Tag Archives: Frugality

Live like you’re broke — but don’t forget that you’re not

Last week, my $2.50 flip flops that I’ve been wearing all summer bit the dust and one of Tony’s two pairs of shoes started to fall apart. I realized over the weekend that I haven’t bought a new pair of shoes in almost two years (aside from the running shoes I bought in January), and it’s been a year since we last bought Tony sneakers with birthday money from his parents.

I looked objectively at what Tony and I were wearing on our feet. We looked like a couple of college kids with some tattered shoes. I suggested to Tony that we should go shopping for some shoes, and he looked at me like I’d grown another head.

“Should we really be spending money on something like that right now?”

When I outlined the facts for him, we both realized how ridiculous it was not to buy new shoes.

We each have only three pairs of shoes — Sneakers, dress shoes, and gym shoes.
It’s been over a year since either of us bought shoes.
Our sneakers are falling apart.
We are not broke.

It’s kind of silly that we had to remind ourselves that buying one pair of new shoes each year isn’t unreasonable. We may not make a lot of money, but we make too much to walk around in shoes that are falling apart.

We spend so much time trying to convince ourselves that we’re broke because it makes it easier to resist overspending, but every once in a while we have to put things into perspective.

Don’t deprive yourself of basic necessities in the name of frugality. Walking around in tattered shoes or clothes to save money isn’t frugal — it’s cheap, and you deserve better than that. Frugality is about conserving, making the most of each dollar you spend, and shopping for the best deals. It’s not about depriving yourself.

We spent Saturday shopping for new shoes, and we ended up picking up two pairs of Converse sneakers on sale at Shoe Carnival for buy one, get one 50% off. Not only did we get a great deal on comfortable shoes, but we reminded ourselves that we are not as broke as we let ourselves believe.

Unexpected benefits of life without cable

Don’t you love when you make a life change for one reason, and realize that it benefits you in countless other ways? That’s kind of how we feel about canceling our cable. We made the decision to shut it off to save money. We were paying $70 a month for a service that we barely ever used. But after two weeks without cable, we’ve discovered a long list of other ways it’s improved our lives.

We have more time.

Now that we’re not wasting time watching junk on TV, we have more time to pursue other hobbies like blogging, reading, and listening to music. We still watch our favorite shows online at Hulu or on network websites, but we’re more purposeful about what we watch now. Plus we don’t spend countless hours zoned out while channel surfing and looking for something good when there’s really nothing on.

We’re more active.

I used to spend the evening parked on the couch on nights when Tony was in class late. Last week, when Tony was on campus and I was bored at home in the evening, I headed to the gym for my second workout of the day. On the weekends, we’re more likely to get up and get out of the house instead of zoning out in front of the Food Network.

Our house is filled with music again.

We used to keep the TV on in the background all the time, but only now that it’s gone have I realized how distracting and annoying it could be. Now when we’re writing or spending a quiet evening together, we play our favorite music in the background. It’s much more relaxing.

We’re branching out and watching new things.

It’s ironic, but only now that we’ve stopped channel surfing and feeling obligated to watch our expensive cable have we started getting into new TV shows. We rent TV shows on DVD from Netflix that we’ve always wanted to watch, like “How I Met Your Mother” and “Lost.” Our Netflix plan is only $8.99 a month for unlimited DVDs (only one at a time), but this is plenty to discover new shows and movies that we never had time to watch before.

Life without cable isn’t for everyone, but if you’ve been considering it, I say give it a shot! We still get to watch our favorite shows online for free, so canceling cable has been nothing but positive! Plus, we’re putting that $70 to better use!

Photo by puffsdaddy

Bye bye, cable

Last week, we joined the legions of personal finance bloggers who have canceled their cable TV.

In August, our yearly “promotion” ended, and the cost of our cable and Internet increased from $97 a month to $108 a month. Of course, like a lot of people, we were talked into the digital cable/Internet bundle. We had digital cable with more channels than we ever watched, HDTV even though we have an old TV, and DVR. I have to admit, the DVR was nice. But lately I’ve been thinking about just how much TV we watch.

We have never used the On Demand services, and the majority of shows recorded on our DVR come from regular network stations. Like I said, with our busy schedules, DVR is nice. But here’s the thing: every single one of the shows we watch is available online for at least a week after it airs. We could basically watch them online on our own time without paying for cable or DVR.

