View Full Version : Cutting Recurring Costs - Biggest Bang for the Buck?
try2bfrugal
9-25-12, 12:39pm
One of the main ideas in the Your Money or Your Life books is to reach FI at the the point where your passive income exceeds your outgo. Here is a related article by Alan Roth I thought some of you would like along the same lines.
Financial Wealth - It's Time not Money
"Financial freedom - years, not dollars
The measure I'm about to propose turns the commonly held perception of wealth on its ear. This benchmark turns some millionaires into paupers, and makes those with a modest $150,000 401K into the stinking rich. That's because it defines wealth in the following way:
Wealth in years = net worth / annual expenditures
Using this measure, a millionaire worth $2 million, leading an extravagant lifestyle costing $1 million a year, only has 2 years of independence. The person worth $150,000, who only needs $6,000 a year to supplement social security, has 25 years of financial independence. This person might never need to work again."
http://www.cbsnews.com/8301-505123_162-37743641/financial-wealth---its-time-not-money/
One of the ways to implement this idea is to slash your recurring, fixed expenses down to the nubbins. It is fun to get free bananas, ice cream and copy paper this week just from signing up for local store newsletters. I have some books on quick breads waiting for me at the library today. But the real savings for us for each hour spent at our house comes from cutting recurring expenses. Getting rid of a cable option for $10 a month takes 5 minutes online to update our account and will save $3,600 over the next 30 years.
Most people here know about paying off your mortgage and downsizing to cut recurring expenses. What are some of your other biggest recurring cost slashers / income generators?
Here are a few of mine -
Shopping at pack it yourself grocery store - several thousand a year over retail store prices.
Making our own cleaning supplies and toiletries - a few hundred a year.
Reducing or eliminating all disposable products from batteries to paper towels - $1K a year or so.
What are some of your big recurring cost slashers?
Some interesting concepts here.... I really like the concept of number of years of FI.
We're kind of new to thinking like this. I suppose the biggest recurring-cost discovery we've made is the cost of eating out. Not like we were eating out most of the time or at fancy places. But even my knocking out buying lunch at the company cafeteria most days reduces net expenses by about $100 a month. I eat lunch at home most days now, which is cheaper (and, frankly, more boring), though still not "free".
Neither my wife nor I was ever really caught up in keeping up with the Joneses. For instance, our friends often asked us if we had seen the latest episode of some cable TV show. We have "basic basic" TV cable -- the level of cable TV that our city requires Comcast to offer for cheap, with maybe 3-4 channels which are not local. And the only reason we have that is because it's cheaper to get cable Internet with "basic basic" TV cable than without. There is no $10/month service we could remove from our cable. And (trust me) we would do without a number of other things before we got rid of the cable modem. It's not like we could knock out fancy haircuts, either, because both of us go to cheap national chains as it is. Maybe I could do more of my own work on our cars, but that idea sounds a lot better now than it does when the oil change is due in January and I'm on a frozen garage floor. And that ignores the money I'd have to spend on specific tools and the like.
But that brings me to the thought that keeps coming back to me: there's "simple" and there's "frugal". And I think they're two different things. IMHO, shopping at the pack-it-yourself grocery may save several thousand a year over shopping someplace else. But the quality of the food at the two PIY groceries around here is not as high as that of my food co-op or some of the other better supermarkets; nor do many of the producers there express our preferences. We can tell the difference. In addition, the nearest PIYs are both at least 10-15 minutes from here. It may be cheaper for us to shop at those stores, but I sure would argue whether it's simpler or as much in line with our values.
We have evaluated lots of expenses in the last several months in light of whether what we're getting is worth what we're paying in money and/or time. We've knocked out a bunch of sort-of one-time expenses, and while we may miss some of the benefits of those expenditures, there's no arguing that we're happier in the long run for having made the change. But we are aware that some expenses (for example, using two cars) haven't changed because we believe life is simpler that way, not the less-expensive way. And everything we spend has to be reviewed in that light.
We do many of the things noted in the article (no cable tv; basic cell phones only; bag our own groceries with our own bags for the nickel rebate per bag; make homemade cleaners (not so much as just buy vinegar and baking soda and use as is - even easier!); eliminate disposables) --- but I think the savings estimates given above are far more than we ever spent on such items.
I like thinking about it that way, especially if one were to divvy up their "retirement" and "pre-retirement FY3". I'm nowhere near there yet but I do hope to retire early. It would be useful to think about retirement as the traditional age of around 65-70 depending on how everything's looking when that time comes, but also some period of time before that when we could cut back or stop working FT, based on taxable savings. Right now we have something like 5 years of expenses in retirement accounts and something like 6 mo of expenses in taxable accounts, plus a couple little stashes of extra-extra emergency for peace of mind. It'll be good to both work on lowering yearly expenses and increase saving and earning. However, life isn't always something to be put off until 20-30 years down the line so I think we will trade and maybe even increase a few expenses depending on how things go. I would also agree with Steve, that frugal and simple are sometimes in line and sometimes at odds. For example, we trim our own dog, saving at least $20/month or so but pay to have our oil changed in the cars. Also, some of the happiness studies have shown that spending small amounts on social things actually increases your happiness compared to scrimping for some bigger, far off thing. In reality there should be a balance, but spending $6 a week on coffee at my local coffee house is probably (to me) more worth it than saving the $6 at this juncture of my life. I see the same people and make local friends, I support a local business and often it's where I meet a friend to carpool to work. Saving that $300 a year wouldn't make me as happy.
ApatheticNoMore
9-25-12, 10:47pm
I don't have many reoccuring bills. Landline local phone, prepaid cell, (green) electricity, gas, internet (internet is around $23 a month and is required for work as well as play), rent. What could be reduced there? Only rent really, and only by moving somewhere cheaper or doing the roommate thing. I'm considering those (but ha any move would be within Cali at this point).
Definitely agree with the simple/frugal tradeoff. When I look at the actual exaustion and the subsequent chaos of my life, I see how hard it is to get myself to cook most of my own food (and I do but ocassionally slip up). And then I'm supposed to be making my own cleaners too? Is there really a chance in heck that is going to happen when half the time I'm on the verge of forgetting to pay one of the mentioned monthly bills, when stuff is piling up in my apartment because I haven't had time to take it to be recycled etc. etc.? Well unless I arrived upon some strategy like making all 3 day holidays "make cleaning products day", and I don't know about that, then probably not, I'll buy the green cleaning products (at least they aren't too harmful for the environment) and be done with it.
