2013 Spending Goal: Little Things Add Up

Now that I’m no longer hunting for a condo, moving, or refinancing the condo and my savings plan is likely to be a bit more static, I’ve decided to turn to the other side of the table and work on my expenses. My goal for 2013 is to keep my non-mortgage spending under $24,000 for the year or under $2,000 on average each month (including travel). I think that this is definitely doable. One of the ways I’ve been working on this is by tackling the little things.

Interested in a book? I used to just go on Amazon and buy it for my Kindle. But recently I found out that my local library has e-books in addition to regular ones! So that’s a free book for minimal effort beyond buying it! My Kindle is almost 3 years old now, but it still works great! I probably will replace it when it completely dies, but I have a feeling it will last for a little while yet.

Food: Muffin, tea, lunch, fruits and yogurt? I can buy a muffin mix for $2-3 at the grocery store, make some on Sunday and bring them in. (Yes, I realize I could also make them from scratch. That’s the next step.) The office has free tea, hot chocolate, and coffee, so there’s no need to pay $2-5 for those. And I can bring in sandwich makings and yogurt from the grocery store for much cheaper than buying them for 4-5 days each week. In January/February my food spending totaled up to:

  • $68.41/$2.72 Dining out – This was an anomaly month and probably won’t happen again (see super cheap February at $2.72), so I’ve lowered this budget from $110/month to $70/month. (Note that only eating out with just me or me and my boyfriend that I pay for goes in this category. Eating out with friends goes in Entertainment.)
  • $246.36/$139.66 Groceries – I made once weekly trips to the grocery store to cover breakfasts, dinners, and work lunches except for one week. There was definitely a bit of stocking up since I noticed some sales at the grocery store, so this might go down next month. (up $119.81 from my 2012 average spending) Yup, definitely went down in February. Not bad!
  • $49.22/$48.00 Work Lunches/Coffees – I ate out every day the short week of the holiday and the last week of January due to various work functions. This is the least I’ve spent on work lunches in one month over the last three years. (down $122.65 from my 2012 average spending) Sweet, I spent even less in February!

It looks like the grocery and work lunches differentials in January about evened out, so I didn’t really save any money. It definitely went better in February when I made fewer trips to the grocery store! I lowered my work lunches budget from $200 to $80 and increased the grocery budget from $150 to $200.

Cell phone bill? I switched from Sprint to Ting, terminating my contract early. Even with paying the early termination fee (ETF), it still would have been cheaper, but I was able to get in on the giveaway Ting was doing to pay your ETF, so I’m saving money instantly. I found that I wasn’t using data much at all, so this should work out well. I was paying about $83/month with all the taxes and fees with Sprint for way more than I needed (it was an “unlimited” plan of sorts). But now with Ting, it looks like the taxes and fees are way cheaper at around $2-3/month versus almost $14/month with Sprint and my plan is way cheaper too. Their thing is that they adjust your billing plan each month based on which usage tier you *actually* fell into. I figure that I should spend about $34/month including taxes and fees, which shaves about $48/month off my cell phone bill and it would have been cheaper for me to switch even if Ting wasn’t paying my ETF. I also got a $25 referral credit from someone online, which was a pretty sweet bonus!

New cell phone? I was setting aside a bit of money each month to buy a new cell phone once my contract was up and switch carriers. Since I was able to bring my phone with me when I switched carriers and I’ve already set aside almost $300, I’m not going to add any more money to that line item in my budget. I zeroed this out and sent it to the mortgage in February.

Internet bill? I’m working on this one. I never seem to manage to call my internet provider during “business” hours. But I’ve been shopping around and actually found another provider that has a better rate, even when they force me to bundle it with their phone AND they’ll lock the price for 5 years. Even with needing to buy a new modem since the new provider doesn’t support my current one, I will still save about $14/month by switching. Having the local phone and combining that with Google Voice will actually significantly reduce the minutes I use on my cell phone and could reduce that cost as well! I’m more hesitant to pull the plug on switching internet providers because it is not as clear of an immediate savings and it would mean changing from cable to DSL, which I’ve never actually tried.

