Frugal Living: What Is The FIRE Movement? (Part 1)
In this interview, the first in a two-part series, host Jim Markus talks about FIRE (Financial Independence, Retire Early) with Diania Merriam. She is the founder of the EconoMe Conference, an event pertaining to frugal living. You can listen to Frugal Living with Jim Markus on Apple Podcasts, Spotify, Amazon, Anchor.fm, iHeartRadio, or anywhere you go to find podcasts.
How to have fun on a budget
Merriam shares her incredible financial feat: negotiating a two-month sabbatical for herself and creating and maintaining a lifestyle that allowed her to save 60% of her W-2 income. She also explains how she utilized online resources like the Mr. Money Mustache blog to help her evaluate her finances while living in New York.
Merriam also shares how she was able to pay back 30 grand in debt within 11 months. She adapted to this new frugal lifestyle, celebrated her love of community, and earned a deeper understanding of herself. Then, she created a larger community. The EconoMe conference developed from Merriam’s appreciation of frugality, community, and financial freedom.
What IS Frugal?
There is a common misconception that adopting a frugal lifestyle means having to limit yourself. However Merriam explains that, to her, the meaning of the word frugal is opportunities. She describes how she was able to adopt a frugal lifestyle and not only enjoy much of what she used to do before, but also become more aware of how she spent her money.
Read a Transcript of This Episode
Today’s sponsor is AOSOM. And I mean that literally. A O S O M.com. They’re known for low prices, US-based customer support, and one of my favorites, free shipping with no minimum order size. Check out AOSOM.com for discounts on home goods, patio furniture, pet supplies, and more. That’s A O S O M.com. Awesome. This is Frugal Living.
<music> We talk a lot about financial independence on Frugal Living, but this is the first time we’ve had a guest talk to us about one of the foundational elements of this whole community. Have you heard of FIRE? That’s Financial Independence, Retire Early. And it’s a life changer. Let’s geek out about the subject this week and next with Diania Merriam. She’s the founder of the EconoMe Conference. That’s EconoMe, an event with origins in this frugal movement. Here’s our conversation.
I’m Diania Merriam, and I’m the founder of the EconoMe Conference and the host of the Optimal Finance Daily podcast.
I wanna get into the EconoMe Conference because it’s a lot. You have created something memorable, that’s incredible value, and it’s gonna be especially interesting to our listeners. But before we get into that, I wanna talk about you because you have a pretty unique and interesting story. So, first, before I knew much about the EconoMe Conference, what caught my eye is that you negotiated a two-month sabbatical for yourself. And then you created a lifestyle where you could save 60% of your W-2 income. Can you tell me about all of that?
Yeah. This kind of relates to how I even got interested in personal finance. It really started for me in the fall of 2015. I discovered the Mr. Money Mustache blog, and it was, like, a refreshing punch in the face, right? Because at this time, you know, I was 28 years old. I was living in New York City very focused on my career. And I had found myself 30 grand in debt for, like, no good reason. It was simply due to poor money management and living beyond my means and not paying attention. And so, you know, Mr. Money Mustache inspired me to pay attention. And this led me to get out of that 30 grand of debt in 11 months. And really the way I was able to do that is simply through big lifestyle changes. And, you know, recognizing that consumerism was really at the root of all of my wasteful spending. And I was able to tap into this degree of creativity and resourcefulness that I didn’t even know I had. And I think a combination of that as well as having a deep mindset shift around consumerism just led me to stop wasting so much money. And so there are a number of things that I did. For example, I started cooking every single meal that I ate. So I really reduced my food budget. I stopped going out and partying all the time. You know, I actually, the first thing I did was I started tracking all of my spending. And what it revealed to me, and I’m embarrassed to tell you this, I was spending two to $3,000 a month going out and partying. I mean, I was having my twenties in New York City, right? But I didn’t have a lot to show for it! And so obviously, you know, that’s a huge lifestyle change to go from spending all that money going out to now throwing all that money at debt. And I think the reason why I was able to do that is not from depriving myself of the joys that I was getting from going out, but just getting that value met through different, more resourceful means. So what I ended up doing is I would invite my friends over to my apartment and I had this mission to, like, make my apartment more fun than a bar. And so I would host these dinner parties where everybody else would bring the booze, which is probably the most expensive part of the meal, right? I’ve learned to cook for, like, eight people on, like, 30 bucks. Right? So I could be really resourceful in, like, making great food. And then I would create all these games and we would just have so much fun in my apartment. So I think there’s a lot of misconceptions around frugality that it needs to be deprivation. But I feel like if you’re resourceful and creative and really start to, like, question what is the underlying benefit I’m getting from spending the money I’m spending and how do I get that benefit in different ways? I really value going out, meeting people, having fun, spending time, relationships, right? How can I still get that same benefit without wasting so much money? And it led to a lot of resourceful solutions in that regard.
