Saturday, October 31, 2015

Happy Halloween

I hope all of your children are enjoying the trick or treating. We seem to be done here. Only had about 50 kids from 5PM to 6:30PM. The little ones are the cutest. The fire truck with the sirens blaring came through giving all of the kids candy. I thought that was so nice of them. We also had both the Sheriff and the State Troopers making the rounds to be  sure that everything was calm which it was.

It was a busy day for me. Besides getting ready for  Halloween, I baked two loaves of homemade banana bread for company that is coming tomorrow morning. The whole house smelled so good.

Knowing that we would have trick or treat little ones right at the dinner hour, I wanted something that would be easy. So I made a beef stew from scratch this morning and put it in the crockpot to cook all day. Last minute I baked some crescent rolls and we just finished a delicious meal. The best part is that we have enough for dinner tomorrow night.

Tonight I am working on the expense report for the October post that I promised for Monday. Till then.

Friday, October 30, 2015

Getting Ready For Winter

We live in a very cold and snowy climate. So we only leave home for necessary medical appointments in the winter. I hate driving in the bad weather and I hate the cold even more.

Every year I prepare for winter by stockpiling meats, poultry, fish, vegetables, fruits, potatoes, rice, pasta, dairy products,vinegar, condiments, baking products, an assortment of nuts, and onions. I also make sure that I have the other things that I need to put together rice dishes, soups and stews. Pearled barley, dehydrated onions and celery, kidney beans, black beans, lentils and navy beans are used in our household all of the time. I keep large food grade buckets in our basement of these items and just refill my jars as needed for my pantry.

I also store dehydrated green and red bell peppers for Mexican dishes and other recipes that call for them. I just hydrate in water the portion needed.  I check my supply of lemon and lime powder which reconstitutes with water. I also use the lime juice to sprinkle into Mexican dishes for that touch of lime flavor. The lemon juice also works well to clean the dishwasher. The cream of tartar I use in various recipes and for cleaning.  I always have tomato bouillon to use in Spanish rice and other dishes.

Lastly,  I check my supply of raisins, dried cranberries, and orange peel granules. These are all used in muffins, granola, and quick breads, cookies, etc. Over the summer when fruits were at their peak, I froze blueberries, strawberries, and peaches. They come in handy for desserts, to put on oatmeal, for smoothies, and to make pancakes. I made enough strawberry and peach jam to last us a year. 

As we were battening down the hatches this past weekend, I was thinking about how prepared we are this year. We shouldn't have to leave the house this winter to do any grocery shopping when it is snowing. We will just eat from the stockpile. Next week, I plan on making a run to Sam's Club for our non food products like toilet paper, vitamins, shampoo, and a few other staples that I pick up there. I am also keeping my eye on the sales for the rock bottom price for butter so that I can stock for another year. Turkeys and whole cranberries will also be on my November list.

We also cleaned the shed and garage last weekend and got the snowblower ready to use. When my son visited on Sunday, he helped his father move all of the patio furniture and some things from the garage into the shed. I am so glad we did that because we had wind gusts up to 62 miles an hour here the past couple of days. Our furniture would have been blowing down the street like our neighbors was. The snow tires are being put on our car today. Our local tire place that we use every year, offered us a 50% off coupon if we got them done by October 31.

I hope all of you and your children have a fun and safe Halloween tomorrow. If it isn't too cold, we will be sitting out in front of the house when the children come to give out our candy. I just hate opening and closing the door so much with the heat on.

BTW, Sunday or Monday is the day to calculate what you spent this month..........every penny of what you spent. Then you can calculate how much money you have to pay off debt or put into investments.  Also calculate your net worth so that you will have your baseline for seeing how much your net worth goes up each month.

On Monday, I will show you every penny we spent in October and what our savings rate for the month was. Then I will evaluate it.

Wednesday, October 28, 2015

Am I Frugal or Just Cheap?

Some people may think that being frugal is just being cheap. But I don't look at it that way. I don't feel that I am ever cheap.

I never make my purchases at the expense of someone else. For example, I would never stiff a waitress her tip. I may give her a little less if the service is poor or a little more if the service is excellent.

I would never just buy any old gift for a recipient regardless of whether I thought they could use it or not based on the fact that it was so cheap. For example, I would not give a friend a candle that I may have found for $1.00 when I know she isn't into candles.

When we make purchases for ourselves, we usually make our decisions based on careful research of the product. If it is a large appliance, we look at the quality and how long we think it will last? Most of the time we will pick the mid grade which will work just fine for us. If it is a refrigerator and the ratings are excellent, we may pay a little more than mid grade to get what we need. We rarely buy the cheapest because they don't seem to last the number of years of the more expensive ones.  In other words, we want our dollars to be used wisely. I don't want  to be replacing such a large purchase every couple of years because I chose based on the  dollar.

