Author Topic: Help me reduce my spending!  (Read 5783 times)

PencilThinMustache

  • 5 O'Clock Shadow
  • *
  • Posts: 37
Help me reduce my spending!
« on: June 01, 2014, 08:22:26 PM »
OK, the time has come for us to cut our spending and Im turning to all of you for some advice.  My wife and I discovered MMM a few months back and have truly embraced the principles.  We practice a 50% savings rate and stick to a budget, easily tracked on mint.com b/c we exclusively use amazon rewards CC that we pay in full each month.  we established the allocated amounts of money into each category based on previous year's trend.   

I think we actually have modest spending when compared to my colleagues (I'm a physician in a lucrative specialty), and really many of my age-group peers (early 30s). I think we live pretty modestly.  Drive VWs.  Accept hand-me-down kids toys and clothes.  Cant remember the last time I bought a single piece of clothing from anywhere but TJ Max or Ross.  Live in a very nice house in a great neighborhood, but far from luxury (most neighbors are military officers or young professionals).  But now after compiling our spending, I am shocked and appalled by the sheer amount we spend per month and we need to find ways to cut it.  Here is the deal:

income: 16k/mo post tax

Fixed expenses (that I cannot change reasonably):
50% "savings": 8k per month off the top goes to 401k, IRA, until full; remainder is going to chop away at $200k SL debt that got me where I am today.  I realize that its not actually savings but when SL are paid it will be
2500 PITI (on 400k home)
380 life/disability insurance
550/mo car lease payments (2 VWs, I need a car for work, sorry cannot ride 30 bike 30 miles each way to work...and wife needs safe baby vehicle)

Variable expenses
750 groceries (we place a high value on eating healthy.  We try to eat a paleo-ish diet and can be pricey)
500 dining out
750 entertainment (on further review this is mostly travel expenses to visit family.  Actual entertainment is closer to 200)
300 baby supplies
350 church donations
300 personal care (hair cuts, clothing, etc.  shocking to me b/c wife shops mainly at target and TJ max, etc)
300 gas/fuel (really doubt I can meaningfully change that)
220 utilities (water gas garbage electric)
130 cable and internet
100 wife cell phone
750 miscellaneous crap (gym membership, amazon purchases of batteries, dog stuff, etc.  this category is tough to explain but somehow it always finds itself at or above 750/mo)

I know, I know.  Its far from mustachian.  But the truth is we don't spend lavishly.  But we do spend a LOT.  Thoughts and suggestions?
« Last Edit: June 02, 2014, 11:00:51 AM by PencilThinMustache »

hownowbrowncow

  • 5 O'Clock Shadow
  • *
  • Posts: 92
Re: Help me reduce my spending!
« Reply #1 on: June 01, 2014, 09:14:14 PM »
What are your interest rates on SL and cars? Is that $550 car payment + insurance or just auto insurance?

If going carless won't work for you, then don't go carless but I'd ditch the VWs for cheaper cars you can pay for in all cash.  I'm guessing they're new because you're not complaining about repair bills.  But anyone I know who's ever owned a VW hates it eventually because they end up dealing with expensive electrical/software issues.  Never heard of these issues from owners of other brands. 

Medical/dental/vision costs not mentioned.  Since you're in that  field do you get them for free or are they lumped in under baby/misc?

I think you need to break down some of these categories more - such as entertainment, baby, personal care, misc - to make trimming fat easier to tackle.  Initial thoughts:

