All other events in February were truly dwarfed by the fact that our second daughter, Littlewoods, was born this month! I’m sure other things happened, but it feels like that was about it. Our spending certainly reflects her imminent arrival, most notably in the area of…
Whoa, Mrs. Frugalwoods, you’re probably thinking, what is with that line item for restaurants?!? All for a good cause, I assure you. My fabulous mother-in-law came to help us out for Littlewoods’ birth and before Littlewoods made her arrival, my mother-in-law offered to babysit Babywoods for us while we went out on dates! And so go out on dates we did! Mr. Frugalwoods and I went to a pre-natal appointment together, went to the grocery store, took care of errands and… went out to lunch multiple times! And to dinner once too!
Normally, we eat out one night a month, but seeing as we had a loving, free, in-home babysitter in the form of grandma, we decided to take advantage of the opportunity to cram in a bunch of dates all in one week. A true hedonistic jaunt of dining out. And it was glorious. We’re not exactly sure when we’ll be able to go out sans children again, so I’m very grateful to my mother-in-law for watching Babywoods while we lived it up.
This also caused us to reflect on the fact that, while we had fun eating out a ton in one week, our preference is to mete these treats out over a longer period of time. As I’ve written before, the rarity of a luxury’s occurrence truly does make it all the more special. If we do something all the time, it loses the luster of novelty and becomes a rote chore. Constantly treating ourselves numbs us to the luxury of something like dining out. Conversely, when we save treats for special occasions, they’re more amplified in our minds and we get a higher return of happiness on our investment.
Driveway Of Ice
We also paid for a load of sand and gravel to be dumped on our quarter-mile long driveway, which had helpfully molded itself into a solid sheet of ice. Usually we just wait for the driveway to thaw or for it to snow again or Mr. FW will use the chains on the tractor to rough up the ice. However, given the impending birth of Littlewoods, we wanted to be really sure we’d be able to get out of our driveway in a hurry. Hence, we ordered a delivery of sand from our neighbor!
Other than these two aberrations, it was a fairly standard month despite the arrival of the fourth member of the Frugalwoods fam! If you’re interested in learning more about how we parent frugally, check out my Kids section.
I Wrote A Book!
I really did! And I’m so excited! My book, Meet The Frugalwoods: Achieving Financial Independence Through Simple Living, was published on March 6th by HarperCollins.
Huge thanks to everyone who has already read the book and written a review and shared their thoughts with me! If you’re so inclined, I’d love it if you’d consider writing a review of the book on Amazon. Many thanks!
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 $20 bill went; it all shows up in our monthly expense report from Personal Capital. This prompts me to spend less money because I KNOW I’m going to see every expense in detail at the end of each month.
- We get rewards. Who doesn’t like rewards? Credit card rewards are a simple way to get something for nothing. Through the cards we use, Mr. FW and I get cash back as well as hotel and airline points just for buying things we were going to buy anyway.
- We build our credit. Since Mr. FW and I don’t carry any debt other than our mortgages, having several credit cards open for many years (which are fully paid off every month) has greatly helped our credit scores. By the way, it’s a dirty, dirty myth that carrying a balance on your credit card helps your credit score–IT DOES NOT. Paying your cards off IN FULL every month and keeping them open for many years, however, does help your score.
If you’re interested in opening a credit card, I highly recommend using this site to search for a card that’ll best fit your needs. And if you’re interested in travel rewards cards specifically, check out this list curated by my friend Brad from Travel Miles 101. I respect Brad’s work in the travel rewards space and I trust his advice on which cards will reap the best benefits.
Huge caveat to credit card usage: you MUST pay your credit card bills in full every single month, with no exceptions. If you’re concerned about your ability to do this, or think that using credit cards might prompt you to spend more money, then credit cards are not for you–stick with using a debit card and/or cash. But if you have no problem paying that bill in full every month? I recommend you credit card away, my friend!
Personal Capital: How We Organize Our Expen$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.
How To Read A Frugalwoods Expense Report
Want to know how we manage the rest of our money? Look no further than Our Low Cost, No Fuss, DIY Money Management System. 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 2016).
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.
If you’re interested in the other things I love, check out Frugalwoods Recommends.
A Note On Rural Life
Since we live on 66 acres in rural Vermont, our utilities and expenses are slightly different from traditional urban and suburban dwellings. We don’t pay for water, sewer, trash, or heating/cooling because we have a well, a septic system, our town doesn’t provide trash pick-up, we heat our home with wood we harvest ourselves from our land, and we don’t have air conditioning. For more on our rural lifestyle, check out my series This Month On The Homestead as well as City vs. Country: Which Is Cheaper? The Ultimate Cost Of Living Showdown.
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 tax.
If you’re curious about how we handle charitable contributions, check out How We Donate To Charities Like Billionaires and also How We Make Meaningful And Tax Efficient Charitable Donations.
Alright you frugal money voyeurs, feast your eyes on every dollar we spent in February:
|Household & miscellaneous||$216.72||All non-food household and miscellaneous purchases, such as laundry detergent, toilet paper, farm supplies and tools, etc.|
|Preschool||$180.00||Babywoods goes to preschool two mornings a week and absolutely loves it!|
|Restaurants||$123.39||WHOA! Highest ever on account of our many pre-Littlewoods dates :). Totally worth it.|
|Gasoline for cars||$119.62|
|Internet||$74.00||We LOVE our high-speed Fiber internet out here in the middle of nowhere.|
|Driveway sand and gravel load||$65.00|
|Doctor visit co-pays||$40.00|
|Diesel for tractor||$37.91|
|Holiday gift for preschool teacher||$20.00|
|Cell phone through BOOM Mobile||$19.99|
|New spatula||$10.40||Ahh yes, our replacement spatula, the tale of which I told in detail here.|
|Hand cream||$6.35||My hands get ridiculously dry in the wintertime and this seems to be the only cream that does the trick.|
|Airport parking||$5.00||Parking at the airport while picking up my in-laws|