Is Being Frugal the Best Technique for Becoming Financially Successful?

Steve Annette Economides
Steve and Annette Economides November 14, 2019

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Is being frugal the best way to ensure financial stability? Steve and Annette Economides, authors of America’s Cheapest Family Gets You Right on the Money, show how frugality can be fun, and why avoiding debt is the best tactic for financial stability. Discover how the Economides family became known as “America’s Cheapest Family.”

How to create a solid financial foundation for your family

Building a financially secure home is a family matter. Show host Doug Goldstein, CFP ® and his wife, BatSheva, discuss how they manage their family finances. Get a glimpse into how they make financial decisions and how they teach their children to manage their spending and saving.

Follow Steve and Annette Economides at and @SteveEconomides.

Watch America's Cheapest Family on YouTube.

Read the Transcript

Interview with Steve and Annette Economides

Douglas Goldstein interviews Steve and Annette Economides, best known as ‘America’s Cheapest Family’. Read on as they share their thoughts on frugal living, and how it has enabled them to live a stable lifestyle.

Douglas Goldstein:  I’m very excited to have on this show here today, Steve and Annette Economides, who are New York Times bestselling authors of more than one book. They are parents of five grown children who are considered family finance experts, and often they are considered experts in frugality. Is being frugal the pathway to financial success?

Steve Economides:  Being frugal is fun. It’s a challenge.

Annette Economides:  It is, and I would say it can bring success. I think of frugal living as a way to enrich your life, to have what everybody else has ,but to get it in a far more creative way.

Steve Economides:  Walt Disney said, “It’s kind of fun to do the impossible.” We believe that about finances and finding deals.

Douglas Goldstein:  It is true you guys are noted for finding unbelievable deals, which we’ll get to in a minute. I just want to clarify what you said. What is frugality a recipe for? It certainly isn’t a recipe for getting rich.

Why Be Frugal?

Annette Economides:  It’s a recipe for stretching what you have. We think of our lifestyle as very stable, so no matter what the markets are doing - the economy, whatever the peaks, and the lows and the highs, we are just sailing right through it.

Steve Economides:  When the economy crashed in 2008, we didn’t change our spending. We didn’t change our lifestyle. We didn’t move out of our house. The house was paid off. It is a recipe for sustainability. That’s the key.

Douglas Goldstein:  I think that’s important given the volatility of the economy. My day job is I’m a financial advisor and quite frankly, people say, “Oh my gosh, what happens if I go broke?” They are so focused in the investments going down that they don’t think about paying the bills on a monthly basis, which is more your focus, right?

Annette Economides:  Exactly.

Steve Economides:  The goal is pay the bills but also have money set aside, build your emergency, and start building your investments. It’s a progress plan, but the first step is to stop using credit cards. The second step is start building equity and wealth, build your budget, build your emergency fund, and then start investing.

Annette Economides:  It’s also having a budget; having a spending plan. Managing the day-to-day because when your cars are paid off, when you have no consumer debt, when your house is paid off, it’s a great place to be. Even if you lost your ability to work, you could probably still survive.

Douglas Goldstein:  Let’s go over the math a little bit on this. I’m a no-debt kind of a guy. I believe in it because I think, from a stability standpoint, if you don’t owe money then you are miles ahead of everyone else. There is an argument that a lot of people will make. For example, no one says it’s a good financial move to be in credit card debt, but lots of people say, “Listen, you can get a really cheap mortgage today. Why not buy a property, take a mortgage, and then you have all that liquidity to invest in something else.”

Steve Economides: You could also lose money on that, or you could lose money on your house. There is risk involved whenever you borrow money, and you know the old saying “The borrower becomes the lender's slave.” We’ve seen servitude skyrocket in the States and internationally,  and we don’t want to owe anybody anything. The freedom you have when you don’t owe anybody anything is huge, but even do the math.

If you are paying interest. The first house we bought, we had 11% mortgage on it.

Annette Economides:  That was in the mid-eighties, right after the savings and loan crisis.

How American’s Cheapest Family Ended Up Owning Two Homes

Steve Economides:  We borrowed $47,000. It was a repo fixer-upper, four-bedroom house. We were supposed to pay $150,000 in principal and interest over 30 years. We paid that house off in nine years. Our total principal and interest was $70,000. We cut $80,000 off of what we should have paid by focusing, by having priorities, by managing our money, and paying things off early. That’s a huge saving.

Annette Economides:  Then we took that big chunk of money and put it down on the next house, which is a five-bedroom on three-quarters of an acre, with a citrus orchard.  At the time we bought it, it was right before the market exploded. We paid $220,000 for this house. At one point, the house we are sitting in was worth $1,000,000. I would say that’s a pretty good investment, wouldn’t you?

Douglas Goldstein:  It’s always good if you can buy a property at a low point and see it appreciate in value. Of course, it’s not always possible because a lot of living expenses are just because that’s where you have to live for either work, or family, raising kids.

One of the things that sometimes happens when children grow up in a family where their parents are very focused on finances is the kids become a little weird about money. How do you raise your kids to not become weird about mone,y but to become responsible?

Raising Children To Be Financially Healthy (And Giving) Adults

Annette Economides:  People ask that all the time. You would think that we are focused on money, but we aren’t because we just made life a treasure hunt. We try to figure out what everybody needed and we showed them how to get what they needed with good quality for the least amount of money. We developed resources. We figured out where the best thrift stores and consignment stores were. Our kids really did feel like they were playing a game and they were playing to win.

