Author Topic: Reader CASE STUDY: Where to start when already fairly frugal?  (Read 6564 times)

AllisonMightBeAMoose

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Reader CASE STUDY: Where to start when already fairly frugal?
« on: October 20, 2014, 03:19:01 PM »
Income: $49,500 (Gross) for family of 2. I work in an office, my husband quit his job over a year ago to pursue his dream of sports memorabilia trading.

Current expenses:
Monthly
Mortgage: $1,020 <--cannot move closer to work without greatly downsizing or moving to a less than safe part of town. Additionaly we have 2 large dogs that would go nuts without a yard to romp in.
Cell phone: $160 <--on Verizon, and yes, it is outrageous. I am required to have mobile data for work, so I can't drop that. I agree I could find a MUCH better plan.
Gas: $300 <-- 90% of my driving is to/from the office or for business, for which I get mileage.
Grocery: $400 <-- could be better, but I don't buy extravagent foods - chicken, spaghetti, cereal, milk, sandwich fixin's, etc. No steak. Nothing crazy.  I routinely cook dinner and pack breakfast/lunch.
Energy Bill (all electric): $100 <-- on average (set to 76-78 in summer and 66-68 in winter) in Cincinnati, OH where summers are easily in the humid 90s and winters routinely drop into single digits
Water: $20
Internet: $60
Car Insurance: $80 <-- could definitely shop this. We have pretty sweet coverage and a low deductible. This could easily be reduced.

Assets:
401k @ $20,000
Stocks @ $10,000
HSA @ $2,000
Checking/Saving Account is a rotating door

Liabilities:
I have credit card debt of about $2,000.
My husband has MUCH more credit card debt. HAIR. ON. FIRE. RAGING FIRE.
No car loans
No student loans

MY QUESTION IS THIS
- if we can not move closer to my work (you will jest that I can, that I choose not to, but living in even a small house with a yard for the pups closer to my office, which is not in a great part of town, would easily cost twice what we pay now)
- I grocery shop frugally - observing sales, etc.
- we eat out maybe once a week as a treat
- are conscientious of our energy usage (yes we could set the thermo more extremely, I will concede on that)
Where do I start to cut back to pay off our debts in a more aggressive manner? Are we talking eating beans and rice for months? Obviously we can get rid of eating out completely and save $20 a week, of adjusting our energy usage to cut maybe $5 or $10 a month, of my husband getting a job (DUH), but are there other places I am forgetting to look??

Northerly

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #1 on: October 20, 2014, 03:54:18 PM »
There are lots of hours in the day. It seems that husband could work a 9 to 5 and still pursue the dream. Otherwise, you are making about half the money you need to seriously pursue FIRE. That CC debt has got to go.

Short answer: husband needs a j-o-b until he has a serious nut saved to live on/start this "business".

lhamo

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #2 on: October 20, 2014, 04:00:02 PM »
Also how much of his credit card debt is related to the "dream"?  That might very quickly spin into a nightmare if you don't keep a handle on it....  I would focus on working more stable jobs until you get the debt under control.  He can do the dream as a side job within very strict limits (= sales must equal more than purchases) in the meantime.

One more thing -- it is hard to trust your budget when you leave out the $20/week for eating out.  I wonder how many other little expenses there are that you aren't considering.  Credit card debt doesn't just magically appear -- you have to spend money to end up with it.  My guess is you aren't as frugal as you claim.

marty998

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #3 on: October 20, 2014, 04:00:22 PM »
Income: $49,500 (Gross) for family of 2. I work in an office, my husband quit his job over a year ago to pursue his dream of sports memorabilia trading.


For real? I don't like stamping on people's dreams but this is silly.

BlueLesPaul

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #4 on: October 20, 2014, 04:21:13 PM »
I would echo the other posters.  This sport trading seems like a money pit hobby disguised as a business. 

Outside of getting hubby a job, you appear to know you major trouble areas:  Cell Phones, maybe car insurance and gas.  Is there any possibility to take public transit or to carpool?  You might be able to save some money on internet.  I personally pay half as much and it sufficient for my wife and me.

Is there a cable bill?  Just assuming that if your husband is that into sports, it is likely that has cable.