There are three different things that you just hit on that all deserve a full episode’s worth of conversation. But first, before we get into those, how cool is Mr. Money Mustache?
Oh my gosh, the best. And I know you touched on the EconoMe Conference, but he spoke at the last event.
I saw it. It’s on your YouTube channel. I was, like, “What! How did you get Mr. Money Mustache?”
And that was crazy to me. It was, like, so personally satisfying because he changed my life, you know? And he was this, like, demigod to me, you know? Like, I just devoured his blog with a spoon and became obsessed with it. So then I ended up meeting him in person at something called Camp Mustache. And as you can see, I’m a huge fan of in-person events. That’s why I created one. But when I got outta debt, I, like, sent him, you know, a note about it. And he wrote me back and then I got to meet him in person. And then, you know, I told him about the EconoMe Conference and for him to take interest in this thing that I created was just, like, mind-blowing for me.
I don’t know anyone who’s neutral on Mr. Money Mustache. You either love him or you haven’t heard of him. But to go back to your story, after discovering this kind of life-changing blog, which changed my life as well and highly recommend for listeners, you talked about removing going out to eat, eating at home every night. You stopped going out and partying. You brought the parties home. All of that is a very natural transition to what you did next. You talk about the value you have in, you know, these types of conversations, only with real people in-person in the same room, not over web conference. So you created a conference. Can you tell me what that process entailed? Like, how did you get started with that?
Yeah. So there’s another conference that I go to that really inspired me. And actually, the way I found out about that is Mr. Money Mustache spoke at this event. It’s called World Domination Summit, which sounds crazy, right? Like Pinky and the Brain made it up or something, but it’s actually a conference of people living very nonconventional lives. And so Mr. Money Mustache fits very well into that, right? And this conference isn’t all about money. It’s, again, about nonconventional living. So people will tell stories about the charity they created or traveling the world or athletic feats, right? It’s just very growth-oriented people. And I’ve gone to that event three times. Now this year is actually the last year that they’re doing it and I will be going this year as well. And every time I have left that event, I left with this feeling that my life was so full of possibility. And I was surrounded by all of these very expansive people. And it’s almost like the energy of the room, you just can’t help but be changed by that. It’s like inspiration isn’t even a big enough word. I get inspired by watching Ted Talks online, but it’s a totally different experience to, like, be in the room and feel the energy of the speaker, feel the energy of the people around you, the interactions that you get to have, the spontaneity that you get to have, and the people that you meet, it was life changing for me. And so I wanted to create something that would enable other people to feel that feeling, but about something very specific, which is their money. Because once I figured out my money, my whole life changed and it just felt like I created so many options for myself that I didn’t even know I wanted. Right? So getting out of 30 grand of debt opened up the opportunity for me to take this sabbatical from work. So I took two months off of work unpaid to go walk the Camino de Santiago, which is a 500-mile trek across Spain. I mean, I walked across a country in 38 days. That’s insane. I never would’ve thought that was a possibility, you know, at 30 years old. And then I moved to Cincinnati, I convinced my employer to let me work remotely before that was the norm. So this was in 2017. I bought a house. I didn’t even know that I wanted to buy a house. Right? But when you have options, you get to explore those options. And I look at how things have unfolded for me after getting out of debt and saving such a large percentage of my income. And I just have wanted to, kind of, share that magic with people. And so that’s really how EconoMe came to be.
