This week was supposed to be a fitness week. Despite my friend Katy giving me an excellent suggestion - stretching daily - that should have been easy, I have not done a thing. I haven't even wiggled my toes.
So I guess I've kind of decided I'm taking a break. Skipping a week. The fitness weeks are usually some of my favorites, so I'll go back to it next week. This is the second week this summer that I've done nothing, and the first week I've passively skipped. In case you were wondering.
In the mean time, I thought I'd write some updates on the longer projects I've taken on this year, such as the 1% savings challenge, the $400 food budget and, more recently, the capsule wardrobe.
It was March when I posted about the 1% savings challenge, but we started in January. I guess I was afraid we'd drop the ball and not do it, so I waited until we had a few months under our belts to post about it. As it turns out, I didn't have to worry. We're still on track. As a matter of fact, we've saved a LOT of money, more than the 1%. I'm putting the challenge money in our savings and leaving the rest to sit in our checking account. There was so much in checking, as a matter of fact, that I didn't have to take money out of savings to cover our vacation in May.
I've also been increasing my 401k contribution by 1% every month, hoping to bring the tax bill down a little bit. I won't say I don't notice the money being deducted from my paycheck, but it's not so bad once you get used to it. And I only notice the most recent amount. It goes down a tiny bit every 2 or 3 paychecks, depending, and I notice, then forget about it. Then it happens again, and I forget about it. I couldn't even tell you what my take-home pay was in January, but I know what it was last month and what it is this month.
None of this would have been possible, however, if we hadn't committed to seriously cutting back on our expenses. I keep track of everything we bring in and everything we spend, so I already had a spreadsheet with our yearly expenses in every category. Eric and I looked at each category and decided where we'd try to cut, and to what extent.
The categories we chose to focus on were: clothing, leisure, groceries, dining out, alcohol, and gifts.
Before I tell you how we're doing, you might want to know how I come up with these numbers. Something tells me that if you're an accountant, this might make your head hurt, but it works for me. I compare the previous 12 months of spending (so right now, 8/7/14-8/6/15) to what I spent in 2014.There are four months of overlap, but it allows me to see the numbers decreasing without having to project into the future, which for whatever reason makes me nervous. Even though we've been spending a lot less than last year, I'd still rather use last year's numbers, you know, just in case we lose our minds and start spending all kinds of money again.
Our most successful categories have been groceries (down 37%), clothing (down 38%), dining out (down 34%), and alcohol (down 22%). If you like real numbers better than percentages, in 2014, we spent $7374 on groceries. In the last twelve months, we spent $4645. I'll talk about this more in my hopefully upcoming post about the grocery challenge, but I haven't felt deprived at all, not in any of those categories.
Leisure is up 2%. Leisure has a bunch of subcategories: media (music, books, movies), entertaining and going out, fitness, hobbies and the pool. We spend the most on going out, which includes going out for drinks, concert tickets, museum entry fees, etc. Then we spend a lot on fitness, such as replacing a Fitbit, entering a race, or buying some sort of gear. The other categories don't take much money, although you could argue that our dual Spotify subscriptions are wasteful. However, our musical tastes are just enough different that it's really better this way. I can only take so much Hot Chip and Daft Punk, for example.
The other category we've failed to bring down is gifts. We went to five wedding last year, three of which we were in. This year, we have one wedding, and although we are in it, our financial obligation is low. So I thought for sure we could bring that number down. But we made some changes to our gift-giving that 1) brought up some accounting decisions and 2) didn't help our spending.
This change was to favor experiences over things. So for mother's day with Eric's mom, we took the train to Hermann, Missouri, and toured some wineries. For father's day with my dad, we went shooting at the gun club. For Eric's brother's birthday, they played paintball. These were awesome experiences for everyone involved (personally, I would rather clean the house of a hoarder than play paintball again, so I opted out of that one). They were way more memorable than, say, dinner out or a gift certificate, or even a real gift.
But they're not cheap. There's the cost of the recipient's part in it, and our part. I debated between categorizing our part as "gift" or what it actually was (usually leisure or dining out). In the end, I decided that if we spent money on something we wouldn't have otherwise, it was part of the gift.
Money well spent? Definitely. Still, money spent is money spent.
On the other hand, there have been some pleasant surprises! Categories we haven't been paying attention to, much less trying to bring down, have seen reduced expenditures.