When I made the initial call to get some information, they of course tried to talk me into keeping at least basic broadcast channels for $10 a month. What they didn’t tell me is those channels are free with a digital converter box or digital TV.

We’ve been trying to find a way to cut expenses ever further lately, and we’ve always planned on upgrading to a newer TV at some point before we move. Because we plan on buying a new TV in the next year or so, we don’t see any reason to invest in the digital converter box now since we can watch all our favorite shows online.

Canceling cable will save us $60 a month or $900 over the next 15 months. We’ll put that money in a separate savings account and use it to buy a new TV and a Playstation 3 after we move. We’re not big gamers, but we’ve been looking into a digital multmedia player that will function as an external hard drive and allow us to stream Netflix, photos, and music to our TV. Plus we’d be able to rent games if we wanted to. :)

Bonus: we’ll spend less time channel surfing and watching things that we don’t even really enjoy, and more time reading, blogging, and talking. It’s win/win!

I never thought I’d be so excited to cancel cable, but putting that money to good use has really motivated us!

Photo by adspackman

Necessity is the mother of frugality

Tony will finish graduate school in May 2010, but after that he’ll have a semester of student teaching before he’s certified to teach. Right now he receives a stipend for teaching undergraduate classes, which he won’t receive while student teaching. Unfortunately, this means we’ll have to live on my income alone for about 7 months. The student teaching program is full time, and we’re hoping he’ll be able to work nights and weekends, but I don’t want to count on that considering the trouble he’s had searching for part time jobs in the past.

We’re also preparing ourselves for after the move. I’ve done a little research, and in the area where we’re moving, it looks like we can expect Tony to start somewhere between $32,000 and $35,000 as a high school teacher (according to what I read, he’ll be paid slightly more than a normal first year teacher because of his master’s degree and experience). Of course, this number is just an estimate. If you have any information about what starting teachers in the Indianapolis metro area make, by all means please pass it along!

I will continue to generate freelance income, but I won’t be working full time since we’re planning to start a family shortly after Tony finds a teaching job. Freelancing is feast or famine, so we don’t want to factor my income into our normal budget. That means we need to start planning now for a reduced income with a baby.

On top of all this, our savings goal has increased since we’d like to buy a house sooner rather than later.

To help us reach these goals, we’ve decided to reduce our monthly spending by about 5% and increase our total monthly savings amount by 25%. Put simply, that means we’re cutting about $150 from our monthly spending and adding it to our monthly savings.

I spent some time pouring over the budget. I determined that if we continue living on a cash budget, cut our weekly spending by $25 a week and make some minor adjustments in other areas, this is totally doable. If we hadn’t spent the summer on such a tight budget, I never would have thought this was possible. I thought we were saving as much as we possibly could, but after a summer of tight expenses, instead of feeling like we need more, I only see where we can cut.

In real terms, this means we’re cutting our grocery budget from $50-$60 a week to $40-$50. Our “shopping” budget, which covers household expenses like cleaning products and other miscellaneous items, is being cut from $20 per week to $15.

As we move into fall, we’ll increase our additional savings by another $50 when our electric bill drops from $100+ during the summer to $40-$60 a month during the cool winter months.

Over the next 8 months, this will increase our total savings by about $1500. More importantly, it will better prepare us for next summer and fall when we lose 1/3 of our total income. It will also make it easier for us to transition into a single income home in spring 2011 when I’m no longer working full time.

My point is this: if you’re looking ahead to a lower income, now is the time to make cuts. It’s always easier to transition slowly than it is to jump into the cold water. Don’t wait until you lose your income. Learn to live on less now so you can bank the extra money for the future.

Photo by jayd

Sales tax increases are another reason to be frugal

Last week, the state where I live (North Carolina) increased its sales tax from 4.5% to 5.5%. With local taxes, that means our total sales tax has increased from 6.75% to 7.75%. A 1% increase may not seem like a lot, but it can add up for big purchases. On a $1000 purchase, that’s an extra $10 tacked onto your total cost.

I’m not sweating it, though. Paying less money in sales tax is just another perk of frugality. Here’s why:

I don’t buy a lot of stuff.

Since we live frugally, we just don’t make a lot of purchases that are subject to sales tax. Most of our expendable income goes to groceries, which is subject to a 2% sales tax in North Carolina. Our budget only includes about $100 a month for entertainment and household expenses like toilet paper and cleaning supplies. That means at most we’ll be paying an extra $1 a month with the increase.