One of the big recurring themes in Frugal Living, our podcast, is something that you mentioned. There’s a misconception about the word frugal. This podcast is a little bit about taking that back. But your story is a very clear, solid example of frugal doesn’t mean limits. Frugal means opportunities. You took two months and you had an adventure. Like, what an inspiring idea. Why Spain? Why this trail?
So I got the idea for it in my early twenties. I had an aunt that was very adventurous and she also very frugal person. So she did this trip when she was in her forties and it was life changing for her. And so she kind of planted that seed in my mind. And as I’m getting later in, in my twenties, I remember thinking that she was telling me my uncle was gonna do this for his 70th birthday. And I was like, “Oh no, I’m not gonna let him go by himself.” Right? Like, the idea of a 70-year-old man walking across a country sounded insane to me. So my original motivation was to go and support him. Like, what if he needed something? What if he got hurt? Like, I figure I’m young. Like, I can help. And so that was my original motivation. But, you know, discovering Mr. Money Mustache at 28, kind of, helped me realize how financially I could make that work. And so in the process of getting out of debt and basically changing my whole life to enable me to go on this trip to support my uncle–you know, I read a lot about it–it started to become something I wanted to do for myself. And then three months before we were supposed to go, they ended up not being able to go. And so I went by myself and I am so actually thankful that I was able to do it alone because I just think it was an experience that I needed to have alone. It did so much for helping me question a lot of the assumptions and programming I have from our conditioning. Right? So for example, like, a lot of my identity was tied up in my career. And so when I think about the kind of conversations that I had on the Camino, no one asked me what I did for work. They asked me why I was walking the Camino, what was the spiritual reason why I was there? It really helped me, kind of, separate, again, my identity just from what I did for work. It also helped me see that I’m actually a really generous person. And up until this point I thought of myself as a pretty selfish person. You know, I was a typical New Yorker where it’s, like, if you’re walking too slow in front of me, I was gonna, like, flip out, you know? Like, I never considered myself a very generous person. But on the Camino, the people that you meet, it’s like this instant sense of camaraderie because you’re all, you know, kind of, headed towards this common goal. And that’s really powerful to have community with people that are headed towards a common goal. And I really felt very concerned for their wellbeing. I wanted to make sure they had enough water. If they were dealing with blisters, I wanted to help them navigate that. I found this nurturing side of me that I think was, kind of, concealed previously by my ambitions that, you know, I thought I wanted to have of making a ton of money and becoming successful in my career. And I think that all really started to unravel when I met this other side of myself that I liked even more. <music>
This episode, as always, was brought to you by Brad’s Deals. There’s a community of people here scouring the web for the best deals on everything. The site is B R A D S D E A L S.com. One trick for deal hunters: You can sign up for the Brads Deals newsletter. That way, you’ll have a better chance of snagging something stellar before it sells out. Thanks for listening. <music>
There’s a lot of things about what you’re describing that are appealing. But the thing that I think is gonna be most relevant to our listeners is this isn’t an end-of-the-rainbow story. This isn’t, “And so I saved a million dollars and retired. Now I have a yacht.” This is, “I changed my life. Here are the specific steps I took.” You started saving money, but now you started exploring… And this kind of goes back to the theme it seems of your life of building community in unlikely ways where you’re finding new aspects of yourself and of your personality by interacting with people in person, by helping them on a trail that I can’t imagine you would’ve gone to if you were still prioritizing, you know, corporate life.
Exactly. I wouldn’t have. I remember telling my mother I was gonna take this trip and she was horrified, horrified that I would take two months off during a time when I should be focused on growing my career. And I think when it comes to how this all relates to money and frugality, I’ve found that you have to think about money until you no longer have to think about money. There comes a point where it’s all just automated. You’re not living paycheck to paycheck anymore. You have a better sense of how much is enough. So you, kind of, like, not lose your ambition for more, but I think you gain this ability to start asking bigger questions. So rather than asking myself, “How do I save more? How do I make more? How do I reach financial independence faster?” I started asking myself, “What do I wanna do with my time? Who do I wanna spend it with? What do I wanna create?” And those questions are lifelong questions that to me are so much more interesting than, you know, “How do I reduce my expenses even more?”