Pet care is down 14%. Part of this is a result of not shopping as much and therefore not making as many impulse buys. Seriously, every store has something the dog would love. :) And one of our cats passed away this last year (RIP Leroy), but he spent most of his time at the neighbors, so that wouldn't account for much. The rest? A mysterious side effect of trying to spend less.
Household spending is down 38%. This is a category I put all our regular, non-utility, non-project expenses in, such as cleaning, kitchen needs including small appliances, laundry, maintenance, and yard care. Again, I think this must be a reflection of less shopping in general, decluttering and the associated downsizing that comes with that, and getting used to "needing" less. I'm no longer thinking about what might look or be best. Now, I think about what we need, what we have, what will do, and go from there. Which usually leads me nowhere. Seriously, we have a lot of stuff!
Personal care expenses are down 20%. I attribute this to the fact that I now wear makeup only a couple times a week, and I've made an effort to use what I have before buying new products (you probably don't really want to know, but I might have been kind of hoarding personal care products). Our big expenses here, though, are really my haircuts and color, and supplements - neither of which has been reduced by much.
Some other categories have seen changes, but nothing notable (transportation costs up a bit, electricity costs down a bit). We are actively trying to bring down our electricity costs, but we're on budget billing, so it's not easy to track. And transportation costs? If you go places, you have them.
Overall, I'm very pleased with the way things are going. Although every cut initially feels like a deprivation, we adapt to them so quickly, I completely forget about feeling deprived and the new spending level becomes the new norm. I'm even considering lowering our $400 grocery budget, because it's started to feel generous.
The only area I struggle with is leisure. The problem isn't my $10 Spotify subscription. It's the concert tickets and going out! I love seeing my favorite performers live. I don't want to miss out. We only go to a few concerts a year, but it adds up. Especially if you tack on drinks beforehand, or souvenirs. I know we could skip those extras, but I'm not ready for that, not yet.
We do try to stay home when we can, have people over, or go to their houses. But sometimes you just want to go out with friends. It's easier. Often, it's what they want to do. So I'm not to the point of saying "no" to all those things, or doing without experiences I really want to have.
I know the "experiences over things" mantra works for me in these situations, but again, money spent is money spent. And this is where I'm choosing to spend it.
Recently, I read a blog post (sorry, not saved) about cutting back, and that blogger brought up the issue of feeling deprived. If I remember correctly, the gist of it was to cut, cut, and cut some more, until you start to feel deprived. If you fail to get used to the deprivation, you've gone too far, and should increase your budget in that area. I like that idea. Because it allows me to continue spending in the leisure category. :)
Eric and I each get an "allowance" of $20, cash, that we can spend however we choose. Maybe it doesn't sound like much, but for both of us, it adds up to $2080 a year, or $173 a month, which isn't exactly nothing. We can do whatever we want with this allowance. Eric mostly spends his on food, from what I gather. He certainly doesn't have to report what he spends it on, so this is what I've put together from things he says and the occasional credit card charge he makes that he later tells me should be deducted from his allowance.
And I have been spending mine on clothes. We knocked our clothing budget waaaay back, to $50 a month, $25 each, which isn't much. True, we own a lot of clothing already, and I'm only wearing 37 items of clothing total right now, but that's still what I'm spending on. I've purchased exciting things, including new bras (not really fair, considering how expensive bras are and how absent they are from Eric's clothing needs, but whatever), a swimsuit coverup and a maxi dress. I'm not including purchases I make strictly for work, I'm shopping in thrift stores some of the time, looking for sales the other times, and I'm still having trouble staying anywhere close to that $25 budget. Yay, allowance!
If you and your spouse do any sort of budgeting that doesn't allow for expenses you don't have to explain to each other, I highly recommend you add an allowance.
10 Things I've Learned from Cutting Back
- Numbers are motivating. Seeing our expenses go down is a lot more interesting than seeing our savings increase (not that I don't like that, too, because I do).
- I feel the pain of cutting back for a minute, then it goes away.
- It's liberating to not be in the market for buying most things.
- Now that I'm not eating out all the time, it's super exciting and great when I do.
- I've already got most everything I need.
- As a matter of fact, I have too much, and getting rid of the excess feels great.
- There is a lot of food here. If all the grocery stores went away, I bet we could survive for at least a month. Probably more.
- Even a vice liking drinking can be made less expensive without sacrificing quality of experience.
- I really value not sharing a Spotify account with Eric. Also, if he really wants to go see Hot Chip live, I'll go.
- Not spending brings a sort of peacefulness that spending can't touch. I don't understand it or even know how to explain it, but spending less feels much calmer.