Secondhand items are usually subject to 0% sales tax.

When a friend or family member gives you a piece of furniture or other item, guess how much sales tax you pay? 0%. The same is true if you shop at garage sales or Craigslist. In some states, you don’t even pay sales tax at thrift stores, particularly if they’re affiliated with a church.

If you’re worried about sales tax increases, think about ways you can live more frugally overall. After all, the less you spend, the less you pay in taxes.

A change in perspective

Our no spend summer has resulted in the lowest balance on our checking account in, well, as long as I can remember. I was paid Friday, and after paying our bills and buying our groceries, our checking account balance is now $250.

I know there were times when I was in college, and even after I graduated, when my balance dipped well below $50. There were times when I overdrew my account. I remember these times vividly. But this is the first time since we started living frugally that I’ve seen a bank balance this low.

Don’t worry about us. We have more money in savings than we’ve ever had in one lump sum in our lives. We’re doing fine. Keeping our checking account balance low is a defense mechanism. It protects us from ourselves, and prevents us from spending more money than we want to spend.

But looking at that balance stresses. me. out. Especially since we’re heading on vacation this weekend.

I have access to our savings through my ING checking account just in case we need money immediately. Our low balance doesn’t pose us any threat since every penny is accounted for these days.

I still just don’t like seeing our balance that low. It makes me feel out of control, just like I did a little over two years ago when every penny wasn’t accounted for. When I still had bills to pay and food to buy with that $250 balance, and I was trying to make a dollar out of 99 cents.

I’m tempted to move some money around just to make myself feel better. I don’t like looking at that balance. But then the sadist in me wants to keep going, to see how far we can go this summer without dipping into our savings. After all, that was the point of the challenge. If I move $100 into our checking account just to make myself feel better, that’s technically cheating. So I’ll probably keep going, and it may even dip lower before the summer is over and Tony starts getting paid to teach again.

But it’s made me think about those days 2 years ago when low balances were a fact of life. Back when my bank balance rarely went above $500, and there was no separate account where I kept my savings because I didn’t have any savings. Back when I spent every penny I earned almost immediately. I felt out of control, and I never knew where my money went.

It’s times like these when I’m proud of what we’ve accomplished in such a short time, and I remind myself that I don’t ever want to go back. It’s amazing what frugality has done for my perspective.

Living well isn’t just about money

I’ve been doing a lot of thinking about the direction of this blog. The truth is, the more settled we become in frugality, the harder it’s become for me to find inspiration for finance-related posts. As Tony and I continue to live a healthy, simple lifestyle, though, I’ve been hit with a ton of inspiration and ideas about simplicity and healthy living.

This is a frugal blog, and I want it to remain a frugal blog. But I’ve been doing some thinking about what frugality really means to me and why I started this blog and this lifestyle to begin with.

When I started this blog, I wanted to document our financial journey and learn new ways to save money. But more than that, I wanted to live healthfully, happily, and simply. That’s why I named the blog “Living Well on Less.” Above all else, I want to live well (don’t we all?). Spending wisely is just another part of living well. Budgeting and saving free us from the stress of paycheck-to-paycheck living and allow us to focus on living a simple, healthy lifestyle.

As I approach the 1-year anniversary of this blog, I’d like to shift my focus just a little bit. I’ll be writing more about lifestyle, simple living, healthy living, and, as my blog title says, living well.

This doesn’t mean I’m abandoning finance posts. After all, mindful spending is a huge part of the simple, frugal lifestyle. I’ll still write about saving money and spending wisely. But I’ll also be writing more about health and wellness, happiness, and simplicity. I’ve always written on these topics, but in the past I felt compelled to tie them in somehow with finance. From now on, all of my posts won’t be related to finance. Some of them will just fall under the umbrella of living well.

I hope you’ll find this updated theme helpful and interesting. I’m so excited! I have a ton of ideas, and I can’t wait to share them with you.

As always, feel free to contact me or comment if you have suggestions for topics you’d like to read about on “Living Well on Less.” Thanks for reading!

Beauty doesn’t have to be expensive

One of the most frustrating things about the frugal world is while most people acknowledge that everyone is different when it comes to budgeting and spending, the approach to beauty is relatively one size fits all. The consensus seems to be that you don’t need to spend money on beauty products.

But personal appearance is an important part of living your best life. In order to be confident, it’s essential that you feel comfortable in your skin, whatever that means to you. Everyone is different, and you shouldn’t feel guilty for wanting to invest in your personal appearance to ensure your confidence.