Variable expenses
750 groceries (we place a high value on eating healthy.  We try to eat a paleo-ish diet and can be pricey)  ---> 2 adults + 1 baby? unless you live in NYC or something $500 should be plenty for now - reduce it more later.  Shop local and seasonal.  Start tracking prices on most frequently  bought items in Excel, review weekly ads, shop at Trader Joes and Costco.  Even Whole Foods 365 brand is cheaper than most name brands
500 dining out --> How many meals per month is this?  Is it more take-out or going out?  Don't go cold turkey.  Aim to convert one "out meal" per week to made at home.  And goes without saying but I'll say it - bring your lunch to work at least 80% of the time.  $375
750 entertainment --> What on earth is this?  That's a lot of Jimmy Buffet tickets and mangos in Paris :) $300
300 baby supplies --> Diapers? wipes? formula?  Review exactly what makes up this category and see where you can cut. $150
350 church donations  --> No concerns. You're not hair on fire so give what is meaningful to you. 
300 personal care (hair cuts, clothing, etc.  shocking to me b/c wife shops mainly at target and TJ max, etc) -->  There are definitely leaks here. Talk more with your wife.  Is she shopping more than you realize?  Are baby clothes included?  Are you spending $40 on a haircut every 4 weeks when $15 every six weeks in sufficient?  Aim for $100/mo
300 gas/fuel (really doubt I can meaningfully change that) --> Check if a grocery store you already shop at offers X cents off per gallon with gift card purchases.  When I had a car I would buy gift cards to Shell in $100 increments during promo periods at the grocery store here and then use the cards when I filled up and get $0.40 off per gallon. At $4/gallon that's 10%.  $270
220 utilities (water gas garbage electric) --> Don't know enough about your area rates. But if you can lower the thermostat a little in the winter and use the AC a little less in the summer you could see a modest improvement.
130 cable and internet --> Try calling cable/internet company assuming it's a bundle.  Threaten to switch to competitor.  That should get a nice 12 month promo rate.  $100
100 wife cell phone --> Check the super thread and see if any plans there work.  Otherwise maybe combine with in-laws to get savings through a family/friends plan.  $60
750 miscellaneous crap (gym membership, amazon purchases of batteries, dog stuff, etc, and travel expenses.  this category is tough to explain but somehow it always finds itself at or above 750/mo) ---> Break this down more.  Gym/fitness should be its own.  Are you using it enough to justify it?  Do you live in a place you can exercise outdoors most of the year?  Is biking (for recreation/exercise) an option? 
Travel should be its own category too.  Same with dog stuff and home supplies (that's a mint category).  Even if these don't have monthly entries they're probably making enough of an impact to deserve closer scrutiny.

These are just suggestions of course from a stranger who doesn't know all the details.  But you could cut almost $1250 not even including the misc category and it would be relatively painless.  $15,000 extra to invest per year - boom.
« Last Edit: June 01, 2014, 09:18:42 PM by hownowbrowncow »

Zamboni

  • Handlebar Stache
  • *****
  • Posts: 2454
Re: Help me reduce my spending!
« Reply #2 on: June 01, 2014, 09:41:36 PM »
HOLY MOLY, so much to work with here. 

I'm going to pick just one category:  Entertainment.  $750?!  Every month?!  Plus, that doesn't include $130 that you list separately for cable and internet (I don't have cable but list both my $8.95/month Netflix and $29.99 internet monthly charges both in the entertainment category of my budget even though, yes, I also use the internet for work.)  So I would have you in my spreadsheet at $880 for entertainment.

That entertainment line item is lavish and deserves a face punch.  Do you sit next to Jack Nicholson at all the Lakers home games or something?  Do you belong to an exclusive country club that is $500 a month not including golf cart fees?  Do you hire private magicians, jugglers, and face painters to come to your home every single week?

My friend, both you and your family need to be introduced to the concept of free fun.  Go to the library.  Go to the local museums.  Go to the damn park and let the kids swing on the jungle gym.  Drive to the airport and watch the planes take off and land (my local airport has a viewing platform and park out by the runways specifically for this purpose.)  Play catch or whiffleball in the yard.  Teach the tots some card games.  Go to concerts at the local college.  Go for a hike in the mountains (or the local woods) or a run on the beach (whichever is closer). Ride your bikes around the block a few times.  Find a little nearby stream and look for frogs with the kids.  Sit in the yard and watch birds, look at the clouds, and look for cool bugs.  Take the dog for a long walk together.  You get the idea.