Easier option: I called Comcast and asked to lower the speed. My February bill was cut to $8 instead of $50 and I will only pay $31 going forward each month. It seems that I can still VPN with the lowered speed and everything is working fine. Sweet!

Pandora? I decided to nix this. Upfront savings: $36 since it was just about to renew. Monthly savings: $3.

Remember the Milk? I decided to nix this, but I’m still not completely sold. I’ve tried other to do systems and just stuck with this one out of habit and not bloating up my phone too much. If it’s actually gone, $23.08 in upfront savings and $2/month.

Insurance? After my 25th birthday, I’m going to ask my current insurance company to re-pull my insurance score (re: do a soft pull on my credit) and see how that lowers my rate and then shop around to see if there is anything better out there. I shopped around for car insurance back when I was buying the condo and I didn’t see anything worth switching to, probably because I was still under 25. My umbrella insurance will also get about cheaper once I turn 25. I’m curious to see how much turning 25 saves me on my car insurance. I’m guessing $10-20/month?

Feminine hygiene? I calculated that in 2012 I spent at least $60 on such products. I spent about $40 to buy a menstrual cup in January which should last for several years. Not a huge cost savings in the first year, but I’ve heard good things about it in general and I figure it’s worth a try. I still have a few months’ worth of prior supplies left, so I will run through those a bit more before trying out the cup for a whole week.

Tax return preparation? The last couple of years, I paid a CPA. But as I’ve mentioned a few times, I wasn’t overly pleased with the service. I spent the first weekend in February working on this for maybe 3-5 hours using Free File Fillable Forms. I’ll e-file by the end of February, once I’ve had a chance to double check my math at least once. Total cost this year: $0.

Electricity bill? The most expensive things here are: lights, heating, and the water heater. Maybe the fridge, but there’s nothing I can do about that. I unplug the appliances that I’m not using. I keep lights off that I don’t need. I only run the dishwasher and clothes washer with a full load. I finally figured out that my programmable thermostats (came with the place) weren’t really programmed, so the heater was keeping the bedroom at 70 F all day. ALL DAY while I’m at work. My electricity bill for December/January was incredibly expensive. As such, I’ve increased my electricity budget a bit, but also trying to fix things somewhat and hopefully the next bill will be much cheaper and I can reduce my budget. Electricity has probably been my biggest budgeting change/unknown since moving to the condo. It’s an older building than my apartments were and it’s also a lot larger of a unit. On the pro side though, I do actually have programmable thermostats and if I didn’t, buying them would save me a ton of money.

Clothing? I’ve evaluated my wardrobe and what I spent money on in 2012. I’ve made a decree that other than buying bras if I don’t have any that fit properly, I’m not going to spend any money on clothing going forward in 2013. Let’s see how I do with this! This is probably honestly one of the bigger “fat” items of all the ones I’ve listed here with food/cell phone being a close second.

Miscellaneous items:

  1. $50/month lowered entertainment budget from $150 to $100. Can you believe that it used to be $300/month? :)
  2. $35/month lowered dining out budget from $70 to $35.
  3. $30/month lowered budget for each person
  4. $16 upfront – don’t need a hair cut in March.
  5. $65 upfront – not going in a sports tournament that I had planned on.
  6. $77 upfront – not going to renew my annual gym membership. I’ll switch to punch cards when it’s up.
  7. $6/month – will keep Tivo for at least 5 more years.
  8. $48 upfront – have plenty of fuel budget rolled over, so don’t need to add more in March.
  9. $2/month – never spend more than $3 on parking meters.

I estimate that all of these “little” things should save me about $200-300/month. That means an extra $200-300/month that I can throw at the mortgage and $6-9k less that I need in investments in order to be financially independent. I’ve lowered my checking account direct deposit from $2,500/month to $2,200/month. (Note that that amount includes a $350/month travel budget that rolls forward indefinitely.)

