Author Topic: Cut Lifestyle Creep  (Read 3484 times)

mcraw25

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Cut Lifestyle Creep
« on: June 30, 2019, 12:50:24 PM »
Topic Title: Reader Case Study - What to Cut?

My job satisfaction has fallen off a cliff over the past few months. It pays but is very stressful and more and more i dread going to my office. I am applying for other jobs, but most require accepting a substantial pay cut. I would like to hit $2MM to feel FI. Getting there asap is the goal.  Generally I spend every penny in my base pay, but save most of my RSUs and contribute to 401K about 5% of take home pay. I came across this forum and did a budget for this month of actual expenses. It was eye opening how undisciplined Ive become. I consider my self a saver and frugal.  Putting numbers to paper I realized I have a lot of wasted expense. If I take a lower paying job, I have to get back on track with my budget to hit my FIRE goals.  MMM folks seem to be rock stars at this. Im a bit new to this cult. Help me out.  What would you cut back if you were in my shoes? Hit me, I have my big boy pants on. 

Life Situation:

Married. I am 37, wife is 34. 3 very young kids.  I am employed at a mega corp, wife is a stay at home mom. 

Gross Salary/Wages:

~100K annual base pay + ~70K RSU company stock (currently, very subject to market changes)

Rental Income, Actual Expenses, and Depreciation:

Own 2 paid off investment homes. Rent payments gross are $1,500 and $1,200.  Should mention these are in different states and I pay a property management company.  Not a perfect setup, I am considering selling 1 to pay off primary residence.

Taxes: Federal, state/local, and FICA. 

I believe its ~28%Fed and ~5% state.

Current monthly expenses: Meat of my question.

Overall I took in about $8K and spent just about every penny (excluding 401K contribution of 5%) 

Giving (10% of base)

Charity/Church $650.
Kids School Donations $150

Housing (31% of base)

Mortgage $1520 (30 yr fixed, 4.1% interest rate)
Water $100
Gas $40
Electricity $300
Phone $100
Internet $55
Pool $100 (pay a guy to maintain salt water pool)
Repairs/home projects $200
HOA $75

Transportation

Gas and maintenance $265

Food (16% of base)

Groceries $800
Restaurants $300
Various household/ diapers / laundry: $200

Lifestyle (17% of base)

Clothing $100
Child Care $220
Netflix/Amazon $41
GYM $120
Haircuts $30
Hobbies $400 (PM coins, bitcoin gambling, wife spending, weird crap off ebay)
Date night $100
Gifts to friends/family $200
Home Security $25
Kids Activities $100
Personal Care Products $50

Life and Auto Insurance

total $345

Rotating Expenses


Rentals and personal $565

Assets:
3 Houses : ~$685K in Real Estate equity. Just bought primary residence, only including equity in this equation.
Roth IRAs/401K : ~$275 K (all index funds with low ER)
Cash : ~$55K
Gold/Silver : ~$11K

Liabilities: only debt is residence. $270K at 4.1%. 

Net worth (assets - liabilities) just gets me in the 2 comma club. Hit this goal about a month ago! Real Estate appreciation covered up my spending sins.

six-car-habit

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Re: Cut Lifestyle Creep
« Reply #1 on: June 30, 2019, 03:33:45 PM »
It looks like you are tithing 10% of your work salary, and getting the $150 in monthly school donations as 10% of the rental incomes ?  Do the kids go to a free pre-school ?  If not why so much donation $150 each month for kids school....

What is GYM @ $120/mo ?
I thought the idea behind a salt-water pool was that the maintenance was way easier, so why a pool guy @ $1000+/yr ?
What is a PM coin ? an alternative to bitcoins ? is $200 a month on "virtual coins" a good plan with only 5% going into a 401K...
Restaurants @ $300 a month - cut that in half. Kids don't eat a lot.  Drink water if you'all want dessert, Not lemonade + dessert when at restaurant.
$200 a month in gifts - thats a lot of birthday parties - is this not charity of sorts ?
$220 / mo child care , is this for date night ?   Stay at home parent could rotate kid watching duty with a friend for free maybe if she needs time alone.
Wife gets  a 20 hr a week job when youngest enrolls in first grade - 6 yrs old.

I only see $756K in net worth , does the addition of the RSU's bring you to $1,000,000 ?

edit to clarify restaurant thought

« Last Edit: June 30, 2019, 04:17:16 PM by six-car-habit »

mcraw25

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Re: Cut Lifestyle Creep
« Reply #2 on: June 30, 2019, 03:56:59 PM »
It looks like you are tithing 10% of your work salary, and getting the $150 in monthly school donations as 10% of the rental incomes ?  Do the kids go to a free pre-school ?  If not why so much donation $150 each month for kids school....

