I write to you from the depths of an epic heatwave here in Vermont. With temperatures cresting 90 most days, we are officially on swelter alert, which is highly aberrational for us–our summers are usually much more temperate with only sporadic forays into the 80s or, at worst, 90s.
Given this sustained heat, our two very small children (not to mention our own hatred of hot), and our absence of central air, we bought two window air conditioning units in June to bring our indoor temps down to reasonable. I’m usually all for toughing out temperatures–be they hot or cold–but I confess I met my match with an 85+ degree bedroom. I’m a weakling for a cool bedroom and, in ardent refusal to bake ourselves, we are pretty darn happy with our window units. Ahh, chilled air, oh balm of this ungodly heat.
The Month of Cars!!!
Goodness gracious we spent a lot on our cars this month! For those of you following along with the Frugalwoods Fleet-o-Vehicles saga, we recently purchased a used truck (full story here) and plan to sell our Subaru Outback. We’ll keep our Toyota Prius and thus have one of the largest and one of the smallest vehicles Toyota makes. The truck and Prius look hilarious parked side by side, but they’re the perfect combo of vehicles for our rural lifestyle.
The truck hauls lumber, materials, and tools while the Prius gets superb gas mileage on our long rural drives. Since we plan to sell the Subaru, we took it into our mechanic for an all-around check-up, which resulted in a discovery that it needed new brakes and a new oil pan. Both the Subaru and Prius were also due for their state inspections and registrations, plus, we needed to get the Prius’s new summer tires mounted and balanced.
Now that the summer tires are set on rims, Mr. FW will be able to change them out each season (from snow to summer and vice versa), which’ll save on this expense. Even though we buy our cars used and in cash, it’s still expensive to own and maintain vehicles, which is why we’re planning to divest ourselves of the Subaru as soon as possible. Never own more car than you need!
Mr. Frugalwoods’ parents visited us for the month of June and offered to babysit while we went out to dinner… and so we did… A LOT. Free childcare is the greatest gift imaginable for us right now. The ability to go out alone together as a couple was such a wonderful thing. Having the freedom to do something without our kids was lovely for these sleep-deprived, exhausted parents.
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.
Interested in how we keep costs so low? Up for some hardcore frugal adventuring? Sign-up to take my Uber Frugal Month Challenge, which is the method Mr. FW and I employ to sculpt our frugal lifestyle. You can sign-up at any time and you’ll start with Day 1 so you won’t miss a frugal thing. P.S. It’s free! And 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 June:
|Brakes and oil pan parts for Subaru
|Two window unit air conditioners
|This includes thrilling items such as toothpaste, toilet paper, laundry detergent, shampoo, soap, sunscreen, medications, baby items, etc.
|Car repairs for Toyota Prius
|Inspection, oil change, mount and balance of new summer tires for Prius
|Home improvement supplies
|DMV: car registration
|Two years of registration for our Toyota Prius
|Massage for mama!
|I got a massage for the first time in… a very long time! Lovely for my exhausted mama muscles.
|Woodshed building supplies
|Foundation layout supplies for the woodshed Mr. FW’s planning to build
|Gasoline for cars
|DMV: car registration
|One year of registration for our Subaru Outback (which we plan to sell soon)
|We have Fiber internet out here in the middle of nowhere, and we LOVE it.
|Preschool registration fee
|Babywoods will start preschool again two mornings a week in the fall; this was the registration fee.
|Ethanol-free gasoline for small engines
|Doctor visit co-pay
|Cell phone through BOOM Mobile
|We have solar, which is why our electric bill is so low.