Octsoberfest

It happened like this: I decided I needed to quit my job and strike out on my own, in small part because I realized it would actually be cheaper to work from home. No more buying gas once a week at $4 a gallon, no more checks written out to the dog walker, no more eating out for lunch (I've never gotten the hang of that bring-your-own-lunch thing). In fact, my calculations indicated that I could save around $500 per month by working from home. (Of course there's the issue of how I'd make any money, but that's a discussion for another time.)

"Fumar acorta la vida"

 

Starting to work from home would mean not only that I'd be going through a huge life transition but also that money would likely be even tighter. These two factors led me to conclude that Oct. 1 was the perfect time to quit smoking. Cold turkey. Quitting smoking would save me at least $60 per month. And there's that whole thing about not wanting to be addicted; as much as I love to smoke, I do not love feeling like I have to smoke.

Photo © 2009 by David Aeschliman

My chances of successfully quitting smoking would be raised, I realized, by keeping myself away from temptation. Namely: the bar. Or any alcohol, for that matter. I have a tendency to chain-smoke when I drink, so if I cut the alcohol out for the entire month of October, it would help me stay true to my goal. Another positive side-effect was that I'd spend less money. Somewhere around $25 a week less.

And that's how I decided on a smoke-free, alcohol-free month of October, which my neighbor and I, after much discussion, renamed Octsoberfest. (I discovered later that other people have also thought of Octsoberfest. I guess there really isn't any such thing as originality. Darn.) If you're interested in reading about how it's been going, click here.

How much money could you save by cutting out one habit or vice for just one month?

Little things for pet owners

Just a couple thoughts today on little things pet owners can do to save some money:

1. Pet insurance.

When my dog, Milton, came into my life a few years ago, he was scared but healthy. Not being a believer in the insurance industry in general, I passed on the offer of pet insurance. About 6 months later Milton was limping and crying, and it turned out he had a congenital defect that was causing hairline fractures in the head of his left femur. His bone was literally disintegrating day by day. Very painful. The surgery alone cost two thousand dollars. Add to that his regular check-ups, flea meds, heartworm meds, and a host of other things I won't go into here, and he's the most expensive little "free" dog ever. But this was my lesson: no pet is ever actually "free," even if you don't have to pay an adoption fee. Oh, how I'd wish I'd bought pet insurance when I had the chance! 20-20 hindsight, and all that.

It's true; there are a variety of opinions about whether or not pet insurance is worth it. So don't just take my word for it. Do some research to find out what's right for you. Here's an article against, one that's on the fence, and one (written by a veterinarian) that's for.

2. Poop bag alternatives. 

For the dog owners among us, poop bags can be incredibly expensive. Where I shop, 120 bags, about a 2-month supply, costs $13. A few months ago my dad offered to start saving his newspaper bags for me. Brilliant! If you don't get the newspaper, see if a relative or neighbor does and is willing to save the bags for you. Bread bags also work. Plastic grocery bags are not recommended, as they tend to have little holes in them. Yuck.

Keeping a budget: The why

I'd like to back up for a second here and talk about a basic money management tool: the budget spreadsheet. In this post I'll explain why I think this is a useful and important tool. In a subsequent post I'll tackle the how.

A long time ago, in a land far away, I didn't even have a bank account: I got a weekly allowance from my mom and dealt in cash. Overspending was never a problem because I only had the cash in my pocket; once it was gone, there was nothing more to spend.

In high school I got a job and needed a bank account so I could cash my checks without having to pay a fee. Though I didn't have many financial responsibilities, tracking my funds became a little harder. I learned that I couldn't really trust my bank balance because it takes longer for some transactions to go through than others, so on Saturday when the ATM said I still had 50 bucks left and I was like "Woo hoo!" and spent it, and then come Monday something I'd bought on Friday went through, I was suddenly in the red and paying overdraft fees. Yuck.

That's when I started tracking my spending in that handy little transaction register your bank gives you. Very helpful. I'd just keep all my receipts and write down everything I bought in that little book, and it greatly helped in avoiding those overdraft fees. Except when I forgot to write something down. Oops.