What is GYM @ $120/mo ?
I thought the idea behind a salt-water pool was that the maintenance was way easier, so why a pool guy @ $1000+/yr ?
What is a PM coin ? an alternative to bitcoins ? is $200 a month on "virtual coins" a good plan with only 5% going into a 401K...
Restaurants @ $300 a month - cut that in half. Kids don't eat a lot.  Drink water or get dessert, Not lemonade + dessert when at restaurant.
$200 a month in gifts - thats a lot of birthday parties - is this not charity of sorts ?
$220 / mo child care , is this for date night ?   Stay at home parent could rotate kid watching duty with a friend for free maybe if she needs time alone.
Wife gets  a 20 hr a week job when youngest enrolls in first grade - 6 yrs old.

I only see $756K in net worth , does the addition of the RSU's bring you to $1,000,000 ?

Hi,
Thanks for the response and ideas. Responses here.
The $150 is a part of our goal to give/tithe 10%.  Its not required. The school is free. 
I have 2 gym memberships. One near work and one near home that has great kids care. I should probably cut one.
You are probably right about the salt water pool. This is my first pool and the previous owner suggested keeping the service as he had failed at self maintenance. Good idea to learn it myself.
PM coin= precious metals. Fair call out that its not good to buy bitcoin and under fund retirement. Ill fix it.
The gifts are mostly kids friends birthday parties. I never expected to attend so many before I had kids. It is a notable expense.
The $220 is indeed associated with date night.  Good idea to set up a rotation! I think thats an easy win.
As for net worth, its the way I did the math on the primary residence. Have 3 homes worth ~$955 total. I owe $270 on one. So $685K in equity. My bad, I didnt really list as assets - liabilities.

six-car-habit

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Re: Cut Lifestyle Creep
« Reply #3 on: June 30, 2019, 04:15:08 PM »
oops - I thought GYM was an acronym - Well i spend $90/mo for us at a gym. Worth it for our fitness, but we do go at least 2-3 times a week.  I think if you cut out the work location membership, that is an easy win.

On the kids parties - yes - that is an unexpected expense that crept up on us also - and we only have 1 kid.
On the bright side, as kids get older they tend to invite less friends to each party , so that expense will go down , eventually...
Also , one week later , who remembers which kid gave which present to whom .....nobody.
A quote i like for this situation -- " My [childs] presence here is present enough " . I don't say it out loud, but i do think it !
« Last Edit: June 30, 2019, 04:19:17 PM by six-car-habit »

RWD

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Re: Cut Lifestyle Creep
« Reply #4 on: June 30, 2019, 04:52:29 PM »
I calculate your total expenses at $7,151/month. That is quite high. The good news is that there is a lot of fat and it should be relatively easy to cut $1,500/month with little impact to quality of life if you are serious about it.


Electricity $300
Ouch. $200 has been our absolute max electric bill with an average around $100/month. And that was with living in very hot southern states.

Pool $100 (pay a guy to maintain salt water pool)
Can you DIY?

Groceries $800
Even with 3 kids this is very high. I think this should be under $600.

Restaurants $300
Date night $100
Your monthly budget for these is about what we spend annually.

Various household/ diapers / laundry: $200
Personal Care Products $50
Seems high. We're at ~$50 for both these categories combined but we don't have kids so no diapers.

Netflix/Amazon $41
GYM $120
Something can be cut here.

Haircuts $30
Per month? Holy crap. Again, that's like our annual cost.

Hobbies $400 (PM coins, bitcoin gambling, wife spending, weird crap off ebay)
Seems like you could scale this back significantly. Definitely stop gambling with Bitcoin.

Gifts to friends/family $200
You are very generous. But stuff is not as valuable as time.

Kids Activities $100
I thought your kids were very young. Why do you have $100/month of activities already?

Life and Auto Insurance  $345
We're paying $100/month for auto insurance (a Porsche and a Subaru). Why do you need life insurance when you already have a net worth of $1 million?

mcraw25

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Re: Cut Lifestyle Creep
« Reply #5 on: June 30, 2019, 06:31:52 PM »
Quote
I calculate your total expenses at $7,151/month. That is quite high. The good news is that there is a lot of fat and it should be relatively easy to cut $1,500/month with little impact to quality of life if you are serious about it.

Thank you for the advice. Agreed. I am serious.

Quote
Electricity $300
Ouch. $200 has been our absolute max electric bill with an average around $100/month. And that was with living in very hot southern states

Wow thank you. I had no idea. The average according to Google is $175 in my area. My house is medium size. Ill look at ways to improve this!

Quote
Haircuts $30
Per month? Holy crap. Again, that's like our annual cost.

How is $30/month possible? I pay about $15 per haircut with 5 people, is that too high?

Quote
Kids Activities $100
I thought your kids were very young. Why do you have $100/month of activities already?

I suppose its choice. Most are one time expenses like Soccer, Swim Lessons, Aquarium visits and so on.  I didnt think this was too high till you mentioned.

Quote
Life and Auto Insurance  $345
We're paying $100/month for auto insurance (a Porsche and a Subaru). Why do you need life insurance when you already have a net worth of $1 million?