I guess I have about 5 years for around here, but it's pretty expensive here, I'm pretty sure it would be more elsewhere.
It'll be good to both work on lowering yearly expenses and increase saving and earning. However, life isn't always something to be put off until 20-30 years down the line so I think we will trade and maybe even increase a few expenses depending on how things go.
Yea I hear you. I'm thinking of developing an odd spending plan where I do two weeks spendy and two weeks super frugal, correponding with the 2 paychecks I get a month. Has to do with my psychology I guess, I can't for instance diet for anything, don't even mention the word, did you know "diet" contains the word "die", luckily I have no huge need to (could be thinner but it's not a health risk), but I can fast (isn't really for weight loss though). I can be frugal almost all the time, but I'm not really sure it makes me happy.
mamalatte
9-25-12, 11:14pm
Saved quite a bit by shopping around my auto and homeowners' insurance policies to get the lowest rates.
try2bfrugal
9-26-12, 12:52am
Definitely agree with the simple/frugal tradeoff. When I look at the actual exaustion and the subsequent chaos of my life, I see how hard it is to get myself to cook most of my own food (and I do but ocassionally slip up). And then I'm supposed to be making my own cleaners too? Is there really a chance in heck that is going to happen when half the time I'm on the verge of forgetting to pay one of the mentioned monthly bills, when stuff is piling up in my apartment because I haven't had time to take it to be recycled etc. etc.? Well unless I arrived upon some strategy like making all 3 day holidays "make cleaning products day", and I don't know about that, then probably not, I'll buy the green cleaning products (at least they aren't too harmful for the environment) and be done with it.
You have to do what works for you and you can fit in your work schedule. We both work from home these days so we have more time to for cooking from scratch and DIY projects. We kind of mix those in with regular work because many of of our recurring cost cutting projects save more per hour than we can make working, especially after taking taxes into account.
I came to the point where I realized that I was working just to pay for material possessions or to support a certain lifestyle. It seemed never ending. My profession (public school teacher) meant that I needed a car (which required gas, insurance, license, repairs) and my job meant I needed proper clothes, lunches at work, supplies for my class because I worked in the inner city in a impoverished area. My job exposed me to many colds and bouts of flu each year which cost money for Dr. visits (you needed a note from a doctor to get paid for the sick day), and so on and so on. The fact that I worked meant I was often too tired to cook and thus we ate fast food or ordered out. It was an endlessly exhausting cycle and we were going nowhere fast.
Our house meant a mortgage, repairs, taxes, utilities, upkeep, insurance, interest on the outstanding mortgage and on and on. City life meant parking fees, road tolls, etc. There just seemed to be no end to the costs. We even had to pay the city to get permission to add on to our house or to have a garage sale in our own yard. We faced getting tickets for parking in our own yard or for putting our trash on the curb too early. If we were unable to pay our electric bill and had no electricity, the city could actually evict us from our home as "uninhabitable". The city has gone so overboard with writing code violations these days.
So Now i live wayyyy back in the country and am happy to report how much more cheaply we live. We (me and my fiance aka BayouBoy) bought a small wood frame house (20x30, 600 sq ft) for less than $4500 and moved it on our own to our large property. In the city we would have been forced to hire a company to move it (about 10,000+) , paid fees to the city, the electric company and to other agencies for moving it. We would have to get a permit and inspection, an electrical inspection, plumbing inspection etc, etc. But this in the country so we could do it ourselves. I love living in a place where hard work is respected and people can do things rather than just calling a pro.
So we moved the house on our own for minimal cost. BayouBoy did all the work including hooking up the plumbing and electrical (with the help of a few friends). We opted out of our local water system which charged a minimum each month whether you used the water or not, plus tacked on fees for trash pickup (we don't use their trash pickup anyway so why pay for it) and other services that we didn't use.
We dropped cable because it was costly and mostly infomercials and repeats and we can rent DVDs free from any library in our state or join netflix. We can also watch most shows over the internet. Internet is mandatory for us since I work online and we are both avid computer users.
Our vehicle insurance dropped drastically since we moved to the country. Liability and comp insurance on 3 vehicles runs about $125 a month. It would cost 3 to 4 times that much in the city. One of our vehicles is classified as a "farm truck" which means it even cheaper rates since it is used mostly on the property and in the woods.
The nearest fastfood place is 25 miles away so there is no wasting money there with impulse food purchases. We make a trip once or twice a month to the small town up the road or to the "big city" to do our monthly big shopping trip to stock up. Getting together and cooking with friends or family takes to place of restaurants. Cheaper and more fun!
A large house just means it is more expense to upkeep. The electric bill is higher as is the repairs on it. There is more to go wrong in a big house and it takes a lot more time and money to keep it cleaned and running smoothly. So may people spend their lives working for their house and property when they should be finding ways to make their house and property work for them.
Our new little house was paid in cash ($4500, I think?) so we have no mortgage and no interest accruing on the balance. We have no yearly taxes on our house since it is not on file in the govt records. Our electric bill is much lower and we have a fireplace which helps cut the heating bill in the winter (along with a electric blanket). There is an abundance of free firewood since we have a large property with many trees, as well as neighbors who have trees that fall and will give the wood free to whoever will haul it off. We have our own well so there is no monthly water bill.
My life's goal was to get our expenses to be well under $1000 a month and we have succeeded with that. Having been disabled with illness and struggling to pay bills during that time (when I was in the city), I wanted a life that I could easily afford and a home that could not be taken away from me thru foreclosure ( as so many are experiencing nowadays). I was tired of working so hard to support a large house that I rarely enjoyed because i was too busy working. Our budget nowadays looks something like this
No mortgage, no rent, no water bill, no house insurance,
electric bill - about $125
phones - $125 ( we have 5 lines for us and the kids plus a line for the house)
internet - $50 ( I work online and we watch movie and TV shows as well)
car insurance $125 (3 vehicles)
We also have the variable expenses of fuel for vehicles and the tractor, groceries and incidentals. It usually comes to about $800. In general, we have a rule of no credit cards or running debt but we made the exception to buy generator because we were about to be hit by hurricane Isaac and I was so thankful for the generator when the electric was out 3-4 days. We can also use it at pecan season and with many other chores. BayouBoy also bought a used tractor which he is now paying off, but it is a necessity that pay for itself during hay time and pecan season, not to mention mowing our many many acres of land.