But even the transaction register is no longer sufficient for the convoluted mess my finances have become. I have automatic payments set up for things like the mortgage payment and the electric bill. I have credit cards. I have automatic deposit. This means that there's activity in my bank account that doesn't come through me directly. I also have expenses that are important and substantial but don't happen every month, like my car insurance payment.

All this has brought me to the budget spreadsheet, a fantastical invention I became aware of when I temped for a property management company and saw how they kept their properties' budgets. Amazing.

The budget spreadsheet helps me do the following:

1. Anticipate how much money I'm going to be spending each month and on what (vs. how much money I'll be bringing in) so I don't run into that overdraft problem;
2. Track trends in spending so that I can make conscious decisions about where my financial priorities are...for example if I'm having trouble paying my bills but I see that I'm spending a ton of money on eating out every month, I can curb the restaurant binge;
3. Factor in how much money I need to set aside every month for those less frequent expenditures, such as aforementioned car insurance but also vet bills, dog registration, car registration, oil changes, etc.;
4. Planning for fun stuff, like travel or going to a show once in a while: I know that if I want to do these things I need to save up for them on top of what I'm already putting aside for #3 above. (Does no good to set aside money for car registration only to spend it on a concert because I forgot what that money was in savings for.)

Even when I don't have a steady income or steady expenses I find it helpful to keep a budget spreadsheet because it helps me see how much money I need to make in order to keep my head above water, and if I'm short $100 this month then something has to get cut out and I can use the spreadsheet to fiddle with the numbers--whittle away a few dollars here, a few dollars there, until I'm in the black again.

Home decorating on the cheap

After hiring an underemployed friend to paint my bedroom last summer I began, finally, to put art up on the walls. Probably my favorite piece is a cheap frame I bought on sale at Fred Meyer and filled with art postcards. Total cost was around $12.

But then there was this big blank space over my bed that I couldn't figure out how to fill. A mirror? A big art piece? A headboard? I couldn't decide, so it stayed blank for many months. Then one night I was laying in bed, looking at the blank wall and thinking about how I had no money for a headboard. I remembered that my friend Brad used two old doors for a headboard, so I started to riffle through my mind's files for things I already owned that might create a headboard-like effect. Suddenly it hit me: I had an extra curtain rod and a pair of curtains my mom had given me when I first moved in. Perfect!

It looks quite nice, if I do say so myself, though perhaps it leans a bit on the bordello side of decor. And because it's fabric, it has the added advantage of muffling *ahem* "bedroom noises."

Speaking of blank walls, there was one in my living room too, until I found an enormous (4'x5') painting of a zebra head out by the dumpsters. Amazing what people throw away.

Another time I found a 2'x3' gold-painted picture frame with the glass intact out by the dumpster. Snatched it up and used it to frame some mementos from Paris, so now I have a free piece of art that is also highly personal and sentimental.

It turns out I've managed to do quite a lot of decorating using items I found by the dumpster, filched from my relatives, or already had lying around. I've been challenging myself to open my eyes, look around, and think creatively about what I already own so I can re-purpose what I'm not using into something I actually will use.

What are your cheap decorating tricks? What do you have lying around unused that you could turn into something both functional and aesthetically pleasing?

A narrow escape

Nearly every week I take time to visit the iTunes Store and download the newest free songs and music video (a money-saving strategy for adding to my music library, broadening my musical horizons, and finding new artists).

A few months ago I noticed something new: free eBooks. Since several of the free eBooks on offer appealed to me, I downloaded those as well, thinking I could use iTunes to read them. That did not turn out to be the case. After downloading the free Kindle app and having no success reading the free eBooks that way, I did some research and discovered that one can only read them on an Apple mobile device: the iPhone or an iPad.

When the iPad first came out I could not think of anything more senseless. It was somewhere between a smart phone and a laptop, but did not have the full capabilities of either. Who would possibly use this, I thought, and for what? But now a few of my co-workers and friends have iPads, and I've begun to see the possibilities.

So when I realized I'd need an iPad or iPhone to read the free eBooks, I started to think about it more seriously. I still viewed an iPad as a non-essential, luxury item, but since I could think of several ways I could use it, including using it to read these free books, I could start to justify a purchase. Even if it was (gasp!) $500. I had a tax refund coming my way--surely I deserved to be able to spend some of it on non-essentials?