Setters-r-Better

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #5 on: October 20, 2014, 05:23:07 PM »
Take home pay? Clothing?  Pet and human medical expenses? Value of home? Mortgage balance? you know the totals of how much spouse owes on all cards? Is he possibly depressed or some other mental illness that would cause him to quit his job and pursue that "dream"?

Prepube

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #6 on: October 20, 2014, 05:27:56 PM »
Seems like there might be a lot of expenses you are not divulging, and the more info you give to the forum's budget analysis geniuses (and that's really what they are!), the more helpful it will be for you.  So, give us some more info.  Use Mint to track your expenses for a little while, then revise your original post with lots more info about where your money is going.  How much do you spend on the dogs?  How much do you spend on fun?  On clothing?  On maintenance for the house?  Cable?  Etc. etc. etc.

And yes, beans and rice might be a part of your solution if it is a hair-on-fire debt emergency as you say.  Tell us more about yourself and get ready for some facepalms and punches!  And to chime in with everyone else so far, get the husband a job ASAP.  You must do some things differently to get out of the spot you are in.

La Bibliotecaria Feroz

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #7 on: October 20, 2014, 08:45:00 PM »
The Frugalwoods folks estimated that they save like $900 a year by switching from cold cereal to oatmeal (see http://www.frugalwoods.com/2014/07/14/breakfast-the-hidden-destroyer/).

You can get some delicious cheaper dinner ideas from Budget Bytes. I made her ham and bean soup in the crockpot today for like $1 a serving, for instance. (Plus I whipped up some cornbread on the side.)

It's not all or nothing for husband. He could look for something part-time, either out of the house or something he can do at the computer, like Leapforce (which I do: details in my blog at http://frugalparagon.com/2014/02/05/why-the-frugal-paragon-loves-leapforce-at-home/ and Butler Hill and Lionbridge have similar opportunities).

Your hair is on fire. You cannot afford to pay other people to make food for you one whole night a week. Every other, if you must, but once a month would be better. Or never. Mr. and Mrs. Frugalwoods swear that they literally never eat in a restaurant.

Good luck! I know it's one thing for us to sit here on the Internet and tell your husband what to do, and quite another for you to actually get through to him :-).

StangStache

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #8 on: October 20, 2014, 08:53:26 PM »
I'm astonished at your cell phone bill.  Is it $160 for your plan alone?  Or does that include your husband?

I understand the need for lots of high speed mobile data for work, but you can still have your cake an eat it too.  Have you considered moving to Cricket?  Even if you buy their most expensive mobile data plan, it's still only $55/month (after taxes + autopay) for 10 gigabytes of 8mbps LTE data, then unlimited throttled data afterwards.   All of this with native AT&T coverage.  I have my iPhone on Cricket and can't believe what I'm getting for the price.  Seriously consider this.

I can't say I agree with the others on your eating out habit.  Once per week isn't terrible.  Yes, once every other week is probably better, but seriously, it's not like you're eating fast food every day. 

retired?

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #9 on: October 20, 2014, 08:54:51 PM »
toilet paper......see other current thread.

1967mama

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #10 on: October 21, 2014, 12:45:08 AM »
As a couple, you make around the same as these folks:
 
http://www.theprovince.com/business/Young+living+cheaply+Vancouver+bring+Freedom/9692666/story.html

They post here on MMM as Zikoris ... and their expenses are WAY less than yours. Take a look at the article, their blog, and their posts on MMM to pick up some great tips! They have a black belt in frugality!

JoanOfSnark

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #11 on: October 21, 2014, 02:36:57 AM »
Regarding the dogs: I'm guessing their food is part of the "grocery" bill, maybe you can buy it online to cut some costs there? I hear people have good luck either going the Costco route or online to get better deals on the same stuff, and you might have luck finding something cheaper that they like just as well. I know my parents' dog would eat a bowl full of rocks happily if you put Gross Things (table scraps of dog-safe stuff, like chicken skin and whatnot that would otherwise just have gotten thrown away) on it. He is not a smart dog, though.

I'm going to also side with the chorus here and say the husband's sports memoriabilia business, if not already wildly profitable, is probably something best pursued DURING ER, rather than before.

2ndTimer

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #12 on: October 21, 2014, 02:43:28 AM »
Your food bill seems a bit high.  We spend about half that for all our "housekeeping" expenses for two adults and two cats. 

markbrynn

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #13 on: October 21, 2014, 03:51:23 AM »
One comment on the husband's career choice.