I got off to a good start with January and February! This whole new year, new mortgage thing has been great to motivate me to cut out some of this fat.

Readers, have you recently done any budget overhauls? What kind of fat did you find in your budget to cut?

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31 thoughts on “2013 Spending Goal: Little Things Add Up

  1. We’ve been doing really well with our budget and are really happy with it. We do need to start cooking from scratch more as we NEVER do. I do wonder how much we would save if we started doing that.

    • Michelle … I don’t know how much you save but my girlfriend and I cook most all meals maybe go out once or twice a month… a lunch and a dinner or something. Together we have a $400 monthly grocery / (food eating out) budget and I am always moving excess from that into the savings account at the end of the month.

      We likely actually spend around $300 a month.. and then $100 more into savings.. but if we want to go out we let ourselves spend that extra.

      Plus you can hardly eat healthy when you eat out.. that is the biggest part of why we cook at home.. so we know what goes into what we are eating.

    • I’ve cut $150/month out of my work lunches budget by bringing my lunch and groceries didn’t really go up that much. My groceries budget somewhat feeds both my boyfriend and I and I really don’t see that ever going over $300/month. It’ll probably stay around $200 on a normal month. How much do you guys spend on food each month?

  2. Nice work Leigh. Sounds like you have a good plan. I’ve already cut down the things I don’t need. The key one probably being the Cell. I use it to make calls when I need to. So I got a prepaid 2 years ago again and well lets just say I pay around $8 a month if you work out the numbers. Basically $99 a year is what I pay.

    Taxes are easy and I work a couple of side jobs that I get 1099’s for and run them as a contact business with deductions and so forth.. I would not want to spend 3-400 a year having my taxes done.. Plus it is a great way to understand taxes and what you are paying for and so forth.

    Two things.. Your gym membership and the sports tournament.. If you like those things does your work.. or would they consider subsidizing / sponsoring those items for employees. My employer reimburses me $300 a year for my gym membership which costs me $369 for.. so you can see that is a no brainier to keep doing.

    I also run marathons and thru a healthy incentive initiative I have got going thru the corporate office now we have 5 or 6 races set up this year that the company is covering the registration fee for employees.. These efforts are huge for many of the sedentary people in my office. I don’t fit that crowd but it is nice to not have to pay out of pocket for all my races each year.

    As for the fuel budget… I bike to work as much as possible from April thru October.. I do live in Michigan so its hard some times in the early spring / late fall.

    You did not mention how much your electricity bill was last month.. Just curious how much your budget is for it and how much you exceeded it by. I can’t seem to tackle electricity for cutting back. .. If I do nothing and don’t worry about it.. sometimes around $105 a month.. but even when I unplug and turn off everything constantly.. I’m lucky for it to be down to $90.. so I kinda stopped worrying about that $15 / $20.

    Also.. Love the book idea.. I never buy books.. I can reserve them online at the local library and I walk in and pick them up from the reserve shelf.. very very easy and free.. well technically my taxes dollars paying for that so why not use it.

    Keep up the great work!!!

    • I used to do the super cheap prepaid cell, but I had a landline to use at home. Then I started dating someone and there was texting, so it turned into a $30/month cell. I do sometimes use Google Voice from my computer to call my mom to cut down on the cell minutes, especially now that that actually affects my bottom line!

      Hah. No, my company will not pay for or subsidize any fitness things. Other tech companies in the area that pay similar salaries do, but mine doesn’t. $1,000 of random benefits isn’t worth changing companies over when that is < 1% of my total compensation.

      My electricity budget…I'm still figuring it out. My first bill was high, my second bill was low, the next bill was probably normal, and the last bill had two months of the thermostats running almost 24/7. I was budgeting $1/day in my apartments, but that is clearly insane for the winter in the condo as my last bill was about $3-4/day, so well over "budget". I think it should go back down to closer to $2/day. Or at least I'll try budgeting for that for a few months and see how that goes.