What saved me was to think more seriously about that $500. What else could I spend $500 on?
a) New clothes--I hadn't bought many new clothes in the last couple of years; I lost weight last year and most of my clothes didn't fit me well anymore.
b) Ten nice dinners with friends--one of my favorite ways to spend "extra" cash is to treat my friends to a good meal and treat myself to their company.
c) An inexpensive, week-long trip--a priority in my life is to travel and experience new places and cultures, both in the U.S. and abroad.
d) A car tune up--my car is overdue for its next major service.

This kind of thinking helped me realize that if I do have an "extra" $500, I have other, more important spending priorities. I was on the verge of making an expensive impulse buy, and I'm glad I took the time to think about it differently. In the future I plan to use this reasoning more often to help me live in better alignment with my long-term goals.

Update on the food budget

Back in September I decided to try to save money on food each month by allowing myself $15 a day, whether I spent it on groceries or eating out (see original post). It's time to check in about that experiment.

The plan went well September-November...with a minor hiccup due to buying a couple friends dinner. But for the most I stayed within my food budget. What was interesting though is that after a couple months I found myself craving food from the supermarket, so I gradually began to buy more groceries and eat out less frequently. The general principle of spending $15 a day, however, remained intact.

December went...not so well. Which is to say that I spent almost my entire food budget in the first ten days of the month (I blame the cookie decorating party) and then had to live off of cans of soup and whatever else I could scrounge up until I went to my mom's for the holidays, where, fortunately, I ate for free right up until payday came around again.

In late December I started seeing a Naturopathic Doctor. All of a sudden I'm supposed to eat breakfast, take flax seed oil, take a daily vitamin, and eat red meat twice a week. Seriously?? My whole $15 a day thing pretty much hinged on only having coffee for breakfast. And have you seen how expensive flax seed oil is?!? Outrageous.

Oddly enough, though, I came in significantly under budget in January ($11.90/day) and only slightly over budget in February ($15.89/day). Could this actually be working??

It appears so. Hurrah! Here are a few tricks that I think have contributed to success:

• Chunking my budget. Instead of thinking I have $450 this month for food, I'm thinking I have $15 today, or $100 this week.
• Offsetting "splurge." I spent too much in early December, and the trade-off was cheap meals the rest of the month. If I go grocery shopping, I have to subtract what I spend at the store from my weekly allowance. The added expenses of breakfast, flax seed oil and red meat are offset by eating cheaper meals a few times a week. And if I decide to treat myself to sushi at Miyamoto, I know that means a few nights of very cheap dinners--black beans and rice, for example. Or a can of tomato soup.
• Dealing in cash. Whether I take $100 out of the ATM at the beginning of the week and use it to pay for groceries as well as meals out or whether I get $40 cash back when paying for groceries with a debit card, I've found it enormously helpful to deal in cash as a way of tracking my spending each week. There's an immediate, tangible consequence to spending cash: once it's gone, I'm done spending money on food that week. End of story.

The little things

In an attempt to shave every little last bit of unnecessary spending out of my monthly expenses, I recently downgraded from an Android phone to a flip phone, which will save me $40 a month.

And then I started thinking about all the other little things I've cut back on or cut out of my budget in the last two years and wondered how big a difference they're making.

In addition to downgrading the cell phone, I've cancelled my Netflix subscription, reduced the number of haircuts a year from four to one, stopped buying facial cleanser, cut back on the amount of wine I buy at the grocery store, and switched from doggie daycare to dog walking.

The result? I'm spending about $317 less a month, or about $3,810 less a year. Not bad!

Now if only I could figure out where all that "saved" money has been going instead...

A beautiful book, a moral dilemma

I was in one of my favorite shops this weekend (Presents of Mind) when I came across this book: Savvy Chic: The Art of More for Less by Anna Johnson.
After I got over the minor depression of possibly having found that the book I one day aspired to write had already been written, I picked it up to admire the hip cover art, glossy pages and satisfying weight of it in my hands. Sigh. This truly is a beautiful book.