Instead of eating out, our adult kids come over and we all take turns cooking. We don't have the need to call professionals for house repairs as BayouBoy can handle it. We need a new roof but BayouBoy and I are experienced roofers and can do it in about 2 days for less than $1000 by ourselves. If we need help , we have family and friends who also call us when they need a hand.
In addition, our property works for us and pays us (instead of us working to pay for it). We have a pecan crop each year that pays for Christmas gifts. We harvest hay to sell and to feed our cows. We have a fig tree and a persimmon tree. We have ample firewood from property. We have a well which provides clean clear water. We plant a few pecan trees each year as part of our retirement plan.
I truly wish there were more people who could live this way. People are no longer able to live by providing for their family with their own two hands, Most people in the city cannot hunt or garden or work from their homes. Everything is over regulated and so many expenses are mandatory. And to me, that is sad.
Here is a picture of our $4500 wood frame house which has 2 bedrooms, a petite bathroom with a tub ( A tub is mandatory for me!), a fireplace but oddly no closets. We intend to add a wraparound porch, extend the roof for covered parking on the left side and add a bigger bathroom/mudroom/closet.
Hhttp://www.simplelivingforum.net/attachment.php?attachmentid=916&d=1348497271
try2bfrugal
9-26-12, 2:49am
That is a great simple living and cutting costs example, BayouGirl. It is great you could find a way to own a house that didn't require a mortgage.
fidgiegirl
9-26-12, 7:45am
I have been thinking about this idea a lot lately, try2bfrugal. I am dissatisfied with the savings I'm finding here or there and ready for another round of budget soul-searching. Can you believe we're even considering parting with our iPhones?! Big deal to us. If we switch to Android phones on a pay-as-you-go plan when our contract is up, we will be able to save about half of what we're paying in cell phone plan now and have basically the same functionality. Wow!
Another biggy right now is that we are just about done with refinancing the house. That will restructure our loan in a way that will save us thousands (tens of thousands?) over the life of it and make it easier to calculate how extra or additional payments are making an impact on paying it off. Before we had 2 loans and now we'll have one.
Insurance we could look at, for sure.
We got rid of DirecTV about six months ago and are happy with that decision. DH said the phone call was so difficult - not for him, for the representative! - it was like getting a divorce! :laff:
try2bfrugal
9-26-12, 10:48am
I think when we are done with our cost cutting and downsizing we should be able to live well on less than our Social Security income eventually and yet have a nicer life than we had when we were both working full-time outside the home. That is kind of my hobby these days - to live well and pack in fun activities each week on as little fixed expenses as possible. I now regret decades of buying Ziplocs, paper towels and brand name ink cartridges. Those small amounts each month would have really added up to big savings over the decades to put towards retirement if I had understood the logic sooner.
I am not down to BayouGirl's expense level yet, but we have come a long way from where we were at. Each month we chip away at more and more of the ongoing expenses.
try2bfrugal
9-26-12, 11:03am
I have been thinking about this idea a lot lately, try2bfrugal. I am dissatisfied with the savings I'm finding here or there and ready for another round of budget soul-searching. Can you believe we're even considering parting with our iPhones?! Big deal to us. If we switch to Android phones on a pay-as-you-go plan when our contract is up, we will be able to save about half of what we're paying in cell phone plan now and have basically the same functionality. Wow!
Another biggy right now is that we are just about done with refinancing the house. That will restructure our loan in a way that will save us thousands (tens of thousands?) over the life of it and make it easier to calculate how extra or additional payments are making an impact on paying it off. Before we had 2 loans and now we'll have one.
Insurance we could look at, for sure.
We got rid of DirecTV about six months ago and are happy with that decision. DH said the phone call was so difficult - not for him, for the representative! - it was like getting a divorce! :laff:
We still need to look at the phone costs and insurance ourselves. With having Amazon prime, Netflix, Hulu and all of the free shows on the Internet I would drop cable TV but my husband likes it. He has agreed to give up some options so that is progress.
Next on the list is getting rid of the landline.
We dropped our life and disability insurance this year and eliminated collision on the older cars. We still need to shop rates.
Our biggie will be downsizing but we have to fix up the house we have now and get rid of the clutter before we can do that.
We have a landline only and no cable. Ongoing expenses are computer service, water, electricity (modified a lot by solar panels but complicated in winter by extremely drafty house we haven't figured out how to cure), car maintenance (we have a truck and a car, need both now but looking to reducing to one car when DH retires from his part-time job, probably sticking with my Prius. We use Netflix cheap plan, but get lots of DVDs at library and local community college. I am elegible for the latter because my dr said I was getting stiff and had to start swimming regularly, so I had to pay for a course to get use of the pool. That's $70 2-3 times a year--a new big expense but likely to continue.
Having recently refinanced, when our 2nd loan on our house is paid off (likely next May 15), we'll have a mortgage payment of $800 a month for life, but hoping we can handle that. Dogfood and birdfood are expenses that stay the same as long as our dogs live (bird will outlive us). We use Onesuite.com for low long distance bills--seldom call LD though. I may use library for computer if DH dies before me--he's a computer whiz but I would be stuck with the whol computer upkeep thing on my own.
We are also in the middle of a refinance.Monthly payment will remain about same amount,but will shave 7 years off term of loan.Going from 30yr at 5.75% to a 15 yr. at 3.35%
just thought of The Tightwad Gazette.Amy D. suggested in one of her books that perhaps if trying to reduce grocery expenditures start with volume of consumption.Our monthly food bill is a recurring exp. that we're trying to reduce,and I certainly afford to lose some weight.
I'd like to cut internet and landline,wife not ready for that yet.Considering going with pay as you go cell phone depending on if I'll need cell for future employment.
Our previous inkjet printer was 6 or 7 years old when we gave it away because it would no longer "speak" to our home Macs or our work laptops (making it a true paperweight). By then I think we may have been on ink cartridge set #3.
