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Archive for February, 2006

Where does it go?

March 1st, 2006 at 04:46 am

Looking at my Quicken records, it is becoming clear what I spend my extra money on. I still live below my means, but I had idly wondered where the money went, as I was still so low with groceries, cleaning supplies, etc., and my savings was growing but at a slower pace than I would like.

I already knew that travel and gifts and dining were a big piece. I spent an embarrassing amount last year. Even going to Europe cheap for 2 weeks is a good chunk of change. I still consider that money well spent-by the way, Budapest has incredible Turkish spas, and the Van Gogh museum in Amsterdam actually made me cry. I enjoy dining out and traveling and giving gifts, and do not regret them, but the dollars were big time. I had a Europe trip and a Mexico trip, and didnít go into debt, but wow. Itís sad to think of losing the travel at a low wage, though I can see that dining and gifts given are a bit decadent.

But, there are money eaters I hadnít realized. I spent $300 in jewelry last year. Now, no single piece cost over $50, and most $15 to $25-I happen to prefer silver and semi-precious stones. I always buy a piece of jewelry when I travel-earrings from Oaxaca, a ring from Brugge, a couple amber necklaces from Krakow. I don't regret this either, but wow, that's $25 a month, nothing like I could do if on minimum wage.

Yesterday, I ordered 12 books on half.com for 33 bucks. That's a decent price, and I am a book junkie. But I spent $224 last year-19 a month, and that's even despite all the books I get at the "buck a bag" sale, which ends up being a penny to a nickel a book, depending how many books I can fit in the bag. No more Half.com on the challenge-ďbuck a bagĒ only.

And, Iím even realizing that sometimes savings might require spending. As you could see from some of my posts, my electric bill is awry. We are considering buying a new dryer if the PG&E rebate is good and we can get a good price. But what if my half is $100, or even $200? I canít fit that in the challenge, I couldnít do that without serious scraping at real minimum wage. I donít know if Iíll do it or not, but I certainly have been pondering every expenditure. Poverty can lead to more poverty: toilet paper by the roll or 4 pack can be much, much more than by the 24 pack.

Tomorrow I begin! I am excited. I will be more aware of where I get good value from spending (frankly, I know I will still travel), but in other areas I will be able to reduce spending at the same time that I have a greater appreciation for the value I get when I do spend in a luxury area.

Excitement is mounting

February 28th, 2006 at 03:23 am

I've been working at getting into that very frugal, instead of mostly frugal, headset.

Today I went to the Canned Foods Outlet (a friend calls it the Used Food Store) and I almost felt guilty, like it was cheating to buy groceries 2/27 before starting the challenge 3/1. Then I realized, it would be sillier to avoid doing a regular shopping run. I bought what I would normally buy, without regard to stockpiling during my lean months.

It's funny, I just posted about buying $80 shoes (that I don't regret-Dansko's-love them) but other items I am so price sensitive. I was upset the Canned Foods store had no conditioner under $1.99, even though the $1.99 was a big bottle. I searched long and hard for 99 cent antiperspirant. I "splurged" on a fifty cent asian pear, because I've been trying to be less stingy about fresh fruits and vegetables.

However, it's not too contradictory-I get really good value from my Dansko's, and I am totally brand insensitive to conditioner (which I don't even use every wash) that I might as well save on conditioner to have money for shoes.

Spending money on my priorities-huh, not contradictory at all.

This will work

February 26th, 2006 at 09:50 pm

Excitement builds pending the start the Modified Minimum Wage Challenge (MMWC) in 3 days. I'm checking my frugal tool belt to see if this will be doable, and I think it is.

I made muffins from scratch (following the loose Tightwad Gazette recipe), so will have breakfast and snaks though the week. Mango-cornmeal-oatmeal-raisin-brown sugar-bran muffins-it's a very loose recipe.

I've purchased the YNAB spreadsheets, and I really like the look of them. Since I have almost 8 years of spedning in my Quicken, I don't think I'll be able to switch my "regular" money to it. I will be able to easily track my MMWC progress, and even if I slip, I should still be saving a significant amount of money.

I remember when I was going to school for 14 units while working full-time, and then graduated. It was funny how easy an 8 hour day was. Granted, I have no dependants and a very short commute, but when I was able to be home by 4:15 and all that time was mine, it felt very decadent. Now, of course, I'm used to the 8 hour day and it seems long.

What I hope this challenge will provide me, along with additional savings, is a reminder of how wealthy in some ways I really am. Just having a warm bed and unlimited food and more than one set of clothes and regular health care makes me much wealthier than many in the world. By limiting my spending, I will again not take for granted the wealth I do have. To be reminded to be grateful is a lesson I will gladly take.

Even within my challenge, I have many luxuries. I'm not sure what I will do it a travel oopurtunity comes up-I think I will go ahead and travel, and take the expenses "outside" the challenge. That may be cheating, but travel is rewarding and I will still be ahead.

Come Wednesday, I'm ready.

Starting Two Challenges

February 25th, 2006 at 08:55 pm

I'm joining the $20 challenge and the living on minimum wage challenge at the same time.