Includes 2 average (Sonata car and Sienna minivan) vehicles auto, rental property policy, umbrella, and ~$550 K on me for life insurance, $330K on the wife.  I think this about right, let me know if you think its too much. 

Quote
Hobbies $400 (PM coins, bitcoin gambling, wife spending, weird crap off ebay)
Seems like you could scale this back significantly. Definitely stop gambling with Bitcoin.

Proud owner of $0.24 in Bitcoin today.  I agree this entire area should be significantly cut or eliminated until I hit my goal. 





« Last Edit: June 30, 2019, 06:41:23 PM by mcraw25 »

RWD

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Re: Cut Lifestyle Creep
« Reply #6 on: June 30, 2019, 09:03:23 PM »
Quote
I calculate your total expenses at $7,151/month. That is quite high. The good news is that there is a lot of fat and it should be relatively easy to cut $1,500/month with little impact to quality of life if you are serious about it.

Thank you for the advice. Agreed. I am serious.
Happy to help.

Quote
Haircuts $30
Per month? Holy crap. Again, that's like our annual cost.

How is $30/month possible? I pay about $15 per haircut with 5 people, is that too high?
We bought a hair-cutting kit for maybe $40 about a decade ago and my wife always cuts my hair. Then my wife gets her hair cut once a year at most. Probably has worked out to about $30-50/year but I haven't tracked it too closely. I cut my wife's hair earlier this month too for the first time (TBD if she'll continue to allow that). If you're paying someone to cut hair then $15 per cut sounds reasonable. But you could save a decent amount by going DIY. It is easier to cuts boys'/men's hair, of course.

Quote
Life and Auto Insurance  $345
We're paying $100/month for auto insurance (a Porsche and a Subaru). Why do you need life insurance when you already have a net worth of $1 million?

Includes 2 average (Sonata car and Sienna minivan) vehicles auto, rental property policy, umbrella, and ~$550 K on me for life insurance, $330K on the wife.  I think this about right, let me know if you think its too much. 
Ah, I didn't realize that included rental property insurance. Umbrella insurance is probably a good idea. How much of the $345 goes to each of those?

red_pill

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Re: Cut Lifestyle Creep
« Reply #7 on: July 01, 2019, 12:57:22 AM »
Home security - $25.   I would cut this unless you have a monitored fire alarm that gives you a corresponding reduction in house insurance.   A burglar alarm system doesn't have to be monitored for it to go off with the just audible alarm and scare away the bad guys.  And in a smash and grab scenario they ignore th alarms even if they are monitored because they will be long gone before the police show up.  Your area may differ, but for us here it was an unnecessary expense and I don't miss paying it. 

Hobbies - $400.   Glad you smashed this already. 

Restaurants - $300.  Bro. This is totally unnecessary.  At least cut half of this if not 3/4.

Gym $120.  I get it, totally.  If that was the membership fee to your one place then cool, but having two gym memberships can be avoided with some scheduling choices. 

I just redid our budget for this coming year and we have also fallen for lifestyle creep....again.  It just sneaks in there.  Good luck!   
« Last Edit: July 01, 2019, 01:04:53 AM by red_pill »

tamuaggie2011

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Re: Cut Lifestyle Creep
« Reply #8 on: July 01, 2019, 07:16:38 AM »
I'll try and target things others haven't already talked about:

1. First and foremost unless the investment options are crap within your 401k (this is possible) then I would definitely increase this to at least 10%, preferably max it out but it is often very hard to make that jump.
2. Having two paid off rental properties is an awesome accomplishment but having them so far away brings to mind a couple possibilities. You mention selling one and using the funds to pay down the mortgage on the house, and I would actually support this idea as if you are focusing on FIRE then you definitely want to be debt free and the combination of peace of mind and well as additional cash flow that be invested is a win win. However for the other house...
3. Have you considered selling that property and then using the funds to purchase a similar property close to where you live? I'm not sure about the wife's availability being a stay-at-home-mom or the kids ages but if you can avoid paying a property mgmt company because the wife is able to manage the rental now since it's close by that would also increase the cash coming in.
4. Even if they aren't old enough yet, eventually then you could also "employ" the children to clean the property or other similar chores and use the funds to invest for them in ROTH IRAs.

Just a couple ideas. Congrats on the decision to get focused and cut back on expenses!!

Freedomin5

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Re: Cut Lifestyle Creep
« Reply #9 on: July 01, 2019, 07:32:30 AM »
You or your wife can cut your kidsí hair. I cut DDís (age 5) hair. DH cuts his own hair. My sister cuts my hair. When your kids are young, theyíre not going to care that they donít have a professional hair cut.

If you have a pool, why do you have a gym membership? Canít you just swim laps in your pool? Otherwise whatís the point of having a pool you donít use?

Look for free kids activities in your area. DDís favorite activity is taking an empty plastic jug and looking for bugs in the yard or at the local park. Kids donít need much to be amused.

Phone is also too high. There is a thread on the forum on how to get your phone bill to $5 or $10 per month, if you live in the US.