But I am seeing places where we could reconsider our fixed expenses. Using two cars is one, though that raises the simple/frugal question again. Insurance is another, though we like the company and the agent and it would be a pain to move all of our insurance (it's all in one place for simplicity's sake); it would have to be worth the $$. Pretty much all of our banking is done with the credit union, so it's not like we're duplicating maintenance charges and other fees. Going to prepaid mobile service is an option when the contract is up (and assuming DSD does not accidentally re-up it by replacing her lost/broken phone). Unfortunately a re-fi is not in the cards for a while what with our short sale and with me now self-employed.
I still think cost reductions should be evaluated in light of more than just the bottom line. But I think try2bfrugal has pointed out a very useful way of looking at expenses and I like how it ties into YMOYL's "how much of your life are you spending for this" and with the way we've been evaluating expenses lately ("Yeah, it would be fun to go, but that's enough money to pay for three months of electricity!"). In our case, ten years of generic ink carts versus name-brand ones probably works out to about $20 total. But there certainly are other expenses we could look at reducing.
We first approached big expenses, which set the standard for the non-fixed expenses that were much smaller.
*Cutting our housing expense to well below our monthly stipend, to where utilities included, we actually were saving money
*Selling one vehicle that A) had a loan B) had very poor gas mileage C) costly repairs & maintenance, eliminated that payment & insurance. We had one vehicle for a little while, while saving up for a motorcycle that had 4-5x the MPG & 1/10 the cost in annual insurance
*We purchased bicycles for the family as a Christmas gift. This now provides us with A) exercise B) no cost transportation C) result is less fuel cost and wear and tear on the one main transportation that we have for routine errands around town
And then, there were smaller savings by switching to no contract cell phone service, after our contracts ended with the former companies, canceling landline, having children in only school related after school activities or church activities, shopping second hand for clothing and other needs that are within our comfort zone of purchasing used, repairing thngs that in our younger years we would consider 'broken', eating at home more but making the meals more fun or interesting to give us that feeling of something special (which was the main reason why we were going out to eat anyway), so we have our homemade pizza night, our BBQ/smoker on a Sunday afternoon.. Also, joining a church which gave us a stronger sense of community, as well as access to more recreational/fellowship activities. There's plenty more. However, in all, it translated to enough of a savings that we were not only able for me to now be at home full time but continue reducing our debt ($76,000 in 3 years).
Our goal is to be debt free prior to husband's retirement from his first job, so we will have the flexibility (freedom) for husband to work part time, if he wanted, go to colleage or retraining if he is just that worn from years working in Aviation as active duty, or us relocate if he stays in his current background (which could be anywhere within the U.S. or overseas). We also have land that is a future factor, with a shed/cabin already on it, so it may be a situation like BayouGirl where we live on very little, expand the cabin for full time living for the 4 of us, grow some of our own food, expand our residual income on the land (partial lease for horse grazing, goats (which his relatives do), pine trees (they cut down every so many years plus the annual income from pine needle collection), and husband may be able to operate a very part time small engine and electronics repair business. Just so many options but the key ingredients are A) that we've reduced our standard of living to a modest yet comfortable level, after 3 years, this has created 'the new standard' and B) paying off debt and establishing more savings prior to his 1st retirement.
I see the last response was a few months old, however, thought it was a great thread if anyone wants to continue the conversation. These are some great stories, and BayouGirl - that house is really great (love the front porch). What a great deal! So glad you are happy.
Right now, we are living well below our means and saving like crazy. It becomes apparent once you reach a certain point and adjust your expenditures, that so much of what we spend money on just doesn't need to happen. I am amazed at what we live on compared to most I know. We especially save on car expenses because dh has a company car and I drive an old Volvo. Just this past week after going for several years without repairs, I paid $650 for new struts, brakes, oil change and was SO relieved when the mechanic said it was good to go for many more years. I look around and everyone has new cars because financing is so cheap but with the old paid-for Volvo my insurance is minimal and I never have to worry about someone stealing it. etc. It gets me to work and back for next to nothing. I do wonder when I observe the high income people I work with how it evens out - yes, they make a lot - but they certainly spend a lot too.
try2bfrugal
10-19-12, 2:24pm
We first approached big expenses, which set the standard for the non-fixed expenses that were much smaller.
*Cutting our housing expense to well below our monthly stipend, to where utilities included, we actually were saving money
*Selling one vehicle that A) had a loan B) had very poor gas mileage C) costly repairs & maintenance, eliminated that payment & insurance. We had one vehicle for a little while, while saving up for a motorcycle that had 4-5x the MPG & 1/10 the cost in annual insurance
*We purchased bicycles for the family as a Christmas gift. This now provides us with A) exercise B) no cost transportation C) result is less fuel cost and wear and tear on the one main transportation that we have for routine errands around town
And then, there were smaller savings by switching to no contract cell phone service, after our contracts ended with the former companies, canceling landline, having children in only school related after school activities or church activities, shopping second hand for clothing and other needs that are within our comfort zone of purchasing used, repairing thngs that in our younger years we would consider 'broken', eating at home more but making the meals more fun or interesting to give us that feeling of something special (which was the main reason why we were going out to eat anyway), so we have our homemade pizza night, our BBQ/smoker on a Sunday afternoon.. Also, joining a church which gave us a stronger sense of community, as well as access to more recreational/fellowship activities. There's plenty more. However, in all, it translated to enough of a savings that we were not only able for me to now be at home full time but continue reducing our debt ($76,000 in 3 years).
Great list, SimplyL. We are on a similar path.
We did the same for low cost activities for our kids. All their activities were mainly low cost family activities or nonprofit clubs, park rec sports and classes, the Y, Scout or hobbies they could do on their own like hiking, archery, mountain biking, photography and woodworking.
This month to cut recurring costs I removed my email address from all Ticketmaster, discount ticket and theater mailing lists. I think we actually have more fun doing stuff with our various activity and sports clubs, dining out with Entertainment coupons, movies with Costco tickets, hiking, biking and free library pass activities.
try2bfrugal
10-19-12, 2:34pm
Right now, we are living well below our means and saving like crazy. It becomes apparent once you reach a certain point and adjust your expenditures, that so much of what we spend money on just doesn't need to happen.
