Don’t judge this penny pincher by his cover. Jeff Yeager may be the author of The Ultimate Cheapskate’s Roadmap to True Riches–which one might assume to be filled with coupon-clipping strategies and saving tricks–but his philosophy isn’t as much about how to get more for less as it is learning to live with less, period. Sure, he blogs about “12 Surprising Ways to Reuse Aluminum Foil,” making cider bisque out of your jack-o-lantern, and using just enough toilet paper, but the bigger goal here is to live green, not just cheap. Ultimately, Yeager says, consumers should direct their frugal efforts toward downsizing their lifestyle–in major areas like housing and transportation–rather than saving a buck here and there. U.S. News recently spoke to Yeager about the most effective ways to economize. Excerpts:

Explain your ‘cheapskate’ philosophy.

I don’t really write about penny-pinching tips. I focus more on quality-of-life and happiness issues … especially the idea of deciding what “enough” is for you. Most people don’t ask themselves that. What would be enough money and enough stuff for you? My wife and I answered that question early in marriage, in our 30s. We were living a comfortable lifestyle–why would we want to spend every last dollar we earned as our salaries increased over the years? We established what I call a “permanent standard of living,” a level we still live comfortably at today, even though we could afford to spend more … we managed, for example, to pay off our house in 15 years and essentially retire in our 40s. It’s all about the decisions you make.

What sorts of decisions?

Well, for me, it’s all about the bigger financial decisions in life. I rail against the latte factor … for 20 years, pundits have been saying that if you give up your daily Starbucks cup and bank the money, you can attain financial security. That may work on paper, but I don’t think it works that way in reality, for most people. One [of the bigger decisions] is housing. I’m a big believer in finishing in your starter home: Buy a modest home when you’re first starting out and ignore people who tell you not to pay it off right away. Pay off your mortgage as quickly as you can, settle in and get to know your neighbors, and make your house your home. The conventional wisdom before the housing bubble burst was that if you could afford to pay down your mortgage early, instead take that extra money and invest it because mortgage money is relatively inexpensive to borrow. The financial pundits at the time said that any idiot could make a return on their investment above 5 percent or 4 percent of their mortgage interest. … Well, it didn’t work out that way.

These days with the tight economy, you hear so much in the media about economizing. But that’s almost always about “how to get more for less” … how to clip a coupon or find a bargain. But I think we’re missing what could be the golden epiphany of these hard times: We shouldn’t be asking ourselves “How can we afford it?” We should instead be asking, “Do we really need it?” There’s lots of social science that shows that once you’re above poverty level, more money and more stuff doesn’t contribute to happiness. I believe that most Americans would be happier, and the quality of their lives would increase, if they would only spend and consume less. If you believe as I do, I think there will be a lot of upsides to the current recession in the long run.

What are those upsides?

For example, when gas was $4, we all complained about it, but two-thirds of people reported that they changed their driving habits as a result. And unless I’m missing all the horror stories, nothing awful happened because of it. Certainly driving less is better for the environment and better for our pocketbooks, so where’s the downside? Another example: Since the start of the recession, the size of new homes being built in the U.S. has dropped by about 11 percent … 300 fewer square feet. Again, that’s a change, but I don’t think that’s a bad thing. Think about the tremendous financial impact that the decision to live in a smaller home will have on your life. Not only it cost more to buy [a larger home] in the first place, but once you have those extra 300 square feet, you have to insure it, decorate it, heat and cool it, maintain it, repair it, and pay taxes on it. That’s the kind of fundamental decision that has enslaved so many Americans to the yoke of too much debt. So apparently now were going to be living in slightly smaller houses, but why is that a bad thing?

If you read the book The Not So Big House, it says that as humans, we’re uncomfortable in big spaces. If we have a chance to move into the mansion on the hill, we’re not really comfortable with it. We’re learning some lessons in the recession. Personal savings rates are up. Even though things are tighter now, we’re somehow magically able to put money in the bank. Go figure.

Aside from driving less and being happy with a smaller house, what other significant things we should cut back on?

Eating lower on the food chain, for one. I try to spend only a dollar a pound on food. It’s a myth that it costs more to eat healthy. You can spend a lot, but when you think about the kinds of things we should eat the most of–whole grains, legumes, and produce–they tend to cost less per pound than things that are bad for us like red meat and many processed foods that are high in trans saturated fats. I encourage people to eat more meals at home. Forty-five percent of the average U.S. family food budget is spent on food prepared outside of home. And they cost an average of 80 percent more than preparing the same food at home. There’s a lot of waste, too. According to the USDA, about 25 percent of food is thrown away, so arguably you could reduce your spending here by 25 percent simply by being smarter about food storage and portion control.

You write a lot about the relationship between being frugal and environmentally conscious on thedailygreen.com. Any takeaways?

For most Americans, the greenest thing you can do is consume less, which probably means spending less. I think there’s some hypocrisy in the current green movement, even though I’ve been an ardent environmentalist my whole adult life. I fear that the so-called green movement is catching on now because there’s a bunch of cool, expensive green stuff we can by. It’s become what I call a “cause de stuff.” Much of the current environmental movement in the U.S. seems to be built around the very thing it should be seeking to combat … rampant consumerism. Take green cleaning products. They tend to be more expensive than the toxic products. But you can clean almost everything with baking soda and vinegar, which are safer for the environment than green products and cost less than any other cleaning products, green or toxic. Hybrid vehicles are another example. It’s cool now to own a $35,000 Prius, although driving a gas guzzler to work instead is better for the environment IF you carpool with four friends. Sure, the greenest choice would be to carpool in a hybrid, but I don’t see Americans being that committed to environmentalism. We’re really mostly committed to buying cool, expensive, green stuff. That’s the hypocrisy I’m talking about.

You must make big purchases every now and then. What’s your strategy?

I’m a big believer in the Consumer Reports approach to shopping. Buyer’s remorse is at epidemic proportions. How is spending money on something we’ll regret later a good thing? It makes us poorer, and clearly hasn’t made us happy. My advice is to have a mandatory waiting period. Wait at least a week after you see something in the store that you want. I guarantee that half the time, you won’t go buy it.

Once or twice a year, I look at the things I’ve spent more money on, and ask myself one simple question: “If I had it to do over again, would I have spent that money?” I call it a ‘what heck was I thinking? audit.” Maybe you’ll see that you spend a lot on restaurant meals that you regret. I noticed that when I had a regular 9-to-5 job, when I was stressed at work, I’d often buy things I regretted later. It’s a way of helping you learn from your mistakes and change your spending behavior.

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