I will buy organic meats, vegetables and fruits when I feel they make sense for the amount of money we are spending. We try to eat a little healthier than when we were in our coupon craze phase and just not buy the cheapest. I know that many people can't afford organic products so you have to make your decisions based on your finances.

I believe that frugal people think about things a little more than other people. I think that is what needs to be done so that you don't waste your dollars. For example, when I am getting showered and dressed in the morning, I am thinking about what my day will be. However I am also conscious of how much water I am using for that shower and how fast I can finish. Most of the time I take navy showers to conserve on energy and water.

If I have errands to run, I think about what order will I drive my route to save the most gasoline. Is there any other errand besides what is on my list that I can do to not have to run errands another day this week.  

If I am going to do laundry, do I have enough for a full load so that I use my electricity efficiently. Can I wash this load in cold water? Do I have enough homemade laundry detergent for a load or do I need to make a new batch? Do I have enough room to hang the clothes to dry in the house rather than run the dryer?

If I am going to run the dishwasher, do I have full load? Can I run it on the ECO cycle to save energy? Do I need to fill the rinse dispenser with more vinegar?

I could go on and on but I will leave that for another day when I take you through my entire money saving day. 

But bottom line is I am not cheap just frugal. I try to use our resources to benefit our pocketbook without hurting another person.

Certain cheap things I draw the line at. For example, I will not use cloth toilet paper or not flush the toilet for every use. It just isn't something that is worth it to me. Toilet paper is cheap to buy in bulk at Sam's Club or Walmart. I know, I know, you are paying for something that you are just throwing down the drain. But that is my choice. If others can live with doing it, that is their choice. I just couldn't.

So  the next time you are spending money or doing something around the house, take a few minutes to think about how you are going to do it that might save you a bit of money without being cheap.  The cost of those little things add up to big dollars over a years time.      


Monday, October 26, 2015

How I Grocery Shop

Over the years, I have changed the way I grocery shop many times. That is because tastes change, the number of people in the household change, the amount of money coming in changes and health requirements change.

Up until 6 months ago, I would say we ate pretty healthy but still incorporated some canned and  processed foods into our diet. Now I shop for a really healthy diet. 

Each week we buy fresh fruit and vegetables that are in season. Right now that means we are eating lots of apples, sweet potatoes, brussel sprouts and cabbage in our diet. The bonus of eating in season is that they are at their cheapest prices all year. I don't  find many coupons for these items so I only buy them when they are at the lowest price. Most of my purchases are made at a local produce market.

In the summer when many fruits and vegetables are at their peak, I can them to use all winter. I also freeze lots of vegetables and fruits. I made enough strawberry and peach jam to last us for a year this summer when those fruits were at their peak.

We buy a lot of chicken breasts at under $ 2.00 a lb and fish and occasionally shrimp when they are on a good sale. Beef roasts are purchased in bulk when the sirloin tips are at  $3.99 a lb. I roast them, grind them for lean ground beef, cut them into chunks to make beef stew in the crockpot or cut thin strips for stir fries. We only buy steaks in the spring and summer when they are on sale and we can grill them outside.

We also buy ground turkey when it is on sale, corned beefs in March, and legs of lamb around Easter.  Occasionally, we purchase lamb chops or veal cutlets.

In November I will buy turkeys and hams when they are at rock bottom price. We are about to roast a 22 lb. turkey for Thanksgiving that I bought last year.

When turkeys are cheap and I don't have a lot of freezer space, I buy a few anyhow, roast them and use my food saver to freeze them in portions. I use the portions in recipes that call for chicken. I also make broth from the carcass and freeze it until I need it.  

We do buy bacon for breakfasts and an occasional BLT for dinner. But it has to be on a good sale.

We try to go meatless 2-3 nights a week. This cuts down the amount of money we spend on dinners.

I am not true to any local market, meat or fish market. I buy where the best prices are the best if they are within my 15 mile driving limit.
Pizza night is always on Fridays and I make homemade. We usually eat cheese pies.

I purchase a variety of cheeses at Sam's Club or Aldi's depending on who has the lowest prices. We also buy butter, milk, eggs, and sour cream at Aldi. 

I usually buy all of my flours, sugars, rice and dried beans in bulk at Sam's Club. I store them in food grade buckets in my basement. Recently Aldi had a good price on flour so I purchased 25 lbs. there. I also purchase my olive oil and canola oil in huge containers at  Sam's Club.

I make all of my own baked goods: cookies, quick breads, cupcakes, cakes, donuts, English muffin bread and all other breads. I also make my own pizza crusts, muffins, hamburger and hot dog rolls, and donuts.  Once in a while if I have  a large coupon, like I do now and there is a sale,  I will purchase Thomas English muffins. 

We also make our own salad dressings, tartar sauce, enchilada sauce ( now that my canned are gone), BBQ sauce,  mayonaise, and just about any other sauce that you can  think of.

We do buy ketchup, mustard, pickles and olives.