I agree. I think advertising and what we see on TV has a lot to do with spending too much money. How often do you see people at an expensive restaurant instead of going on a hike with a picnic lunch? Gradually I am starting to rethink all of our expenses. I just gave away our toothbrush holders as I realized plain glasses could suffice and were easier to clean since they could just be put in the dishwasher.
We live in the same house and drive the same cars as we did a year ago so our basic standard of living hasn't changed, but our expenses are down a huge percent just by buying less stuff, not eating out as much, reviewing our insurance costs, refinancing every time rates drop, cooking more from scratch, etc.
I agree and have found with our past experience (when I worked, as well) as our income increased, our expenses did as well. The chief difference with that: there was little time to manage what we had. Hence, the Craiglist ad that I posted in Open Forum, last night. Here's a person that obviously has a high income (or I would hope with a 4200 sqft house knowing our house values in our immediate area, and the fact that they are gone so much of the day).. and they're willing to pay a Nanny/House Manager $1600/month to essentially do everything from cooking, cleaning, pet care, taking kids to activities, etc. etc. Maybe they really love their career and it brings them joy. However, one could also say that they could move into a much smaller house in a still very nice phase of our neighborhood, be home at a reasonable time, get the chore chart out for the middle-school aged children, and come to the same bottom line. Still, it's personal finance and when cutting costs, people/families have to place value on the services, expenses that sometimes goes beyond the actual amount spent.
Personally, I washed dishes while a pumpkin candle burned, with the windows open and a nice breeze, listening to my kids play in the backyard. That to me was peaceful and enjoyable. And can say that maybe a decade ago, I wouldn't have enjoyed the same activity.. I may have evolved into the 4200 sqft person placing the Nanny ad, had we continued on the path that we were on before we moved.
Anyhow, seeing that ad was (for me) thought provoking.
I agree and love the idea that you've reduced your exposure to mail lists. There's something else 'Deal Chicken?' maybe it's called that I know several friends have fallen into. They see they're saving (in their mind) 70% off of a restaurant or service, so they grab at those mad crazy. For me, those are services that I'm not even going to use, so it's not even a temptation. A bit like going to the department store and the clerk telling you, 'you saved $200!' on really things that you probably didn't need to buy to begin with. Whereas, I can say, 'I saved $300' and friends may blink and not get it. That's because I didn't go to the store - at all. So, no expense!
I agree. I think advertising and what we see on TV has a lot to do with spending too much money. How often do you see people at an expensive restaurant instead of going on a hike with a picnic lunch? Gradually I am starting to rethink all of our expenses. I just gave away our toothbrush holders as I realized plain glasses could suffice and were easier to clean since they could just be put in the dishwasher.
We live in the same house and drive the same cars as we did a year ago so our basic standard of living hasn't changed, but our expenses are down a huge percent just by buying less stuff, not eating out as much, reviewing our insurance costs, refinancing every time rates drop, cooking more from scratch, etc.
catherine
10-19-12, 3:09pm
BayouGirl, I've always lived in the NE, but I could be convinced to move to Louisiana if all it takes is $4500 to own a cute little house like you have!! (NOTE, I originally typed that, and then thought, 'wait, I must be reading it wrong--it must be $45000' and sure enough it's 4500 on your land. Wow.)
My biggest recurring expenses, in order, are:
--the gosh darn mortgage on my MIL's house which we are STILL trying to sell!!! It's eating us alive. Believe me, we are trying to divest that one!!
--The mortgage on my home. Not willing at the moment to reduce that by moving. But I'm open to it (DH isn't)
--DH business loans. Can't escape those
--Health insurance. We are both self-employed, and 60-ish, so we pay $1325 a month. DH smokes. I have actually considered dropping my insurance, or at least dropping it to a catastrophic benefit only. I wouldn't do that for DH because of his bad lifestyle habits, but I hate this big bill. Can't wait till Medicare kicks in.
--Utilities: We're pretty conservative, but we can probably do better
--Cable: I need the "triple play" because of my business requiring internet and landline. Not much savings there
--Auto insurance: Not bad, since we've paid off the cars and eliminated the collsion. But we do live in NJ, so I'm sure what I consider "not bad" you guys would think is atrocious.
--SmartPhones: Again, I write it off as a business expense
--I also have some internet subscriptions... ancertry.com, myyogaonline, Dave Ramsey's totalmoneymakeover.com. I'm aware how those add up
I really liked that article. It makes a lot of sense, and I'm proceeding on the principle that I'm going to be very happy living on less in retirement, because not sure I have any options.
I'm learning to want less. Which is very different from not buying something that I want.
Example: Today I said to my husband, "after we ride bike to get our hotdog lunch from our street vendor friends who are back in town, let's ride bike to the state fair!" Then I realized that I didn't really want to go to the state fair. What I wanted was a long bike ride. So we rode to a CVS farther from home to get a few things we needed and I was happy. And we saved money on a state fair that I really didnt care about anyway.
try2bfrugal
10-19-12, 3:42pm
I agree and have found with our past experience (when I worked, as well) as our income increased, our expenses did as well. The chief difference with that: there was little time to manage what we had.
We spend a lot of time now managing what expenses we do have. It is kind of crazy looking back how little attention we paid to things like food, cable and insurance costs but we just didn't have the time before to comparison shop or make food at home as much.
My latest purchase is a Yonanas to make soft serve banana ice cream at home so we don't go out for frozen yogurt anymore. We were spending maybe $10 a week on frozen yogurt between the two of us. That is $520 a year and $5.2K in ten years.
I realized buying chocolate chips at Costco was way cheaper than buying chocolate bars and they were identical foods with the same ingredients just different shapes. Then I realized I could buy candy molds and melt the Costco chocolate chips with stuff like coconut flakes and nuts to make my own chocolate candy. Next I realized I could make my own healthier chocolate using honey instead of sugar and coconut oil instead of butter.
It has pretty much become my main hobby to see how much we can chop off our expenses each month and yet do more fun stuff and eat healthier food than we did before.
rosarugosa
10-19-12, 7:32pm
Try2befrugal: Oh, I really like your chocolate ideas! Chocolate is one of my primary food groups, and that sounds fun and delicious as well :)
Tammy: What you said really resonated with me. Lately when I'm thinking of doing something spendy, I can analyze it and pluck out the essential element that is what I really want, and I realize that the essential element can be had for little to no cost. It's a very worthwhile mental exercise!