(PS, if it's golf, make a separate line item for that and call it what it is.  Then track the real entertainment for your family separately.)
« Last Edit: June 02, 2014, 05:37:29 AM by Zamboni »

Left

  • Handlebar Stache
  • *****
  • Posts: 1159
Re: Help me reduce my spending!
« Reply #3 on: June 01, 2014, 09:46:59 PM »
sounds similar to what I've seen here http://forums.studentdoctor.net/threads/an-emergency-docs-budget.817037 and not suprising to me. My sister just finished her med school and well... doctors as smart as they are, they just don't know how to manage money, or rather I feel like they think they are entitled to a living standard far above what they really need and delude themselves into thinking it isnt lavish because they change their definition of lavish to people with millions more than them.

you don't spend lavishly? But you are spending more than you did before you became a doctor. Sure you might not have to scrape money for the next meal and I woudln't say to do that again. But why do you need a 400k home? I mean yes, I understand some area's cost more. My sister will do residency in New York and so I've been helping her look at places. But couldn't you just rent for a while? The same house rented might be a "sunk" cost in that you aren't going to be able to own it but you'll have money left to invest. That is unless the rents there are as high as mortgages in which case, sure buy a house if you think you'll be around for the 15/30 years or can find a buyer/renter later on.

You could find a "baby safe" car that aren't VWs, well since you bought them, it might not be worth selling if they aren't brand new. Insurance, I have nothing to say since I feel like this is something a doctor needs. You could save money buying enough for a year for the meat and freezing it if you aren't already. But why are you spending so much on both groceries and eating out? If you ate out that often, why do you need so much groceries at home? Or why go out to such expensive resturants if you aren't living "lavishly"? Same with the entertainment, you're still a fairly young/new doctor if you are still in your 30s, so I'm assuming you still work longish hours? How do you have that much time to spend on entertainment to spend $750/month? Are you buying tickets to every show that comes into town or something? Shopping costs, just because it's TJ max/target doesn't mean you save money by shopping there. If you spend $100 for 1 shirt or 10 shirts, you are still out $100...

The rest of it, I'm not great at pointing out/breaking down for you. Sorry.

edit: saw the comment about bringing lunch to work, not needed if he's in hospital. All the ones I've worked in, know about provide their doctor's meals so it's a free meal anyways.
« Last Edit: June 01, 2014, 10:07:35 PM by eyem »

NinetyFour

  • Walrus Stache
  • *******
  • Posts: 6465
  • Location: Southwestern US
Re: Help me reduce my spending!
« Reply #4 on: June 01, 2014, 09:49:01 PM »
You say you place a high value on eating healthy, but you spend $500 per month eating out.  I doubt all that stuff you consume when you eat out is a healthy as what you could make at home.  You can cut that down to $100 per month.  That, alone, is a savings of almost $5000 per year.

Good for you for posting your expenses.  Brave!

mrmanhattanmustache

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Re: Help me reduce my spending!
« Reply #5 on: June 01, 2014, 10:01:57 PM »
Whoa, you're going to have to please break out this $750 figure into some more specifics, as it does not add up

> 750 groceries (we place a high value on eating healthy.  We try to eat a paleo-ish diet and can be pricey)  ---> 2 adults + 1 baby? unless you live in NYC or something $500

Ahem, I live in downtown Manhattan and still think that's a crazy high grocery budget. My fiance and I used to spend that much combined on food... back when we used to  eat out a lot. Brunches, sushi, Seamless, Grubhub, you know.

So the fact that you're spending that much _without_ including eating out is a little scary. A lot of the healthy stuff that cavemen ate is produce, for example, which is quite cheap. Meat is actually pretty cheap too. I've been able to find chicken breast at around $2/lb  fairly easily in both in Arkansas (Wal*Mart) and Manhattan (Trader Joe's) if you don't irrationally insist on the most expensive cuts of the most expensive animals (eg a nice steak of beef) and as a physician I'll leave you to compare the nutrition.

Rediscover your freezer. It's like a bank account for your groceries.
There are often great deals on cheap, healthy stuff that either comes frozen or is fresh but you can freeze it.

When picking a product at the grocery, don't grab the first one you see or something, and don't look at the price. Look at the _unit price_. For a lot of product categories, the store brand on the annoyingly placed bottom shelf costs a lot less.

