Wednesday, November 28, 2012

Gave myself a raise

I’ve gone back and forth on the 401(k) issue quite a bit but I finally decided to enroll and put a 5% contribution into my retirement.  My company matches up to 4% to my 5% so I effectively just gave myself a nice 4% raise.  My hesitation to enroll at first was that I didn’t want anything to detract from my mission to pay off my debt, following Dave Ramsey’s advice to put off investing in the future until all debts are paid off.

The more I thought about it though the more uncomfortable I became with the idea of potentially not putting anything aside for retirement for another 5 years (my original estimate for how long it would take to pay off all credit card, car loan, and school loan debt).  I then thought I might at least pay off the car loan and credit cards before enrolling which would take two years.  After crunching the numbers I realized that in those two years I would be missing out on the 4% “free” money plus any interest I would be earning on the whole 9%.  By enrolling now, even if my rate of return is low, I would still end up adding roughly 11k to my account in those two years.

Besides the pure numbers, I also thought about the other factors in my life.  Life has been changing pretty rapidly for me lately and it’s made me realize that there will ALWAYS be some excuse for me not to put money away for retirement (just like there used to ALWAYS be an excuse to not pay down my debt).  The past year’s journey has taught me some valuable lessons and the biggest is that I can achieve a better financial future if I can just take one tiny step at a time!

Thursday, November 15, 2012

Energy savings

I’ve been looking back at some of the changes I’ve made over the last year to reduce my expenses and free up more cash to pay towards debt.  Besides the food bill which I looked at last post, the energy bills are also a big chunk of the monthly budget.  To cut energy costs I made the following top five changes:

#1: Cold water washing:  This was an experiment at first to see if cold water washing would get our stuff as clean as using hot/ warm temps in the washer.  I was pleasantly surprised to find that I couldn’t tell any difference in the cleanness of the laundry and have noticed that our darks are staying darker which can also be due to my next change…

#2: Line drying: Our washer and dryer are out of the way in a corner of the basement so we hung a couple clothes lines from the ceiling, put a stackable flat racks for sweaters, and a folding rack for the smaller stuff and started letting our clothes air dry.  Sheets and towels still get tossed in the dryer.  It’s more work but it saves electricity and is also easier on our clothes. 

#3: Thermostat battle: The one thing we did that is still a constant battle for me is turning the thermostat up in the summer and down in the winter.  The summer’s not too bad for me but S hates it when the thermostat is set at 78.  During the winter we have the opposite problem where I’m freezing at 60 and he’s loving it.  But in the name of savings we have toughed it out as much as possible.

#4: Smaller energy items: We switched all our bulbs to compact fluorescents and have been making sure we turn off the lights when we absolutely don’t need them on (which is a lot harder to do than I would have thought).  We are also turning off or completely unplugging more of our smaller electronic items when not in use.

#5: Cook wiser: This is probably a teeny amount of savings but we’re trying to be more aware of the energy we use in the kitchen for cooking.  Like when I heat up the oven I try to use it for multiple meals instead of just the next one we are preparing to eat.  This has actually been really helpful in having lunches ready for work and already prepared dinners for the nights we are too busy to cook.  Also, we’ve been making sure we’re using the lowest temp on the stove or oven required and using the right size burner on the stove. 

Because we’ve only lived in this place for a year and I implemented all the changes when we moved in plus we moved from Florida to Massachusetts where energy costs and consumption are different, it’s hard for me to estimate how much these things have actually saved.  However, the elderly gentleman who lived in our place before us shared some of his previous year’s bills with us before we moved in to help us budget so I’ve been comparing the costs.  Our January bill for electric was $114 and gas was $69.  His bill from last January was $162 for electric and $147 for gas.  His bills for April were $170 and $33 while ours were $77 and $11.

I know it’s not really accurate but using his cost as a baseline means we saved around $120 per month by making relatively minor changes to our lives or at the very least we are $120 smarter about how we use energy!

Monday, November 5, 2012

November update

I haven’t been feeling particularly bloggie for the past month, life has been a lot more hectic than usual and I’ve found myself taking on too many extra responsibilities and getting burned out in the process.  Add to that some pretty big curveballs that S and I have recently experienced and I’ve just turned into a big mess (and turned back to some of my old nasty spending habits)!  

To remind myself of the journey I’ve been on for the last year with the debt pay-off and financial overhauling, the next few posts I make are going to be dedicated to the ways I’ve changed over the past year.  Hopefully, reminding myself of all the big and little things I’ve done in my day to day life to get me where I am today will get me back on the straight and narrow.

I’ll start with the food, one of my biggest areas of weakness!  Here are the top 5 changes I’ve made over the last year that have reduced my monthly expenditures in the food department:

#1: Reduced the junk food and meals out.  When I started a year ago I was spending a small fortune every month on junk food and eating out.  I calculated around $250 a month went to completely non-essential food like soda, chips, lunches, drinks and dinners out.  In retrospect, now that I actually know how to track my spending, that number was probably a lot higher.  I’ve cut that amount in half and am still working on whittling it down by packing plenty of food including snacks for work, making more interesting food at home, and just plain saying “no” to my food cravings!

#2: Amped up the meal planning.  Part of cutting back on spending for eating, drinking, and snacking out was to be better prepared with food on hand at home.  I was already pretty good at making and sticking to a list for the grocery so making an actual meal plan was just one step further.  By planning out meals and snacks I’ve been able to really reduce the amount of food waste we have and be better prepared for all our meals and snacking urges!

#3: Discount shopping.  The nice thing about having a meal plan and list of household items that are needed is that I can now hunt for sales, coupons, and cheaper alternatives.  I’ve pretty much mastered the art of maxing out the discounts at my CVS and get most of the household goods there.  I’ve also got a handle on what stores have the best deals for the staple food items, I regularly use coupons (which I previously thought was such a time-hog it couldn’t be worth it), and I shop the discount rack at my grocery store and then prepare/ freeze the soon to expire food ASAP! 

#4: Went  vegetarian (kind of).  Meat is freakin’ expensive so we have been experimenting with a mostly vegetarian diet.  I was kind of shocked the first time I did a “meat-less” grocery run, my grocery bill was automatically cut by at least a third!  S was already comfortable with a vegetarian diet since pre-me he was a strict vegetarian and my transition was actually kind of fun getting to look up all sorts of new recipes to try out!

#5: Making it from scratch.  Sure opening a can or box of something is convenient but making things from scratch has really saved me a ton of money over the past year.  Take beans for instance, a great and cheap protein staple for the new semi-vegetarian diet we are trying.  A can of beans is somewhere around $1 but a bag of dry beans is also around $1 and makes the equivalent of 4 cans.  Dry beans are not at all hard to make and, unlike the canned beans, don’t come with a ton of salt already mixed in. 

So that’s how I’ve reduced my food spending each month in a nutshell, looks good to see it written out and definitely is the reminder I need right about now that I can stick with the positive changes I’ve already made!