The last few years I've been thinking a lot about the question, "what do I want?" ... For lots of situations. It's a difficult question after so many years of doing what society views as good, responsible, respectable ...
Good thread! Good ideas.
My cleaning products consist of vinegar, baking soda and soap for most things. I have used the homemade laundry detergent with success and will again but found my laundry detergent on sale and since I use just 1/4 cup at a time with vinegar as softener is very economical.
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For food restriction, it has really helped us to focus on a good simple diet. For each meal - two 1/2 cup servings of starch, one fruit, one dairy, and for the lunch and supper each meal contains 2.5 oz cooked protein and two or more veggies. That is it! If we want anything above this, we go carefully to make sure that we are not loading up on extra body fat items.
Not to endorse a product, but car expenses are modest because I have a Toyota Corolla. The car is paid for and as long as I follow maintenance plan and work with a reliable mechanic consistently, costs remain low. Plus, 32-35 mpg on regular. If you're looking to replace, try a Toyota product. The only drawback is it is not a hatchback.
I may only put up a suet feeder this season. Normally, I put up feeders with suet but the cost of bird seed is high and I cannot guarantee it's not spent seed, meaning the oil is already pressed out and this is waste product. I normally only buy black oil sunflower and a blend finch food. I love feeding the birds but I am becoming more and more unwilling to pay the price to do so. For years, this was an aesthetic necessity. I love watching the birds come and go in the colder months. I've stumbled over drifts to make sure they are fed. Now, it's an expense. I regret that thought.
Tussiemussies
10-23-12, 2:32pm
We are going down to basic cable soon and also canceling out land line telephone. DH knows of some computer.program that you can use your phone through, we also have Skype and Google phone now. This should save us$130.00 a month. We will be making the changes as we move.:)
When we move we won't have a water or sewer bill anymore...:)
I'm really hoping in the near future that we will be able to afford a wood burning stove and to be able to use less of the furnace
Our monthly recurring costs for home are internet connection, gas/electric (green), fatso (movies), and rent.
For the internet connection, we are looking at switching to a company that is just internet broadband and NOT 'landline also' and such, which looks like it will be half the price of the current "bundle." We're also talking to our telecommunications company about having the home internet put onto our business bill, since we mostly use it for business anyway when we are home. We are also considering cutting it altogether, but we aren't sure about that at this point. We are definitely discussing it. :)
Our weekly recurring costs are food, gas/parking (transportation). Our annual recurring costs are in the car: maintenance/repairs, warrant of fitness and registration, and insurance (which is very cheap).
Then of course we have our clothing costs. Overall, we do ok with only replacing every 3-5 years for DH and myself, and DS gets replenished by grandparents. And then entertainment/sports costs which are largely swimming pool fees ($45/wk), archery lessons ($10/per), DH's weekly gym trip ($15/per). Ah, and DS's schooling, which my parents cover.
Not to endorse a product, but car expenses are modest because I have a Toyota Corolla. The car is paid for and as long as I follow maintenance plan and work with a reliable mechanic consistently, costs remain low. Plus, 32-35 mpg on regular. If you're looking to replace, try a Toyota product. The only drawback is it is not a hatchback.
Well, I guess I am endorsing a product...but, I have a 2010 Honda Insight that routinely gets 38-42 for mixed use milage, and has a hatchback which has allowed me to transport 1) a Bari saxophone + student+backpack and briefcase + 2 lunches and room for more or 2) an entire rock and roll drum set + student or 3) 4 students plus 4 small instruments like clarinet/electric bass/alto sax etc. The only draw back is that it has some wicked blind spots.
Though not as bad as the car I saw today...a 1980's sedan with the back window ledge full of stuffed animals and multiple bumper stickers on the car "Start Seeing Motorcycles." I don't know how you could see a semi-bearing down on you with all those stuffed animals. :~)
edited to correct the year of my car.
I have to say that deal sites can be a good thing.
We got our dental taken care of for half price using deal sites (we needed the dentist), and also our wedding anniversary celebrations (movie, dessert/coffee, dinner, and big breakfast out) we got all of that for $58. It would have cost us at least double, if not more. I think two of the places were more than 50% off.
When we had DS's birthday, we were able to get a family pass to the zoo for $15, whereas if we would have paid full price, it would have been $55. So that was considerable. And then we also got him a cake/coffee deal (for the whole family -- three slices plus three beverages), and that cost us $12 instead of $25.
It's a good use when we are going to celebrate something. :) Otherwise, we don't use it for stuff that we really don't need. When my ILs come at christmas, I plan on gathering some up -- particularly breakfast and dinner deals. Also, there's usually 2-3 bowling/pizza deals during the holidays, so I'll grab one of those. And also the petting zoo/farm experience where we are headed. . . you get my drift. Things that we'd do with people here, but avoid otherwise. LOL
try2bfrugal
10-24-12, 12:40am
I have to say that deal sites can be a good thing.
We got our dental taken care of for half price using deal sites (we needed the dentist), and also our wedding anniversary celebrations (movie, dessert/coffee, dinner, and big breakfast out) we got all of that for $58. It would have cost us at least double, if not more. I think two of the places were more than 50% off.
When we had DS's birthday, we were able to get a family pass to the zoo for $15, whereas if we would have paid full price, it would have been $55. So that was considerable. And then we also got him a cake/coffee deal (for the whole family -- three slices plus three beverages), and that cost us $12 instead of $25.
It's a good use when we are going to celebrate something. :) Otherwise, we don't use it for stuff that we really don't need. When my ILs come at christmas, I plan on gathering some up -- particularly breakfast and dinner deals. Also, there's usually 2-3 bowling/pizza deals during the holidays, so I'll grab one of those. And also the petting zoo/farm experience where we are headed. . . you get my drift. Things that we'd do with people here, but avoid otherwise. LOL
I did subscribe to all the daily deal emails for awhile but the ones by me were just for things we were not interested in like pedicures and fitness boot camps. I am glad you found some things in your area that were useful to you.
Last year we made good use of our the free passes at the local library for museum and zoo admissions, a couple of Entertainment books for eating out for half price, discount Costco movie tickets, an ASTC reciprocal science museum membership and Goldstar for discount events so I never really used any of the daily deal offers. This year we are dropping the Goldstar stuff and getting a NARM (art and history) museum membership instead of ASTC for a change. So that list repeated again plus a bunch of non-profit activity clubs and meetup groups will be our frugal entertainment for next year.
