Spend Less
Posted by creining | Filed under Financial Independence
In my previous post Becoming Financially Independent I covered my overall vision. Next I will cover spending less. For me spending less means being frugal or thrifty. I think that I live a fairly frugal life. It does not mean I wear potato sack outfits, eat cat food, and collect aluminum cans for extra cash. It means I make coffee at home rather than getting it from a coffee shop and buy summer polos when they go on clearance in the fall. I do spend money on things that I think help me live comfortably. However, that is a fine line and I know that everytime I spend money I am a bit further away from retiring.
When I think about what it means to be frugal it not only means making my dollars stretch but it also means living a low impact lifestyle. It means walking or riding my bicycle when possible (this means living in an urban area), not wasting food, eating healthy local and organic food (I am vegetarian), bringing my own mason jars and containers to the Coop to fill up on staples from the bulk aisle, washing my clothes in cold water and drying them on a rack (they last longer too), living in a sub 1000 square foot space, and drinking water from a reusable stainless steel bottle.
Frugal also means using the least amount of services. You know, the whole cable, internet, phone stuff that Charter sends me a piece of junk mail about weekly. I have been able to cut out paying for most services.
Television: I do not have any television service anymore after I ditched DirecTV for Plex. I do have Netflix which I pay $10 a month for which is well worth it! I both watch DVD’s I get through the mail and have an enormous streaming catalog available on my plasma.
Phone: I am thankful my employer pays for my mobile phone (seems to be the norm in I.T.) so I do not have that monthly recurring cost. I do not have a landline, does anyone without gray hair?
Internet: Internet service is included in my monthly condo fee so while I do pay for that it ends up being included in my housing cost bucket. I would not live without it though.
Gym: I do have a gym membership but I do not necessarily pay for this. My high deductible health plan from my employer includes a debit card that gets loaded with money every year to pay for health costs. I use this money to pay for my gym membership so it is not money that comes out of my pocket directly. Also, I get reimbursed $30 a month for going to the gym a certain number of times per month so that is essentially extra income.
Two other things that I pay for on a regular basis are my subscription to The New Yorker and haircuts. I really enjoy The New Yorker; I read it almost cover to cover every issue. I recently renewed it. While they charge $69.99 a year to subscribe on their website I called and asked them what the best deal they could give me and they offered 2 years for $59.99. Clocking in at 47 issues a year each magazine costs me $0.64! I can live with that. Haircuts. I like a great haircut. It is my one and only recurring splurge. I spend $45 on my haircut every 5 weeks. It hurts to write that!
When I do buy things I usually make sure I need it. I noticed an interesting consumer behavior within myself. Let us imagine there is something I think I need. I put it on my Amazon Wishlist as a way to keep track of “the things I need”. A couple months pass. I have not bought that thing yet. I realize I have lived without that thing for those two months and got by just fine. So I remove it from my Wishlist. This has happened quite a bit. I think by putting it on my Wishlist it satisfies some deeply hidden retail therapy I need.
For something I do actually need, for instance a new fleece to replace the old well worn one, I will research and pick out a high quality and well reviewed product. I will then go to Google Shopping and find the retailer with the lowest price on that item. I will then hit up a site like RetailMeNot to look for additional coupon codes I can use during checkout. I don’t think I ever pay retail anymore for anything besides groceries. Additionally, I subscribe in my RSS reader to Slickdeals which has, as the name implies, great deals on various items. Right now I do need a couple things and I am waiting for a deal to pop up on that site for those items – I need a backup drive for my MacBook and a new pair of Converse. I do not need those things right this minute so I am fine waiting for a deal. A side note on the Converse, I buy one new pair every year and it is my primary shoe. For travel, I use Priceline’s Name Your Own Price. You can game that system a little, check out Better Bidding. I can’t remember the last time I paid a rack rate for a hotel room I usually pay half of what someone coming in off the street would pay.
When making a purchase I also must get good quality for the price. I like to buy quality items, take care of those things really well so they last a long time, and then replace them when they are worn out. This applies to most everything I buy. For instance I bought these quality Turkish towels from Restoration Hardware 5 years ago. They look the same as the day I got them. I am sure they will last for many more years. The same with sheets. I have a pair of quality flannel sheets from Garnet Hill that I have had for years now and have lasted through tons of washings and still look great with no pilling.
Things that I do not use anymore I sell. I have a clothes rule that if one year goes by that I do not wear something I will get rid of it. I typically donate clothes but I will sell other things on Craigslist. If I can get $20 for something I will sell it, less than that and I do not think it is worth my time and I will donate it. My place is extremely uncluttered as anyone who has come over can attest to! I have one bookshelf full of books and about 10 DVDs. I sold long ago my CDs and recently sold the majority of my DVDs. I will never purchase those items again. I sold most all of my small kitchen appliances – my electric coffee maker, my deep fryer, two popcorn poppers (I use a large saucepan now). The other thing I have come to realize is that if I go and buy something today from a store, in a year I can sell that thing but nowhere near what I bought it for. So there is a cost to going to a store to buy something.
I try to do most things myself that I could pay someone else to do for two reasons. One, I like to figure things out and to feel a sense of accomplishment in performing a job I have never done before. Two, it saves me a lot of money! Recently I got a quote to replace some engineered wood flooring from a local store and it was $1,000. I had never replaced flooring before but with help from the internet and some Youtube videos I did a respectable job for less than $250. I had never changed the serpentine and A/C belt on my car before. I got instructions off the internet. I ordered the parts off the internet for $36 (less than the dealer wanted for the parts). I spent an hour of my time doing it and saved the $200 the local shop wanted. Is an hour of my time worth $164, yes!
Wrapping this up, these are some of the things I do in order to spend less, so I can save more, so I can invest those savings and become financially independent. I think we live in a society where we continually spend more time at the office along with more pay but what we trade in order to do that is needing to pay other people to do the things we once did ourselves. As I alluded to before, some people do not have the time to mow their lawn so they pay someone to do it. Or walk their dog so they pay someone to do that. Or to cook their meals so they eat out. When the nation industrialized, and we did that very very well, every worker did their 40 hours of the same task. I think that is when we lost the ability of doing these things ourselves. Before industrialization, people worked a little, played more, spent time with family, relaxed, hunted, gathered. It was simple. That is the time I am trying to get back to.