The table of contents and a snippet of a chapter read in the store confirmed that this book would be of interest both to myself and to the readers of this blog. Then began the debate with myself over whether to buy it. Could I justify spending money I don't really have on a book that might save me money in the long run? It would be a long-term investment, see. And surely reviewing it on the blog would be like a public service. So a good karma investment as well. Surely that must be taken into consideration.

Then I looked at the price sticker. $18.99? Really? Does anyone else see the irony in this? Almost twenty bucks for a book about how to live the good life without breaking the bank. Do you know your audience at all?

Later in the day Mom was telling me about the challenges the owners of her local bookshop face: people will come in, browse the books, decide on the ones they want and then go online to buy them for cheaper. She feels sad and disappointed that these people benefit from the physical bookstore but don't reciprocate by buying there. If we don't buy from the physical stores, she points out, they won't be there anymore.

When I looked for Savvy Chic online and saw that I could buy it for almost ten dollars cheaper than the list price, I thought back to the conversation with Mom about supporting the local shops. And now I am faced with a moral dilemma. On the one hand, yes, I love to browse Presents of Mind. I love that it's there to be perused and that their buyers have such fabulous taste. I acknowledge that without this store I might never have come across this book. On the other hand, it's so darn expensive!

These are the kinds of moral dilemmas I face every day: a seeming choice between living within my means and being socially conscientious. How do I reconcile the two?

Do I buy the book cheaper online but shop at Presents of Mind next time I have some extra cash? (Pfft. Yeah. Like there's such a thing as "extra" cash.) Do I go a few more dollars into debt to support the local shop? Do I avoid choosing between the two and forgo the book altogether? Or do I borrow it from my local library, which saves me the most money and also supports a public service in which I believe?

This time I'll go with the library, and if I like the book enough, I can always save up the money, a few dollars at a time, to buy it from the local shop later. But the essential dilemma--the choice one has to make from time to time between supporting local business or saving money--still remains. It lurks in dark corners, waiting for the next opportunity to strike.

Update: Free Christmas

Well, I did manage to find presents for each of my family members with whom I spent Christmas. I gave books and DVDs that I wasn't reading/watching, necklaces I never wear, mixed CDs I made with the recipients' music tastes in mind, bottles of wine I'd actually bought for myself but decided I could part with, and coupons for shoulder rubs. It also helped greatly that a friend of mine makes fabulous scented soaps and gave me several bars, with permission to re-gift them.

What's more, I didn't spend any money this year on the wrapping.

To wrap this year's presents I used:
-recycled wrapping paper & bows
-pages from the free alternative weekly newspaper
-recycled greeting cards
-new wrapping paper I'd bought last year
-various gift bags and boxes I'd kept from presents I received in past years
-an empty stationary box

The trick to most of this, of course, is to keep empty boxes, Christmas cards, used bows, etc., which comes with its own price: space. A couple plastic tubs and various boxes are full of this stuff, and it does take up room in my closet.

If I didn't have the space (or hadn't kept this stuff), I would have resorted this year, as I have in past years, to wrapping everything in pages from the free newspaper and labeling presents with plain pieces of paper. I like to look for large color ads or articles that the recipient might find interesting; it gives it a more thoughtful touch. (An example of this in the photo above is the present with the wine bottle on it, for my uncle who is something of a wine connoisseur.)

I'm curious about how other people saved money this Christmas. What were your tricks or strategies, from the actual gifts to the wrapping?

The food budget

My whole adult life I’ve struggled to live within my means. The main challenge to my success seems to be my love of eating out.

Eating out affords me many luxuries: a variety of foods can be bought and consumed without having to think too far ahead; on any given day I can decide that I want Mexican or Chinese or Thai or sushi, a hamburger or a hummus plate, salad or french fries; I can buy foods that I haven’t the first idea how to make in addition to pretty much anything I do know how to make (with the exception, perhaps, of a few dishes no one outside my family has heard of).

But eating out tends to be expensive and less healthy. The going rate for a dinner entrée in my town is around $12, whereas I can feed myself at home for as little as $3 a meal. I also tend to eat richer, more fattening foods when I go out. I mean, what’s the point in spending all that money if I just get something healthy and don’t really enjoy it? I’m sure that one can find reasonably priced, healthy food in restaurants, but I haven’t had a habit of doing so.

