Gaming frugality – month one

Early in April, I posted about the serious discussion my husband and I had about being seriously frugal to meet our financial goals sooner rather than later. So I thought I’d report on how we’re doing after a month. The stated goals and their follow up:

• give up beer until summer – Update: our fridge and cupboard are now beer-less, after drinking the remaining Stella, Hoegaarden, and Third Street Brewing company remainders we had. I believe we did buy one six-pack right before my birthday at the end of the month, so on this count, we basically failed. New goal: no beer until the 4th of July.
• one fancy coffee drink per month  – Update: Total and utter failure because of our vacation to Seattle, world capitol of coffee and fancy coffee drinks (which were part of the vacation budget), plus BOGO deals at our favorite local coffee shops. New goal: we can get fancy coffees if there is a BOGO, but only if we have met the previous month’s gym goal of 12 visits.
• both will bike/walk to work once it is warmer than 30 degrees when we leave – Update: holy cow, winter lasted forever, so this is only a half failure. When we returned from Seattle, I felt really stupid driving my car less than a mile to work, so I started walking. Husband is still driving since he gets done with work at crazy late times (3:30am sometimes!). I drove one day last week since I needed my car for work, and I drove today because I woke up late. New goal: pump up my bike tires and continue walking or biking every day that I can. Encourage husband to bike when he doesn’t work late.
• only eat out together for dates, not as a convenience – do more meal planning – Update: we actually did plan a few meals in the past few weeks, and we bought easy things to make so we have been doing pretty well on this count. I am counting this as a win. New goal: just keep on planning a couple meals per week and have cheap/easy things so we are not tempted to eat out.
• husband will not get professional massages, and will visit the chiropractor only once per month, as needed – Update: total win, no massages, and only one chiro visit in April. New goal: not needed.
• no new clothes unless essential for work – Update: I did buy one purse before our vacation. New goal: use Pinterest for ideas to use pieces I already own.
• no new makeup, nail polish, other frivolous lady temptations for me – Update: I bought one new nail polish, and counted it as a birthday present. New goal: avoid these aisles altogether.
• I will eliminate lady temptations by only going to Target for groceries – Update: total win, have gone to Target only for groceries. New goal: not needed.
• Buy gifts primarily with credit card points for Amazon.com – haven’t needed to buy any gifts, but we do have points to use for this. New goal: not needed.

Overall, not great, but not terrible.

Vacation on a budget

We recently returned from a five day trip to Seattle with my parents. My dad had a conference to attend, and so my husband and I kept my mom company and also got to sneak in a short visit with my husband’s father who visited from British Columbia since it was a short trip for him to come see us while we were there. We had a wonderful time, and we actually spent less than we expected to. I had a rough daily budget in mind for food, bus fares, entry fees, etc., and we went over it a couple times but then came in under budget other times, so it evened out. Even though we stayed at a fairly upscale hotel close to my dad’s conference location, it was not an expensive trip, and that was due to a few factors:

• hotel location was close to the monorail, light rail, and a major bus pick-up area – took light rail to hotel and back to airport
• hotel location made many destinations walkable, even for my mom – within 1 mile
• close proximity to a major shopping/dining area and small plates at hotel restaurant made for some amazingly delicious $20-$30 dinners
• hotel had refrigerators so we bought milk and cereal at the nearby IGA and had hotel coffee each morning
• pre-purchased discounted tickets online for Seattle Center’s Space Needle and Chihuly Garden & Glass with hotel business center
• pre-purchased discounted tickets online for the Experience Music Project (EMP) and Cinerama showing of ‘Iron Man 3′ in 3D with hotel business center
• took lots of pictures and saved receipts, ticket stubs, wrist bands, and other ephemera to put into a Smash Book (on-the-go scrapbook) instead of buying lots of souvenirs – we came home with an almost-complete book and a great record of what we did each day
• what souvenirs we did buy, we kept to useful or locally-made items – two t-shirts for my husband, one from a small art fair, where I also got a turquoise necklace

Also, I was relieved and pleased how easy and fun it was to travel with my parents, and my husband agreed. We hope to do some more traveling with my mother, specifically to France, because my father is not interested in travel outside of the US. This made us both excited for planning a few more trips with her.

