1% Savings Challenge for 2015

At the beginning of the year, Eric and I have decided to tackle the One Percent Challenge. Every month, our goal is to save another percent off the top of our after-tax pay. So if we were bringing in $2000 a month after taxes, we'd save $20 in January, $40 in February, and so on. This is in addition to whatever we might already be saving.

We've sold some things, such as these tiki torches, and thrown the money in savings, too, but it doesn't count toward the challenge (or toward our income).

We've sold some things, such as these tiki torches, and thrown the money in savings, too, but it doesn't count toward the challenge (or toward our income).

I mapped it all out and the first half of the year looked like it should be pretty easy. After that, it'll get tougher, but I think we can do it.

We're three months in and so far, we're doing a great job. 

It hasn't even been that difficult. Once you get used to the idea, it's not too bad. 

 

Changes We're Making

We had already decided to limit our clothing budget to just $25 a month per person. That change alone will get us through several months of the challenge. We spend a crazy amount of money on clothing considering we're not all that well-dressed or really into clothing. 

We're also committed to eating out less (only for holidays and birthdays, unless someone else is paying). We used gift cards we had from last Christmas to pay for carryout for our anniversary at the beginning of January. For Valentine's Day, we made a fancy meal at home. We've been avoiding social obligations that require eating out, unless we can pay with our allowance (we get $20 each, every week). 

Another change we talked about is to cut way back on activities that cost money. There are a lot of free things to do around here, including free museums, and hiking. We probably won't go to any concerts, plays or other shows this year. Although I kind of want to go to a play this weekend, because it's being put on by a community theatre right here in our neighborhood. But I already spent my allowance on lunch today. 

Vodka of the Gods - Much less expensive than beer. Also fewer calories. Not so interesting, however.

Vodka of the Gods - Much less expensive than beer. Also fewer calories. Not so interesting, however.

I'm also trying to spend less on interesting beers. This was nearly impossible. When we first started this challenge in January, I think I passed up exactly one beer that I wanted. At this point, I've passed up quite a few. We still spent a good chunk of money on beer when we went to visit my brother, because the grocery store had lots of great stuff, but when we're home, it's better. I no longer feel like I need every beer I see. 

Starting Point

As of January 1, we were saving 16% of our income, mostly in retirement accounts, but that number also includes extra payments on the mortgage. It took us less than a month to get it up to 17%. Now our savings rate is up to 20%. We're a little bit ahead of the game, which is great. 

If all goes well, by the end of the year we could be saving 28% of our income. I'd be absolutely thrilled with that! 

But we're dreaming of a much higher saving rate. If that sounds totally insane to you, then check out this post from Frugalwoods. In 2014, they saved over 70% of their income. And that doesn't include their 401K contributions. If I took out our 401K contributions, our savings rate would go way down. I know it's pre-tax savings, but it's money we save, so I'm leaving it in. 

I've been playing with our budget and the best savings rate I can get to work out without us giving up our cars or cell phones or something like that is 46 percent. But, you know, as we go along it gets easier. In the beginning, I struggled to not buy every good beer I saw. Now that's easy, so I have decision-making energy to use for something else. Such as thinking about how I might make my cell phone less expensive...

What's the Point?

This fits into our overall plan to spend less, have less, save more and hopefully move ourselves closer to the day we are no longer tied to our jobs. Sure, in the short term saving isn't as exciting as spending, but it's fun to watch our savings grow.

I'm also curious to see how much we can save. What all can we do without? It's not like we're really suffering here. We've bought a lot of stuff over the 15 years we've been together. Like everything we've ever wanted, it sometimes seems like. Now I guess we're trying to undo some of that accumulating. 

Yes, Maybe We're a Little Crazy

Our end goal is early retirement. Maybe we'll make it, maybe we won't, but if we don't try, we definitely won't. At first it seemed impossible, but we made a few little changes, started saying no to some things that cost money and yes to things that cost less, and over time it's gotten easier. That change happened quickly, actually. 

In many ways, it feels liberating. When we do want to spend money, it's there. We have fewer decisions to make (Order pizza? Nope.). Buy that beer? Maybe next year. 

Some things I'm still struggling with. I do want to buy new clothes, but I don't. I don't like it when it's nearly the end of the month, but not quite, and we're out of grocery money. The vacation we have planned this year is no trip to Europe. But when did I start thinking a vacation had to take place in another country? Expectations escalate, lifestyles inflate, unless you work to make it not so. 

So we're working to bring our spending back down a notch. If it turns out it sucks and we made the wrong decision, there's nothing to stop us from going back to our spendy ways. But I suspect that's not how it's going to end up. 

Updates:

 

$400 Grocery Budget - We Did It!

At the beginning of February, we joined Sam at Frugaling in a $200-per-person grocery budget for the month (so $400 for the two of us), after Sam wrote about his January grocery budget failure. Sam's budget differs from ours in that he includes ALL food he eats in his food budget, including entertaining others and food he buys on dates. We're not exactly dating, but we do entertain and I put those expenses in another category. 

