August 2018 Expenses
All other line items were dwarfed by our annual property tax bill, which we paid in full in August. It’s a whopper since it covers our 66 acres along with our house and barn. However, it’s a bill we’re happy to pay because property taxes are what fund crucial public services such as schools! Vermont has high income tax, a fact that many folks cited when Mr. Frugalwoods and I announced our decision to move to Vermont and make it our permanent home. But we moved to Vermont will full knowledge of this fact and also full knowledge of how Vermont utilizes these taxes. We’re thrilled to be in a fabulous public school district and in a vibrant little town in a great little state that funds things that are priorities for me and my family.
I don’t mind paying taxes so that I (and my neighbors) can reap the benefits of a good school system that offers–for example–free preschool for all children ages three and older. I don’t mind paying taxes so that I (and my neighbors) can enjoy well-maintained roads and pristine Vermont landscapes. It’s all part of being in a community and so it’s a check I happily write every year. Last year, a number of readers asked why I choose to pay big bills (such as our property taxes) in full, as opposed to meting the payments out (in the case of property tax, there’s an option to pay half now and half in the spring).
So why not keep that other half invested and earning interest? Well, quite frankly, it’s easier. And, I wouldn’t have that dollar amount invested anyway because I don’t invest anything I know I’m going to need in the near future. Since the nature of the stock market is to rise and fall, I keep liquid (in a savings account) enough cash to cover payments such as our property tax bill. I find it more straightforward to pay the full amount and thus remove the need for me to remember to pay the second half in the spring. Plus, I always figure its easier for my town to receive the full amount all at once and thus deploy that money to municipal services that need it.
The other mega line items in August were for woodshed materials! Mr. FW completed construction of our wood palace in early September and I detailed (exhaustively) the process here.
We are SO GLAD (I mean, it borders on elated) to have this thing built and stocked with firewood before the first snow flies.
Also, SO glad to be done with paying for the lumber and screws and nails and clamps and ratchets and gravel and…
Also, Mr. FW noted that he purposely overbought on lumber and fasteners so that he wouldn’t have to trek back and forth to the store during the project. Hence, he plans to return what he estimates is around $300 of lumber and supplies, which will reduce the “woodshed materials” line items.
Preschool IS BACK! (and the parents doth rejoiceth)
I know I just said that preschool is free in Vermont*, but Babywoods isn’t old enough to qualify yet. One must be precisely three years old on September 1st in order to attend free preschool and our oldest daughter won’t be three until November. And yes, I 100% called the school (and spoke to the principal) just to check and see if maybe they could squeak Babywoods in, but nope. Rules are rules and I respect that. Given this, we’ve chosen to pay for Babywoods to attend private preschool this year (as she did last spring) because this child is READY for school.
All summer long, she played school and every single morning, she’d ask me, “mama, can I go to school this day?” (I don’t know why she says ‘this day’ instead of ‘today,’ but it cracks me up so I don’t correct her). And every time we drove past her school this summer, she’d pipe up from the backseat, “that’s my school! I love my teacher!!!”
So uh, yeah, she’s a school lover. And thank goodness since home schooling is NOT in our future and would NOT be my or Mr. FW’s forte. We’ve found two different preschools for Babywoods to attend this year, which means she’s able to go to school Monday through Thursday mornings. This month’s line item reflects the tuition for just one of her schools since the other check wasn’t deposited in August. Hence, the normal monthly total for her school will be about double what’s listed below.
It’s not cheap, but it’s also very worthwhile for us. Babywoods adores going to school and it’s clear she’s thriving in these environments. Would I rather not pay? Of course! But on that same token, I’m happy to save money in other areas (for example by sourcing all of her clothes, gear, toys, and books as hand-me-downs or from garage sales) in order to pay for something I value greatly: early childhood education. In addition to the benefits Babywoods derives from school, it gives me and Mr. FW a break from parenting and lets us work on projects we need and want to do (such as building a woodshed and writing this post!!!).