These foods are the basic mainstays of our diets. Most of our meatless meals are skillet dishes that incorporate some kind of bean and rice in them. The cheese pizza also count as meatless meals. We do make grilled cheese sandwiches and homemade tomato soup. The sandwiches go on homemade bread and the soup is made from tomatoes that we canned.

Our breakfasts consist of oatmeal, toast with peanut butter(purchased at Sam's) and homemade jam, homemade pancakes or waffles, homemade granola and milk, or bacon and eggs and toast. We buy our oats in bulk at Sam's Club. We also buy dried fruits for granola there.

Most spices are purchased in bulk from Sam's Club or ordered from San Francisco Herb Company online. 

Lunches consist of veggies and homemade dill dip, peanut butter and jam sandwiches, turkey or chicken salad, or a tossed salad or cup of homemade soup.

We make dinners from our freezers and fridge and is whatever I plan for the week.

We eat veggies and dip for snacks, cheese and crackers or just grab an apple or banana. Sometimes, I dip the apples in peanut butter. It is so good. 

Since I rarely have coupons, I try to keep my costs under $300. - $ 350. a month for the two of us. Sometimes it is lower and sometimes I go  over when I am stocking up. But the average over the year will hit that target. 

If you have any questions, feel free to ask it by commenting.  

Friday, October 23, 2015

Heating Season is Here

My heat has been on for at least 4 weeks. I live in a Northern state where it gets brutally cold in the winter. Along with the cold comes high heating bills. 

So my husband and I do whatever we can do prepare our home and make sure that our heat isn't leaking outdoors. This year we caulked all of the windows where it was needed and checked all of  the weather stripping on the doors. Our home is only a little over 5 years old it was amazing how much caulk needed to be redone.  

We heat with natural gas. I am reading that the natural gas rates should be cheaper this winter.  Some of the weather sources are telling us that it will be a warmer than usual winter and others tell us it will be colder and much more snow. I have found that the only weather forecast that I can rely on is to look out the window and  see what it is doing outside. 

Since we are older, we get a lot colder than we did when we were younger. We keep our heat at 69 during the day and 65 at night. When we were under 55, we could tolerate 65 during the day and 60 at night by wearing sweaters or sweatshirts and putting an electric blanket on our bed. We still use the electric blanket but keeping the heat higher is a necessity that we planned for. 

We do have two extra bedrooms that are used only when we have overnight guests. So we close those off and shut the doors. We also have insulated cloth snakes that we put at the bottom of the doors to make  sure the heat from the rest of the house isn't leaking into  those rooms. If you don't have snakes, you could use rolled up towels. Just don't do this in an extra bathroom where you could have pipes freeze.

Our basement is insulated and could be heated but we keep the heat registers closed down there. I keep cloth snakes at the bottom of the two doors into the basement also.

When I bake in the winter whether it be in the regular oven or the toaster oven, I leave the door open when I am done to let the heat into the house. Being that we like cooking in small appliances, we use those as often as we can to cook meals because that saves on  the natural gas bill. My husband is preparing chili to go in our crockpot as I write this.

When the sun is shining I open the South facing windows to let it help heat the house. If the sun isn't shining, I keep the energy saving shades drawn on the windows. In this climate that we are in, I keep the North, East and West facing window shades down.

We only use our garage door entry in the winter. It stays warmer and we can close our inside door before opening the garage door. If we used the front or back doors, we would get too much cold air flowing in.

Every month I change the filter on the furnace so that it keeps the air flowing freely. We just use the cheapest filters we can get on the recommendation of our heating man. He says a lot of the pleated and fancier filters restrict air flow which does not help with your bills.

Every month I try to reduce both our gas and electric bills. But in the winter it is hard with the heat. So I do whatever I can do  reduce the part of the bill that isn't heat.

Please feel free to leave a comment and share how you reduce those heating bills.




Wednesday, October 21, 2015

Christmas Shopping For Free

Have you started your Christmas shopping yet? Do you dread this time of the year? Do you spend too much and worry about the credit card bill coming in?

I know you are thinking it isn't even Halloween yet and she is talking about Christmas. That is because one of the things that I have learned over the years is that the gifts are usually more reasonably priced and in stock before Halloween. I try to get mine done early every year for those two reasons and to avoid  the crowds.

This year I have half of it done so far. I am awaiting a wish list from one of my sons for his family. As the grandchildren grow older each year, their interests change and I don't know what they already have. So to avoid the disappointment of my grandchildren and my sons having to make returns, I ask for the wish lists every year.

The best part of buying gifts this year is not having to spend any money. I do the majority of my shopping through Amazon. I have been accumulating points using their reward card, so I did some of my shopping for free with those points.

However, I have another bank card that I have been accumulating reward points for years. I used those points to get $400. in cash back to use for gifts.

I also save all of the cash rebate checks that I get from Ebates all year long to spend for Christmas. This year that money will also be used to buy special foods that we enjoy at the holidays.