There is also a thread on the forum on how to get your grocery bill to under $200/month. Thatís a bit extreme maybe for a family of five, but growing up in my family of five, we averaged $500/month. Check out www.budgetbytes.com for cheap, delicious, and nutritious meal ideas.

For gifts, check out local thrift stores. Sometimes you can get brand new things for very low prices. Or consider regifting. Label gifts with the giverís name so you donít accidentally regift something back to the person who gave it to you.

For clothing, check out thrift stores. I average $100/year on clothing, and I need to dress professionally for work. DD gets her clothes as hand-me-downs or secondhand from the thrift store. Iím assuming your Kid 2 and Kid 3 are wearing Kid 1ís hand-me-downs.

There...probably just saved you $1000/month to put towards savings.


civil4life

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Re: Cut Lifestyle Creep
« Reply #10 on: July 03, 2019, 02:47:43 PM »
Housing (31% of base)

Water $100 This may be a little high.
Electricity $300  Definitely check this one out.  See if your utility company does energy audits.
Phone $100 I use Total Wireless which uses the Verizon network.  I pay $26/month for unlimited text and talk.  $10 for 5 GB of data as needed.  Whatever big carrier is best in your area look for the to the CDMA or GSM carrier.  Do not limit yourself to whats available at Walmart.  Check out the internet too.
Pool $100 (pay a guy to maintain salt water pool)  Definitely ditch
Repairs/home projects $200 Are you actually spending this or saving for future repairs?  How old is the home.
HOA $75  I am guessing this does not cover much?

Transportation

Gas and maintenance $265  This seems really high especially with one commuter.  Try to combine trips be more conscious of things you need to do.

Food (16% of base)

Groceries $800  As someone already mentioned budgetbytes.  I like $5 meals too.
Restaurants $300 High
Various household/ diapers / laundry: $200 High

Lifestyle (17% of base)
  I think quite a bit can be cut from here.  Mostly looking at thrift shopping and sharing resources.

Overall, you have a bunch of areas you can work on.  It can be overwhelming at first wanting to jump in and do everything.  I would start with the low hanging fruit like you did already with bit coin.  Many of these require habit changes so try working on a few at a time. 

Keep track of your progress.  It is great to see the changes in your spending over time.  I use Mint to track my spending others here use You Need a Budget. 

Mrs. D.

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Re: Cut Lifestyle Creep
« Reply #11 on: July 03, 2019, 09:37:37 PM »
I have two young kids and am struggling with some of the same unexpected expenses. For gifts, we've taken a new strategy this year that we like. I researched a charity that supports a cause we care about and is well-rated on Charity Navigator. For every birthday, mother's day, gift-giving occasion, we make a small donation to that charity in the person's honor and send the honoree a letter. If we're going to a kid's party, we also give a cheap book just so we're not showing up empty handed. People respond well to this, or at least they are tactful enough to not complain about it, because, you know, charity.

Kids' activities are sneaking up on us too! I try to keep it to one paid activity per week, preferably none. I got a membership to our local children's museum. We rotate through all the local parks and splashpads, go to our neighborhood pool, find free festivals and events. When the weather is really bad, we go to the mall and my toddler can walk and get some energy burn while I push the baby in the stroller. They both enjoy playing in the play area and climbing on the coin-operated cars (my kids don't know they do anything special when you put $ into them :P). Maybe your wife can find deals or Groupons for special things like the aquarium. In Houston there are free or discount days each month for all the major museums and attractions. And when Sunday evening rolls around and we are desperate to get out of the house, we walk the aisles at Home Depot so DS can look at tools and forklifts and climb ladders when no one is looking.

We live in a part of the country that's hot as balls in the summer and we did a lot to get our highest electric bill <$200/month. We had our attic outfitted with a radiant barrier, new insulation, and a solar fan. It was expensive but we got a 30% federal tax credit. Maybe you can see if that is still available. We also put in a new high-efficiency HVAC system. We're looking into additional steps like applying tinting film on the windows of our western-facing bedrooms and installing a shade sail over the back of the house.

My family of 4 averages $650/month for groceries and household items (that includes diapers and wipes). I shop at Aldi for my main grocery trip and try to cook vegetarian 1-2 times per week. Our restaurant spending is about $20/month. I'm not really sure how you get to $1,000/month in consumables with an extra $300 in restaurants.

Annie101

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Re: Cut Lifestyle Creep
« Reply #12 on: July 03, 2019, 10:33:53 PM »
Your wife doesn't need life insurance if she isn't working.  You might want to up yours slightly. 

We spend $20 per kids party gift and it could be less.  I think your gifts budget is high. 

Get a membership to the activity family most enjoys (aquarium, science center) and go there often, rather than a different place each time. 

reeshau

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Re: Cut Lifestyle Creep
« Reply #13 on: July 04, 2019, 03:00:24 AM »
Your wife doesn't need life insurance if she isn't working.