      I used to love the library, but it's not that convenient for me to pick up books anymore. So while I still have an Amazon Prime membership, I'm trying to use the lending library from them, and I'll also download e-books from the library. My library doesn't have the greatest selection of e-books, but it's still something. I'm realizing how much I used to love books until it became inconvenient to acquire them (mostly with how cheap I am). If I paid for all the books I read, I would be spending tons of money on books each month.

      Sounds like you're doing pretty well with cutting things down to what you really care about as well!

    • The culprit on your electricity bill could just be the number of days in the billing period. My billing period ranges anywhere from 58-65 days, which obviously makes a difference in the winter billing months. $5-10 fluctuation each month could easily be explained by the number of days in the billing period for that bill.

  3. Muffins from scratch is just as easy as from a box. Yes, you have to put a few more ingredients together, but you don’t have to deal with the plastic container and spilling stuff all over the counter trying to get it open and the ingredients out.

    • I know :( Macaroni and cheese from scratch isn’t that much harder than boxed either and I do that. I’ve also switched to making pancakes/waffles from scratch instead of from a box, which is way easier to mix up the ingredients and I end up with fewer lumps. My mom just never made muffins and I’ve been hesitant to try random recipes off the internet.

      Nurse Frugal had a delicious looking recipe that I’ve been meaning to try: http://nursefrugal.com/2013/02/11/healthy-morning-muffins/ They basically look like a hodgepodge of deliciousness!

      • Leigh,

        As a completely different scheme from MMM, one can retain their big carrier cell phone plan with their high GB of data, and instead run your smartphone like a router. Then, get rid of your internet bills altogether by using the free wifi hotspot app from your phone. Wifi hotspot came with my MyTouch 4G but you can also download an app by searching “FoxFi” in the marketplace. I turn mine on only when I need to surf the week on my laptop so there isnt’ a big run up on data. I do not personally get close to 5 Gigs a month even though my contract is truly unlimited.

        • That’s an intriguing idea! My 3G data connection is so terrible in my condo on at least two carriers that that probably wouldn’t be worth it. I actually use Wi-Fi on my cell phone while at home primarily because the data connection is too slow otherwise and goes in and out.

  4. Muffins from scratch are not that much harder and they taste a lot better!

    I’ve been better about bringing my lunch, tea and coffee to work. On the to do list: shop our car insurance. And apparently we need to look into Ting!

    • So I just called my insurance provider and apparently they won’t take off the under 25 premium on my umbrella policy until the next plan renewal. Wow. I’m definitely shopping around for insurance the day after my 25th birthday.

      If you’re with Sprint, definitely give Ting a look! It’s the same network, plus you can roam onto Verizon’s network with their agreements for text/voice. And it’s really great for pooling! For example, my bill by myself is going to be $23-32+taxes and if I could convince my boyfriend to not use much data, we would probably pay $38-55/month together. I BYOD’d my device: https://ting.com/blog/bring-a-sprint-device-to-ting-you-know-you-wanna/ They don’t support iPhones yet though and may never.

  5. Clearly you don’t have much fat to cut. It’s good to reassess budgets which inevitably grow to encompass a good deal of waste from time-to-time. But when you’re making a great deal of money and saving such a large % of your income, doesn’t it become a little bit ascetic to cut 33% from your entertainment budget? I mean, to each their own considering you are making such wise decisions generally, but if anybody deserves some slack (compared to most blogs I read) it’s definitely you.

    • Nope, I don’t have much fat to cut. My budget wasn’t as conscious as it should have been and that’s what I’m trying to fix, mostly cutting the fat out in categories that I didn’t value what I was spending. I tried to cut out eyebrow waxing, but I really value that, so I kept it. On the other hand, the books I can get for free aren’t any less or more valuable than the ones I have to pay for. And with my cell phone, I was able to maintain the same level of service, but pay less per month. Similar with the internet.

      I think that $36,000 in annual spending for a single person is still pretty extravagant, no?