Besides those forms of payment, I also accumulate Amazon gift certificates all year long by searching through Swagbucks.

The other large expense that we always had at Christmas was buying cards and mailing them. At $.49 each just to mail them, it gets expensive. Last year I purchased cards after Christmas for less than $ 1.00 a box. Over the years, we have whittled our list down to family and some longtime friends. So instead of mailing the 100+ cards that we used to, we now only mail about 25. Back when we were doing 100+ if we had had e-mail, I think I would have seriously considered sending greetings that way.    

As soon as my Christmas shopping is done, I will start accumulating again for next Christmas. I don't buy anything unnecessary just to accumulate points. We put everything that we can on our rewards cards all year long to earn those points. We charge groceries, drugstore purchases, restaurant bills, clothing, and gasoline. We also charge any one time bills that we can without paying a fee, like medical bills, insurance bills, or our car registration. If they don't charge us to do it, we charge it. We always pay our credit card  bills in full every month. A word of caution, if you can't pay the bills in full each month use cash when purchasing your Christmas gifts.

If you don't have a way to  purchase gifts this year for free and you don't have a lot of cash to spend, you can make homemade food products like bread or muffins. You could pair them with homemade jam that you made this summer. We had a rough year back in the 1970's when my husband was hit by a car walking to work from the parking lot. He was out of work while he was recovering for over 6 weeks with no pay. We just didn't have any extra money for Christmas gifts without touching our retirement savings that year so we made some homemade banana bread to give. We did let our family know that we could not afford to exchange gifts that year. 
Then we surprised them with the bread. 

I have a perfect gift for next year for my adult children that I will be working on every month next year. I can't tell you because it needs to be a surprise to them. Best part is I am hoping to do it for free.

So if you can't do a free Christmas this year, start saving those reward points, free gift certificates that you earn and Ebates cash for next year. Come October 2016, you will be so glad that you did!


Monday, October 19, 2015

We've Been Retired Over 14 Years

We've been retired over 14 years. Our retirement has been during one of the worst economies that I can remember. Yet, we have more investments today than when we retired. Our net worth is much more today than it was 14+ years ago even though we have had many expenses during our retirement including buying two automobiles and a home with cash. Our property and school taxes are huge because we live in a high tax state.
How can that be that we have more money than when we retired? It is because we still have income streams in retirement. We have a small pension that is fully taxable. Since we retired we have leased property that we own to a company in another state. We are now old enough to collect Social Security. But most importantly we have investments that produce income.

But I think the most important reason is because we continue to live the way we always have. We spend as little as we can to be comfortable with the life we want. We don't let other people like the "Joneses" control what we spend. We have friends who are also frugal and saving for retirement.

We live in a beautiful home that is just perfect for us but still has room to house family or friends when they visit. We eat healthy meals, enjoy an occasional glass of wine with them, dine out occasionally with friends, enjoy many different forms of entertainment, and travel when we want.

Our life is richer than when we were working because we have no commute and we are our own bosses.

We have been asked why we continue to save now that we are retired which I think is a stupid question. Just because we are retired doesn't mean that we still don't have dreams and goals. We have a huge goal that we are working towards. We also have seen so many of our retiree friends spend all of their money and become dependent on just Social Security. By saving, we also know that no matter what emergency or large expense comes our way, we have the money to afford it. 

In other words, we save just as we did when we were working. We work towards a goal and we watch our net income monthly.  

If  you are paying down your debt, cutting your expenses and then saving as much as possible every month, you too can have that early retirement. As I told you before, it isn't easy, it takes discipline and hard work. But in my experience, if you really want something you can do it. 

Saturday, October 17, 2015

FYI - Aldi's

I had never really noticed any clearance in my Aldi's until yesterday. I went to pick up my second case of canned pumpkin at $.89 a can since our news station said that there will be a shortage of canned pumpkin this year due to a shortage of pumpkins.  

While I was there, I took the time to really scan my store for clearance. They had a good number of items on clearance. But the one that really caught my eye was Parmigiano Reggiano cheese. I love this cheese. In my estimation it is the best there is. So much better than that "sawdust" that comes in a green container. But it can be very costly.

So I was very happy to see this cheese on clearance for $ 2.99. Another woman and I spotted it at the same time. There were 4 left so we each took two. 

We have a cheese grater like the one that they bring the cheese to the table with at Olive Garden. So we love grating it fresh onto our entrees and salads.

I asked one of the employees why they clearance their items since the items did not seem to be expiring any time soon. She told me they are products that they may or may not be able to get back in the store and only have a few left or that have been discontinued.

Now that I know that my Aldi's does have a significant amount of clearance items, I will be keeping my eyes open when I shop.


Friday, October 16, 2015

Don't Waste Your Dollars

We have all wasted food at one time or another. I know that I have thrown out forgotten produce that died in the vegetable drawer, an expired can of food that got shoved to the back of the shelf, and leftovers that never got eaten.

