Cheap Is Chic : Lots of Former Big Spenders in O.C. Learn to Live on Less--and <i> Like </i> It
Margo Corpening of Lake Forest fondly remembers the flush times.
As a liquor store deli manager, she was pulling in a bit more than $40,000 a year; her husband, Chuck, earned more than $30,000 as a fleet technician for the city of Santa Ana. And together they made an additional $18,000 a year with a franchise office-cleaning business.
The money went toward remodeling the house, buying a new van, taking trips, dining out. As Corpening laughingly recalls: “We couldn’t spend money fast enough.”
But those were the ‘80s; these are the ‘90s, and like many Americans the Corpenings are learning to live on less.
Chuck Corpening still has his job, but Margo quit hers in 1991 to stay home with their year-old son, Charlie, and they turned the cleaning business back to the franchiser after their three workers--moonlighting Marines--were sent to the Persian Gulf, and Chuck, a captain in the Marine reserves, reported for duty in Twentynine Palms. These days the couple adheres to a strict, no-frills budget. Forget buying clothes at Nordstrom: Now Margo Corpening shops at Mervyn’s and Target. She even clips coupons.
“I used to get so irritated by those people standing in line with coupons, but I didn’t realize how much money they were saving,” says Corpening, 40, stressing that her family is not hurting by any means. “We have a fine life. It’s just that it’s gone from going to the Chart House in Dana Point to using two-for-one coupons at Denny’s. We do Denny’s a lot. “
Despite their lowered income, the Corpenings, for the first time in their married life, are managing to save money--$250 a month--from Chuck’s paychecks. Says Corpening: “You get kind of a hoot about a budget after seeing how far you can stretch your money.”
Call it the New Frugality.
Americans are recovering from what Business Week magazine has called “a 20-year addiction to spending that has left many on the brink of financial peril.”
Faced with job losses and potential job losses, sobered by decreased home equities and worried about future retirement, many families are seeking a safe, financial middle ground more akin to the Waltons’ lifestyle than the Ewings’.
Suddenly, it’s chic to be cheap.
“What I’m especially happy about is you get points for being intelligently frugal now,” says Andrew Feinberg, author of “Downsize Your Debt: How to Take Control of Your Personal Finances.”
“Ten years ago people might have seen you as being cheap and no fun. Now I think they’re seeing you as being in control of your life and knowing what you really want,” he says.
Not that the frugality trend is universal, Feinberg says. Some people have merely exchanged credit cards that charge 19% interest for those charging 15%. Others have refinanced their home mortgages, but instead of earmarking those monthly savings to pay off their debts--which Feinberg highly recommends--they’re seeing it vanish into the air.
But now, and maybe even more so in the future, the New York City author says, “I think it’s going to be chic to be smart about your debt: that debt should buy a home, that for a time it should buy a car, but that it shouldn’t buy your new wardrobe and vacation every year.”
Says Mary Hunt of Garden Grove, author of “The Best of the Cheapskate Monthly: Simple Tips for Living Lean in the ‘90s”: “I just think we’ve come to the point where it’s very time-consuming and it takes a lot of energy to pretend to have more money than we really do and to keep juggling credit cards to keep up a lifestyle.”
Hunt’s book, already in its fourth printing since its publication in May, grew out of her 22-month-old newsletter, the Cheapskate Monthly. It is one of a handful of newsletters nationwide providing cost-cutting tips and advice to the frugal-minded--everything from reducing the cost of your insurance by increasing the amount of the deductible to shopping at membership grocery warehouses.
“I think many people are seeing that the way they were living for the moment and having no thought or care for how it was going to be paid off is not a real honest way to live,” says Hunt.
Hunt speaks from personal experience: In 1982, she and her husband, Harold, were at the peak of their indebtedness. And it wasn’t a “peak,” Hunt quickly corrects.
“It was a pit,” she says. “I think of it as the lowest point of all. Around that time people looking at us probably assumed that that was the most affluent period of our lives.”
They were, in fact, more than $100,000 in debt, the result of nearly 30 credit cards, personal loans, doctors and dentist bills--”everything you can imagine.”
The turning point?
“When the pain got great enough where I was willing to change,” Hunt says. “The terrible thing is, as I look back now at the time, I didn’t realize there was help available.”
Had she known about counseling organizations such as Consumer Credit Counseling Service and Debtors Anonymous, she says, “I’m sure we could have gotten out of the mess more quickly if we had realized there are plans and methods” for so doing.
For the Hunts, who hope to finally have their debt paid off by the end of this year and use only an American Express card for their property management business, there’s a lot of satisfaction in living within their means.
“For myself, I find shrinking the material goods in our life and getting along with less simplifies your life and it brings a breath of freshness and joy,” she says. “I don’t know how to explain that. It’s happened for me, and I’m seeing it in the lives of others too.”
It’s certainly happened to Corpening, whose husband presented her with a subscription to the Cheapskate Monthly for her birthday.
“It’s amazing that we can drop income by over half and still I don’t feel any different,” says Corpening, who thinks nothing of going to the movies--as long as it’s a bargain matinee--and uses a Discover card because there is no annual fee and no finance charges if the balance is paid off monthly. Customers even receive a small percentage back annually based on what they have charged.