Historically, then, every time I go over budget and have to find a way to cut back, one of the first things I look at is the money I spend on eating out. As my fellow blogger Jackie notes, meal planning and eating at home can save a lot of money. “I just have to be more disciplined,” I tell myself. “I’ll just have to buckle down, do the grocery shopping, pack my lunches every day, and get my spending under control.” And you know what? I always fail.

Even though I have the best intentions and feel ultra-determined, I always fall off the wagon. Maybe the first week I’ll do okay, but the second week I’ll forget to go grocery shopping and end up buying lunches and eating snack food and pasta for dinner. The third week I’ll try to get back on track and go grocery shopping again, buying a bunch of food that ends up sitting in the fridge until it rots because I don't leave time in the morning to pack a lunch and I don’t have the energy to cook when I get home. The result: $300 a month on groceries that rotted and $400 a month on eating out, for a ridiculous grand total of about $700 a month on food. Outrageous.

The reason I keep failing, I’ve realized, is because the difference between eating out and cooking at home is a lot more than just money. Yeah, I can save money by making my meals at home, but you know what I lose? Loads of time and energy: spent planning my meals for the week, going grocery shopping, getting up early to pack a lunch, cooking and—worst of all—cleaning up after myself. That stuff takes hours! By the time I get home from work, cook, eat, and clean up, it’s pretty much time for bed, and I’ve spent most of my time at home doing things I consider to be chores.

So the last time I got serious about cutting back on spending I tried to think of something different. Something that would be cheaper, but which also didn't take up too much time or energy. Because although money is essential to my idea of quality of life, it’s certainly not the only factor, and I don’t want it to always be the deciding one. I came up with a new idea, a brilliant idea! All this time I’d been trying to cut back on eating out and do more cooking at home. But what if I stopped grocery shopping and only ate out?

I did some quick calculations and discovered, much to my joy and amazement, that allowing myself $15 a day would result in spending far less money per month on food than I had been spending when trying to be good. And $15 a day, while modest as a restaurant budget, actually seemed do-able. Since I usually just have coffee with creamer for breakfast (one of the few things I’d still go to the grocery store for) my breakfast budget wouldn’t need to be big, say $3, which would leave $6 for lunch and $6 for dinner.

If I splurged and bought a dinner that cost $12 or $13, I would exercise restraint and just eat half, leaving the other half for another meal. This would encourage me not to overeat in the first place, thereby contributing to my health goal, while keeping me on target financially.

After thinking about it a little more, I decided I wouldn’t forbid myself from grocery shopping either. I’d allow myself to buy food at the grocery store, so long as I didn’t overspend my weekly food allowance. In order to make sure that was the case, I’d use cash rather than debit so I could keep a closer eye on how much I was spending.

I’ve been trying this out since September and I am delighted to say that for the first time in my adult life I’m actually spending less on food than what I’ve budgeted for. In terms of time, money, and energy saved, it’s working out beautifully.

The down side, of course, is that there are only so many options for $6 a meal that aren’t junk food. I’m not eating many fruits or veggies, and I’ve taken to eating fast food more often, facts which are not in alignment with my health goals. These, however, do not seem like insurmountable obstacles, especially since there’s a fancy grocery store close to my work where I can hit the salad bar for a little under $4, and since it has meat, kidney beans and bleu cheese dressing, it’s filling too.

It's an experiment-in-progress. I'll let you know how it goes.