I disagree.  With young kids, if something happened to her, then OP would need help with their care.  You should consider the cost of replacing the unpaid labor.

Freedomin5

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Re: Cut Lifestyle Creep
« Reply #14 on: July 04, 2019, 06:44:42 AM »
Your wife doesn't need life insurance if she isn't working.

I disagree.  With young kids, if something happened to her, then OP would need help with their care.  You should consider the cost of replacing the unpaid labor.

Yup. As long as wife is contributing to the running of the household, she does need term life insurance. This will allow OP to hire someone to help care for kids and run the household, as he is the primary breadwinner and will likely need to continue working.

freya

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Re: Cut Lifestyle Creep
« Reply #15 on: July 04, 2019, 07:30:10 AM »
Are your silver and gold coins collector's items, or are they bullion coins that you're buying for investment purposes?  If that's the case, then the $11K in coins is part of your savings, and the part of the $400/month you spend on them should be considered as long-term savings.

It would be useful to break out the rental house costs from the rest of your budget, since that's not spending in the usual sense.  Also it's not clear how those investments are performing.  If they are earning less than what you'd get simply by selling them and investing the proceeds, then you might consider doing that.  Can you list the amount invested, monthly costs, and net profit for each house?

Also, I don't see property taxes listed anywhere, for either your home or the rental houses. 

I don't have kids, but I've spent plenty of time entertaining young kids, and it's not hard to do for free.  Trips to a park, playground, hiking area, brook etc are all free, and kids like these at least as much as places that require admission fees.  For example, I used to take my nieces into Central Park (in NYC) with the idea of going to the carousel or the zoo, but 9 times out of 10 we never got there because of all the fun to be had along the way.  I don't know why we've come to accept the idea that all time & activity has to be structured and commercialized.  Breaking free of that mindset will have all kinds of benefits apart from reduced spending.


SimpleLifer

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Re: Cut Lifestyle Creep
« Reply #16 on: July 04, 2019, 09:22:12 AM »
I'm not judging...I just went through this exercise for myself, and I "found" ~$2,000 in wasteful spending each month. 

Since you're wearing your big-boy pants...here's what I think:  I would be putting  $1,745 post-tax dollars each month towards financial freedom.

Quote
Charity/Church $650.
Kids School Donations $150

No disrespect to religion, I would eliminate or severely cut this charitable giving.  When my kids were "very young", we didn't participate in things that required this type of donation.

what if this $800 was invested in VTSAX each month?  Wow...the possibilities.

Quote
Pool $100 (pay a guy to maintain salt water pool)
what if this $100 was invested in VTSAX each month?  Wow...the possibilities.

I would be on you tube today figuring out how to DIY this task.

Quote
GYM $120
what if this $120 was invested in VTSAX each month?  Wow...the possibilities.

Quote
Hobbies $400 (PM coins, bitcoin gambling, wife spending, weird crap off ebay)
what if this $400 was invested in VTSAX each month?  Wow...the possibilities.

Quote
Date night $100
keep doing this!  Your family is depending on the health of your relationship with your wife.

Quote
Gifts to friends/family $200
what if this $200 was invested in VTSAX each month?  Wow...the possibilities.

Quote
Home Security $25
I would cancel this, and keep the signs up in the yard.

what if this $25 was invested in VTSAX each month?  Don't laugh...it adds up!
Quote
Kids Activities $100
what if this $100 was invested for college each month?  Wow...the possibilities.

RWD

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Re: Cut Lifestyle Creep
« Reply #17 on: July 04, 2019, 09:33:13 AM »
Wow...the possibilities.
Throw those into a SP500 calculator and... It comes out to $400k over the last 10 years. Wow indeed.

Annie101

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Re: Cut Lifestyle Creep
« Reply #18 on: July 04, 2019, 10:13:38 AM »
Your wife doesn't need life insurance if she isn't working.

I disagree.  With young kids, if something happened to her, then OP would need help with their care.  You should consider the cost of replacing the unpaid labor.

Yup. As long as wife is contributing to the running of the household, she does need term life insurance. This will allow OP to hire someone to help care for kids and run the household, as he is the primary breadwinner and will likely need to continue working.

Oh yeah, I forgot about this.  Agreed

mcraw25

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Re: Cut Lifestyle Creep
« Reply #19 on: July 04, 2019, 10:22:19 AM »
Happy 4th. 

All, thanks for the tips. 

Quick question responses. The coins are mostly bullion and pretty liquid. I sort of see it as a hedge/savings and a hobby. Plus I get to feel like a pirate. Rentals return about 4% in rent. Appreciation on rentals has been pretty good. Lease with one tenant ends in a few months, seriously considering selling to pay off current primary residence. 

Whats done/almost done.