Since food is one of my biggest expenses, I have become more and more mindful to not waste any of it. I do so by checking the leftover shelf every day to see if there is enough for the two of us for dinner. If not, the  leftovers get made into another dish using extra ingredients, eaten by one of us for lunch, or frozen for soup or stew. After dinner if there is just a smidgen of meat or vegetables left, I add them to my bag for soup that is in my freezer. Fruits get cut up and frozen for smoothies.

Every day, I check the fresh vegetables and fruits to see what needs to be eaten quickly before they end up in the garbage. They are eaten that day in a salad or as the vegetable for dinner or used in my main dish. If I can't use them that day and they can be frozen, I do so. Many an onion, potato made into mashed potatoes, carrots, celery, tomatoes, etc. have been frozen. The onions, carrots, and celery get diced and the tomatoes get cooked before they go in the freezer.

I try very hard to calculate how many fruits and  vegetables will be eaten each week so that I buy just what is needed. My husband and I eat a banana a day, so I just  buy 14 for the week. If someone doesn't eat theirs, they get frozen for banana pancakes, banana bread or smoothies.

Bread or rolls that can't be used before they mold, get frozen for another day. Being that there is only two of us, we only use 1/2 a loaf at a time and freeze the other 1/2. I make a lot of our bread and since it has no preservatives, I freeze half right after it cools. When English muffins are too expensive to buy, I make homemade English muffin bread and freeze 1/2 of that loaf. Hamburger and hot dog rolls get frozen and I only pull out two when I need them. I do the same with any homemade baked good. I freeze half for a future day and we eat half. Our freezer saves us from wasting a lot of money.

If I am wasting food, I might as well save my time shopping for it and cooking it and just burn the dollars instead. Because that is what I am doing if I throw food out.

Yesterday, when I was checking to see what needed to be used up, I found lettuce that was getting a little old and a couple of cans of enchilada sauce that  expire this month. So, we had tossed salad for lunch and will have it again today to finish the lettuce up.

I made this delicious recipe to use the enchilada sauce: Cheesy Enchilada Rice Skillet  for dinner. I did make  some substitutions since I didn't have all of the called for ingredients. I omitted the green pepper, used frozen corn, used all red enchilada sauce, used less rice for the two of us, used the entire can of black beans, omitted the salt for health reasons, and omitted the fresh cilantro which I did not have.

My husband loved this so much that he wants me to make it every couple of weeks. Since it is meatless, I will be happy to accommodate that request. I didn't even have time to take a picture before he had dished up plates. 

If you just take a few minutes each day to see what is ready to expire in your home, you will save a substantial amount of money. That money can be put towards debt or your investment goals.

Wednesday, October 14, 2015

It's Cheaper and Healthier to Eat at Home

Just like most Americans, we like to eat out once in a while. However, we don't eat out once a week or even once a month. We save our eating out for special occasions like birthdays and our anniversary. We never eat out on holidays. 

This is my birthday month and last month was my husbands so we have eaten out a bit more than normal. We like fine dining at family owned restaurants. But in the spirit of saving some money this month, we actually ate at a chain restaurant using a coupon. We also ate breakfast out with our son and grandson at a family owned restaurant on my birthday morning using a gift certificate. The gift certificate was free from a business. So it helped to defray the cost.

But most of the year, I cook our meals at home. It is healthier and cheaper. Most  restaurants load their food up with butter to make it taste better. Besides that I always wonder what is really in it. Also in my kitchen, I know that it is sanitary and that my hands are clean. 

We rarely take home fast food. When we do it is usually Subway or Panera Bread. We don't order pizza. When we crave it, we either use a frozen one purchased on sale with a coupon or I make my own. My husband prefers my homemade so that is usually our choice.

Yesterday, we were craving Egg McMuffins for breakfast. I always make them at home. I can make them in less time than it takes to drive to McDonalds, order them and come home.

I used Thomas's English Muffins purchased on a buy one get one free sale and used a $ 1.00 off coupon that they sent me for complimenting their product. I purchased the bacon on sale for$ 3.99 a pound. The eggs were purchased on a buy one get one free sale for a final cost of  $ .46 per egg. The cheese was on sale for $ 2.00 for 16 slices. So my final cost per sandwich was $ .25 for the muffin, $ .52 for the bacon, $.46 for the egg, and $ .12 for the cheese for a total of $1.35. So for $ 2.70, my husband and I had a yummy breakfast and I didn't have to go to McDonald's to get it. I don't know the cost of one at McDonald's since we don't eat there. But I would wager that it is more than $ 1.35 a sandwich. So even with egg costs so high right now, I still made it cheaper and saved my time.

This is just one example of how I save money on the small things. $ 2.70 - $ 3.00 is probably the most we spend on a breakfast entree. Most meals are homemade oatmeal or granola and fruit. Right now bananas are $ .39 a lb and apples are $ .99 a pound so we have been eating those fruits with meals.