One of my friends has over time cut back all other work that he used to do to become a trader of toys (mostly from the 70's and 80's, specialized in certain types, etc.). Since he became serious about it (he was dabbling for a while), he has been able to make a decent living out of it. No need to give you all the details, but he buys locally, sorts out from people's collections into different lots and sells individual pieces or larger lots around the world via ebay. Because of his detailed knowledge of the prices for these toys, he is able to get a decent margin and avoid losses.

I have no idea of OP's situation. Maybe her husband is goofing around and he should snap out of it and deal with reality. Also possible that it's making money. However, it would be handy for OP to include husband's income/costs from his business to give a better picture.

mrsggrowsveg

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #14 on: October 21, 2014, 07:16:47 AM »
You are buying inexpensive foods, but are they from an expensive store?  That seems kind of high.  Do you meal plan to avoid buying unneeded items?  How far do you live from the office?  What kind of car do you commute in?  I have what most on here would consider a gastly commute and spend far less than that on my share of the gas bill. 

Gone Fishing

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #15 on: October 21, 2014, 07:55:58 AM »
Generally 12-24 months is long enough to see if a start-up business is going to make it off the ground or not.  If he is not profitable at this point it may be time to decide how much further he will go. 


Sid Hoffman

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #16 on: October 21, 2014, 10:35:01 AM »
Monthly
Mortgage: $1,020
Grocery: $400
Gas: $300*
Cell phone: $160
Energy Bill (all electric): $100
Car Insurance: $80
Internet: $60
Water: $20

The OP asked where to start.  I always start by sorting expenses from high to low.

Housing: The OP says no options, but I would argue this is self-imposed because of the dogs.  As a pet owner who at one time lived with 3 dogs and 2 cats, I know that the temptation can be to say that there's "no option" but to keep them, however that is not actually true.  It's a choice.  Perhaps the OP wants to stay the course, but I would acknowledge that pet ownership is a luxury good, not a necessity.

Grocery: Again, as others pointed out, a portion of this is undoubtedly for the large dogs.  Again, that's a luxury, and should be accounted for as such.

Gas: This one doesn't scare me nearly as much because the OP says that some of it is reimbursed by work.  So the more they drive, the more they get reimbursed.  As long as OP has a reasonably fuel efficient car (which we already know is paid off, too) I might pass on this one until the car actually needs replacement or if the paid off car is worth at least $10,000.  If so, that could make it worth trading in on a certified used Prius or something that may potentially make sense economically.

Cell phone: As was covered, this is a lot of money for two lines and obscene if it's for only one line.  If the husband isn't really working or going anywhere, he doesn't need a fancy cell phone.  Something like the basic $10 Republic Wireless phone plan may be sufficient.  If T-Mobile coverage is sufficient in your area, you could do a plan with unlimited data and a high end phone and still only come up to $100 or so.

Energy: Seems fine to me; pass.

Car insurance: This doesn't seem bad to me either if it's for two cars, but no harm in shopping around.

Internet/water: Again, so cheap that it's hard to get much savings when you're down in such small dollar amounts.

Not listed: credit card interest.  The OP doesn't say how much is being spent on interest for the carried balances on the credit cards but let's say it's $15,000 of debt at 15%.  That's $187/month in interest.  Pay off the debt and you get $187/month back.

So that's it.  Where to start is easy: Go where the money is.  Whatever you're spending the most on is what you devote some time to first.  Pick one budget area and research the heck out of it for an entire week.  Once satisifed, go down to the next item on the list and work on that for a week, and so on.  When you get to the bottom of the list, go back to the top and start over again.  It's a systematic continuous improvement loop.

AllisonMightBeAMoose

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Re: Reader CASE STUDY: Where to start when already fairly frugal?
« Reply #17 on: October 21, 2014, 11:04:29 AM »
Thanks to everyone for your replies.  I had a few follow up points written, but then decided that everyone has pointed out great places to look regardless of the specifics dollar amounts involved.
Thanks again - it really helps to have a good ol' face punch every now and then to help you wake up and realize that it really can just come down to the little shitty habits and being too comfortable in the ways things are.