Here's my initial planning for the challenge of living on minimum wage. Iím going to make this a double challenge by buying JMJJ215/Jesseís YNAB budgeting spreadsheet for $20 (less a nickel)and seeing how much that $20 helps me save by living way below my means. (This isnít a plug-yet. I donít know Jesse, I just need a separate way to track this specialized budget outside of my current Quicken. I use Quicken to track, not budget, and with this I will need to budget-for example, I wonít be spending $20 a month on Auto service, Iíll be banking $20 a month towards auto service.)

As I live in California, I am going to use the California minimum wage of $6.75. Part of my justification is that I have some current expenses that I am not comfortable cutting, such as health insurance and prescriptions. The other justification is that I do live in CA, and couldnít make less than $6.75. If I truly had a minimum wage job, either $6.75 or $5.15, I would likely have no insurance, and would struggle to find special programs to cover the 1/3 of my prescriptions that are absolutely crucial.

In doing this challenge I am in no way stating that I believe that the minimum wage is fair, etc. This is not a political statement of any sort. Iím doing it because I can really boost my savings by doing this, and remind myself that things I have taken for granted recently are really luxuries.

All rent and utilities are exactly half of the household total; my boyfriend covers his half with his income-this has been our arrangement for over eight years and this challenge wonít affect it. He will likely actually enjoy the scaling back as he is off work living on savings now (for fun, not laid off).

CA min wage of 6.75 at 40 hours a week at 4.33 weeks a month is $1169. Less 7.65% FICA for $90, 1/2 percent SDI for $6. Iíll assume due to low income no federal or state tax liability.
$1169 Ė 96 = $1073 total to work with

My expenses are taken either from the exact monthly bill, or my total from 2005. I have used Quicken since 1998 to account for every penny spent, so my figures should be accurate.

Rent $400 (A larger place than I need; if I was min. wage Iíd scale down)
PG&E $100 (Our bill is crazy, see other posts)
Phone $ 9 (Just the basic line, long distance is on a prepaid MCI card Ėnegligible, Iím still going on a card bought early 2005)
Cable TV $5 (We have the very basic limited cable)
Cable Internet $30 (We compensate by having a sweet connection-again, something that is a luxury)
Groceries $145 (2005 $1227/12 mo = $102 a month, but I need to increase to lower my dining out amount Ė maybe three meals total a week lunch and dinner- a luxury I will cut for this)
Personal $ 27 (2005 $253/12 mo. My groceries amount really is only food, I separate shampoo, tampons, etc. Haircuts are included in this, and I went crazy on bubble bath last year. I can probably do much better here.)
Netflix $10 (Half membership of 3 at a time. Again, I could/would cut if necessary.)
Household $21 (anything from toilet paper to furniture, last year $243)
Car-Fuel $15 (2005 $167/12, plus a dash) (I have less than a mile commute)
Car insurance $51 303 2x a year.
Car Reg $9 ($105/12 mo.)
Car AAA $4 ($40/yr for Ĺ a two person family membership)
Service $20 hoping for no more than $240 for the year-itís a 2000 Saturn w/ 33K miles on it, well kept)
Health Ins. $44 (My share, work pays the rest. Yes, this is unfortunately a luxury these days, but thatís a different story)
Health-other $62 (2005 $739/12, for copays, deductible, prescriptions, eyeglasses, OTC meds. If I was minimum wage, Iíd learn to go without.)
Clothing $25 (2005 $552/12 mo. makes it $46, but I was very luxurious last year and spent a lot-a couple pair of Dansko shoes, etc. I could easily cut it down by shopping smarter)
Entertainment $20 (Yes, Cable and Netflix is already entertainment. I donít go out to movies. Iíll use this for garage saling, dining out, and poker.)
Workout $17 (Local Adult school, cheap water aerobics and weightlifting. Iím overweight and working on it, the price is reasonable. I could drop this but I am considering it health related.)
Charity $20 (Iíll give less than usual, but I canít give none.)
Savings $39
Total $1073

These are bills/expenses I donít have: Credit card debt, car payment, cell phone, anything kid or pet related. (I will have pets again someday.)

Now, if I really only had this much, I would: cut cable; cut food to $100-I have done it, the $145 will easily accommodate my club soda and fresh fruits and treats; cut Netflix, cut medical expenses-some prescriptions, doctors visits, and glasses; cut personal-fewer and cheap haircuts, much less bubble bath; cut the workout expense and walk to work instead; but, I actually would probably keep cable internet because my boyfriend is total geek, we run servers (donít ask) and I am super spoiled-it would be a last luxury.

Things I spend ďtoo muchĒ on now: dining out a few times a week-I increased my food budget to compensate. Travel-I went to Poland and Mexico last year. Gifts - a great satisfaction of having some extra money is buying friends and family treats, like my dad a lap top, or paying for his hotel when he visits, etc. I will get frugal gifts, which I do currently give-I think a $3 garage sale item can make a ďbigĒ gift if itís right.