The good news is the direction you're headed in, it won't take many years at all of saving like this before you could splurge carelessly and not make a dent...

RealCanadianSavings

  • 5 O'Clock Shadow
  • *
  • Posts: 39
  • Age: 39
  • Location: Vancouver, Canada
    • Real Canadian Savings
Re: Help me reduce my spending!
« Reply #6 on: June 01, 2014, 10:37:19 PM »
I agree with a number of the other posters - your food plus eating out bill is absurd. My husband and I eat fairly paleo, you need to evaluate your menu and find better priced protein. Also, one of the great things about paleo is you don't need (or shouldn't need) ANY packaged foods. So if you're eating packaged foods, take a good look at them and see if you can cut them out (they are often very expensive per serving).

horsepoor

  • Magnum Stache
  • ******
  • Posts: 3137
  • Location: At the Barn
  • Horses: for sanity & poverty!
Re: Help me reduce my spending!
« Reply #7 on: June 01, 2014, 11:12:13 PM »
Agreed on the food budget.  Crazy!  We also eat paleo-ish, and it's more like $500/month for 2 adults, and less than $100 for eating out.  Buy a grass fed beef quarter and freeze it.  When salmon is on sale, stock up and portion it out and freeze (I just picked up 2 wild caught fish at $3.99 a pound).  Cook whole chickens and use the leftovers for chicken salads.  Don't pay $8 a pound for boneless, skinless free-range organic chicken breasts.  Even if you don't go the beef quarter route, learn paleo recipes for ground beef - here I can get grass fed ground for $4.79/lb frozen.  Also get lots of egg recipes in your repertoire.  Even high-quality eggs make a pretty inexpensive meal.  Buy coconut oil and coconut in bulk; make your own coconut butter, nut butters, etc, if you use them.  It's also easy to make your own kombucha and stuff like that, which can really blow a budget.  Challenge yourself to get to $750 total with groceries and eating out, and then go from there.  If you're not a CostCo member, maybe look into it.  They've started carrying lots of paleo type stuff from frozen salmon patties to almond flour and coconut oil, for much cheaper than Whole Foods or whatever chichi high end store.

Start tracking the $750 of "stuff."  Challenge yourself to go a month without any of it.  You'll find that much of what you were going to buy, you don't even want after a month.  When you are thinking of buying something.  Write it down on a list and then revisit after the end of the month and reevaluate whether you want it.  Same goes with the $300 hygiene/clothing category.  Look at where you can simplify (e.g. use the same product for multiple purposes) or change to a generic/bulk size.

Also curious about your cars.  For your 30 mile commute, how about a Toyota Yaris, or a Prius C or similar?  Likely cheaper and more reliable than your VW, and unless you have a diesel something, better mileage, too.

Phone - I switched from Verizon to Republic at the beginning of the year, and $28 is SO much nicer of a phone bill.  Phone works great unless you're in questionable coverage areas a lot.  I'm totally happy with it, and can deal with the rare occasions when coverage is limited, for almost $50/month savings.

PencilThinMustache

  • 5 O'Clock Shadow
  • *
  • Posts: 37
Re: Help me reduce my spending!
« Reply #8 on: June 01, 2014, 11:39:34 PM »
wow!  thank you all so far for the comments.  It does take courage to do this type of thing...and I appreciate you not tearing me a new one!

hownowbrowncow: thanks for the specific suggestions and the thought of "chipping away" at each category.  about baby budget its diaper wipes and...three $80 trips to target?!  I have to do some investigations on that category! same with personal care. 