Cut bitcoin. Cutting 1 gym membership Monday. Bought some kids toys on a neighborhood garage sale page, 5 disney dolls for 5 bucks for kids gifts! Looking at used kids stuff now I see its greatly reduced cost.  Bought a single membership for kids activities with multiple locations we can visit to save $. Cutting the Ebay stuff. Wife is going to cut my hair for the first time this week (nervous). I only ate in a resturaunt once this week, pretty strong improvement in my little world. I realized how often after a long day I am lazy and just jump on grubhub vs looking in the kitchen.

As for next steps. 

Bought a NEST Thermostat that is supposed to cut electric bills and gets us a local discount. Looking at cuts to grocery, specifically seeing alcohol and protein $ is high.  Budgetbytes is pretty solid! Transportation is a bit high, I just applied for a flexible WFH job, might help lower as I currently commute about 60 min 5 times a week.  Reducing the $200 on home expense...most was just fun house projects. 

Have not moved on.

Charity, pool, security, insurance, phone. Will get to these after gauging progress on above.  These are a little harder for me to dive into.

Thanks for the help on this! Pretty cool to read all these ideas and perspectives I hadn't considered. Nice to see online "judging" of others paying off.  :)

freya

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Re: Cut Lifestyle Creep
« Reply #20 on: July 04, 2019, 08:28:37 PM »
Assuming the big-boy pants are still on (good phrase that!)....

I think you skipped a few steps on the way to the NEST thermostat.  Step 1 is figure out where your energy is being used, and your first purchase should probably be a Kill-a-watt meter.   Which comes after you inspect/service/replace the A/C, fridge and other energy hogs, and check all the light bulbs.  If you've got halogen bulbs on 24/7, for example.

Congrats on the other stuff you've done, and best of luck with the haircut!  Bet you a bitcoin that no one at work will be able to tell the difference.

SimpleLifer

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Re: Cut Lifestyle Creep
« Reply #21 on: July 04, 2019, 09:45:32 PM »
Assuming the big-boy pants are still on (good phrase that!)....

I think you skipped a few steps on the way to the NEST thermostat.  Step 1 is figure out where your energy is being used, and your first purchase should probably be a Kill-a-watt meter.   Which comes after you inspect/service/replace the A/C, fridge and other energy hogs, and check all the light bulbs.  If you've got halogen bulbs on 24/7, for example.

Congrats on the other stuff you've done, and best of luck with the haircut!  Bet you a bitcoin that no one at work will be able to tell the difference.

Agreed.  So much that can be cut in the existing budget without spending a penny, and much higher impact to the bottom line.

red_pill

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Re: Cut Lifestyle Creep
« Reply #22 on: July 07, 2019, 04:29:44 PM »
Assuming the big-boy pants are still on (good phrase that!)....

I think you skipped a few steps on the way to the NEST thermostat.  Step 1 is figure out where your energy is being used, and your first purchase should probably be a Kill-a-watt meter.   Which comes after you inspect/service/replace the A/C, fridge and other energy hogs, and check all the light bulbs.  If you've got halogen bulbs on 24/7, for example.

Congrats on the other stuff you've done, and best of luck with the haircut!  Bet you a bitcoin that no one at work will be able to tell the difference.

Agreed.  So much that can be cut in the existing budget without spending a penny, and much higher impact to the bottom line.

As was suggested to me in this forum, you can usually borrow a kill-a-watt from your local library.  No need to buy one!

mcraw25

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Re: Cut Lifestyle Creep
« Reply #23 on: July 07, 2019, 05:02:34 PM »
Hey,
Interesting, I didn't know the city library was good for anything except warehousing homeless. Kidding. I did not know you could borrow a kill-a-watt meter there. Great call, Ill check that out.

I did jump the gun buying a Nest. I have been going a little overboard on Alexa related add-ons. Something else to improve. 

First week is down and were trending downwards on spending vs last month. See how we finish out the month. Reducing spending is harder than it should be. Its interesting to see how fast I gravitate to Amazon/EBAY when ever I have a want/need. Wife suggested we delete the apps from our phones.  Curious if anyone has done this.

reeshau

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Re: Cut Lifestyle Creep
« Reply #24 on: July 08, 2019, 03:08:24 AM »
Wife suggested we delete the apps from our phones.  Curious if anyone has done this.

Never added the app.  Why do you ask, as if it's necessary?  If I want to order something, go to a web browser, log in, etc. etc.  (of course, your phone does have a browser on it, if you are away from home)  Although that's still pretty easy, it's a variation of delayed gratification.  And it won't send you advertisements notices.

Freedomin5

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Re: Cut Lifestyle Creep
« Reply #25 on: July 08, 2019, 03:33:20 AM »
Another suggestion that has been made to various people regarding Amazon/online purchases is to add things to the cart but wait for one to two weeks before actually hitting the ďPurchaseĒ button. If you still desperately need the item after two weeks and havenít found a way to borrow the item or live without that item for two weeks, then purchase it.

happy

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Re: Cut Lifestyle Creep
« Reply #26 on: July 08, 2019, 04:51:31 AM »
Just some general principles/tips for you to think about:

-The 3 biggest expenses are usually housing, transport (cars), and food. Because they are the largest, there is more potential to save more if you can come up with a radical plan eg only 1 car, ride a bike or catch public transport.

