December rounded out my season of favorite months, with a stellar Christmas and even a New Year’s Eve celebration (by which I mean we stayed up until 9:30pm and managed to each drink a glass of champagne… ).
Mr. Frugalwoods and I delighted in our frugal Christmas and spent the holiday week alternating between snuggling by the wood stove and snowshoe hiking around our property. Mr. FW has opened up a trail that circumnavigates the boundaries of our property, which we’re absolutely loving. There’s a fair amount of elevation gain, but I’m pleased that Babywoods’ new game sled handles the trails beautifully.
As you probably know, Mr. FW and I don’t give each other gifts for Christmas (or birthdays or anniversaries). And we decided not to get any presents for Babywoods this year either since, at one-year-old, she’s really too young to understand the holiday. Not to mention that she’s perfectly happy with an empty box… We figured we could take a pass this Christmas since she’s so young. No reason to start the Santa Claus tradition too early :)! When she is old enough to understand the holiday, we plan to give her just a few gifts (which we will absolutely buy used if at all possible!).
We do give gifts to our immediate families (parents, siblings, nieces, nephew) every year. We also decided to send gifts to our tenants as well as the teenagers who staff the nursery on Sundays at our church. We came in just under $200 for everyone, which I consider a resounding success. Most of our gifts were purchased locally, and we’re delighted to support our friends and neighbors who make delicious things like maple syrup, maple cream, teas, lip balm, and more! Everyone has opened their gifts by now, so I shouldn’t be ruining any surprises…
Personal Capital: How We Organize Our Expen$e$
Mr. Frugalwoods and I use Personal Capital to aggregate and consolidate our transactions from across all of our accounts. We then drop them into a spreadsheet to provide the below analysis for you fine people.
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. No excuses.
Personal Capital (which is free to use) is 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. If you’re not tracking your expenses in an organized fashion, give Personal Capital a try. Here’s a more detailed explanation of how I use Personal Capital for my expense tracking.
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.
Credits Cards: How We Buy Everything
Mr. Frugalwoods and I purchase everything we possibly can with credit cards for several reasons:
- It’s easier to track expenses. No guesswork over where that random $20 bill went; it all shows up in our monthly expense report from Personal Capital. This prompts me to spend less money because I KNOW I’m going to see every expense in detail at the end of each month.
- We get rewards. Who doesn’t like rewards? Credit card rewards are a simple way to get something for nothing. Through the cards we use, Mr. FW and I get cash back as well as hotel and airline points just for buying things we were going to buy anyway.
- We build our credit. Since Mr. FW and I don’t carry any debt other than our mortgages, having several credit cards open for many years (which are fully paid off every month) has greatly helped our credit scores.
If you’re interested in opening a credit card, I highly recommend using this site to search for a card that’ll best fit your needs. And if you’re interested in travel rewards cards specifically, check out this list curated by my friend Brad from Travel Miles 101. I respect Brad’s work in the travel rewards space and I trust his advice on which cards will reap the best benefits.
Huge caveat to credit card usage: you MUST pay your credit card bills in full every single month, with no exceptions. If you’re concerned about your ability to do this, or think that using credit cards might prompt you to spend more money, then credit cards are not for you–stick with using a debit card and/or cash. But if you have no problem paying that bill in full every month? I recommend you credit card away, my friend!
How To Read A Frugalwoods Expense Report
The below is an itemization of every single dollar we spent over the course of the last month. I share this because it’s the most transparent articulation of how we allocate our resources and adhere to a lifestyle of extreme frugality.
Want to know how we manage the rest of our monies? Look no further than Why We Don’t Micromanage Our Money. We also own a rental property in MA, which I discuss here. Why do we save so much and spend so little? It’s all in service of our goal to reach financial independence and move to a homestead in the woods (which happened in May!!).
For us, embracing frugality is a joyful, longterm choice. We prefer a simple life to one filled with consumerism and we spend only on the things that matter most to us. Our approach isn’t one of miserly deprivation; to the contrary, we live a luxuriously frugal existence.
Interested in how we keep costs so low? Check out How We Save 65% Annually. If you’re up for some hardcore frugal adventuring, sign-up to take my Uber Frugal Month Challenge. Nearly 9,000 people are taking the challenge this month, and you can sign-up to start at any time!
But Mrs. Frugalwoods, Don’t You Pay For X, Y, Or Even Z????
Wondering about common expenses that you don’t see listed below? Our August 2015 expense report has the answers you seek! Plus, as I explained here, we pay bills in full the month we receive them–that’s why you won’t see monthly payments for things like car insurance or property taxes. If you’re curious about how we handle charitable contributions, check out How We Make Meaningful And Tax Efficient Charitable Donations.
Alright you frugal money voyeurs, feast your eyes on every dollar we spent in December:
|Ugh. Beyond bad. We splashed out for Christmas and New Year’s with fancy groceries and beer, wine, and champagne! But still.
|We gave gifts to our immediate families (parents, siblings, nieces/nephew), as well as our tenants and the teens who staff the Sunday nursery at our church. Mr. FW and I don’t exchange gifts and we also didn’t get Babywoods any gifts (at 1-year-old, she is happier with an empty box anyway).
|All non-food household and farm supplies, including such thrilling things as toilet paper, soap, and dental floss.
|Gasoline for the cars
|We took a day trip up to Burlington to see the Christmas lights and stroll around, so a bit more driving this month than usual.
|The cost of shipping gifts to our families and tenants.
|Home Improvement supplies
|Mr. FW is going to build interior window insulation panels for our house. This was the cost of materials.
|Stamps for Christmas postcards
|Check out my cheap postcard hack here.
|Babywoods’ Game Sled
|As discussed here, we bought this game sled–on the recommendation of several Frugalwoods readers–to tow Babywoods on our hikes and snowshoe adventures around our property. It works fabulously!
|Christmas Angel Tree Gift
|We bought a few Christmas gifts for a child in need in our community.
|O’Keeffe’s Healthy Feet cream 3-pack
|I’ve tried 1 million different lotions/creams/potions for my horrifically dry hands, and O’Keeffe’s For Healthy Feet is THE best. It’s not cheap, but it’s worth every last penny. I don’t put it on my feet, but I bet it would work there too.