I had the Uber-Frugal Month talk with Mr. G over the Christmas weekend. We’d already contemplated doing another month of not eating out, but I set the parameters for this month as “no buying stupid stuff and no eating out.”
To mentally prepare myself for a month of renewed austerity (and to jumpstart a more frugal year), I thought I’d work through Mrs. Frugalwoods UFM questionnaire and preparatory steps that were outlined for her readers in the Uber Frugal Month planning post.
1. Why are you participating in this Challenge? What do you hope to achieve?
I’m approaching this UFM with two goals: to save money (which I will throw into my emergency savings account), and to establish a “baseline” for household expenditures (to have a better idea of how much money I actually need for 12 months of emergency savings). Mr. G hasn’t articulated his goals yet, but hopefully he’ll figure them out by the end of January! (We’re not married and our finances aren’t fully combined.)
What are your longterm life goals? Where do you want to be in 10 years?
We don’t yet have a clear idea or timeline of what early retirement looks like for us. Part of it comes down to understanding how frugal we can be without driving ourselves crazy or feeling miserable. Part of it is figuring out how much we’d like to travel while we still have jobs, how much we want to travel in retirement, and if we want to have a “home base” in retirement. There are also big questions about what healthcare looks like for early retirees (especially 10 years from now) and what the next 10 years means for both of our careers. Regardless, I think we can establish some interim goals like paying down our next house in a rapid fashion, saving for a rental property, making sure we understand various investment vehicles, planning for long-term charitable giving, and starting to plan for post-retirement housing and healthcare.
What about your current lifestyle might prevent those goals from coming to fruition and what can you do about it?
Currently, we don’t live particularly extravagant lifestyles, and neither of us has consumer or education debt. (Mr. G has a small amount of auto debt and he carries the mortgage.) We both have the tendency to waste a lot of money on eating out. On the “stuff” side of things, I love clearance sales and craft supplies, and Mr. G has a propensity to order random stuff from Amazon. Trimming any of these spending categories will result in significantly more money to funnel towards our larger goals.
Review Last Month’s Spending & Categorize Expenses
I’ve been tracking my spending with Mint since 2009, so I have lots of data on my monthly habits and my wise and not-so-wise spending choices over the years, with all of it fairly well-categorized. After reading Gwen’s 2016 wrap-up post the other day, I was curious about my “big picture” habits such as how much my spending has fluctuated year over year. I was delighted to learn that my average monthly spending has dropped by about 1/3 from my “baller years” of 2012-2014. (Admittedly, my “baller years” were not actually that baller, but I was buying a lot more stupid stuff during that time.) The graph to the right is my spending from the last eight Decembers, and there are three distinct phases – the end of graduate school plus my post doc years (lower earning, lower spending), my “baller years” that encompassed the first few years of my career (higher earning, higher spending), and my frugal phase (higher earning, lower spending). I’m hoping next year’s spending will be even lower!
In December 2016, we spent almost $700 on food & alcohol (ouch!) but that included a number of food/beer gifts and probably about $200 in ingredients for my annual holiday baking extravaganza. (I bake A LOT of cookies for gifts – over 1,000 cookies plus 3-4 kinds of candy. I anticipate this as an annual expenditure and save for it accordingly.) In a normal month where we eat out 2-3x a week, the amount is probably closer to $500 for two people. Still not great, but there it is. In addition to Christmas gifts, I also bought a new winter coat and a few clothing items on super sale. My current goal is to save 50% of my take-home pay, which I obviously missed this month. It was an expensive month, to be sure, but it was still 1/3 less spending than the average December during my “baller years” – which lets me know how far I have already come.
What Can We Eliminate or Substitute?
Our UFM will completely eliminate eating out. We eat out too much during the holidays, because the kitchen is occupied with my baking extravaganza, our schedules weird, we have friends in town, and we’re probably traveling at some point. For me, January also means eliminating alcohol. As far as substitutions go, I’m going to try to incorporate more regular trips to Aldi and see how that affects our grocery budget. (I like Aldi, but I don’t shop there enough to feel comfortable with where items are located and what items we like.) January will probably involve a continued effort to eat down the stuff in our freezer, which will further reduce our grocery bill.
I’ve been on and off the Diet Coke train many times throughout adulthood, and right now I am chugging Diet Coke with wild abandon. With my work project deadline in mid-January, I’m not sure how much I want to disrupt my caffeine intake! ? I promise I’ll give it a stab in the second half of the month, with the recommissioning of my Soda Stream and shifting my beverage focus back towards hot+iced tea.