-Daily and weekly expenses are more important than quarterly or annual expenses. eg 2 fancy coffees a day at work = $10/day = $50pwk = $2500 a year. Add $10/day for bought lunch and thats another $2500 a year. Pretty easy to blow 5k without thinking. Its really worth targeting small daily or weekly habits.

- If there's something you really don't want to give up, try my rule of half. Spend half as much on whatever it is. You could either buy/do whatever half as often, or keep the same frequency and spend half each time.

freya

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Re: Cut Lifestyle Creep
« Reply #27 on: July 09, 2019, 11:46:56 AM »
Going to Amazon for quick solutions to problems is a habit that is all too easy to fall into - ask me how I know!

My solution:  Go ahead and research options on Amazon, then if it looks good, add the item to your cart.  Put it aside and leave it that way for at least a day or two.  One of these things will happen:

1)  You never get back to it and eventually forget about buying the item.  Next time you're at Amazon buying something, delete it from your cart.
2)  Alternative, cheaper solutions occur to you, and you realize you don't actually need the item. 
3) You decide you do want the item, but when you get back to Amazon you realize there are things you hadn't thought of so you need to do more research.  Decide on a new item, put it in the cart to replace the old one, and wait a day as before.
4) You still want the item but you don't really want to buy it right now.  Use the "save for later" feature to do exactly that.  I've got a few things saved up for Prime Day in case a good deal becomes possible.   Every so often, I go through my "save for later" items and delete the ones I'm no longer interested in.
5) You want the item and it makes sense to buy it right now.    Go for it.

It's amazing how many potential purchases don't happen with this system.  I'd say at least 2/3 of the time I don't go through with it.  The ability to buy things "with one click" is a major consumer trap, and I'm sure Amazon knows exactly what it's doing with that and their Dash buttons and Alexa ordering. (I am a proud NON-owner of an Alexa device, and this is one of the reasons.)

BTW you can return the Nest within 30 days, right?  Since you haven't really determined whether it will save you enough energy bills to compensate for the monthly fee you just incurred, you might want to consider this.



mcraw25

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Re: Cut Lifestyle Creep
« Reply #28 on: July 11, 2019, 03:50:51 PM »
Quote
Never added the app.  Why do you ask, as if it's necessary? 

Admittedly an excuse and personal perception. Its a great time saver. Like several hours a month. I can often order in the morning and have the item delivered before I get home from work. At most its next day. It saves a lot of trips to stores, and I really really dislike standing in lines at stores. Of course it being easier means I over purchase...

Another suggestion that has been made to various people regarding Amazon/online purchases is to add things to the cart but wait for one to two weeks before actually hitting the ďPurchaseĒ button. If you still desperately need the item after two weeks and havenít found a way to borrow the item or live without that item for two weeks, then purchase it.

Ill start doing this for the items I dont truely need. 

Going to Amazon for quick solutions to problems is a habit that is all too easy to fall into - ask me how I know!

My solution:  Go ahead and research options on Amazon, then if it looks good, add the item to your cart.  Put it aside and leave it that way for at least a day or two.  One of these things will happen:

1)  You never get back to it and eventually forget about buying the item.  Next time you're at Amazon buying something, delete it from your cart.
2)  Alternative, cheaper solutions occur to you, and you realize you don't actually need the item. 
3) You decide you do want the item, but when you get back to Amazon you realize there are things you hadn't thought of so you need to do more research.  Decide on a new item, put it in the cart to replace the old one, and wait a day as before.
4) You still want the item but you don't really want to buy it right now.  Use the "save for later" feature to do exactly that.  I've got a few things saved up for Prime Day in case a good deal becomes possible.   Every so often, I go through my "save for later" items and delete the ones I'm no longer interested in.
5) You want the item and it makes sense to buy it right now.    Go for it.

It's amazing how many potential purchases don't happen with this system.  I'd say at least 2/3 of the time I don't go through with it.  The ability to buy things "with one click" is a major consumer trap, and I'm sure Amazon knows exactly what it's doing with that and their Dash buttons and Alexa ordering. (I am a proud NON-owner of an Alexa device, and this is one of the reasons.)

BTW you can return the Nest within 30 days, right?  Since you haven't really determined whether it will save you enough energy bills to compensate for the monthly fee you just incurred, you might want to consider this.

Cool detailed ideas. Ill try this Amazon advice.

As for the NEST I like it and plan to keep it. Its pretty cool to voice activate AC or even turn on and off from work.  See if there are really $ savings on electricity. 

Wife is cutting my hair tonight! See how it goes. 

reeshau

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Re: Cut Lifestyle Creep
« Reply #29 on: July 12, 2019, 03:47:32 AM »
You could probably benefit from using camelcamelcamel, too--you could still have a "game" effect of shopping online, but it would incentivise you to wait, as well, for a better price.

minimalistgamer

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Re: Cut Lifestyle Creep
« Reply #30 on: July 12, 2019, 07:50:55 AM »
I do not have any insights into your case study at the moment, but I just want to congratulate you on your charity. Thank you so much for this. Folks like you help make this country a better place.

