Happy New Year! I hope you all had a frugal and fabulous start to 2015! Mr. Frugalwoods and I* managed to stay up until 10:30pm on New Year’s Eve, so I’d count that a roaring success.
*Frugal Hound was out by 9:30pm, so don’t be impressed with her.
December Was Expensive (by our standards)
December was a predictably expensive month since we booked our flights to visit my family later this month ($216.20/person round-trip Boston–>San Diego, baby!). We also spent $104.17 on Christmas-related festivities. Our total expenses are almost identical to November 2014, which was another abnormally costly month due to hosting Mr. FW’s family for Thanksgiving and our weekend trip to Vermont to homestead hunt. It’s reassuring to see that our standard expenses are dialed way down and super consistent.
Our Christmas was delightfully cozy this year and Mr. FW and I were pleased with our decision not to exchange gifts. Keeping our frugal wits amidst the materialistic panoply that Christmas has sadly devolved into is core to what Mr. Frugalwoods and I believe. In addition to saving money, we avoided the deluge of unneeded junk that would clutter our lives and minds. My well-being and ability to think clearly is directly correlated with how tidy and organized my space is. Clean house = clean mind for Mrs. Frugalwoods. Thankfully Mr. FW is an avowed minimalist and basically the cleanest man I’ve ever met.
Why It Doesn’t Matter That December Was Expensive
The fantastic thing about our habitual frugality–and the fact that we’ve been saving mammoth amounts of money for years–is that an aberrational month honestly doesn’t impact our bottom line very much at all. We have a hefty cash cushion, which enables us not to worry when our spending is higher than normal.
The key is to ensure that these pricier months truly are exceptions to the frugal norm. By adhering to our lifestyle of frugal autopilot, we consistently spend less than pretty much everyone we know.
Cooking From Scratch Is Where It’s At, Yo
We continued our trend of not eating out for any meals, drinks, or coffee and not getting any take-out. People, it is DANG CHEAP to cook all of your meals at home from scratch.
I underscore that point this month because I FINALLY separated our Costco groceries from our Costco household expenses by combing through the receipt item by item… (next month I’m going to be a smart girl and do two different transactions at Costco–one for food and one for household goods).
We spent $330.15 on groceries in December, which covers every meal we ate. This works out to $1.77 per person per meal (assuming three meals a day). Since this also includes our ahem coffee bean habit, I’m rather satisfied with this figure. It’s not a perfect calculation since there’s wide diversity in our per meal costs (our breakfasts, after all, are only $0.10 per person), plus we haven’t eaten every drop of food we bought in December (some is in the freezer and some are bulk ingredients like rice, beans, spices and olive oil), and the total includes snacks such as bananas, apples, and popcorn. Regardless, our aim every month is to skate in under $335 for groceries, so we’re happy campers.
Not A Cent Spent on Entertainment
Additionally, we stuck to our traditional $0 entertainment budget for the month. Wondering what we did for fun on zero bucks?
You’re in luck, I’ll just tell you: we hosted three dinner parties at our house (makes our grocery expenses look even better!), we visited the brand new Harvard University Art Museum (which is free to all Cambridge residents), we read library books, we went hiking, I went over to my friend’s house for a girls night, I took free yoga classes, Mr. Frugalwoods continued his extreme wintertime biking, we went to a few holiday parties, we took lots of walks with Frugal Hound, we baked, we cooked, we discussed the homestead properties we saw with our realtor last month, and we just generally enjoyed life. Why spend money on entertainment when there are so many awesome free things to do? Seriously, folks, that’s not a rhertorioal question.
Coming Your Way In January
I’m going to blow your minds right now and let slip that I’m planning to finally publish Mr. FW’s epically inexpensive and healthy rice-n-beans recipe this month. I’ve received so many emails and comments asking for our thrifty recipes that I’m shamed into posting them. Thank you for your persistence readers, I eventually get the clue ;)!
As I shared with reader Shannon, our main delay is that Mr. FW doesn’t cook from recipes… he just sort of tinkers around in the kitchen and out pops a meal. In order to translate his anarchist cooking style into words on a page, we’ve started a technique whereby he calls out his ingredients and measurements while he’s cooking and I write them down. However, it’s still a work in progress because he keeps saying things like “a dollop” or “a few drops” or “you know, enough” instead of actual measurements. Rest assured, I think we accurately captured the rice-n-beans process.
You can sign-up for our email list (below in the Frugal Hound box) to ensure you don’t miss it! Since my mom successfully signed up for the list, you’ll probably be able to figure it out too :).
How To Read A Frugalwoods Expense Report
From top to bottom. I jest, you could read it bottom to top if you so desire, I’m not going to stop you. As regular readers know, we itemize every single dollar we spend (which is why there’s a line item for $0.92). I do this because it’s the most honest articulation of how we allocate our resources and manage to save 65%-85% of our take-home pay (that’s after maxing out our 401Ks).
Interested in learning how we keep costs so low? Check out How We Save 65% Annually and, if you’re up for some hardcore frugal adventuring, take my Uber Frugal Month Challenge. If you’re curious about some of the common expenses that are missing from the below, our August Expense report has the answers (or feel free to ask in the comments below).