My co-workers were always amazed that I would bring my lunch to work every day and sometimes breakfast. They all told me they didn't have time. Well, make the time. It is not that difficult to make up a number of Egg McMuffins on a weekend and freeze them. Just pull one out of the freezer before  you leave for work and microwave it in the office. Or pack a bowl of oatmeal that you can add water to and do the same. For lunches, cook them on the weekend and then just reheat at work. I  always had fruit and oatmeal in my desk at work. In case I forgot my lunch, I had bread and a jar of peanut butter. My co-workers picked up breakfast on the way to work and many of them ate lunch out. My husband took his lunch every day except for twice a month when  he would go out with his co-workers. When you retire early and no longer answer to a boss anymore, you will be glad that you took the time to make these meals.   

So if you are the average American family who eats out once or more a week, calculate how much money you could be saving by eating at home. If you spend $40. per week for your family eating out, you could most likely make a delicious meal for under $10. at home. At a savings of $ 30. per week, you would save $ 1560. over the year. That is a significant amount of money that you could put towards debt, your child's college fund, early retirement or any other goals that you are working towards. 

So the next time you are considering going out to eat, think about cooking at home and saving the money you would have spent on one of your goals instead. The meal you go out for you won't even remember in a few months time. Reaching your goals you will remember and it will make such a difference in creating a stress free life.

Never hesitate to ask a question or comment. I will try to answer them all.           


Monday, October 12, 2015

The Small Expenses Can Destroy Your Dreams

For years I have heard the "money gurus" say not to worry about the small expenses. They say reduce your large expenses and that is your path to financial independence. They also tell you to make more income to get to FI.  

I agree that you should reduce the large expenses as best you can. However, there are only so many large expenses and after you cut them, you get to a point where you can't cut them anymore or it will affect your quality of life.

Not everyone is able to make more income for many different reasons. Of course, you should always be striving to better yourself in your career, but not everyone can or wants to take on a second job. So you work within the means that you have. 

Telling you not to worry about the small expenses is a bunch of baloney. Those small expenses will sink your goals faster than the big ones.

I am sure you have heard " Don't buy your coffee out every morning instead make it at home because it is so much cheaper". For example, let's just say that a cup of coffee at your local coffee shop costs you $3.00 a day. If you used a K- cup machine each day before you go out the door, that cup might cost you $.46 a day. Over 365 days, the coffee out would cost you $ 1095. The coffee brewed in your K-cup machine will cost you $ 167.90. That is a savings of  $ 927.10 and that if just for one cup of coffee.  That is a significant amount of money. If you don't want to pay for K - cups, just make a pot of coffee in a regular brewer. You will save even more. 

This is just simple math and can be applied to anything you buy. Let's say you go out to eat once a week and spend $ 40. for your family of three to do so. That is an expense of $2080. per year. You can probably make that same meal at home for under  $15. That would cost you $ 780. for a savings of $1300. 

Whether you eat at a restaurant,  grab fast food, or pick up a pizza,  you will save significant amounts of money by cooking at home. I know it's fun to eat out and we do it occasionally but not weekly. On those occasional outings, we pay cash. If we didn't have the cash to eat out, we would never be eating out.  If you have credit card debt, you should not be eating out at all until your debt is paid off. That interest never sleeps. It just keep piling up. It is detrimental to your well being and your finances until you pay it off. No one likes to live with stress and everyone would like to be financially free of bosses telling them what to do. But you can't get there by borrowing money. 

That might sound harsh to some but face it, it is the truth. If you want to retire some day whether it be early or not, you have to pay off your debt and start upping your net worth. If you don't, you will either be working until you die or be retired with very little money to pay for the basics. I don't think anyone wants to live like that. 

So I will be showing you how we cut the large expenses and the smaller expenses to get where we are today. There is no secret to it.  It takes discipline and hard work but if you make a game out of it, it can actually be fun.

So join me on my continuing journey to up my net worth and how we spend as little as possible each month to save even more to reach our goals.

Friday, October 9, 2015

Our Largest Expenses and How We Reduced Them

The biggest expense we had over the years was a mortgage. After we felt comfortable with the amount of cash and investments we had, we decided to take some of the money we invested monthly and pay down our mortgage rapidly.

I know some financial people believe that you shouldn't pay your mortgage off. That might make sense today with interest rates as low as they are. If you can make more interest in investments than your mortgage is costing you then that is something to think about.

However when we had a mortgage, interest rates were a lot higher. It made sense for us to pay that debt down quickly and save a lot of interest on that loan. So we started paying extra money with each payment. We paid our last mortgage off years ago and paid cash for the house we live in now. We also paid cash for the house before this one. We have downsized the square footage of our home over the last 16 years. So the only really large expense for our house is the school and property taxes. They get paid in September and January. 

We also have homeowners insurance which has risen by a large amount over the past few years. So it is time again to look for a cheaper company without sacrificing any of the insurance we have now.  We look for a better deal every couple of years.

