Author Topic: Doing all the obvious stuff, how to dig deeper?  (Read 6593 times)

Lans Holman

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Doing all the obvious stuff, how to dig deeper?
« on: May 15, 2013, 04:46:30 PM »
Hello.  I found this blog through that big article, been reading through it all and loving it, now I want to start getting involved on here.  I immediately related to the general philosophy, although I must say it never occured to me that early retirement could be such a possibility, even on my income. 
I would say my biggest challenge with putting all of this into practice is that I was already doing a lot of it.  My wife and I have never earned a lot of money (working mostly in education/ non profit fields) and we're frugal by nature which has made that work.  Examples, just referring back to the "zero to hero" post:
-never even occurred to us to get cable
-cheap cars, no debt on them
-clamshell prepaid cell phone
-vacations mostly involve camping or staying with relatives or friends
-live close to work, ride bikes a lot
-renovated our garage and now rent it out to a friend as living space


I am going to try to start biking more, and I'm going to start putting some of the advice on grocery savings into practice.  My question is, what other suggestions do people have for someone who more or less practices this philosophy instinctively?

Some details if they help:
I work full time doing sales and marketing for a retirement community.  Great job, pay is decent.  I take home about 2500 a month plus bonuses of up to 1000 a month.  My wife works part time as a school librarian, takes home about 1700.  Including the rent on the garage, that gives us a monthly income between 4500-5500 (after taxes, health insurance, 401k contribution).  Mortgage/taxes/home insurance is about 1300, we make bimonthly automatic payments and kick in an extra 100 toward the principal, so 1400 there.  Our daughter starts kindergarten this fall, so we'll be done paying for her preschool.  We pay about 650 a month for a friend of ours to watch our five month old son when my wife is at work.  I just signed up for mint to start tracking our food spending, I think its about 400-500 a month.  Internet, electric, natural gas, trash, etc. add up to about another 250.  So now that we're past the maternity leave we should be putting 1000 or so in savings each month, but it seems like that never quite happens.

BPA

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #1 on: May 15, 2013, 04:49:16 PM »
Hello.  Welcome!  Sounds like you are already wonderfully frugal.

I'd recommend putting the $1K into savings/investments before you pay anything else.  Also known as paying yourself first.


Lans Holman

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #2 on: May 15, 2013, 04:56:59 PM »
That's a good idea.  I'll look into how to set that up with my bank.

smalllife

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #3 on: May 15, 2013, 05:00:45 PM »
Start with tracking your expenses: Your Money or Your Life, Mint, YNAB, Excel, pad and paper, analyzing bank statements, etc.  Whatever it takes so you know where the holes are, aka how that $1000 never seems to make it to savings.

cerberusss

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #4 on: May 17, 2013, 01:07:38 AM »
we should be putting 1000 or so in savings each month, but it seems like that never quite happens.

I've got the same problem, in the sense that I "lose" about 500 euros and have started tracking expenses since the 1st of May. What I've discovered so far, is:
- Do you go out for dinner every now and then? I spend about 100 on restaurants.
- Do you have an iPad or iPhone? Turns out I spend about 50 on games, apps, what have you.
- Do you make lunch at home, or buy it? What about coffee? Costs me about 50 per month.
- My hobby (electronics) also costs me a 100.

That's already 300 right there, which I couldn't really explain before.

To start tracking, I got HomeBudget. It works on smartphones too, so you can easily add expenses, and it syncs with your PC.

gooki

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #5 on: May 17, 2013, 01:18:42 AM »
Are you paying PMI on your mortgage? If so might be worth trowing the spare cash into the mortgage to get enough equity and say bye bye to PMI.

Another tip, put that $1000 every month into your savings/investments when you get paid. That way you've already reached your savings target, and now you are forced to live within the remaining funds.

marty998

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #6 on: May 17, 2013, 02:46:35 AM »
Yeah that's a really good idea gooki. Save first, and force yourself to live off the rest.

MorningCoffee

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #7 on: May 17, 2013, 06:05:44 AM »
Another vote for paying yourself first. You can always tweak it if you need to.

Also, check your recurring expenses and negotiate lower rates where you can. Internet providers, phone companies (cell and land line) and insurance companies are a good place to start. A phone call can often get you a lower rate if you ask for one. Check for extra charges you don't need and can remove (call waiting, modem rental, maintenance/service insurance, etc.)