I doubled his budget because we have two people. I don't think groceries is one of those areas where the cost goes down as you add more people. Twice the groceries is twice the groceries. Sure, we share things that last, such as condiments, which would bring down the initial cost, but over time, it levels out.

Despite spending $85 at Costco on staples right off the bat, we met our goal with a few dollars to spare. The Costco run included cases of diced tomatoes and tomato sauce, which we've been using to make pizza sauce, and a huge can of tomato paste that we haven't even opened yet (we plan to freeze it in small quantities and use it as we need it). We used a surprising quantity of the diced tomatoes, but we still have some or most of everything left. 

Most of our food budget went to Aldi ($134), because we can get so much there for so little. Their sales are amazing. Trader Joe's came in a close second, at $122. Everything else was small: $17 to a local international food market, $15 at a new grocery store (Fresh Thyme - mostly for produce loss leaders), $12 for three dozen local eggs, and $12 at a regular grocery store. We didn't eat out at all. 

You'd think with all the food we already have, we could eat for free for quite some time, but you'd be wrong. 

You'd think with all the food we already have, we could eat for free for quite some time, but you'd be wrong. 

Of course we ate some things we already had, such as frozen bread sticks I bought for a party but didn't use, butter, oils, frozen meat, etc. On the flip side, we have a lot of canned tomatoe products left over. 

Toward the end of the month, I wished I could buy a little more. I wanted a whole chicken so I could make broth, and I wanted to buy more flour and citrus fruit at Aldi while it was on sale. But I didn't buy anything. And Eric realized we had some beef bones in the freezer that he's using to make bone broth, so I kind of got over the chicken.

Honestly, we didn't have too many splurges this month. I bought Powercrunch bars only twice, when I was really hungry and didn't have one of my homemade oatmeal bars with me. I don't even want to tell you how many Powercrunch bars I had been buying, but I was buying them five at a time to cut down on transactions, if that gives you any idea. 

Most of the time, I managed to take my lunch to work, which is one of the main ways we save on money. And we made a really good, if slightly expensive, shrimp dish for dinner on Valentine's Day, which was a lot better (and less expensive) than going out. 

We did some entertaining here at the house that involved food, including a brunch for seven people, but like I mentioned, I put those expenses under the "entertainment" category of the budget. The total cost of the brunch came out to $45 or so, but we already had some of the things we used (such as sparkling wine for mimosas, and tomato juice we used for bloody marys). 

I paid for a meal out with a co-worker who was moving to a new location with my allowance, thereby keeping that out of the food budget. We each have a weekly cash allowance of $20 each to use for whatever, so we don't have discuss every little move we make. Other than that, we didn't eat out at all, and that was fine. Well, Eric might have used his allowance to eat out; I don't know because that's the whole idea of the allowance.

Anyhow, I love to eat out, but eating out all the time can be a little stressful. For starters, if you might eat out, then you have a decision to make every time you're hungry. And if you decide to eat out, then you have to decide where, what to order, etc. If I'm eating at the house, I'm having what's here, so there's an immediate restriction on the number of decisions I'll have to make. There just aren't that many choices at home. 

Sam was also successful. In the comments, you can read about some of his others readers who were also successful. I didn't spell out our food costs like Sam's day-by-day list, but I can tell you ours was seriously front-loaded, too. 

$400 will be our new grocery goal. I think we can do that or better every month, if we stay focused. My next goal is to inventory our freezer(s). I most often open the freezer to get ice, but it's full of food. What food? Who the heck knows! The basement freezer is full of meat, mostly fish from my dad and the remains of the half a cow we went in on with friends. That's something we might like to do again, or maybe a pig, but it would have to be worked into the food budget. If we bought $450 worth of meat even once a year, that's $37 off every month's food budget. Just something to think about. 

For now, I'm going to focus on staying below $400. Just to give you some idea, last year in March we spent $792 on groceries and $194 dining out, for a grand total of $988. Sheesh. So far in March, we've spent over $200, but we've got a lot of food on hand so I think we'll be okay. 

Food Budget Posts:

Wednesday Links

Slow Your Home has an interesting post called Slow is boring. For me, this is both the appeal and the challenge with mindfulness. My mind never stops, so I'm never bored, because I'm always doing or thinking about something, which, as it turns out, is the problem. Those slow moments might be boring, but they're valuable. 

Mommy Points has a good post on When You Can't Afford "Almost Free" Travel. Her husband lost his job unexpectedly, but I think this is an interesting thing to consider at any time. With points, it's possible to take some amazing trips for nearly nothing, but they're still not really free. I find it difficult to keep vacation costs down in general, no matter how much is paid by points, so it's nice to read that it's not just me. 

The trail at Queeny Park in St. Louis County

The trail at Queeny Park in St. Louis County

I'm making this banana bread tonight, using modifications I found in the reviews. I love recipe reviews for that reason. Thanks to the comments, I used brown sugar for half of the sugar and added vanilla, cloves and nutmeg and a splash of dark rum. 