Yeah. We don’t need to linger on budgets. We don’t need to linger on the limitations we need to set for ourselves. I think you’re totally right.
It’s like there’s seasons to this, right? So when I look at the 11 months that it took me to get out of 30 grand of debt, that felt like an aggressive season where I was super frugal. I did not spend $1 that was unnecessary because there’s actually an article from Mr. Money Mustache that, like, if you’re in credit card debt, your hair’s on fire. I’m pretty sure that’s, like, the first article that I found, Your Debt is an Emergency. And so that was a very aggressive period. I don’t think that that aggression is sustainable for my whole financial journey. There comes a point where you can almost take it too far. And you’re so concerned about acquiring this pile of money that you forget that money is a tool, right? I kind of think of money as, like, a hammer. And when we talk about financial literacy, we’re talking about, “What kind of hammer do you need to get? How do you get the hammer? Where are you going to store the hammer? What kind of features does this hammer have?” Right? That’s what we talk about when we’re talking about financial literacy. All that stuff starts to get pretty easy once you grasp the hammer, right? What’s much more interesting about acquiring a hammer is what you’re gonna build with the hammer. You know? And so I think that if you’re just focused on the hammer, you kind of miss the point. It’s not so interesting to own a hammer that you have sitting in a toolbox. It needs to serve a purpose. And I think that you almost have to graduate to that point and and it takes time. You know, it takes time. It takes effort. If you’re living paycheck to paycheck, all you care about is getting that hammer because you wanna alleviate, you know, the pain of living paycheck to paycheck. But you will move into another season where you get to, you know, recognize that money is a tool, that money is only as valuable as your clarity on what you’re gonna do with it and your comfort level of how much is enough. I mean, that to me has, kind of, been, like, a maturing of my relationship with money. That is a very satisfying path.
That’s a beautiful analogy. I’ve never heard it described that way, but money is definitely a hammer. It’s a dream conversation to talk to you. These are all incredible points. I think before we move into more specific areas, I wanna focus again on your life. Let’s rewind. If you were talking to 20-year-old Diania, what advice do you have? I mean, that’s gonna depend on where, where you were at the time, but what advice would you give yourself knowing what you know now?
I would say, specifically about money, what I wish I would’ve known at 20 is that income is not the most important thing, that the gap between your income and your expenses is the most important thing. That’s where you build wealth. I was so focused on growing my income and I was not paying attention to the expense part of it. And both matter. It’s not that income isn’t important, it’s that it’s not the most important thing when it comes to growing wealth. So just, kind of, like, tactically, I wish I would’ve known that sooner. And then I think more on a higher level, I would encourage myself at that age to let my curiosity be bigger than my fear. Because if you can get curious, you can make bold moves. You know, like, curiosity when you’re digging out of debt looks like just looking at that credit report. I was so scared to look, right? I didn’t wanna know. A lot of us have so much shame when it comes to, like money mistakes and where we are financially. We tie our self-worth too much to our net worth. Right? And so it creates a lot of shame. And we don’t wanna get curious about it, but if you can just get curious, you can start without the judgment. You know, you can start really peeling back the onion and recognizing that this is all fixable. It’s totally fixable. The harder part to get around is the shame and the beating yourself up and the judgment.
When I talk to financial advisors, that’s usually the first thing they say is we need to understand where you are and then we need to understand where you wanna go. But being curious about your situation and the facts of your situation, the things we don’t wanna look at are probably the things we need to look at most. Totally agree with all that. And I love it. And you’ve kind of tied it back to the Mr. Money Mustache thing. I thought it was a really illuminating article when he was like, “It’s not how many years until you can retire. It’s how many years until your savings rate goes from whatever it is to 100%. And when your savings rate’s a hundred, you’re retired and then you’re fully financially independent.” Life changing for me, just total perspective shift. And I think that’s something you’ve captured really well. As I was looking into what you’d organized, and kind of being bowled over by the amount of progress you’ve made, and you know, this, kind of, beautiful thing you’ve created, then I stumbled onto your YouTube channel. And I realized I can see a lot of these talks for free. And that’s one of my favorite words, free. How were you finding these people? How were you finding guests to appear at your conference? How are you building that community? Like, you as the organizer?