Let me address the entertainment budget.  I wish it were as fun as it sounds.  Alas, I just went thru and looked at the past few months and it aint all that fun.  Its really comprised almost exclusively of $300+ airline tickets.  Seriously.  No front row concerts.  Only minor league baseball around here.  Free fun abounds here--we work out at the beach weekly and surfing is free.  But travel....well, we enjoy it.  But most of it isnt the pure pleasure trips.  Living away from all parents (wife's parents are divorced so that's two separate trips) with a baby means lots of visits with family.  I will re-categorize travel into its own category and hopefully that can slow down soon.  what's a reasonable amount to spend on travel?  Driving not an option for 2/3 parents house as they are 2 day trips.

groceries.  This is the one area that Ive thought was nuts myself, but chalked it up to eating healthy.  I promise you we are not suckers.  I know all about looking for price per ounce, etc.  We used to shop mostly at Sam's and a local higher-end chain.  Buy almost exclusively meat and veggies, very few dried goods. But I had a realization: making a list/menu at the start of the week actually was driving up our costs.  We would set a menu of exciting recipes we found in paleo cookbooks, but buying all these ingredients that were not necessarily on sale really had the negative effect on the budget. Thankfully, We recently discovered Aldi.  My plan is only shop there this month and compare. But I think its gonna be good.  We went today and spent $58 on enough food for breakfast and dinner all week.  They actually have decent produce, borderline quality meat though.  I'll report back in a a month or so on the "Aldi experiment." 

dining out.  could be trimmed but we enjoy fanypants places about once per month ($150).  add the babysitter and that's close to 200.  Then since I work so much during the week, we enjoy dining out as a family on weekends.  I can def see trimming 100 as suggested by hownowbrowncow

cars.  truth is they are actually both on lease.  I'm already the only guy in the physician lot without a BMW or Audi so I thought I was doing well there ...always room for improvement I suppose

Thanks again for your time and assistance.

1967mama

  • Handlebar Stache
  • *****
  • Posts: 2158
  • Age: 52
  • Location: Canada
Re: Help me reduce my spending!
« Reply #9 on: June 02, 2014, 01:31:31 AM »
Thanks for posting your expenses ... very brave, indeed!

One thing I thought of about your grocery category -- we used to go through the meat and produce sections of the grocery store choosing what looked "good" to us, never stopping to consider the cost.  Eating seasonally has some distinct advantages, one being much lower prices.  So grapes in the middle of winter (in the Northern Hemisphere) might run $4/lb whereas apples from the fall might be only $1/lb or less.

It can really add up quickly! Recently, I filled a bag with really yummy looking red peppers and when I got home, I noticed on the bill that they totalled over $10 ... in PEPPERS! Doh! I was so mad at myself. Other seasonal vegetables are so much cheaper right now.

Left

  • Handlebar Stache
  • *****
  • Posts: 1159
Re: Help me reduce my spending!
« Reply #10 on: June 02, 2014, 05:23:25 AM »
hm, if you don't mind my asking, where in the country are you, it's fairly cheap for me in the midwest to buy meat from farmers? And then where are the parents? And do you fly out each month to see them? Sure it's hard for grandparents to not watch kids grow up but you could try using internet video or something to chat with them more often in lue of flying out there and maybe cut down on the trips to every other? You mentioned it wasn't pure pleasure trips, but visiting family is a pleasure trip in my book, nothing against it but it isn't exactly a "business" trip... You mentioned it was a 2 day drive? That's about half the country, could you and parents each drive out 1 day then meet in the middle? If you come to the mid-west, pick up some meat? :D

with all that flying and spending, at least say you have a rewards card to help get you some flights every once in a while

Yeah, you might not drive a bmw/audi... but that doesn't mean much to me. The other doctors are most likely living off leashes too and plan to just keep trading up to "keep" costs down. $500/month forever and always keep driving the "new" car? Yes, 500 isnt a whole lot out of what doctors take home each month but it's the act/thought that it isn't very much that keeps doctors leasing cars then homes then everything else. If you can afford to spend a few hundred here and there without though, eventually you'll end up spending entire paycheck and not have a whole lot to show for it, nice new shiny car/house that you don't own? It's like seeing lottery winners, suddenly you have a large amount of money but haven't learned how to actually manage it to keep it.