Gaming frugality

After stumbling upon the Mr. Money Mustache blog and reading a few posts, I was intrigued. Here’s a guy and his wife (Mrs. Money Mustache*) who have pretty much cut out every unnecessary item from their spending and retired in their early 30s in order to start a family. They have a lot of the same habits that my husband and I do. They got rid of all debt, because debt is a major emergency. They lived close to work, don’t borrow money for cars, don’t buy stupid cars, have no cable television, etc.

With our incomes, we can live quite comfortably on about half of our income, but we enjoy some frivolous things on a regular basis, with the justification that we already pay down debt and save pretty aggressively by most standards (we put toward debt or saved over 33% of our take-home pay in 2012). However, we have a couple long term goals that would be helped along if we gave some things up for a while. These goals include a trip to Seattle at the end of this month, paying cash for graduate school tuition for my husband, visiting France in the summer of 2014 or 2015, and satisfying my major love of bling with the last couple pieces on my jewelry wish list. We also both like the idea of buying a house with cash. This is totally within reach, if we are patient.

Last night, I asked my husband, “How frugal would you be willing to be? And for how long?” He said, “Well, I can be pretty frugal if I am working toward something.” And so we started making a list of things he is wiling to give up, and things I am willing to give up, and things we can give up together, in order to save money and slash more debt, more quickly. We have decided to:

• give up beer until summer (unless bringing a host/hostess gift to a party), which will have the added bonus of helping us look better in our swimsuits
• one fancy coffee drink per month (as long as we don’t buy any the month before and meet our gym-going goals to get our reimbursements which nearly pay for our membership)
• both will bike/walk to work once it is warmer than 30 degrees when we leave
• only eat out together for dates, not as a convenience – do more meal planning
• husband will not get professional massages, and will visit the chiropractor only once per month, as needed
• no new clothes unless essential for work
• no new makeup, nail polish, other frivolous lady temptations for me – I have tons of stuff stockpiled that I purchased on sale, so can probably go 6-12 months without buying anything new
• I will eliminate lady temptations by only going to Target for groceries (they have the best price on some items in our area, like the largest/cheapest size of the creamer for our non-fancy coffee)
• Buy gifts primarily with credit card points for Amazon.com

We figured we can save a few hundred dollars a month by trying this for 3-6 months. This is a challenge in order to change some of our behaviors, and we are trying to make it into a game, by making the things we really enjoy into more of a treat than a regular daily experience. I will report on how this goes.

*He considers it an extremely high honor to have given her this title through marriage.

2012 overview and 2013 plans

I guess I didn’t do a year-end wrap-up for 2011, or at least I can’t find one in my own archives, but here’s a 2012 run-down.

• We put 19% of our net income (take-home pay) toward our debt, in both regular payments and snowball payments. See huge orange chunk above from our Mint.com profile.
• We spent 14% of our net income on a new-to-us vehicle; we took the funds out of savings and didn’t borrow a single penny to pay for it. See blue chunk above, which also included car repar and gas/oil.
• Buying the car meant we needed to re-save our major emergency fund; we proceeded to save about 9% of our net income to get back to where we were before we bought the car.
• Between paying down debt and re-booting our savings, we snowballed/saved about 33% of our income.
• Between what gets taken out of my checks for my defined benefit plan (read: pension, which is matched automatically by my employer, but if I leave I don’t get to take that money so I don’t count it as savings), and what my husband puts in to get the maximum 401(k) match from his employer, we saved about 10% of our net income for retirement. I would prefer to be saving an additional 10% on top of those savings, but we’ll get to that once we are out of debt.

For 2013, we are potentially looking at my husband starting graduate school (if he decides to apply and actually gets in, that is–fingers crossed), which means we will likely slow our snowball in order to pay cash for his tuition. One thing that was helpful in deciding to maybe get an advanced degree was… wait for it… a cost-benefit analysis. Oh, yeah, you know how I roll. This ‘Will School Pay Off?’ calculator from Kiplinger’s was especially helpful. The cost of a graduate education involves more than just tuition, but lost hours and retirement matching from needing to reduce working hours. For some programs, it’s simply not possible to work and go to school, but we’re hoping that he can work part-time and manage at least a half-time course load.