I started working on this in the summer of 2018. My first conference was March of 2020, one week before everything shut down. That’s divine intervention. I have no other explanation for it. But you know, it’s funny how when you’re creating something, an entrepreneurship, in some ways you are at a disadvantage when you’re naive and you’ve never done this before. And at other times you’re at an advantage because you don’t know better. Right? And so I wanted to create an event because I love going to events and there’s already a huge online community with the FIRE community, right? And I’ve noticed for myself that I don’t actually like interacting online. I find that, you know, there’s a lot of keyboard warriors out there. There’s a lot of people that feel really emboldened to be very mean online and on their interactions online. And I’m definitely a lurker and I marvel at how mean people can be online. And so I’ll sit there and read all of that and go, “I don’t want any of this directed at me.” When I go and meet people at events in person, I almost never see that. I find the FIRE community to be incredibly generous and creative and welcoming, but I don’t see that side of them online. And so I think that my motivation was really to meet them in person. But when it comes to event production, most people that are producing events at this scale, they started with a blog and an online community. They had an established podcast, they wrote a book, right? Usually, you know, they’ve already offered their courses and whatnot. And then the event is, like, the last thing they do to gather those people that are willing to meet in person. And so I didn’t realize any of that when I was starting an event. I just, kind of, flipped it around and said, “I don’t wanna be an influencer. I don’t wanna have a blog.” I don’t view myself that way. I’m just, like, organizing a cool way for us all to get together. So I ended up having to call on about 150 people to get my nine initial speakers. And a big reason for that is because I’ve never done this before. Like, I explained my vision and people are like, “Well, what gives me confidence that you’re gonna be able to pull that off because you’ve never done this before. How am I gonna trust you to draw an audience when you don’t have a following?” Right? And so I think that I was met with a lot of skepticism and not unwarranted, right? I mean, they have very valid points. And also people within the FIRE community are seen as being very frugal. So how are you gonna convince a bunch of frugal people to spend money to go to an event like this? And so I just had this belief that I could create something valuable enough to be worth someone else’s time and money and that could also align with their values. Because to me, I value community. I spend $700 on a ticket to go to World Domination Summit even though I’m a frugal person because it is worth every penny, you know? And so if I could create something that was worth it, I believe that they would pay. And it worked. I mean, the first year we had 250 people. This last event that just happened in November, we had over 400 people. And my max capacity is 560. I’m almost there. I’m very sure I’m gonna hit it for the next event. And so I think that it was really hard in the initial years to overcome the skepticism and, you know, the naysayers, the people that couldn’t see what I was building. But I’m also a salesperson. You know, that’s how I built my career. And so I sold the vision to a few people that really believed in me. And it just so happens that some of them were very influential. Some of my initial speakers had big followings. I was able to use the first event as almost like a case study to like, “Look, I can pull this off. Look how well this was done.” I mean, it was a flawless production. And so I was able to take that and then sell sponsorships. And so it’s been slow organic growth where I, by the way, have not turned a profit yet. I mean, it will be five years before this company gets out of the red. I actually took a 40 grand loss on my first event. So if that doesn’t show you how much I believed in this vision and that I know how necessary it is to have community, especially when you’re on an unconventional path. You know, just like I said about the Camino, the people who are pursuing financial independence, there’s an instant sense of camaraderie because we’re all headed in this common direction. And so to be able to facilitate that community and give people a reason to gather is just an incredible privilege.
We’ll be back with more of this conversation next week. If you’re enjoying Frugal Living, please leave us a review on iTunes. Also, and this might seem obvious, but it really makes a difference, please tell your frugal-minded friends about the show. Thanks to this week’s guest Diania Merriam. Today’s show was edited by our audio editor intern Genny Blauvelt, and I’m Jim Markus. <music>
More About This Episode and Frugal Living
To hear more episodes about the FIRE movement, check out the latest episode of Frugal Living and come back next week for part 2 of the interview. Frugal Living is a podcast for smart consumers. How do you spend less and get more? The show, sponsored by Brad’s Deals, features interviews, stories, tips, and tricks. Jim Markus hosts season four, out now.