(post has been updated with FAQs)
Howdy folks, thank you all so much for your valuable input over the past month! We have made some progress, but still have an Exploding Volcano of Wastefulness.
Our original post can be found here:
http://forum.mrmoneymustache.com/ask-a-mustachian/newbie-to-moustachianism-with-hair-on-fire-requests-help-from-veterans/Changes already made:- Groceries: Started shopping almost exclusively at Winco and Costco, buying pre-sliced deli meat to buying raw meat and cooking and slicing it ourselves, buying more generics and bulk items. Estimated cost savings: $200/month.
- Internet/phone: Switched from Comcast to DSL, and switched to VOIP landline. Estimated cost savings: $30/month.
- TV: Switched from Comcast to Dish Network. Estimated cost savings: $50/month.
- Dining out: Our goal was to only eat out twice a month; technically we ate out 3 times this month, but one of those times was at a fast food joint. About $100 of the total below is from spouse's coffee habit, but he now has a thermos and has been using it religiously. He's a non-mustachian but has been a great sport! Estimated cost savings: $850/month.
- Income taxes: Rather than paying extra toward income taxes from each paycheck, we changed withholding to Married with no additional withholding and maxed out 401K contributions. This did lower our take-home pay by about $1200/month, but if I did the math right, it only cost us about $294 more per paycheck to put $692 in 401k. I didn't like the idea of missing out any any further 401k contributions since it's limited to a certain dollar amount per year and no catch-up contributions can be made until after we would like to be semi-retired/financially independent. Was this the right decision when our hair is on fire...?
- Emergency Fund: We are putting half of the income remaining after expenses into online savings earning 1%, and the other half into a Betterment account with 60/40 stock/bond split (the default emergency fund setting for Betterment). When we have a sufficient total emergency fund to cover 3 months of our new expenses, we plan to funnel all future spare cash directly into the student loan.
- Roth IRA: Had to reverse and discontinue Roth IRA contributions since we will have made too much to qualify for IRA contributions... Sheesh! This is what made me realize we have an Exploding Volcano of Wastefulness!! See increased 401K contributions above.
- Transportation: I have an absolutely ridiculous 38-mile commute, but cannot jump ship at this time due to Hair On Fire and pretty stable work situation. My Toyota has about 285,000 miles on it, and maintenance costs are increasing. I'm leaning toward trying to hang on to this puppy for another year, until/unless I get a repair bill over $4,000, at which time I plan to buy a 3-5 year old used reliable compact to mid-size car.
Next steps:- Cell phone: Need to decide on alternative carrier. There is a lot of information out there (including on this forum), both positive and negative about various carriers. Part of my decision-paralysis comes from the realization that bloggers are getting kickbacks for recommending services, which makes it hard to know who to trust. We already have smartphones that work, and want to bring them to a new carrier. Any additional input would be greatly appreciated!
- Groceries: Obviously need to cut back, but are not sure how to get it cut down by about half as previously suggested.
- Other suggestions...?
Since the main focus of previous posters seemed to be how the heck are we spending so much on groceries, here's a breakdown of the current month:Category | $ | % of total | | |
Meat, nuts, eggs | 207 | 25% | 20% | (excluding one $56.66 deli purchase for Italian beef sandwiches) |
Produce (all other vegetables not sold in a bag) | 60 | 7% | 13% | (total produce section) |
Packaged/sliced vegetables (bagged salad, single-serve applesauce, shredded carrots, etc.) | 45 | 5% | | |
Dairy (milk, cottage cheese, pre-shredded cheese, single-serve yogurts, half-and-half) | 98 | 12% | | |
Baking | 9 | 1% | | |
Sweets, fancy packaged drinks (chia seed, etc.), chips | 70 | 9% | | |
Packaged carbs (bread, tortillas, frozen potatoes, etc.) | 57 | 7% | | |
Condiments (salsa, ketchup, salad dressing, croutons) | 62 | 8% | | |
Frozen pizza, snacks, deli sides | 56 | 7% | | |
Muscle Milk | 22 | 3% | | (Meal replacement for spouse when too busy at work for a meal) |
Coffee (ground & canned) | 49 | 6% | | (note this will be cut by about 2/3 in October due to spouse's new Thermos) |
Bottled water | 5 | 1% | | (I use a reusable bottle, spouse still uses disposable… but at just $5/month, I think we have bigger fish to fry) |
Flowers, chocolate for birthdays at work | 15 | 2% | | (already included in Gifts in expense table) |
TP, paper towels, feminine hygiene | 38 | 5% | | |
OTC meds | 30 | 4% | | (Tylenol, cold, etc., first cold of the season, replenishing stock with cheapest store brand stuff available) |
| | | | |
Total | 822 | 100% | | |
Abbreviated Case Study Info:Life Situation: IRS filing status Married Filing Jointly, no dependents, early 40's, residing near Seattle, WA. I work in Healthcare (maybe 75% job security) and my spouse works in a completely unrelated Transportation field (probably about 95% job security).
Gross Salary/Wages: Before any deductions: about $204,000 total projected for 2015.
Pre-tax deductions:
#1: about $300/month for healthcare (this is charged whether or not we want the healthcare). Currently no deferred compensation contributions.