New to Frugalwoods: Personal Capital
Mr. Frugalwoods and I have started testing out Personal Capital to track and organize our expenses. December was our first month using the software (which is free, by the way) and we’re liking it thus far. We’ll write up a formal review once we have a bit more experience with its functionality. But, I think it’s going to be a great way for us to systematize our financial overviews since it links all of our accounts together and provides a comprehensive picture of our net worth. Always good to have everything in the same place!
Tracking expenses is, in my opinion, the best way to get a handle on your finances. You absolutely, positively cannot make informed decisions about your money if you don’t know how you’re spending it. Sounds harsh, but without a holistic picture of how much you spend every month, there’s no way to set savings, debt repayment, or investment goals. It’s a frugal must, folks.
I’ve included a nifty graph* from Personal Capital above and I look forward to exploring their tools and letting you know what I think. If you’re interested in also making a nifty graph with your finances, you can sign up for Personal Capital for free here. Here’s a more detailed explanation of how I use Personal Capital for my expense tracking.
*Our expenses this month don’t align because the graph includes business expenses that we were reimbursed for by our employers, and which we deleted from the below.
Where’s Your Money?
One of the easiest ways to optimize your money is to use a high-interest savings account. A high-interest savings account gives you money for nothing. With these accounts, interest works in YOUR favor (as opposed to the interest rates on debt, which work against you). Having money in a no (or low) interest savings account is a waste of resources–your money is just sitting there doing nothing. Don’t let your money be lazy! Make it work for you! And now, enjoy some explanatory math:
Let’s say you have $5,000 in a savings account that earns 0% interest. In a year’s time, your $5,000 will still be… $5,000.
Let’s say you instead put that $5,000 into an American Express Personal Savings account that–as of this writing–earns 1.70% in interest. In one year, your $5,000 will have increased to $5,085.67. That means you earned $85.67 just by having your money in a high-interest account.
And you didn’t have to do anything! I’m a big fan of earning money while doing nothing. I mean, is anybody not a fan of that? Apparently so, because anyone who uses a low (or no) interest savings account is NOT making money while doing nothing. Don’t be that person. Be the person who earns money while you sleep. Rack up the interest and prosper. More about high-interest savings accounts, as well as the ones I recommend, is here: The Best High Interest Rate Online Savings Accounts.
And so, with the new year full of promise, joy, and hopefully cookies upon us, I present to you the Frugalwoods expense report for December 2014:
|Mortgage & Escrow for Taxes & Insurance||$2,741.01||Yep, it’s high. But, we live in a very high COL city (Cambridge, MA) and this house will be our cash-flowin’ rental after we decamp to our homestead in the woods.|
|Flights to CA for Mr. & Mrs. FW||$432.40||Thrilled with this price. Thrilled I tell you. This = $216.20/person round-trip from Boston to San Diego. January truly is the most wonderful time of year… to travel.|
|Charitable Giving||$367.00||We made several donations to charity this month.|
|Groceries||$330.15||Since we don’t eat any meals out, this total = $1.77 per person per meal (assuming 3 meals per person/day). It’s uncanny how consistent with are in our grocery expenses. Even with a few decadent Christmas treat purchases (chicken and tidbits of cheeses), we still hit our sub-$335 target.|
|Household Goods Costco||$102.77||Household supplies including: toilet paper, dog food, laundry detergent, vitamins, shampoo, etc. This total does not include any food.|
|Utilities: Gas||$75.78||You can tell we turned our heat on in November! This is why we’re so committed to keeping our thermostat set at 58 at night and 62 during the day. Even at those low temps, we still pay through the nose. Merely a fact of life in this frigid New England clime.|
|Gasoline for Frugalwoods-mobile||$69.11||A tad higher than normal.|
|Utilities: Electric||$68.19||Our standard electricity bill amount.|
|Internet||$66.95||I shake my fist at this every month since there’s nothing we can do to lower it. There’s only 1 internet provider in Cambridge and we’ve unsuccesfully tried to negotiate a lower cost. Since we don’t have cable or a landline, unsurprisingly the company is totally uninterested in cutting us a deal.|
|Postage stamps||$43.80||The postcard stamps for our Christmas cards, plus a book of regular stamps.|
|Christmas Postcards||$28.17||Our Christmas postcards! Love how cheap it was for 100 full-color photo postcards (plus shipping!). I’m definitely doing postcards every year from here on out.|
|Public Transportation (subway pass)||$20.00||Mr. FW added $20 to his subway (T) pass, which will probably last him 4-6 months. We rarely take the subway since we prefer to walk or bike most places in the city.|
|Beer and wine||$16.74||We hosted three dinner parties at our house this month, so we procured a bit of joy juice to serve.|
|Prescription Medication||$15.00||One prescription medication.|
|Shower Cap||$3.18||One shower cap for me. Yes, I wear a shower cap because I don’t wash my hair everyday. It uses less water (water costs money), takes less time, and is better for my hair not to wash it daily. My old shower cap was abysmal–the elastic was worn out and it had a spot of mold. Sometimes you just need to upgrade.|
|Blog back-up||$0.92||Gotta keep the ol’ Frugalwoods.com backed up! We’re lucky that Mr. FW is a software engineer and can manage our website himself, which keeps our blog-related expenses extremely low.|