I put more money in the budget than that for entertainment but I usually don't use most of it so then I get to spend the leftover money on my urban homestead shopping list for things like drying racks for clothes, solar lights and rechargeable batteries.
We don't have access to many of the things you mentioned (i got an entertainment book, but much of it was stuff we didn't use), and most of our museums are free anyway, and we use deals on the sites for entertainment sparingly.
The real value for us has been in dentistry and car-care (meaning mechanic's labor, warrant of fitness, oil changes, etc). This has saved us considerably!
That being said, I've thought pretty deeply about giving up internet at home.
When we first moved here, we really did need it for business and personal communication around that (DH and I used FB chat when I ws at home with kiddo and he was at office or vice-versa). We used it to stay connected with the US as well. It was great.
Then, we discovered the ability to download free tv. I started out being sparing about it. Picking a few shows here and there. This one. That one. And that was it. I think we (DH and I) watched 2, maybe 3, shows tops. And, we chatted, watched movies, and read our books. Or, I did some writing (or he did) on our computers. I also would do message boards and the like.
I have been doing message boards a lot less lately (obviously), but now I'm back to doing it a bit more. I could easily pull back again (and just do "check ins" like I did before I started really getting back into it over the last couple of days -- due to stress, I think). So, that's how I spent our internet data usage -- which is expensive here.
I can easily see myself not checking work email from home, not checking home email, not being on FB at home, and even not being on message boards. I'd miss reading my blogs, the ability to skype on a dime (rather than scheduling everything), and then downloading our TV shows.
Right now, the thought of not downloading master chef australia is just sad. it's actually important to us.
That being said, we can skype just as easily at the office (and fit it in well with everyone's schedules) and we can also watch shows there, too, if absolutely necessary.
So, it's definitely do-able, honestly. we'd just have to figure out the specific logistics.
Also, another option is removing our phone to pay-as-you-use, which might save us a bit.
We have pretty low expenses, due in part to our multigenerational living arrangement.
$230- Association fee, includes water, trash, snow removal, landscaping, painting of the house, a certain amount of homeowners insurance, etc.
$120- Combined landline/cell phone expenses.
$55- internet
$85- car insurance on two cars
$35- life insurance
$88-The Bane of My Existance (my student loan payment)
We are working on knocking out the student loan payment and we choose to have an iPhone for Zach, but for a family of seven, it's pretty workable.
I guess for that reason I tend to focus on the smaller stuff because the grocery bill is my largest recurring expense followed by gas. DH is a residential electrician, so there's really not a lot to be done about gas expenses as he already drives a pretty small, relatively fuel efficient vehicle. The jobs are in a different place everyday.
Dh and I just talked about letting go of home internet! He's game.
We set up a strategy to get going. First, we are going to simply not use the internet at home. We just decided to put a moratorium on it. Second, we're going to watch the remainder of our season of supernatural. It's our favorite show, but there are only four more episodes left (4 weeks) of the season that NZ has (season 7). Season 8 has just started in the US, so if we don't start it, we won't miss anything, and DH suggested that we rent the prior seasons through netflix. I think that this is a great idea! Once that season is done, then we are going to drop the internet back to a small data package for a few months as a "just in case" measure for us.
We have already emailed family to move their skype calls to next monday at 11 and 12. That's Sunday evening for them. We'll come into the office for it. I have also set up a skype call with another family member in another time zone for 2:00.
This will save us $25/wk! Not to mention glorious time! :)
We also are taking our cellphone to "pay as you go" which cuts the bill at the office down by $50/mo as well. This month, I get that bill down to $160/mo, and if we cut the cell, it'll be a streamlined $110 (land line, message service, broadband with huge data allowance)!
We are also redoing our power (gas/electric) to one company (instead of two), which will bring our bill down another $8/mo. And then it will fluctuate between $60 and $180 depending upon the season ($180 is typically high July and August, then it's about $120 for May and June, $80 in sept, and then $60 for Oct, Nov, Dec, Jan, Feb, Mar, April).
Just keep cutting that spending. . . :D
. Second, we're going to watch the remainder of our season of supernatural. It's our favorite show, but there are only four more episodes left (4 weeks) of the season that NZ has (season 7). Season 8 has just started in the US, so if we don't start it, we won't miss anything,
:D
Oh No! You can't miss Supernatural - also my favorite show! I'm TV-less right now so am missing it myself so will rent this season's shows when they come out.
Besides cable-less, and therefore TV less as I don't get antenna Tv where I live, I am also home internet-less. Was even computerless for awhile but have that up and running again so I can now use free wifi or use my sister's internet access (like now) when I am at her place. I also don't have landline and use a pay as you go Tracfone. For the most part I check my e-mails on my phone. Currently my utilities are included in my rent. So other then food, gas, car insurance and maintenance, I have no other expenses. Paying more in rent than I normally would because I got a larger place but as it's only for the winter, I'll eventually get cheaper digs (or will be travelling) in the spring.
Zoe, we've been using pay as you go (again).. We actually had one of the first TracPhones when they came out yearrrsss ago. And now have Straight Talk. $48 (with the taxes). For unlimited, internet, messaging, applications we're saving about $60 vs. what we were paying before. Because husband travels, we definitely want the unlimited. And then, we're also able to do Skype to phone on ours, which is another important thing that we do not want to go without.
We also cancelled our home telephone some time ago. I found that the only calls I ever got were either daughter's friends or A) wrong phone numbers B) some legit or scam charity C) something scam related, in general. There were some days that I would have 10 messages (all one of the above) on my answering machine. And I was paying $50? or more for this. :doh: Yeah, I don't think so!
try2bfrugal
10-29-12, 1:31pm
I had a good month cutting our annual operating costs some more. We used Kill a Watt data to help us decide to replace an old energy hog TV with newer, energy efficient TV. We are funding much of the TV with money from selling the old TV, our garage sales proceeds, a new checking signon bonus, some stuff I sold to Amazon for gift cards, and books I sold at the Half Price book store. So we can get the new TV without having to pony up very much from our savings to pay for it.