edit again: you're a bit off on the "50% savings rate", you are including paying down the debt as a "savings" It's an expense. Sure it saves money eventually to pay it off, but it's still an expense, you don't get to live off it later. with just the IRA/401k being used to save then once they are maxed out you stop "saving" and go into paying debt, you're savings rate are about 20% give or take? I don't know if you are saving for 1 or both parents. Myself, I also max out my 401k/ira/have leftovers for taxable investing (about 10k/year) and I make 50k/year. Aside from a smaller house, I live pretty much similar to you but I'm actually a bit ahead in terms of retirement savings even if it is just 10k/year. Sure you can outpace me really fast since you make 4x my salary but you don't put it away into savings like I do which means that eventually I'll be retired long before you are especially if you think just maxing out IRA/401k will allow you do keep current $16k/month living style unless you keep working until you are 60+.

I'm going through this with my sister right now since she finished med school last month. She keeps telling me I should find a new job because I make so "little" compared to what she will after residency. But I keep telling her that by the time she's out of residency, I'll be close to FI and then what? She'll still have to work and I can sit back and watch her while enjoying life. And this is where we disagree, she chooses to "enjoy live" taking vacations while working, I rather "enjoy" life and take a retirement and not work. So she keeps telling us how she'll have a big house, I keep telling her sure and I'll end up "taking care of it" while she is off working and I can lounge by the pool. I find it odd that she has a MBA as well but has no sense in actually managing her own money. She's taught how to grow businesses but her own business of her life is no where to be seen.
« Last Edit: June 02, 2014, 05:50:06 AM by eyem »

BFGirl

  • Pencil Stache
  • ****
  • Posts: 715
Re: Help me reduce my spending!
« Reply #11 on: June 02, 2014, 05:52:23 AM »
I am not the most Mustachian person on these forums, but I am trying to reduce my expenditures as well.

I agree about trying to pare down your groceries and eating out.  It takes more time but I am cooking most meals now and freezing leftovers to take to work. 

I would buy cars rather than leasing.  That way you own them and can drive them for a long time.

I would NOT give up the travel to see grandparents.  If they can travel to you some that would be great, but I don't think you should give up seeing family if you can reasonably afford it. However, I do agree with trying to Skype with family as well.

I think that once your school loans are paid, if you continue to save at this rate and cut expenses some that you will be fine.


Zamboni

  • Handlebar Stache
  • *****
  • Posts: 2454
Re: Help me reduce my spending!
« Reply #12 on: June 02, 2014, 06:01:46 AM »
Thank you for the reflective update.

You are in a great position to get your student loans paid off quick, then start investing and before long you'll have a huge stash working for you and time will be on your side to buy, hold, and rake in the profits.  For example, there is an emergency room physician local to me who owns hundreds of local rental properties (a mixture of homes and apartment building.)  He retired early.  You don't have to retire early or invest in real estate if those aren't your goals, but you also don't have to let money go swirling down the drain just because that's easier than paying attention.

Good idea changing travel to "travel" in your budget.  Be sure to invite those relatives to visit you as well!  Especially in the case of your wife's parents, it would be cheaper to pay for one plane ticket for an adult than 2, plus then you wouldn't be on a plane with a baby all the time.

Look for your local twins club online to see if they have a semi-annual clothing and equipment sale. Some churches do this as well, but the twins sales are usually bigger.  Up to about size 2T, there are so many clothes at those things you can get perfect, cheap clothes for nearly nothing even if you go late right before it closes (but earlier is better, of course.)  I bought very few new clothes for my children until they were in adult sizes, and they still got complimented all the time.  It sounds like your wife might like to shop a bit for fun, and these types of sales are fun!

You don't have to cut down in every single category with your income, although that can be a long term project for MMM's "constant optimization."  Instead, see what cheaper options you can find in one category at a time.  Is this a project your wife would enjoy?  Is she on board? Make sure she is in on the plan and has incentives to make this work.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Help me reduce my spending!
« Reply #13 on: June 02, 2014, 06:09:50 AM »
I dont know that Aldi is necessarily an experiment.  the food is good people arent dying from eating it.  if you exclusively shop at aldi and spend 750 a month still you're doing something wrong just my 2c.