I’m also eliminating clothing spending. I don’t anticipate needing anything, so I’ll consider it a (minimum) one month clothes-buying ban. Mr. G has promised to “not buy stupid stuff on Amazon,” which is the bulk of his unplanned spending.
We don’t spend a lot on entertainment. We pay for Netflix and Amazon Prime for in-home entertainment. We check out Kindle e-books from the library, and I have a large cache of craft supplies. We go to the county park with the dog on the weekends (or biking or canoeing in warmer weather). Other entertainment usually consists of game nights with friends, college sporting events (usually gifted from a friend with season tickets), a free lecture or event at the university or library, a very occasional trip to the movie theatre, or a local band with a modest ticket price or cover charge. Although we don’t have a $0 entertainment budget, we also don’t spend extravagantly on concerts, music festivals, traveling broadway shows, etc.
We also don’t spend money on a lot of “typical” items or services. We don’t have cable, long commutes, Starbucks habits, super expensive hobbies, gym memberships, lawn care or snow service, doggie daycare, and I spend very little on personal grooming (no manicures, no makeup, and I wear my hair long and don’t color it).
Reduce Discretionary Spending & Insource
As mentioned above, our discretionary spending reductions will focus on food (both of us), clothing (me), and random internet purchases (Mr. G). However, there are a few other monthly expenditures I’d like to think about. The first one is my cell phone plan. I’m currently with a national carrier, and I know my bill could be cheaper. Mr. G has been on Google Fi for a little over a year, and his cell phone service in our area has been ok but not great. My service with Verizon is pretty rock solid, especially in rural and remote areas. I’m a little hesitant to give it up since I often travel through “the middle of nowhere,” sometimes by myself, and sometimes in winter. So I’m going to look into some of their pay-as-you-go plans, especially now that my phone is out of contract.
Another monthly expense that we have is a cleaning service. We insource a lot of home and vehicle maintenance tasks, but neither of us loves cleaning (Mr. G loathes it, in fact), and we lead busy lives. Having a cleaning service prevents so much relationship strife, and I feel so fortunate that we’re able to afford it. It’s also a $140 monthly expense that seems very frivolous at times. It’s staying, for now, but I’m open to looking at less expensive options.
Examine Habits & Plan Ahead
I consider this post my planning ahead, for the most part! Right now, I feel like we will not need to plan ahead for eliminating discretionary clothing & internet purchases. We might buy some plane tickets in January, but we have travel funds available outside of our monthly spending. (I realize vacation spending is spending, but it’s not part of our monthly spending baseline.)
The one thing we will have to plan for is food shopping & preparation. Meal planning is so, so critical to our UFM success. We typically do very well with cooking dinner when we have a plan and have ingredients. Most weeknight meals focus on getting food on the table as quickly as possible, especially if there is a meeting or activity that night. (It’s usually my meeting or activity, I’ll be honest.) Soups and chilis are great meals that are super delicious a day or two later. Another tradition I’m hoping to bring back is homemade pizza on Friday nights – it’s easy to plan for and makes Friday nights a little more fun if you’re not eating out. I also hope to try a few new things with my pressure cooker.
No buying stuff this month! But if it comes down to it, we’ll try Craigslist, our town’s Buy Nothing Group or thrift stores first. And I hope to continue contributing to the Buy Nothing Group throughout the month!
Banish Excuses & Consider Major Lifestyle Changes
Eating out is a huge excuse for us. The prospect of not eating out for a really long time (like a year) feels like it would be a major lifestyle change. Significantly slashing our grocery budget feels like it could be a lifestyle change, but it could also mean just being more aggressive with price comparisons, and not really having to change our diets significantly.
I’ve contemplated getting rid of my car, but I decided it’s staying for now. (Especially since I’m traveling to see family more often.) It’s cold now where we live, but I’ll continue biking and walking as much as possible when it’s not totally awful outside.
To be honest, the biggest excuse I have right now is keeping the cleaning service. Mr. G is fabulous in so many ways, but helping with cleaning is not one of them. Is significantly less relationship stress worth $1680 a year? Possibly. Is it necessary? No, and we could absolutely eliminate this expense if we find ourselves in an emergency budget scenario.
Spending we’re focusing on in January: food (oh, the food), alcohol, non-essential clothing & internet purchases.
Spending we’re investigating: less expensive cell phone plan and cleaning service.
Spending I’m not worried about, but will categorize & analyze: entertainment expenditures, discretionary service spending (aside from the cleaning service), utility spending (Mr. G pays these – I pay a flat rent – but I’m curious how much it varies).
What are you doing to save more money in 2017?