We are also planning to pay cash for a vacation in 2013… more on that in a future post! Any 2013 money goals you are working toward?

Priorities

I learned this week that someone I know, not a close friend but still someone I consider a friend, is very sick. She also happens to be engaged, 17 weeks pregnant, and started chemotherapy last night for a very aggressive form of lymphoma which is making it difficult for her to breathe, and if the tumors keep growing, could throw her into cardiac arrest. I am hoping and praying for the best for her. It’s difficult not to personalize this type of thing, so I’ve fallen asleep the last few nights thinking ‘What would I regret not doing if that were me?’

I think I would rather spend a bit more time in debt in order to do the things I really want to do. I want to travel more, see some of the cities on my 43 things list. I want my husband to be able to go to graduate school, if that’s what he wants to do. I want to spend less time worrying about what others think and care less about office politics. So, while it is entirely possible for us to pay off our debt by the end of 2013, I think we may be looking at a bit longer timeline than that, and I am okay with that.

The current goal is to get it down to $20k by the beginning of 2013, and we are on track to do that. I think I’d also be okay with getting it down to about $15k sometime in 2013 if my husband goes back to school this year, as long as we can pay for his tuition without taking on more debt. The other option, with interest rates so low, would be to pay off my debt and take on some debt in his name at a lower interest rate. That’s all very theoretical right now, though, since he hasn’t decided if he will apply for 2013.

I’ll do a year-end recap of our financial picture soon.

The Target Trap

One of my financial pitfalls is that I usually overspend at a store I go to nearly every week… Target. Since there are two stores in my town and both have grocery sections, it’s very convenient for me to stop there and make one stop vs. also stopping at the grocery store. But that’s not the area that becomes the problem… it’s all of the other areas in the store, and I know exactly why: I am their ‘target’ market. I think it’s something like women between the ages of 18-40, so I fall nicely into the middle at age 31.

The problem is that I can easily drop $100 on each visit to Target. If I visit once a week, that’s $400 a month. And what do I spend it on? Cleaning supplies, groceries, random household items like picture frames and pillows, but also clothes, fun jewelry, makeup, hair products, pet items for my parents’ and sister’s doggies, and so on.

Because I recognize how easy it is for me to spend at Target, for a while when we were trying to get our debt snowball on track and save up a healthy emergency fund, I would do two things: 1) make a list of only necessary items before heading to the store, and 2) only bring in enough cash to buy the items on the list. Honestly, there were still times when I decided that new nail polish was a ‘necessity’ but overall, making a list and sticking to it really did help.

The last time I visited Target was on vacation with two of my cousins’ wives. We needed some grocery items, but also took a look at the cute baby clothes for their kids and clothes for ourselves. I’ll admit I spent about $55 on nothing much: bread, Vitamin Water (on sale), a hoodie (didn’t pack enough warm clothes), and 6 bags of M&Ms (on sale). I’m not super proud of this, but honestly, it’s better than it used to be.

Any stores that are major pitfalls for you? Tips for cutting down on unncessary spending?

Stuff I’ve found on Pinterest

I have been using Pinterest for a few months now, and I find it really fun and there are some great ideas out there to save time and money. I’ve got a Financial Board where I pin things that are more specific to personal finance.

One of my pins is from a woman whose family lives on $28k per year. I’ve started reading some of the posts in the series and it’s very enlightening. One thing they do that would be difficult for me but not impossible: they only drink water. Milk is for cereal and recipes only, and juice is a rare treat for making homemade popsicles. Lots of interested ideas for living on less.

I also found a cool infographic that explains what kids should know about managing money as they grow up. I think there are definitely things in each stage that many adults still need to learn, so worth a look.

Lastly, Nick Hanauer’s TED Talk in which he explains that middle-class earners are the real job creators. He explains in such a simple, elegant way how the rich have gotten richer and how trickle down economics is a bogus idea that hasn’t panned out for either major political party.