I also bought more drying racks and stopped using the dryer. Our electricity is price tiered so I think those two things will shave almost $500 a year off the electric bill. I won't know for sure for a few months to see how much the bills go down, but I am hoping if not $500 it will be a significant decrease. I don't know why I ever used a dryer. The drying racks are so easy.
I bought a mandoline slicer and figured out how to make my own potato chips in the microwave. My kids actually prefer these to the store bought chips. High praise indeed!
We are also refinancing again with another no point, no cost loan so that will save over 10K in interest over the life of the mortgage. We also cut some other expenses so altogether I think I reduced the annual budget by $2.5K in recurring costs from the changes we made this month so far. We probably didn't start out very frugal in hindsight but now that we have more time to look at expenses we are really trying to get them as low as possible.
SteveinMN
10-29-12, 1:58pm
Our electricity is price tiered so I think those two things will shave almost $500 a year off the electric bill.
That's more than $40 a month -- good catches!
I bought a mandoline slicer and figured out how to make my own potato chips in the microwave. My kids actually prefer these to the store bought chips. High praise indeed!
Mind the blade! Always use that pusher they supplied. Don't ask me how I know. rrrrr
Oh, and potato chip quality will depend in part on what variety of potatoes you use and how new they are (as the sugars of new potatoes convert into starches with age). You might want to note which potatoes you used this time to avoid some duds in the future.
We are also refinancing again with another no point, no cost loan so that will save over 10K in interest over the life of the mortgage.
Man, I wish we could refinance. Between the short sale and my self-employment, all we're going to get from a mortgage lender for the next few years is a hearty laugh....
fidgiegirl
10-29-12, 4:45pm
We first approached big expenses, which set the standard for the non-fixed expenses that were much smaller.
*Cutting our housing expense to well below our monthly stipend, to where utilities included, we actually were saving money
*Selling one vehicle that A) had a loan B) had very poor gas mileage C) costly repairs & maintenance, eliminated that payment & insurance. We had one vehicle for a little while, while saving up for a motorcycle that had 4-5x the MPG & 1/10 the cost in annual insurance
*We purchased bicycles for the family as a Christmas gift. This now provides us with A) exercise B) no cost transportation C) result is less fuel cost and wear and tear on the one main transportation that we have for routine errands around town
And then, there were smaller savings by switching to no contract cell phone service, after our contracts ended with the former companies, canceling landline, having children in only school related after school activities or church activities, shopping second hand for clothing and other needs that are within our comfort zone of purchasing used, repairing thngs that in our younger years we would consider 'broken', eating at home more but making the meals more fun or interesting to give us that feeling of something special (which was the main reason why we were going out to eat anyway), so we have our homemade pizza night, our BBQ/smoker on a Sunday afternoon.. Also, joining a church which gave us a stronger sense of community, as well as access to more recreational/fellowship activities. There's plenty more. However, in all, it translated to enough of a savings that we were not only able for me to now be at home full time but continue reducing our debt ($76,000 in 3 years).
Our goal is to be debt free prior to husband's retirement from his first job, so we will have the flexibility (freedom) for husband to work part time, if he wanted, go to colleage or retraining if he is just that worn from years working in Aviation as active duty, or us relocate if he stays in his current background (which could be anywhere within the U.S. or overseas). We also have land that is a future factor, with a shed/cabin already on it, so it may be a situation like BayouGirl where we live on very little, expand the cabin for full time living for the 4 of us, grow some of our own food, expand our residual income on the land (partial lease for horse grazing, goats (which his relatives do), pine trees (they cut down every so many years plus the annual income from pine needle collection), and husband may be able to operate a very part time small engine and electronics repair business. Just so many options but the key ingredients are A) that we've reduced our standard of living to a modest yet comfortable level, after 3 years, this has created 'the new standard' and B) paying off debt and establishing more savings prior to his 1st retirement.
I see the last response was a few months old, however, thought it was a great thread if anyone wants to continue the conversation. These are some great stories, and BayouGirl - that house is really great (love the front porch). What a great deal! So glad you are happy.
So glad you resurrected the thread. $76K in 3 years?! That is AWESOME.
How does one make money from pine needles?
I have learned a lot from you in your time on the boards. Glad you and so many other newbies are here.
fidgiegirl
10-29-12, 4:54pm
I just went through this whole thread again. I see that I posted earlier when we were just starting the refi process - we closed on it this afternoon.
I am interested in changing out our cell phones, but also just got a $90/month reimbursement for it from work. Since we share a family plan, we pay about $120/mo. for our two iPhones through Verizon, so pretty much we're down to $30 out of pocket - pretty good. Of course, if I moved them, we'd be money ahead. BUT if work is paying part of it, I'd have to be sure it's good coverage, etc.! They wouldn't be happy if they are subsidizing and then it didn't work!
Awesome thread, everyone. Makes me want to take a look at my tracking numbers for the last few months.
Polliwog
10-31-12, 12:45am
This is a very thought-provoking thread, and as usual I learn a lot from all of you.
I am closing in on full retirement so cash flow is of utmost importance to me. I recently re-financed my home with a HARP loan and brought my interest rate down to the point that my mortgage payment is $632.00/mo. On top of that, I pay $295.00 for my HOA, approx $100.00/mo for taxes, and another $40.00 for homeowner's insurance.
I have not had a landline in many years; and my cell phone use is paid through family business (I manage property for my son). My auto gas is also paid for through the business and my car is paid for. When I retire fully, I will then have gas and phone expenses. Even though my car is paid for, it is expensive to maintain and gas mileage is not good. I am in a quandary about my car. I would love to have a hybrid but I do not want a car payment.
I do not shop or go to the mall, because then I do not spend money. I take my lunch to work and make dinner at home. I am definitely saving food-wise, because I use to get take-out all the time. But that was when I was working more and it was easier to buy out.
My hobby is knitting and I knit every day at some point. I really love it and what I have found is that knitting puts me at peace because it is very mindful and calming. I do not sit around ruminating on what is missing and what I need to buy. I purchase yarn on sale and end up with something useful. Currently, I am knitting Christmas gifts. In January I will teach myself how to knit socks.
I have reached the age for Medicare so my health insurance is taken care of. The only big expense this year was $7,500 in dental. I was so upset about this but then just relaxed and accepted the fact that I had the $$$ in my emergency fund, so there you go.
Life is good.
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