In my former country, charitable giving is virtually non existent, even among the well to do, so its heartening to see someone take charity seriously.

freya

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Re: Cut Lifestyle Creep
« Reply #31 on: July 14, 2019, 09:19:36 AM »
Rentals return about 4% in rent. Appreciation on rentals has been pretty good. Lease with one tenant ends in a few months, seriously considering selling to pay off current primary residence. 

Just wanted to follow up on this.  If you are getting a 4% net return on rentals that are at least in part tax free due to the depreciation deduction, then you're close to getting the long term stock market return when you count in an average 2%/year appreciation, and you're certainly doing better than the 4.1% you're paying on your mortgage.  If you really manage to focus on saving, you might be able to take advantage of a severance package from Megacorp should one come along.  Remember your goal is to quit Megacorp, so you should be stashing away whatever you feel like you need in order to jump to a lower paying job as your first priority.  Conversely, if you sell a rental you'll have to pay capital gains tax on the appreciation plus the 25% depreciation recapture plus selling costs.  So in your situation you are almost certainly better off carrying the mortgage.  Watch for upcoming opportunities to refinance, if the Fed cuts rates as expected.

So much fun to follow a thread like this, where the OP is serious about taking advice & cutting costs!  However, no one has yet mentioned that the amount of savings/net worth you have at your age is quite an accomplishment.  Kudos to you for that.

mcraw25

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Re: Cut Lifestyle Creep
« Reply #32 on: July 15, 2019, 06:21:54 PM »
You could probably benefit from using camelcamelcamel, too--you could still have a "game" effect of shopping online, but it would incentivise you to wait, as well, for a better price.

Cool! Great to see this tool.  Ill use this for sure. 

I do not have any insights into your case study at the moment, but I just want to congratulate you on your charity. Thank you so much for this. Folks like you help make this country a better place.

Very kind. That might be the nicest thing a stranger has ever said to me. Thank you.

Rentals return about 4% in rent. Appreciation on rentals has been pretty good. Lease with one tenant ends in a few months, seriously considering selling to pay off current primary residence. 

Just wanted to follow up on this.  If you are getting a 4% net return on rentals that are at least in part tax free due to the depreciation deduction, then you're close to getting the long term stock market return when you count in an average 2%/year appreciation, and you're certainly doing better than the 4.1% you're paying on your mortgage.  If you really manage to focus on saving, you might be able to take advantage of a severance package from Megacorp should one come along.  Remember your goal is to quit Megacorp, so you should be stashing away whatever you feel like you need in order to jump to a lower paying job as your first priority.  Conversely, if you sell a rental you'll have to pay capital gains tax on the appreciation plus the 25% depreciation recapture plus selling costs.  So in your situation you are almost certainly better off carrying the mortgage.  Watch for upcoming opportunities to refinance, if the Fed cuts rates as expected.

So much fun to follow a thread like this, where the OP is serious about taking advice & cutting costs!  However, no one has yet mentioned that the amount of savings/net worth you have at your age is quite an accomplishment.  Kudos to you for that.

That is a great perspective on the depreciation. I had not considered that when I estimated the value.  Thanks for the encouragement/kudos as well.

Small progress updates - Ive been trying to focus on mechanisms for permanent change. 

With the NEST we did get a $100 credit this year and an additional $25 off each following summer my energy company...making the cost $0 by next summer. Kudos to the wife for pointing this out to me. 

We cut the pool expense in half by opting out of pool scrubbing service, which I can easily do myself. 

Got rid of one gym membership. Save ~$100/month.  Remaining is only $20 per month!

Have not spent anything in that $400 bitcoin/Ebay bucket! Thats a small win.  It is more satisfying to think about what investing that money would be worth in the future as mentioned above. A great way to think about the needless spending, great perspective change! (thanks simplelifer)

It turns out the Wife is pretty good at dialing back expenses! She hit Goodwill and local used sales got some future kids gifts for $5! Way less expensive vs buying new. She got 8 like-new kids books for $5. Wife is also trading kids toys and clothes with other moms to save $. I would have been way too lazy to explore this space on my own.   

Today is Prime Day at Amazon and I bought NOTHING.

Eating out and groceries are improved but not as much as recommended...over two weeks were at $380 for groceries and $150 for eating out. Better but still work to do here.  We didnt plan meals for a road trip and paid for it. 

So far in the first 2 weeks of July we added $800 to savings we didn't normally save (not 401k) before asking for tips on this blog. Thank you all for the tips and advice, you are collectively better at cutting budget waste than I. 


happy

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Re: Cut Lifestyle Creep
« Reply #33 on: July 15, 2019, 07:53:24 PM »
Way to go mcraw25! Just keep at it and you'll reach your goals before you know it.