You can rent this cute little house on VRBO right down the street from where my brother lives. It's a little pricey at $225 a night but, you know, it's super cute. :)

The St. Louis Post-Dispatch published an article on how to feed a family of 4 for less than $7. Interesting to see something positive said about eating for less in the local news...

Here are 9 Reasons to Use Epsom Salt from Alternative Daily. I used to soak my legs in Epsom salt back when I was training for marathons and it really worked to get the soreness out. I had no idea it had so many other uses. Actually, I didn't know much about it all, so this was an informative article for me. 

Tuesday Frugal Things (and some not frugal things, too)

Frugal things:

  • I planted some kale seeds, lettuce mix seeds and a parsley plant yesterday. That should save us some money during the growing season. The seeds and plants cost less than $5, so if we only harvest each thing once, we'll still be ahead. 
  • Our compost has matured so I was able to mix last year's potting soil with some compost and thus avoid buying new potting soil for my containers. Eric was especially happy about the compost because for some reason he didn't believe it would work. Well, it works. Thanks to our neighbor, Justin, for giving us the compost bin a couple years ago. It's much better than the pile we used to have. And it was frugal because it was free!
  • I took Metrolink downtown to a race on Saturday, the St. Patrick's Day Parade Run. I paid for a friend, too, so it cost $10, but it was worth it to not have to find or pay for parking. 13,000 people ran in the race - that's a lot of driving and parking. But there were lots of other people on Metrolink. It's a fun race and highly recommend it if you're in St. Louis in March. 
  • I started a price list for the ingredients we put in our smoothies, so when we went to Costco, we only bought the stuff that's cost effective. We still spent $200, but at least I'm sure the groceries were good deals. 
  • I moved our savings to Discover Bank in order to get a $50 bonus (I got a flyer in the mail with a code I had to enter for the bonus). Usually I consider it too much trouble to move money around, whether for a signup bonus or for a higher interest rate, but this Discover account happened to offer both so I went for it.
  • We returned a can opener to Savers that didn't work when we got it home. You only have a week to return things to Savers and then you get store credit that you have to spend that day, so I picked up a makeup bag that's slightly larger than the one I've been cramming all my stuff in and a fold-able hat for traveling, which I'm sure will come in handy on the tropical vacation we don't  have planned. But it's good to be ready, just in case. I read about the fold-able hat at Everywhere Once
Doesn't that look like good dirt?

Doesn't that look like good dirt?

Not-So-Frugal-Things

  • I bought a $6 beer after the race to supplement the free beer I got for signing up, and I bought another beer while I was out with a friend on Sunday. Nothing was going to keep from buying a beer after that race, though, because drinking after races is one of my favorite things ever, right up there with mindless eating. 
  • I ordered some new shoes for work, brand new, no coupon. Sometimes I am terrible at this game. But I am going to save the receipt so I can write them off on next year's taxes, since they are for work. 
  • We bought sandwiches at a deli near the house after the race on Saturday. They were really good. This was the first time we got food out (on our dime) since the beginning of the year, though, which is still a lot better than how we've done in previous years. 

Tuesday Frugal Things

I don't have too much to share this week, but here's what I've got:

  • We went to visit my brother and his family in Columbia, about two hours away. It's a frugal weekend trip because it's not to far away, we can stay at their house, and they are good about sharing expenses. One evening they had pizza delivered and the next we made fish cakes with fish my brother had in his freezer. It was nice to not have to eat every meal out. We did have breakfast at a diner one morning. 
  • We packed PB&J's for the trip to my brothers. Those, along with a small cooler of canned soda, kept us from spending money during the drive. 
  • Eric found a pair of good jeans at my favorite thrift store, Savers. Savers is the only thrift store I know of where clothing is organized by size, clean and easy to shop. 
  • I washed my own car. I wouldn't even put that on this list except I know how many of my friends take theirs somewhere else to have it washed. The only reason I don't wash mine more often is because we live on the street in a city and don't have a driveway, so I took advantage of a nice day and my brother's driveway and gave mine a badly needed scrubbing. 
  • Does finding money count? We found $75 in the house that neither of us remembers having or leaving where we found it. Our plan is to save the found money. But I won't lie, it's a little disconcerting to find money where you're pretty sure there was no money. 
Nothing says "middle Missouri" quite like a diner in the middle of nowhere. 

Nothing says "middle Missouri" quite like a diner in the middle of nowhere. 

Speaking of "found" money, last week I got a check from a bank in California for my supposed tax refund of $7600. The only problems were that 1) I hadn't filed yet and 2) I owe money. So we filled out the appropriate paperwork and I'm mailing everything in with my paper tax return. We'll be keeping a close eye on our credit reports, too. I guess if there is a frugal thing in this story, it's that we don't use our taxes as a savings account. I want that end-of-year number to be as close to zero as possible. I'd be super bummed if we were planning to get money back.