That doesn’t mean beauty budgets don’t need limits, though. As I’ve said many times, the trick to living a full frugal life is balance. Here are some tips to ensure you look and feel your best without blowing your budget:

Prioritize.

What is most important to you when it comes to appearance? Do you have sensitive skin that requires specialty makeup or lotion? Are you self conscious about your body and need certain clothes to feel comfortable? Figure out what it is that makes you feel your best, and focus your budget there.

My naturally curly hair is dry, frizzy, and requires a lot of effort to look nice. I spend a little more on shampoo and hair products, but I wash and style it less frequently to cut back on the products I’m using. Look for compromises to reduce the impact of your beauty needs on your budget.

Try alternatives.

Don’t assume that the most expensive product is your only option. I spent years trying different hair care products to find a balance between quality and price. I’ve settled on some moderately priced hair care products bought in bulk to give me the results I want while spending the least amount possible. Don’t be afraid to experiment with other brands, generics, and even natural alternatives like baking soda and vinegar. If you can get the desired effect without spending as much, it’s win-win.

Go for quality, not quantity.

Find makeup products that work for you, and stick with them. If you have a drawer full of cosmetics, really consider how often you’re using those products. Wouldn’t your money be better spent on a few high quality products that work well for you? Really consider how much you need to look your best. Try to limit yourself to cosmetics that you’ll use every day.

If stylish clothing is important to you, it’s okay to spend a little more on the latest styles, but if you’re buying expensive fashions you’ll have to get by with fewer clothing items. Try to stick with classic styles that are likely to be fashionable for longer than passing trends. You’ll look stylish without having to buy a new wardrobe every season.

Focus on you.

So much of fashion and beauty is based on other people deciding what’s trendy, fashionable, and acceptable for everyone. The problem is that the beauty and fashion industry is focused on convincing you that you have to spend a lot to be beautiful. Do your best to focus on what makes you feel comfortable. The point isn’t to impress the world with a large collection of clothing and shoes; the point is to make sure you feel comfortable and look your best.

Ignoring the world’s perception of beauty is a difficult habit to break, but it’s an important step in looking and feeling confident without putting yourself into debt.

Money saving habits wreaking havoc on your health

Last week I wrote that frugal eating habits are also healthy eating habits. Since Tony and I restricted our budget even more, we’ve experienced a ton of positive health benefits, including weight loss, increased energy, and better sleep. It’s really made me start thinking about the balance between frugality and good health.

The truth is, it’s possible to take it to the extreme and practice unhealthy habits by trying to save money. As with other aspects of frugality, maintaining good health on a frugal budget requires balance. Here are some money habits that may be wreaking havoc on your health.

Cheap processed food

It’s no secret that fast food is cheap and convenient. Sunday paper coupons and sales can help you purchase processed foods at the grocery store for next to nothing. But at what cost? The recent documentary, “Food Inc.,” highlights the dangers of low-cost foods, and why they’re making the nation overweight and unhealthy. I haven’t seen the movie yet, but I do recommend avoiding “cheap” food. Instead, shop smart for fresh foods, buy produce when it’s on sale, and always strike a balance between food cost and good nutrition.

Avoiding health care

When our budget was at its tightest, we did the unthinkable: we lived for a year without health insurance. Dumb. The truth is, private health insurance isn’t nearly as expensive as you think if you’re young and relatively healthy. My husband’s costs $148 a month. Even if you have health insurance, you may be avoiding the doctor to avoid paying co-pays. Skipping checkups, refusing to visit the doctor, or ignoring health problems to avoid health costs is not a smart way to save money. That $20 co-pay could turn into thousands in medical bills if you’re not treated promptly.

Skipping exercise

Don’t make the mistake of thinking you have to pay for a gym membership to get active. I’ve found that $20 a month for gym membership is well worth the cost, but you may not be able to fit even $20 a month into your budget. If that’s the case, check out an exercise DVD from your library, go for a jog, or take a bike ride. You don’t need to spend money to get in shape.

Stressing about money

I’ve said it before: frugality is about improving your quality of life. Putting yourself under constant stress about money can lead to a wide array of health problems. If you find yourself obsessing about money because of your frugal habits, take a step back. Remember that the whole point of being frugal is to live a healthier, happier lifestyle by reducing the amount of stress you face about money.