Lans Holman

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #8 on: May 17, 2013, 11:42:04 AM »
I'm actually in the process of gathering quotes from some different insurance brokers right now and it looks like I may be able to chop $40-50 a month there.  I'll try our internet provider next.
We do have an ipad but hardly ever buy apps.  I get lunch for free at work and don't drink coffee at all.  My biggest hobby is music and that generally pays for itself, although I haven't been doing any paid gigs since the baby came along.
Restaurants is one area where we probably could chop some, although I just looked at Mint and realized we haven't been to one in a month. 
I'll definitely be looking into some sort of automatic transfers to savings, that seems like the right way to approach this.

grantmeaname

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #9 on: May 18, 2013, 08:37:44 AM »
That's some impressive frugality practices. Another thing you may want to try when saving $1000 first gets easy is to increase it just a little each month. When you're doing this well, there's no reason to deprive yourself, but having to find another $20 or $50 to save and feeling the belt tighten a bit is pretty nice sometimes. After a year of that you could be saving $1250 a month without trying any harder than you are now.

meadow lark

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #10 on: May 18, 2013, 12:56:14 PM »
In your situation I would think more about income.  Your outflow is excellent, and you are into the "80% work to get 20% improvement" part of the equation.  You need to focus more on income.

tomsang

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #11 on: May 18, 2013, 01:09:43 PM »
In your situation I would think more about income.  Your outflow is excellent, and you are into the "80% work to get 20% improvement" part of the equation.  You need to focus more on income.

Yep.  That is where I would focus. 

Lans Holman

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #12 on: May 18, 2013, 04:22:35 PM »
In your situation I would think more about income.  Your outflow is excellent, and you are into the "80% work to get 20% improvement" part of the equation.  You need to focus more on income.

Ahh, the hard truth.  I've had this same thought but not quite sure how to go about it.  My wife works part time (about 24 hrs/wk.), and will probably go up to more in a few years, but right now with a baby and a very active 5 yr old we feel like we have our hands full.  Her job isn't the highest paying but it's stable, with great benefits, and she loves it.  So nothing is going to happen immediately on her side. 
I've only been in my job about two years and I'm reluctant to leave it for several reasons.  One is that I just now feel like i'm really getting good at it, and the skills i'm developing will be useful in other fields.  Another is that I don't want my resume to be too patchy, I think it's good to have some continuity.  There's really no chance of advancement anytime soon since there are only two people above me in the organization and neither of them is going anywhere.  And I'm not really interested in similar jobs in the industry, mainly because I've heard terrible things about working at most of our competitors.  So I don't foresee big changes to my income in the next few years.
That said, I am interested in figuring out ways to develop my skills so that if something else comes along I will be ready. 
In general, I feel like we have prioritized satisfaction over earnings in our career choices, and if the price we pay for that is that we don't get to retire super-early, I'm OK with that. 

happy

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #13 on: May 18, 2013, 04:48:07 PM »
If you both enjoy your work, then I think that is a great approach. You have 2 little ones, which makes life busy, and they need your attention. Getting side gigs etc will just take you away from them. So in your shoes, my choice would be to concentrate on cutting costs.

foobar

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #14 on: May 18, 2013, 07:31:00 PM »
It seems like figuring out where that 1k/month is going before thinking about more income. Go back through the last 6 months of records and you should be able to get your "real" expenses. Then it is just a matter of figuring out where the unaccounted money is going.
--David

In your situation I would think more about income.  Your outflow is excellent, and you are into the "80% work to get 20% improvement" part of the equation.  You need to focus more on income.

Ahh, the hard truth.  I've had this same thought but not quite sure how to go about it.  My wife works part time (about 24 hrs/wk.), and will probably go up to more in a few years, but right now with a baby and a very active 5 yr old we feel like we have our hands full.  Her job isn't the highest paying but it's stable, with great benefits, and she loves it.  So nothing is going to happen immediately on her side. 
I've only been in my job about two years and I'm reluctant to leave it for several reasons.  One is that I just now feel like i'm really getting good at it, and the skills i'm developing will be useful in other fields.  Another is that I don't want my resume to be too patchy, I think it's good to have some continuity.  There's really no chance of advancement anytime soon since there are only two people above me in the organization and neither of them is going anywhere.  And I'm not really interested in similar jobs in the industry, mainly because I've heard terrible things about working at most of our competitors.  So I don't foresee big changes to my income in the next few years.
That said, I am interested in figuring out ways to develop my skills so that if something else comes along I will be ready. 
In general, I feel like we have prioritized satisfaction over earnings in our career choices, and if the price we pay for that is that we don't get to retire super-early, I'm OK with that.

mpbaker22

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #15 on: May 18, 2013, 09:18:57 PM »
Maybe it's just the way I think, but I don't like how a lot of people are always saying "more income."  I don't know what the tax situation is with ?2 kids, but I make about the same after taxes, and I'm not sure how to increase my income (Other than I'm constantly on the lookout for a multi-family property so I can "pay myself" my rent while receiving rent from someone else"  But that is both income and expense targeting).  You definitely need to figure out that $1000 like others have said.

nktokyo

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Re: Doing all the obvious stuff, how to dig deeper?
« Reply #16 on: May 20, 2013, 04:20:48 PM »
Lets get you increasing your income.

Index funds and the like are safe and will get you there.... eventually. Perhaps you can do something else that speeds up the process? This book I found great for encouraging that mentality http://www.ccsales.com/the_richest_man_in_babylon.pdf