We know that there will always be home maintenance costs and we have accounted for that in our savings.

The next highest expense was an automobile which we have needed since we got married. In the areas where we have lived, we were not close enough to be able to bike to work and public transportation was not available. With the exception of the automobile we have now, we always purchased an automobile that was comfortable and had just a basic radio. There were not a lot of upgrades. We always paid those loans off early the same as we did our mortgages. The last two automobiles that we have purchased have been paid with cash. The one we have now has a lot of the upgrades that we never would pay for before. In our "older age", we went with comfort and love our seat warmers in the winter.

Many people buy used cars and that is a wonderful way to save money over buying a new one. If that is what you do, I admire your choice. For us, we have always purchased new ones and driven them into the ground. We have kept our cars for a minimum of 8 years and a maximum of 13 years with the exception of a lemon that we had. They always had well over 100,000 miles to 150,000 miles when we traded them.

The other way we saved on transportation costs was for my husband to carpool to work. So he saved 1/2 of the wear and tear on our automobiles and had 1/2 of the gasoline costs. This allowed us to only need one car until I worked in my children's teenage years. I arranged my children's and my health appointments around the days I had the car. All errands got run on that schedule also. For the past 14 years, we have only had one car. We arrange appointments around each others schedule. We decided if we ever needed a second car that it would be cheaper to rent one than to buy a second car and insure it. We have never had to rent one.

We also will look for cheaper automobile insurance without sacrificing the limits that we have when the policy is due.

We pay both our homeowner's and automobile insurance yearly to get a cheaper premium. My husband takes a 6 hour safe driver course in our state to give us a reduction on our automobile liability costs. The course has to be retaken every three years.

We also have done what we can to lower the gasoline and oil costs for our automobiles. We have always purchased gasoline at the cheapest price per gallon closest to our home. We try to only run errands once a week. If we can do it on a day that we have a health appointment that is even better. By doing this we keep our mileage under 5000 per year even with a few long 4 hour trips a year.

My husband changed his own oil for most of our years. Now that he is older, we go to our local repair place to have it changed instead of the dealer who is much more expensive.

We wash our own car with the exception of going to the car wash in mid winter.

Those have been our highest costs over the years with the exception of college costs for my husband and our children which we saved for and then paid each semester as they came due and property, school, state and federal income taxes, and Social Security and Medicare taxes. We no longer pay Social Security or Medicare taxes. Instead we receive Social Security benefits and Medicare benefits. Medicare does cost $ 104.90 for each of us monthly but in the spirit of being very honest, my husband's former employer reimburses us those costs monthly.

We also have  a secondary health insurance company premium through the same employer that we pay monthly for a policy that pays most of the most of the amount that Medicare doesn't pay after deductibles. 

If you have any questions, feel free to ask in comments.

Wednesday, October 7, 2015

Frugality is the Path We Took To Financial Independence

After we had our goals laid out, calculated our net worth, and tracked our expenses and  income, we  had the tools to reach our goals. We  knew what we were spending every month and how much we had left over to invest for our goals. It was what we needed to budget for them. 

However, we never really budgeted.  That statement will shock many people but with the exception of 401K payments being automatically deducted and the usual other deductions like health insurance, we didn't lay out a budget every month. We instead, spent as little as possible each month and invested the rest. The last day of every month found us deciding where to invest that money. As time went on and we got more comfortable with how much would be left each month, we did more and more automatic deposits into investments.

It actually became a game to see how much more we could invest every month without scrimping on our way of living. As goals changed and we had children, investment amounts would change. Children meant college tuition and the many other costs of raising them. You certainly can't invest as much when you are raising children. But you can save on the cost of doing so. Our best investment years were before the children came and after they went to college. However we invested as much as we could all of those years.

Frugality was the path we chose to get us from our first jobs to financial independence. Frugality seems to connotate cheapness.  But that is not the case. Frugality is a means of living below your means to get to the goals that are important to you. You don't have to buy cheap items that will fall apart within months nor feed your family the cheapest of foods.  You make substitutions that satisfy what you want.
You make choices in life and the biggest choice that we made was to not keep up with "The Joneses". We didn't care what they were doing or what they purchased. We did what was best  for our family and  purchased what we needed. Through experience, I can tell you that many of "The Joneses" looked enviable but they had credit card debt that never seemed to get paid off. We knew people who lived like that and they now are retired and struggling to pay for even the basic necessities. Believe me when I say that you do not want to be one of those retirees.

If you have debt work hard to pay it off. Then start building an emergency fund and then your nest egg. Is it easy? No, it takes hard work and discipline. You have to be always conscious of your goals and how you will get there. 

The first thing you have to do to be frugal is to cut your large expenses. Can you refinance your mortgage to a lower interest rate? Can you rent  a cheaper apartment?  Can you buy a used car instead of a new one? Can you buy a new car but not a luxury one? Can you go without a car and use public transportation? Do you need two or more cars for your family? Can you cut the insurance bills? These are just a few examples of the really large expenses that we all have. There are just a few large expenses.