      • It’s relative. If you can maintain your earning levels and continue to save insane nominal amounts of after-tax income, $36k is by no means extravagant. And be careful to ensure you do continue to support yourself with reasonable indulgences so your workload and earnings are sustainable. Nothing worse then Trent Hamming yourself — “pennywise, pound foolish” as it were.

        • You are right that my earning levels make far more of a difference than my spending. Unfortunately, with so much of my compensation now in stock, I don’t have a lot of control over that in some ways. I don’t know what my stock compensation will look like for sure in 2014, but I doubt it will be as high as it will be this year.

          The $36k budget includes a $4k travel budget, all the sports I want to play, and many other indulgences including awesome 3-ply toilet paper and Kleenex boxes. I honestly think that the factors affecting my potential workload are not so much spending related, but environmental related. That probably doesn’t make any sense to you. I also love fancy chocolate :D It is totally worth paying $4/bar for chocolate, lol.

  6. The Kindle is the best thing ever! I’ve been itching to upgrade to the basic Kindle Fire model, but the one I have is still doing just fine…

    I’m looking forward to seeing how you navigate these reductions. I’ve been doing a lot of research on electricity usage this month and here is what I noticed. Heating is by far the biggest energy suck. If you want proof read you meter in a 24 hr period with how you currently use heat and if you shut it off for 24 hrs. I think you will be surprised. I’ve basically eliminated mine, I just turn the thermostat off, not down, off. Depending on the weather it stays about 63 degrees in my apartment. I’m ok with throwing on a sweatshirt and sweatpants and stay warm. Comfort and how it is attained is a bit different for each us. I’ve also started using a clothes rack to dry my clothes ;-) and took Headed Homes advice and turned my water heater temp down. I will know more of how these changes impact my electric bill in a couple of weeks, but I’m expecting a big difference.

    Wish you the best!

    • The Kindle Fire isn’t really an upgrade – I far, far prefer the e-ink devices. I will probably never buy a Kindle Fire.

      My thermostat will gladly go down to 55 F if I turn it off. That’s way too cold!! I like warmth and honestly 70 is on the low side for my preferences. (I used to keep the thermostat at 75 in a previous place when I wasn’t paying the heating bill…) So my “compromise” was to only heat the rooms in the hours that I use them. The bedroom is heated about 6 hours a day and the living room about 10 during the week and 17 on weekends.

  7. I like your free book idea from the Library. I have Kindle as well and it came on my mind if I can borrow an ebook from the Library, but our local selection is limited and many of the books of my interest are not available. But I will keep searching. Many times I borrowed a book before I decided to buy it or scrap it.

  8. I’m guilty of overspending on food… I spend over $300/month on food, and that’s just for me! And I’m I a light eater! The problem is I buy a lot of fast-food (close to half my food budget, if not more) and the groceries I buy are all convenient foods. Nothing from scratch or anything that requires any more prep then turning on the oven for me. I know I gotta get this under control; even if it only saves me $50/month that’s still $50… but more so for to be healthier.

    Good luck with your new budget!

    • If it were me, I would work on switching from fast food to convenient grocery store food as a first transition. Boxed pasta is pretty cheap, soup cans can be a full meal, take and bake pizzas are cheap-ish and can last me for 4 meals, frozen stuff can be helpful too. Then once you’ve got that down, try to cook something from scratch-ish once a week. (That’s basically the transitions I did. It just took a few years to get to the scratch cooking…)

      • That’s a great idea! I always tell myself on Sundays (my one day off) or on days when I’m done work at 5 that I’m going to cook something a little more then just spaghetti, but I never do. (She writes while eating McDonald’s)

        • To be honest, I don’t always cook much more than that… But I do greatly enjoy eating in my own home :) If meal planning is too hard, have enough stuff in your house to make a bunch of things! That way, you don’t actually have to plan that much and you still get to eat at home.

          In software project management, we have a phrase “crawl, walk, run”.

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