and number games. Spoiler alert – I am terrible, probiotics notwithstanding, at remembering number sequences.
Most lucrative was our foray into professional taste-testing. I am not making this up.
Over the course of several years we made $1,000s in grocery gift cards debating the merits of different cuts of grass-fed beef and making flax-flour breads at home. We sat around a conference table with a full panel of taste-testers, giving serious thought to whether a cucumber slice should be rated 7 or 8 on the crunchy scale. I have photos of my daughter playing with her beloved stuffed monkey, thinking there was nothing out of the ordinary while I sat nearby in a tiny booth, sliding open a stainless steel door to receive my tray of crackers and gluten-free quiche like a veritable lab rat. She bummed the saltine crackers, designed to cleanse the palate, and fed monkey pretend food out of the little styrene cups my beef jerky and cheese cubes had been delivered in. We tested flavoured maple syrups, salad greens (this was a months-long project – turns out there’s a lot more involved with ranking different types of baby spinach and kale than I had originally imagined), strombowaffles, and even beer.
Coupled with our ability to minimize expenditures (grocery bill with sales, clothing costs by thrifting and hand-me-downs, vehicle expenses by having a single used car and walking as much as possible, housing costs by living in a small, subsidized rental), these other sources of money provided one of the most critical things for a startup – runway. We hear stories of overnight successes but, in reality, even those “overnight” successes involve years of hard work and sacrifice.
That runway gave us time to network. Fail, make mistakes, and learn. Hire Co-op students and invest lots of time into our products and our vision for our startup (and, eventually, a second start-up). We applied for grants and talked to investors and put in one of the only things we could – sweat equity.
Being frugal was a choice. We could have moved for work or found full-time jobs. We had family to fall back on if the going had gotten impossible. We are also blessed to live in a country with incredible social safety nets. But this was less about money and more about the end goal. Financial freedom (no debt) and entrepreneurial itches we wanted to scratch.
My husband knew a very successful local businessman growing up who was known for saving (and reusing) his tea bags. We did that too. A constant mound of chai and orange pekoe showed up in little bowls in our fridge – and for heaven’s sake don’t mix up the decaf with the regular. We bought the ketchup that was on sale and I waited for sneakers in my size to show up at the consignment store when the old ones wore out.
But we spent money too. We went to Denmark as a family of 3 and swam in the Blue Lagoon during a layover in Iceland; we traveled to New York City and took in Broadway shows. Sure, we ate at McDonald’s and tramped through town in our best second-hand clothes, but the memories were no less exciting! Our financial decisions weren’t about deprivation and total sacrifice but about maximizing, stretching, and then reaping the benefits in ways we truly valued.
Ramit Sethi talks about identifying what will make you feel rich. Is it being able to order an appetizer at a restaurant? Is it being able to give a specific amount to your favourite charity? Is it traveling the world, buying a sports car, leaving an inheritance to your children? Maybe it’s bootstrapping a startup…
“Rich” doesn’t have to be a particular number in a bank account, it can represent an outcome – and there can be many ways to get there. Ours just happened to involve cubes of beef and cucumbers.