However, after you take care of lowering the large ones, there are so many more small ones that you can work on lowering. These smaller ones over a years time can sink your goals.

I will be showing you how we cut the large ones and the smaller ones. You will see what we do on a daily basis to cut these expenses.  I will also share with you what we spend every month right down to the last penny. These will give you ideas. For example, in the photo above, I show you how I lowered my expenses yesterday.

Just 1/2 an hour before lunch yesterday, I had an appointment for a haircut. Then I had two errands to do. These errands were going to take a couple of hours. In my "old age", I need to eat at regular intervals to keep my sugar levels consistent. Since I ate breakfast at 8 AM, I knew I would need lunch before I ran the errands. On my 8 mile round trip, there are no less than 6 fast food places. I could have easily spent $10. or more on lunch. But instead I chose to take a peanut butter and SF jelly sandwich and a bottle of water with me. I also took a fruit bar in case I needed it later. The sandwich is healthier than a fast food choice and a whole lot cheaper. The water was less than a dollar since I didn't have a bottle to refill. I  rarely buy water since I usually just refill bottles with filtered tap water. But my bottles had become old so I needed to buy new ones last week. Next time I need lunch on the road, I will just refill a bottle. Anyhow this saved me from spending about $8.70 more. I ate my lunch in the car after my hair appointment and I was good to run the errands. 

I will also show you what percentage of our income we invest every month when I detail the expenses. Even though we are retired, we do have income from all of the vehicles that we invested for retirement. We aren't rich as I told you in my first post but we are very, very comfortable. Unless the U.S. economy collapses, we have plenty so that we never have to work another day.

Monday, October 5, 2015

Track Your Net Worth

I believe that net worth is a better way to track how you are doing on your path to being financially independent. You should take the prior step to track your income and outgo but net worth is the most important in showing you where you stand financially.

You can have a very high income but not a high net worth. A person making $100,000. a year may have a net worth of only $20,000. A person making  $50,000. a year may have  a net worth of $500,000. or higher. It all depends on how much of that income you invest and don't spend.

Net worth is your assets minus your liabilities. Here is a calculator for you to use to track your net worth:

Net Worth Calculator

I track our net worth on the first day of each month. That lets me know if we are going in the right direction to reach our goals. Yes, even though we retired early, we still have goals and continue to save from 50 - 70% of the income that we have available to us each month. Our net worth over the years has consisted of 401K investments, yearly salary savings, a real estate investment, lease income from property we own, a pension, Social Security, stock and bond investments, savings and money market accounts, CD's, etc. depending on which stage of life we were in. All of these helped to boost our net worth. Today we are in the position of never having to work again. 

Was it easy? No! But we made it easier by having automatic savings go each month into different investments. We also always kept our eye on our goals.  

So if you have never tracked your net worth, start doing it this month. Then every month, you can do a quick calculation and see if your net worth is rising along your path to financial independence. Even if you have too much debt and your net worth is negative, you can turn that around by paying that debt down. 

The next post will connect all of the things that I have written about.   


Friday, October 2, 2015

Income and Expenses

The next step in becoming financially independent is to track your income and expenses for 1-3 months. By doing so it will give you an idea of where your money is going.

We did it when we were 19 years old and have done it whenever we feel that expenses are getting away from us.

I keep a small notepad in my purse so that I can write down every penny that I spend while I am running errands. If my husband is out doing errands, he lets me know what he spent when he gets home. Whether that is $ 90. on groceries, $ 26. on gasoline, or a haircut for $ 25., it all gets written down. Most of our expenses get tracked by using our best rewards credit cards. Some get automatically deducted from our checking account. We pay our credit cards in full monthly. But if you aren't good with paying your credit card in full every month, then I suggest that you use cash and write every expense down.

Every month I track every penny we spend along with the income we receive. It all gets entered and  tracked online. There are two free online sites that are excellent for doing this: Mint and Personal Capital. Research both sites and determine which is best for your needs. Or if you want to do it with just  a notebook and pencil, that is fine too.

I hear you saying, "That's too much of a bother. I am not going to do  that." But if you are serious about getting out of debt, saving for a  specific goal or  for financial independence, please do it.  It will be the best time you have spent for your financial well being.

Look at your totals at the end of the month. Finally see where your money is going. This puts a name on every dollar you spend. Over the years I have been surprised at how much we did or didn't spend dining out, how much groceries cost that month, what clothing costs were, how much we spent on gifts, etc.

I will be doing this every month as I  write this blog to share with you at the end of the month. Since it is only October 2nd and I am sure you can remember  what you spent yesterday, this is a good month to  keep track.

We will discuss my totals and what I will do about them at the end  of the month.

Meanwhile, if you have any questions, feel free to ask them by leaving a comment.