It also provides Littlewoods (who is a newly minted seven-month-old) some solo time with the parents (when she’s not napping, of course). All in all, preschool is a boon for our little family and I am a deep well of gratitude for our preschool teachers–they are true miracle workers. I mean seriously you guys, they bake and cook and paint and garden and craft (shudder) with TODDLERS. Miracle workers I tell you. And let’s not forget the bonus that we’re now the proud displayers of a multitude of toddler-generated works of art: there’s currently a dragon nose (??) on my counter and a stick-and-fuzzy ball caterpillar on my kitchen window sill…
*Fellow Vermonters, you read that right! The state provides ten hours per week of free preschool for all 3-5 year olds. Our school district offers free all-day preschool in addition to this ten hour mandate (woohoo!!!). Check out the details here!
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 $20 bill went; it all shows up in our monthly expense report from Personal Capital. This prompts me to spend less money because I KNOW I’m going to see every expense in detail at the end of each month.
- We get rewards. Who doesn’t like rewards? Credit card rewards are a simple way to get something for nothing. Through the cards we use, Mr. FW and I get cash back as well as hotel and airline points just for buying things we were going to buy anyway.
- We build our credit. Since Mr. FW and I don’t carry any debt other than our mortgages, having several credit cards open for many years (which are fully paid off every month) has greatly helped our credit scores. By the way, it’s a dirty, dirty myth that carrying a balance on your credit card helps your credit score–IT DOES NOT. Paying your cards off IN FULL every month and keeping them open for many years, however, does help your score.
If you’re interested in opening a credit card, I highly recommend using this site to search for a card that’ll best fit your needs. And if you’re interested in travel rewards cards specifically, check out this list curated by my friend Brad from Travel Miles 101. I respect Brad’s work in the travel rewards space and I trust his advice on which cards will reap the best benefits.
Huge caveat to credit card usage: you MUST pay your credit card bills in full every single month, with no exceptions. If you’re concerned about your ability to do this, or think that using credit cards might prompt you to spend more money, then credit cards are not for you–stick with using a debit card and/or cash. But if you have no problem paying that bill in full every month? I recommend you credit card away, my friend! (these are affiliate links)
Personal Capital: How We Organize Our Expen$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. (these are affiliate links) 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 allocate our money like we do? 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 prudent financial management and 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.
Why do I share our expenses? To help give you a sense of how we use our money in a goals-oriented manner. Your spending will differ from ours and there’s no “one right way” to spend and no “perfect” budget (perfection does not exist!). But I hope that by being transparent about our spending, you might gain some insights into your spending as well and might be inspired to take proactive control of your money.
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. We also have solar panels, which accounts for our low electricity bill.
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 August:
|The total annual amount for our 66 acre property, which includes our home and barn
|Lumber and metal roofing, which were ordered from Poulin Lumber (and delivered for free!).
|I have no defense for why this is so high other than that I’m really hungry. Hah!
|Lots of clamps, a big extension cord, fasteners, joist hangers, hurricane ties, etc…
|14 yards of crushed 1 inch minus stone (also known as gravel, which was used as the base for the woodshed)
|Preschool for Babywoods
|Morning preschool started back up for Babywoods and she is one happy camper!
|Gasoline for cars
|Woodshed: more lumber
|Mr. FW miscalculated and needed to go buy more lumber… whoops! Good thing we own a pick-up truck!
|Household supplies (including sunglasses)
|Thrilling non-food items, such as toilet paper, laundry detergent, vitamins, baby items, medications, and several pairs of cheap sunglasses for yours truly (I’ve lost/broken at least three pairs this summer… I imagine there are bears roaming around wearing them in our woods somewhere… )
|Date night dinner out!
|Mr. FW and I go out to dinner once a month and our wonderful neighbor stays with the kids. Hooray!
|50lbs of dried chickpeas from Palousebrand
|After our last purchase of bulk dried beans, a bunch of readers suggested cheaper online sources and we researched them all and found that, unfortunately, none of them deliver here. Boo.
|Fiber internet! Woohoo!
|Doctor appointment co-pays
|Non-Ethanol Gas for small engines
|For powering our chainsaw and lawnmower
|Semi-annual refill of our 20lb tank of CO2, which powers our hacked Sodastream
|For our tractor
|Cell phone through BOOM Mobile
|Prenatal Vitamins (this is an affiliate link)
|No, I am NOT pregnant, but I am breastfeeding 7-month-old Littlewoods, so I continue to take prenatal vitamins.
|We have solar so this is the base price to keep us grid tied.
|Mustard Seeds for Making Pickles (this is an affiliate link)
|A key ingredient for pickling the 9 million cucumbers from our garden.