Steve Economides:  Here’s the bottom line. You deal with people who have money and they want to invest. They want to build their retirement, and a lot of them have worked very, very hard. Maybe they are working really hard right now, and they may have this philosophy that they don’t want their kids to have to work this hard so they give their children money.

Douglas Goldstein:  Big mistake.

Steve Economides:  Here’s my philosophy. I was a competitive gymnast through college. That’s what paid for college for me and I’ve got to tell you that I had to work out really hard. I had to lift weights. I had to train, and I built my muscles not because my parents did the lifting for me. It’s the same way with finances. If we want our children to become financially strong and financially independent, giving them money is not going to build financial muscles. What we decided to do, as we realized that the USDA says it’s going to cost $261,000 from zero to 17, was to take the money that we should have spent on them according to the USDA. But we didn’t spend that much obviously. We decided to give them a little bit of it at a time at an age appropriate manner for them to manage.

Annette Economides:  They had to earn it. We taught our kids how to earn their own money. They had to do the work for it.

Steve Economides:  We set up a kind of a fake economy in our house. By the time they turned 11, they had to take the money they were earning and set it aside for charitable giving, some for spending and some for saving. Then they started buying their own clothes.

Douglas Goldstein:  Let’s narrow it down. Americans are considered amongst the most charitable countries in the world, but we are talking about only one or two percent of income that goes to charity. What do you teach your kids?

Annette Economides:  We give more than 10% of our income to charity, and we’ve taught our kids to give 10% of their income to charity. All of our kids are very generous givers. They realize that some of what they have should be shared with others.

Steve Economides: One of our kids was working with a youth group and they were going on a retreat and some of the kids in the youth group didn’t have money to go. Our son, Joe, took money out of his giving envelope. We’ve set him up on cash envelopes and he …

Annette Economides:  Sponsored.

Steve Economides:  … gifted, he sponsored some of these kids to go to the summer camp. It’s not necessarily just giving to big organizations.

Douglas Goldstein:  I remember about 15 years ago, I heard a speech by Howard Jonas, who at the time had started a company called IDT that was competing with AT&T. You’ve got to be pretty gutsy to do this and Howard Jonas was quite successful. I heard a speech he gave where he said that he and his wife give 20% of their income to charity. I was very inspired by the whole speech and I remember I went home to my wife, and this is a long time ago. I was much younger and we did not have as big or successful a business as we have now, and I said to her, “ Honey, I’ve heard this great speech and I think we should try to do that,” and she was onboard right away.

I believe that the fact that we give 20% to charity has helped our kids to do it too. Apart from the fact that we can talk about karma or the religious aspects of giving, it makes you look at money in a very different way. You don’t feel that you deserve it. You feel that it’s a privilege to have it and a responsibility to handle it as well.

Annette Economides:  Agree. Totally agree.

Steve Economides:  It’s called stewardship, and stewardship gets a bum rap in the religious institutions because it always sounds like you are doing a fundraiser, but in my mind we are stewarding what we’ve been given. It’s not ours. It’s ours to channel and to manage and to multiply. Not steward.

Douglas Goldstein:  I think that’s important. All right, we are nearing the end of our time but I want to hear one super story of frugality that you could share to inspire the listeners.

Two Amazing Stories of Frugal Living

Annette Economides:  In one of our favorite regional stores, I always swing past the meat case to see what’s on mark down. Literally, they have overstocked items. I find chicken legs for 19 cents a pound. I’m like for 19 cents a pound, I’m going to load up my cart, take it home, load it into the freezer and guess what? We are eating chicken legs for the next couple of weeks.

Steve Economides:  We don’t do it every day. The philosophy is like Warren Buffet: When you see a deal you buy it and then you know it’s a deal. You stock up and then you eat over a long period of time. I’ll give you another example. Years ago, when I was working as an advertising account executive, I’d get an annual bonus. The bonus could be anywhere from $10,000 to $30,000, just depending on how the year went. What we’d do is we’d take a big portion of that and use that to pay off our house. Then we took a small portion to enjoy and to have some fun. Annette looked at me and said, “You play guitar. Why don’t you go buy a nice guitar like a Martin Guitar?” At the time, the one I wanted was selling at about $4,000 but I wasn’t going to pay $4,000.

I started hitting all the pawnshops, all the music stores around Phoenix. When you live in a big city, there is always someone who has the thing you want and they desperately want to get rid of it. If you find that person, you are going to find the deal. I picked up a Martin D41, American-made solid top guitar and I paid $900 for it.

Douglas Goldstein:  Less than 25%.

Steve Economides:  It was going to be worth $3,000 if I had to resell it. There are always bargains to be had and those are the things we just love talking about.

Douglas Goldstein: I know there are a lot more stories that you could share with us. Unfortunately, we are not going to be able to tell them on today’s show. Tell us, how can people follow you, follow your work, and hear more of the stories about how you manage your money?

Annette Economides:  They can read all about it on our website at They can find us on Facebook, Steve and Annette Economides.

Steve Economides:  America’s Cheapest Family.

Annette Economides:  American’s Cheapest Family. We just reached over two million views on YouTube.

Steve Economides:  We’ve got 8,000 subscribers and we are doing more and more videos. Our focus right now is ways to make frugal fun because it really is a blast, and possible.

Douglas Goldstein:  That sounds fantastic. Guys, thank you so much for joining us. We will put links to all of that at the show notes of today’s show. Steve and Annette Economides, best of luck and hope to have you back soon.

Annette Economides:  Thanks so much Doug.

Steve Economides:  Thanks a lot.

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