Last week I referenced a New York Times article by Alina Tugend about finances and how many of us compare what we have to those around us and may even be bewildered by how others can afford things we can’t. In this article, Tugend referenced a website I had never heard before called Mr. Money Mustache. This website is a rabbit hole of mega proportions, throwing you into a world where every decision you make has financial repercussions. It’s also a helluva lot of fun, with fantastic advice for people of all income levels, and I particularly love to read the forum where people chime in on various topics, ranging from the sensible to the absurd.
Mr. Money Mustache is all about achieving financial independence by making smart decisions, and it’s just one website that’s proliferated the F.I.R.E. movement, which stands for “Financial Independence, Retire Early.” There’s even a new documentary available on-line called “Playing With Fire,” which summarizes the trend of people eschewing mainstream habits in favor of gaining freedom from the spending treadmill. It’s great stuff, and even if you don’t go in whole-hog the way some disciples have, there’s plenty of advice to get you on your way to saving more, borrowing less, and giving yourself a better chance to pursue what you want in life rather than what you have to do due to your financial situation.
I’ve written before about my family’s philosophy when it comes to finances, but I’d like to highlight a few things we’ve done over the last twenty years or so that made an impact. True, we still have spending weaknesses (for me: records, musical instruments, concert tickets and eating out), but by and large we’ve been able to put our family’s money where it matters most to us (namely, retirement, college savings, trips, and charity). Here are a few things that have worked well for us:
1) I cut my own hair. Yes, I’m fairly bald, which makes this a lot more doable, but it’s an option for many of us. Savings: about $250 a year over the past 15 years. Total: $3750.
2) My family hasn’t had cable TV for 19 years now. This is a much more doable proposition today than it was in the year 2000, and if you haven’t already done so, I urge you to cut the cord. Savings: about $1200 a year for 19 years. Total: $22,800.
3) My wife and I have used Republic Wireless for our cell-phone service since 2014, spending on average about $250 per phone verses the iPhone or Samsung Galaxy that cost upwards of $1000. Additionally, we spend about $25 a month each for phone service. Today, that’s not a huge savings, but in 2014 it was. All told, I figure we’ve saved about $3000 in phone costs and about $1200 in service costs since 2014. Before then I didn’t even have a smart phone, so the total savings is even greater. (NOTE: I’m ashamed to admit that some of this savings has been offset by my family still having a landline. My wife won that battle, but family harmony is worth every penny!).
4) We cut our own lawn, shovel/blow our own driveway, and don’t pay for any kind of landscaping except for tree removal. At the low end, I figure I’ve saved about $60 per month for six months a year, and maybe another $150 a year for snow removal. Let’s call it $500 a year, or $9500 savings since 2000.
5) During my children’s school years, they were allowed to eat one hot lunch per week. Every other lunch had to be made at home. Cost savings: not much, really, as school lunch prices are very reasonable in Illinois. But I feel like over the long haul this rule taught my kids to be more self-sufficient. My now-adult daughters pack their own food most days and don’t go out to eat as often as they might otherwise.
6) I save a lot on purchasing cheaper wine at my local liquor store, which often sells overstocked or older wines at huge discounts. I often buy $15-$30 bottles of wine for $4 each. Savings? Well, let’s face it. Wine isn’t a necessity, so the real savings would be giving up drinking altogether, so I’m not adding this in my calculation. But it is another example of approaching purchases with a little more wisdom.
7) My family hasn’t purchased a new car since 2007, and we still own it. Our other car was purchased used, and that’s the only way we’ll go in the future. If there are two rules to follow when it comes to spending: always, always pay off your credit card debt each month, and keep your car for as long as possible (and by slightly used cars). Savings? Hard to calculate, but let’s figure $100 a month for the past 12 years. Total: $14,400.
8) Keep your appliances and outdoor equipment for as long as possible. I just broke down and purchased a new lawnmower after 17 years of using the old one. And here’s the real miracle: our kitchen refrigerator is now older than our 22 year-old daughters. How? Well, for one, we’ve been lucky. But also, we don’t particularly care what our refrigerator looks like (it’s not exactly pretty at this point), and I vacuum off the dust from the coils a few times a year. Who knows if this was the difference, but it’s nice not to have to purchase another one! Total savings: about $2000 minus the electricity we’re undoubtedly paying for a terribly inefficient appliance.
9) We do a lot of home maintenance projects ourselves, outsourcing only when necessary. And it’s important to understand that I didn’t grow up handy in any way, shape or form. I’ve simply read, watched videos and asked lots and lots of questions from my friends who are better equipped for this sort of thing. In the end, we’ve managed to do a few things well, including all interior painting, changing electrical outlets, installing a new circuit board for our boiler, installing our own ceiling fans, installing all of the toilets, sinks and faucets, repairing drywall, etc. It all adds up. Also, don’t forget to change/clean those filters on your air conditioners, humidifiers, etc. and stay on top of your auto maintenance. Savings? A helluva lot, but hard to measure. I think conservatively at least $20,000
10) We put our non-investment savings into an on-line account that earns (currently) around 1.8% interest and we locked our mortgage in at a really low rate (2.8% I believe). Smarter still would be to not have a mortgage, though opinions vary on this.
11) We only pay for a fee-based financial planner, rather than asset-based. I wrote about in-depth earlier this year.
12) We clean our own home - not a given where my family lives. I have no idea how much a service costs, but let’s conservatively say $50 a month or $600 year. Total savings over the past 19 years: $9500.
13) Here are a few examples of ways to save a bit, but more importantly, to reduce waste. We do these more for the environmental impact than anything else.
a) This is my favorite: instead of using Swiffer sheets to dust our hardwood floors, we use pieces of fleece leftover from family blankets we made some time ago. Simply dust, shake the fleece outdoors, and wash. We’ve been using some of these pieces for over a decade.
b) We’ve used almost exclusively cloth napkins and real dishes, even when entertaining, for the past 20 years or so. I abhor using paper and plastic products when avoidable, and cloth napkins look nice and are easy to throw in with the laundry.
c) I’ve started to use my own utensils and napkins when going to eat at a fast-food restaurants.
d) We’ve used cloth grocery bags for the past 25 years or so.
e) We print on both sides of sheets of paper.
f) For our cats’ litter boxes and our dog’s poop bags, we use the bags that come with products we already purchase: cereal boxes, toilet paper or paper towel packaging, insulated envelopes that come in the mail, etc. Of course, not having cats and dogs to begin with would provide even more savings – both financially and environmentally – but how to you say no to this face?