Thegoblinchief

  • Guest
Re: Help me reduce my spending!
« Reply #14 on: June 02, 2014, 07:20:56 AM »
No, your spending IS lavish. The dining out, entertainment, baby care, and misc category are all pretty insane.

$750 for a paleo type diet seems a bit high but somewhat more reasonable. For a frame of reference, I feed a family of 5 on $500 with free range meat and lots of produce, but we use a lot of carbs as well. Bread is the staff of life. I've tried paleo, it doesn't work for me.

If you include alcohol, some organic produce, and cage free eggs, we creep closer to $600. We're still evaluating what gives us the best quality of life now versus savings for later.

The grocery totals include all personal care items too. What on earth are you buying?

It sounds like you both need to learn two key spending tests:

1. The 48 hour test. When buying online, never click checkout right away. Leave the tab open, come back in a few days. Do you still want/need to buy it? Chances are, you will say no.

2. The stranger test. When buying an item, imagine a total stranger comes up to you. The item is in one hand. In the other hand is the cash equivalent. Which do you choose? I almost always choose the cash. It helps even more to remember that the same cash will roughly double every 10 years if invested.

Mrs. Frugalwoods

  • Bristles
  • ***
  • Posts: 354
  • Location: Vermont
Re: Help me reduce my spending!
« Reply #15 on: June 02, 2014, 08:59:30 AM »
groceries.  This is the one area that Ive thought was nuts myself, but chalked it up to eating healthy.  I promise you we are not suckers.  I know all about looking for price per ounce, etc.  We used to shop mostly at Sam's and a local higher-end chain.  Buy almost exclusively meat and veggies, very few dried goods. But I had a realization: making a list/menu at the start of the week actually was driving up our costs.  We would set a menu of exciting recipes we found in paleo cookbooks, but buying all these ingredients that were not necessarily on sale really had the negative effect on the budget. Thankfully, We recently discovered Aldi.  My plan is only shop there this month and compare. But I think its gonna be good.  We went today and spent $58 on enough food for breakfast and dinner all week.  They actually have decent produce, borderline quality meat though.  I'll report back in a a month or so on the "Aldi experiment." 

dining out.  could be trimmed but we enjoy fanypants places about once per month ($150).  add the babysitter and that's close to 200.  Then since I work so much during the week, we enjoy dining out as a family on weekends.  I can def see trimming 100 as suggested by hownowbrowncow


I won't mention all the areas where you can save :), as others already have..but I'll chime in on the food front. Healthy eating is an absolute priority for my husband and me. We used to be paleo as well until we realized how very expensive meat is. Even on sale, it's pricey. We now eat primarily vegan meals (with dairy on occasion) and don't buy much meat at all. We'll snag the occasional fish on sale (+1 on horsepoor's mention of Costco's frozen salmon--that's our fish source), but we definitely don't purchase red meat or poultry. We're able to consume plenty of protein through lentils, beans, quinoa, and vegetables. We get the dry goods at Costco and the vegetables at our local, cheap Korean market. We don't buy anything packaged or processed (unless we're having a treat meal like homemade nachos or Costco frozen pizza!) and we eat very few carbs (with the exception of date night treat meals). For two adults, we spend about $35/week on groceries. If you really want to trim this category down, that's my two cents. Bonus is that my husband and I both feel better and are healthier with this diet!

We also love date nights, but are unwilling to succumb to the exorbitant price of restaurants, so we have them at home. We designate nights every week (usually both Saturdays and Sundays) where we cook up a slightly fancier meal (like pasta!) and light candles, crack open the boxed wine, and sit down at the dining room table together. Having that time to connect is vital for our marriage, but it can be achieved for a fraction of the price of dining out.

Kudos to you for posting this and all my best wishes!

greenmimama

  • Pencil Stache
  • ****
  • Posts: 718
Re: Help me reduce my spending!
« Reply #16 on: June 02, 2014, 12:27:00 PM »
No, your spending IS lavish. The dining out, entertainment, baby care, and misc category are all pretty insane.

