Hey, the beatles!
I am completely hooked on this thread and following it intently. I just got caught up.
Let's recap.
FIRST - this is only four days since the original post. Right?
SECOND - You already have accomplishments.
In those four days, you have already cut out $600 monthly spending on lunches for other self employed people at work.
You have cut off the massages ($70 monthly?)
You are now looking into budgeting for groceries and meals out.
Even without the grocery and meals out - you have saved $670 monthly, or $8040 a year. That's more than $80,000 over a decade.
Start calculating the value of your savings over ten years, and you will see that even little expenses (on a monthly basis) add up to large amounts.
$80,000 over the next ten years.
The next step will put that
well into six figures.
I was going to ask,
what's next? I think I answered my own question, though, and the answer is tackling groceries and meals out. Is this correct? If so, then this will make a huge dent in your spending.
Don't expect to do it all at once in one month. I think your initial goal is too ambitious for a one month cut. 75% all at once is likely to result in failure. Instead of setting and artificial dollar amount, instead start looking at each and every purchase - is this
needed? Can I cut it out? Is there a way to do it cheaper? The end result may well be a 75% cut, but it might take a while, and the process of figuring out what you need and how to get it efficiently will IMPROVE your life. Simply setting a number arbitrarily is going to feel like it is not an improvement to your life. Does that make sense?
I have a similar income to you, and I have 4 kids! So, hopefully, you will not be dismissive of what I say on this. We eat A LOT (just by myself, 8 eggs and 1.5 to 2 pounds of meat daily, and that does not include the rest of the family, plus my veggies and carb sources to fuel workouts). So we are not starving, but we typically spend about $600 monthly on groceries.
Eating out was a big financial issue for me and my wife, as even a few times a month can add up to hundreds of dollars. We called it quits almost entirely on eating out. if you cannot just cut it out entirely, then I think it would be a good idea for you, if your wife is on board with it, to set a dollar limit and pull it out of the ATM in cash. Then your wife and you decide, whatever this dollar amount is, that is it for the month. If we eat out, it will be using this cash. When it is gone, it is gone. No debit card use for eating out. No credit card use for eating out. No cheating. This includes fast food runs with the kiddos because of lack of planning and, well, we have to eat (my wife and I have been there, beatles, I know). Only from that one cash source and nothing else, ever. This includes any meals out for yourself at work. You spend $7, and it is $7 less in that monthly cash envelope for eating out. No excuses. When it is gone, then it is gone. See that Saturday Night Live.
Groceries - the biggest deal will be to buy nothing prepared. If it is in a box or a bag, then do not buy it. If it has ingredients, then do not buy it. Buy raw meat. By raw vegetables. Well, rice and potatoes sometimes come in bags, but you get what I mean. No juice, soda, or any other sugary crap. Sugar is the devil, and your kids will behave so much better once you stop infusing them with excessive loads of it. Your wallet will also thank you.
The second biggest deal is to comparison shop. My wife (SAHM, like yours) does much of this online now. Do they have an Aldi where you are? Check it out if you have not.
Tackling one thing at a time like this will help keep you from burning out. If you look at my journal, I was near a 50% savings rate (similar income to you, 4 kids) in 2015, but then I crashed and burned in spectacular fashion. I basically saved
nothing for 2016. I lost an entire year from my goals. I am trying to get things back on track for 2017.
I am older than you by decades (or very nearly decades). I WISH I had figured this stuff out at your age. I would be very well set by now.
You have a HUGE opportunity here.
I also feel like I have to post on one issue that keeps coming up, and that is your parents. It is time to divorce yourself from them financially. You asked earlier, "What is wrong with parents helping out their kids?" Your question is rhetorical, and it assumes that nothing is wrong with it. The problem is that your underlying assumption is wrong. While the parents are well intentioned, they are actually
harming their kids. Thomas Stanley studied this issue, and he wrote about it in his book, The Millionaire Next Door. He called parents helping their kids Economic Outpatient Care. The results of his study were precisely backward from what everybody expected. It turns out that kids who receive help from their parents are hamstrung financially. They are less able to cope with finances, spend more, run up debt, and accumulate far less wealth.
Here is a little bit about it.
http://www.thomasjstanley.com/2014/04/millionaires-favorite-chapter-in-the-millionaire-next-door/Actual quote from the book with his finding:
. . . in eight of the ten occupational categories, gift receivers [those who receive economic outpatient care] have smaller levels of net worth (wealth) than those who do not receive gifts.
Shocking, isn't it?
So do yourself a favor, and stop soliciting this harmful influence in your life.
As my final advice in this post, just a recap, first, did I record your first four days of accomplishments correctly? If not, please add anything I missed. I do not want to be inaccurate.
Second, move on to groceries, comparison shop, buying whole food (not processed) and reduce or eliminate entirely eating out.
Third, calculate all of these savings on ten year terms to figure out what these things are really costing you.
Fourth, find the next issue and move on to it.
One step at a time!
You have made $80,000 of savings over the next decade, and are about to create over six figures of savings!