As an example of her family’s new living-leaner philosophy, Corpening cites the $500 kitchen oven she recently bought. As she explains it, they bought it from an appliance store offering zero interest for six months. They then made only minimum monthly payments, and at the end of the six months they charged the balance to their Discover card, which they didn’t have to pay for another 30 days. “So it’s giving you seven months before you have to pay for the oven, there’s no finance charges and you get cash back from Discover.”
A few years ago, Corpening says, “I would have either just paid for the oven or charged it to Visa. I just didn’t think like this, but it’s kind of fun to think like this.”
And how do they manage to save $250 a month? By simply lowering the spending allowances they give each other out of her husband’s paycheck.
“We just cut our spending back per day,” Corpening explains, having discovered that “all we were spending it on was junk”--such as stopping off for a hamburger or doughnut while shopping at the mall. “We just don’t do that as much anymore.”
James Porter of Costa Mesa is a kindred spirit: Whenever his wife calls him a cheapskate, he only laughs.
“Knowing how unstable the economy is and not knowing what’s going on, you’ve just got to watch every dollar you have,” says Porter, 35, an eligibility technician for the county’s Social Services Agency, who has whittled down an ‘80s-inspired debt of nearly $30,000 on more than a dozen credit cards.
“Now I have one card,” he says. “I don’t need all those other ones.”
Not the way he shops. In certain supermarket circles, Porter is known as the “Coupon King.”
Indeed, when it comes to cutting coupons, Porter wields scissors as adroitly as a vegetable-slicing chef at Benihanas.
Take one $286 Thanksgiving holiday grocery bill on which, after all was clipped and done, he paid only $69.
“I get people’s attention when I tell that story,” crows Porter, who has even found a way to make money off his expertise: Last year, he started his own mail-order business called Grocery Busters Network, a coupon-shopping network in which he instructs people through a brochure and a hot line on the best ways to save money on their shopping.
In another coupon coup, Porter recently paid only 29 cents a case for Pepsi, thanks to an in-store coupon and a manufacturer’s coupon and rebate. (He bought seven cases, then made a $6-per-case profit selling them at a local rummage sale.)
Porter also buys an entertainment coupon book every year, which provides discounts on everything from dry cleaning and video rentals to fast food and hotels. The book costs $40, but over the past year, Porter says, he saved more than $300 by using the coupons.
“I try to keep abreast of whatever local offers are going on, and I’m probably on every mailing list in the country,” he says. “Whenever I get an offer to see a resort--that’s a free vacation. All I have to pay for is gasoline and go through what their spiel is--and they usually have some kind of complimentary gift.”
“There are,” he says, “just so many opportunities that don’t cost you anything or at least give you the opportunity to save.”
Not everyone is so readily willing to embrace a more austere lifestyle as Corpening and Porter. Cutting back is a bitter pill for many Americans, particularly baby boomers who grew up in a time of plenty.
“One thing I really believe and try to tell people is you don’t have to do this forever,” Feinberg says. “It’s not like you have to go on an austerity budget for 20 years.”
Feinberg advises families to take a year or two--or whatever it takes--to cut back on the frills: dining out, magazine subscriptions, health-club memberships, premium cable channels. Feinberg and many money management experts recommend keeping track of all expenditures for at least a month.
In so doing, you just may wind up as shocked as the Northern California woman mentioned in Feinberg’s book who discovered she was spending $1,950 a year on cappuccino.
Feinberg is not recommending eliminating all the goodies in life--the equivalent of a diet where you only eat Melba toast and water. If done right, he says, cutting back is more often just a onetime thing.
“Unlike dieting, something very strange happens,” he says. “It’s like finding a small pot of gold at the end of the rainbow. All this money you didn’t even know was going to service your debt, suddenly you’re not paying that any more.
“So you’re winning both ways: You not only reduced spending and paid off the debt, but as the debts get paid down, money for your family’s vacations, sofas and investments suddenly appears.”
The bottom line: “Taking control of your debt is the best way to create new wealth in your life,” he says. “It’s easier than getting another job or working harder.”
But, Feinberg emphasizes, it’s not going to happen magically. “You have to plan it, to direct those savings to reducing your debt. Otherwise, instead of spending money on cappuccino, you’re spending it on a Donna Karan suit.”
Looking back at the Great Consumption of the ‘80s, Feinberg says, “I think people temporarily forgot about the virtues of thrift. I mean thrift seemed stupid, it seemed fuddy-duddy: That’s what our parents did. I’m a baby boomer, and a lot of parents go crazy about debt the other way (thinking), ‘That’s terrible.’ ”
In the ‘80s, he says, “there was also this sense for a lot of people of good times, rising incomes, promotions--and without a doubt the opposite of that is certainly part of what’s propelling the frugality movement. I think the ‘80s were also a very materialistic decade in a specific sense of the word. There’s a yuppie cliche that goes here that you could ‘spend your way to happiness’ and, for almost a spiritual reason, I think a number of people don’t believe that anymore.”