$750 for a paleo type diet seems a bit high but somewhat more reasonable. For a frame of reference, I feed a family of 5 on $500 with free range meat and lots of produce, but we use a lot of carbs as well. Bread is the staff of life. I've tried paleo, it doesn't work for me.

If you include alcohol, some organic produce, and cage free eggs, we creep closer to $600. We're still evaluating what gives us the best quality of life now versus savings for later.

The grocery totals include all personal care items too. What on earth are you buying?

It sounds like you both need to learn two key spending tests:

1. The 48 hour test. When buying online, never click checkout right away. Leave the tab open, come back in a few days. Do you still want/need to buy it? Chances are, you will say no.

2. The stranger test. When buying an item, imagine a total stranger comes up to you. The item is in one hand. In the other hand is the cash equivalent. Which do you choose? I almost always choose the cash. It helps even more to remember that the same cash will roughly double every 10 years if invested.
[/b]

Good points, I have used number 1 often in the last year and it has saved me so much money!

As for the OP, You are in a unique position to think you are frugal compared to those around you, without even trying very hard at all. You need to focus on your own personal goals and put big blinders on to your coworkers. Write down your goals, and work to achieve them, you don't have to cut your lifestyle as much as some of us want to, it all depends on your goals.

I like that you are asking for help, at least you noticed a problem sooner than later!

PencilThinMustache

  • 5 O'Clock Shadow
  • *
  • Posts: 37
Re: Help me reduce my spending!
« Reply #17 on: June 04, 2014, 08:36:58 AM »
I dont know that Aldi is necessarily an experiment.  the food is good people arent dying from eating it.  if you exclusively shop at aldi and spend 750 a month still you're doing something wrong just my 2c.

We don't exclusively shop there (yet), but that's the "experiment."  After one month of Aldi vs Publix I'll post results.  If its drastic maybe they'll even put me on a commercial ;)

PencilThinMustache

  • 5 O'Clock Shadow
  • *
  • Posts: 37
Re: Help me reduce my spending!
« Reply #18 on: June 04, 2014, 08:50:27 AM »
Thank you for the reflective update.

You are in a great position to get your student loans paid off quick, then start investing and before long you'll have a huge stash working for you and time will be on your side to buy, hold, and rake in the profits.  For example, there is an emergency room physician local to me who owns hundreds of local rental properties (a mixture of homes and apartment building.)  He retired early.  You don't have to retire early or invest in real estate if those aren't your goals, but you also don't have to let money go swirling down the drain just because that's easier than paying attention.

Look for your local twins club online to see if they have a semi-annual clothing and equipment sale. Some churches do this as well, but the twins sales are usually bigger.  Up to about size 2T, there are so many clothes at those things you can get perfect, cheap clothes for nearly nothing even if you go late right before it closes (but earlier is better, of course.)  I bought very few new clothes for my children until they were in adult sizes, and they still got complimented all the time.  It sounds like your wife might like to shop a bit for fun, and these types of sales are fun!

You don't have to cut down in every single category with your income, although that can be a long term project for MMM's "constant optimization."  Instead, see what cheaper options you can find in one category at a time.  Is this a project your wife would enjoy?  Is she on board? Make sure she is in on the plan and has incentives to make this work.

Both are great suggestions.  Building a real estate empire would be badass for sure.  And I'm not above hand-me-downs.

And yes, fortunately my wife is on board fully.  She is enjoying the new hobby of saving and investing.  I think the best way to describe our situation is "lifestyle/spending creep."  Despite the shock and awe of many posters here, we aren't really spendy people.  Never buy things a normal person would consider "luxury" items (although I suppose plane tickets nearly every month could be construed that way, but again I think seeing family is utmost importance).  All our friends think we are "the frugal ones."  What I realized is we just casually buy lots of little things, and it adds up.  Its been "creeping" up for years now.  Since it doesn't break the bank, we haven't ever really had to face the horror that is 6k in monthly expenses. 

What I realize now is that saving 50% is good but saving 60% is better and could be done by trimming and cutting a few areas already mentioned here.  Although you wont see me making my own biodiesel anytime soon, Im optimistic we can implement some major changes.  Thanks for the tips and advice.