#2: about $692/paycheck for deferred compensation plan, $158 in another deferred compensation plan (pension?? still need to figure out what this is).
No other significant income, dividends, capital gains, or rental income.
Current Emergency Fund balance as of 9/15: $5312Liabilities:Student Loans: original total $129,000, currently owe $108,000 at 6.55% interest with autopay. First payment on schedule in 2012. Originally set up for 25 year payment plan, currently on 10-year payment plan, but my hair is on fire and this debt is eating away at my well-being every moment it's there. Monthly payment currently $1527.10, payoff date 3/2023.
Car loan: Fancy truck purchased for spouse in 11/2013. Original owed: $39,704.50 at 2.59%, $707.05/mo and $27,079.99 remaining on the 5-year loan. (I am awaiting the expected face punch, but this is currently non-negotiable with anti-mustachian spouse. He is coming around, but I think this truck is here to stay. He has a relatively short commute.)
Credit cards: Paid off all $39,000 in credit card debt over 9 months (YEAH!!). Available balance: about $89,000 total.
Summary of this month's spending, as compared with average numbers from the past year and from 1998:Category | 9/15 | 2015 | 1998 | |
Mortgage | $1,391 | $1,295 | | |
Rent | | | $478 | |
HOA | | | | |
Property Tax | $234 | $234 | | |
Mortgage Insurance | | | | |
Home/Rent Insurance | $33 | $33 | | |
Beauty Shop | | | | |
Bicycle Maintenance | | | | |
Cable TV | $47 | $83 | $28 | (2015 recently reduced to $50) |
Car Insurance | $220 | $220 | $162 | |
Car Maintenance, Registration, etc. | $5 | $564 | $165 | |
Charitable contributions | | $9 | | |
Child activities | | | | |
Childcare | | | | (DINK) |
Gifts | $126 | $199 | | (Christmas & birthdays) |
Clothing/Shoes | | $225 | $156 | |
College costs | | | | |
Computer (paper/software/etc.) | | $24 | | |
Credit card fees | | $46 | | (2015 recently reduced to 0) |
Dental Insurance | | | | |
Dentist | | | | |
Dining (Pizza, Restaurant, etc.) | $211 | $921 | $691 | (9/2015 reduced to about $111 with new thermos, 1998 includes leisure, movies, etc.) |
Donations | | | | (already included in charitable contributions) |
Dry Cleaning | | | | |
Electricity | $101 | $124 | $39 | (includes natural gas heating) |
Emergency Fund | $3,010 | varies | | (9/2015 includes $1,100 one-time refunds, previous average including tax refunds and debt paydown was about $4,055/month) |
Entertainment | $24 | $265 | | |
Financial Fees | | $46 | $4 | (includes credit card interest but these are all paid off now) |
Fuel/Public Transport | $380 | $416 | $101 | |
Gas/Oil for heating | | | | (included in electricity) |
Groceries | $937 | $1,178 | $493 | |
Hair Care | | | $12 | |
Home Alarm System | | | | |
Household; Maintenance | $31 | $116 | $103 | |
Internet | | $60 | | (9/2015 reduced to $55 which includes home phone service, not billed yet) |
Landscaping/Yard work | | | | (included in household maintenance) |
Life Insurance | | | | (included in auto insurance plus post-tax deduction of $100 thru employers) |
Lunches | | | | (included in groceries and dining out, generally we bring lunch from home) |
Medical (Doctor, Hospital, etc.) | | $17 | $47 | |
Medical Insurance | $346 | $346 | | |
Medicine (Prescription) | $15 | $21 | | |
Miscellaneous | $20 | $200 | $545 | |
Parking/Tolls | | $79 | | |
Pets | $136 | $80 | $194 | |
Phone (cell) | $139 | $139 | | |
Phone (landline) | $35 | $35 | $96 | (9/2015 reduced to 0, bundled with internet; 1998 includes both landline and cell) |
Recycling/Trash | $27 | | | |
School Tutition/Books/Etc. | | $95 | | |
Sports/Recreation | | $43 | | |
Subscriptions (paper/magazines/etc.) | | $9 | | |
Travel/Vacation | | $1,071 | | ($448/mo excluding a once-in-a-lifetime ridiculous vacation to Vegas) |
Water/Sewer | $116 | | | (includes city water and wastewater, city storm drainage, county wastewater treatment) |
Wine/Beer/Tobacco | | | | |
Work/Professional fees | | $63 | | |
Total | $7,584 | $8,396 | $3,313 | |
| | | | |
Average take-home pay | $9,030 | $12,347 | $2,926 | |
We get all city/county services on one bill and original post had it all listed under Recycling. The table above was edited to split out water/sewer from garbage fees. City wastewater ($28), storm drainage ($13), county wastewater treatment ($43) are all minimum monthly charges and cannot be adjusted. Water is read every second month and this happened to be the month; base charge $18, we paid another $15 for the past 2 months. Garbage/recycling fee of $27 could be reduced by about $8 if we switch from a 35 gallon container to a 20 gallon container (note that
garbage and recycling are picked up every two weeks, composting is picked up weekly). We have high-efficiency washing machine and haven't been watering our yard, so I don't think there's much savings available here...
Mustachian veterans out there have been great, giving us all kinds of awesome feedback! Any further input/suggestions would be greatly appreciated.