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Lean Financial Living

by Shawanda Greene

It was the lure of  The $10 Phone Bill featured on the November 16, 2009 cover of Forbes that enticed me to open the magazine. The article spanned a total of 11 pages. Interspersed within were advertisements and photographs. All sorts of wasted space. My limited attention span couldn’t suffer all the extra information. For now, I’ll just keep paying the $100 iPhone bill.

Since I’d already started browsing, I figured a few more page flips couldn’t hurt. I’m glad I kept looking because I ended up finding a story worth reading: Miser’s Revenge. It was two pages. I can work with that. 

TheyCallMeCheap but, I ain’t got nothing on MaryJo Cohen, CEO (and 30% owner) of National Presto Industries. This woman is hardcore thrifty.

  • She flies coach, stays in three star hotels, and borrows books from the library. (Well, I do all those things too, but my net worth isn’t approaching $200 million and my salary isn’t $415,000 a year – yet.)
  • Desks located within the company’s headquarters were purchased no later than 1961.
  • The company is still running on Microsoft Office 1997. Here I’m thinking it might be time to upgrade to 2007 for my home computer.
  • And get this, MaryJo still connects her personal computer to the internet using dial-up. DIAL-UP!

What I find most refreshing about MaryJo’s company is that it doesn’t have any debt. Cash and government bonds account for 39% of assets. While their competitors were filing for bankruptcy, National Presto Industries was positioned to weather the economic storm, snatch up bargain investments and expand their business.

We can apply these principles to our own lives.

Since I started my professional career in August 2004, I’ve been of the opinion that an increase in pay doesn’t warrant an increase in lifestyle. Many people make the mistake of locking themselves into contracts that limit their ability to gain wealth.

With every little incremental increase in income they upgrade. Suddenly their one bedroom apartment is inadequate. They need a second bedroom for an office. Or they need a new car to impress prospective clients. From flashier cell phones to financed furniture, it all has to be better.

Last night I was pretty frustrated with the lack of counter space in my tiny kitchen. For a second I thought I should move to an apartment with a bigger kitchen so I could cook in comfort. Ignore the fact that the increase in rent would all but eliminate any savings that’d result from cooking at home. What makes me uncomfortable is that every month I’d be stuck paying a few extra hundred bucks on rent. I wouldn’t be able to readily choose what to do with that money. It’d go towards rent.

I like the way I have my finances set up now. Living lean gives me so much freedom. In any given month, depending on how I feel, I can spend more money on things like travel, entertainment, or clothing. The next month, if I’m not pleased with the balance in my bank account or what I spent my money on, I change my behavior. I don’t have to sell anything or move.

Although I’m not managing nearly as much cash as MaryJo’s National Presto Industries, I feel like I have a greater likelihood of getting there if I keep a close eye on my fixed expenses.

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{ 7 comments… read them below or add one }

Jason @ Dyalogues November 12, 2009 at 6:53 PM

That really must be their company's culture, if the desks haven't been replaced since the early 60s. But some of those choices are really odd. Dial-up?! Is it worth maintaining a buggy phone connection when broadband is ubiquitous and cheap?

But a "coach for everyone" policy is admirable.

Reply

TheyCallMeCheap November 12, 2009 at 7:12 PM

I upgraded to a high-speed internet connection once I got tired of running to the office in the middle of the night to download large client databases. That got old really fast. I left it out of the article, but MaryJo also lives with her mother in the home she grew up in. Maybe it's a really nice house, but I'd go ahead and get my own place. That's assuming her mother is in good health.

Nevertheless, I like the idea that the company's management carefully controls unnecessary costs. I remember a friend of mine used to work for JPMorgan Chase before moving to Washington Mutual. She would talk about how cheap the company's CEO was. Well we all know what happened to Washington Mutual and my friend is back work for JPMorgan. I just heard their set to hire 1200 mortgage officers, and they were one of the few large banks who weren't scrambling to borrow money from the government in the midst of the financial crisis.

On an unrelated note (at least to this post), I made your aunt's Swiss chard with potatoes. OMG! It's so good. I was afraid of screwing it up at first, but it turned out really well. Can't wait to blog about it.

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LeanLifeCoach November 15, 2009 at 3:02 AM

Shawanda, you are woman to admire!
National Presto Industries has been recognized for their Lean accomplishments. Lean in their case is much more than just being frugal, it is the scientific application of doing more with less. They learned that ultimately it is the customer who decides what they will pay for their products. If Presto can't control the selling price, what can they control? Costs! The leaner they run their company the more profitable they are.

After teaching these lean techniques for years I am now exploring how they can be applied to our personal life. Ultimately those that hire me will decide how much they are willing to pay for my service. If the market controls my income, what can I control?

You are doing the right thing, stay in your apartment, control your fixed, and also you variable expenses. Over time you will grow wealth that you will be able to leverage for even greater luxuries.

Reply

Shawanda Greene November 14, 2009 at 11:15 PM

Thanks, LeanLifeCoach! I love your slogan”It’s easier to save a dollar than to make a dollar.” Okay, I shortened it a little bit, but still that’s good stuff. Lean living gives you so much freedom. The thought of being locked into a job or relationship because I had too many expenses to set myself free is just terrifying.

Glad you’re spreading word.

Reply

FABULOUSLYBROKE.COM November 15, 2009 at 11:17 AM

Same here.

We live in a studio apartment, low utilities or included, and we love it. :D

We spend our money on food and me, on clothing ;)

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