Free Christmas

With Christmas approaching I once again turned to my budget spreadsheet. In past years I’ve been able to scrape up a couple hundred dollars for Christmas presents, which has been sufficient. (Last year all of my adult family members received a bottle of inexpensive but delicious wine, which cost about $100).
Being on a tighter budget than ever this year, I find myself with no money to buy Christmas presents, not even cheap wine. My options, therefore are: (1) To take money out of savings to cover the cost of Christmas presents & replace it after Christmas with whatever money I receive at Christmas; or (2) Come up with zero-cost present ideas.
Option two makes the most sense to me. I’ve looked around at what I already have on hand, and here are the zero-cost present ideas I’ve come up with so far:
-Mixed CDs compiled from my music collection (accompanied by guitar chords printed off the Internet for my guitar-playing relatives)
-Books off my shelf that I think a particular relative or friend would enjoy
-Homemade cards (I have a box full of craft supplies that I almost never use)
-Certificates promising future service (e.g. Dog-sitting, baby-sitting, cleaning, cooking a meal, etc.)
-Re-gifting household items that I either don’t use anymore or have never used, such as clothing, picture frames, or decorative knick-knacks
-Coupons from this year’s Chinook Book that I don’t expect I would use, but that I strongly suspect another of my friends would use
My survey of friends and co-workers for ideas to steal has also resulted in other low-cost ideas that, while not practical for me, may appeal to readers of this blog:
-Home-canned goods from the summer’s canning
-Jars of pop corn kernels
-Homemade baked goods, chocolates or candies
-Travel-size bottles of shampoo, conditioner & lotion; bars of soap; shower caps…in short, whatever could be claimed from the bathroom of a hotel room on your travels
-The blog Beg, Borrow, Barter chronicles a woman’s year-long experiment in not buying anything new and also has some ideas about cheap/free gifts
There are two criteria that I’m trying to follow in this gift-giving business:
1. Don’t give away anything I’ll need to replace at a later date. Otherwise it defeats the purpose. For example, I don’t want to give away my only copy of my favorite book because I’d just have to replace it later and while the expense is deferred it is not avoided. What I want to give away is a book I’ve either never read though it’s been on my shelf for years or which I’ve read once and think it highly unlikely I will ever read again. Probably I should also include in this criteria that I shouldn’t give anything irreplaceable: what if I decide later that I do want to replace it, but in order to do so I have to go back to Spain to find another one? Not good.
2. Don’t give just to give. I value thoughtful presents. An expensive gift that shows no awareness of my personality or lifestyle means far less to me than a cheap gift that takes into account my personality and lifestyle. I’d much rather receive the homemade chocolates than an expensive sweater I’ll never wear. So the book (or whatever) I choose to give has to be one that I not only don’t care about replacing but which would appeal to the recipient. Tricky. Very tricky.

The goal

Balance. What I really want is balance.

Because yes, I do want to live within my means, but I also want to have time and energy to do the things I love. I want to be able to make choices that are socially and environmentally conscientious, and I want to look good and feel healthy. I don’t want to have to choose between these things; I want to find ways to balance them all.So here I am: single, 32, with a house, a dog, and a job that (at least in theory) pays a living wage. And I am struggling to live within my means. I am lucky enough to have escaped student loans and car payments, and right there I am better off than a lot of people. And yet I still find it hard to balance the things that are most important to me.

I don’t think I live excessively. I don’t throw big parties or go clothes shopping more than once a year. I don’t buy expensive cuts of meat, or even buy meat every week. I don’t go out drinking every night or every weekend (anymore). I’ve cut out a lot of the luxuries: regular haircuts, buying wine, facial cleanser, cable TV.

After taxes and bills, my money goes to food, gasoline, auto maintenance, dog care, cigarettes, and the very occasional impulse buy of a book or movie. Really, that’s it. So as you see, when it comes to cutting things out of my budget, I haven’t got a lot to work with.I’ve been trying to put aside a couple hundred dollars into savings each month, but each month there seems to arise some unexpected expense (emergency trip to the vet, visit to the doctor's office that I hadn't planned for, travel for a conference, etc.) that not only prevents me from saving money but actually results in my having to take money out of savings. The situation, therefore, is this: not enough money coming in to cover my expenses, and a dwindling savings account.And yet I want to travel and take classes for fun. I want to put money into savings so I have an emergency fund in case my dog needs another $2,000 surgery or (god forbid) I lose my job. I want to wear pretty clothes, buy local & organic food, and use environmentally friendly cleaning products.The point of this blog is not to whine about all the things I want that I can’t afford. And I am well aware that, compared to many people in this world, I have it really good. No, the point of this blog is to find out if I can have more of what I want by using the resources I do have differently. The Penny Pincher gives me the incentive to start getting creative.