I suppose you could accuse Stephen and me of being cheap, but with our dream of early retirement, I’m going to just call us forward-thinking. We have been saving diligently, both in our 401K plans and in other non-retirement investments. We try pretty hard to keep our expenses low. We don’t have cable, we’ve cut our dinners out to almost nil, we do our own gardening (which puts us in a minority in our community), I use BookMooch to get used books instead of buying them new, etc. The other benefit of a frugal lifestyle is that it makes us feel more prepared for the unexpected, like a layoff or a medical problem. We don’t want an unforeseen complication to derail our plans – we can delay them, but we don’t want to give up our dreams.
Other than depriving ourselves of any life enjoyment whatsoever, it started to feel like there was no place left to cut expenses. So Stephen has started diligently tracking our expenses, which is of course what every money expert tells you to do anyway. He has just started, so it may be a little soon to see patterns. However just being forced to save every receipt and track every penny has already encouraged us to get more creative and see some new ways to save money.
Just this morning, I cut our garbage bill in half. We kept the same 64-gallon garbage can the previous owners of our house owned. They had two children and produced far more garbage than we do. Some weeks, we don’t even bother putting our cans in the street because there is so little garbage in them. So I called the city and asked to exchange our 64-gallon can for a 32-gallon can. Now we’ll pay $27.50 a month instead of $55 a month. That’s a savings of $330 a year – money that can go toward our retirement instead. And I just don’t feel deprived by having a smaller trash can.
I also just canceled the long distance on our landline. That’s only about $8 saved per month, but it won’t be long before the landline goes altogether. Because we have DSL through our phone company, we just have to talk to them about how we repackage our services without the landline. We could potentially save another $30 a month or so.
I am starting to see more places we can cut as well. I subscribe to five magazines, which just isn’t necessary. Three of them, I could easily browse through in a bookstore. A fourth, which I recently allowed to expire, usually isn’t that interesting. As I write this, I’ve decided I am going to either cancel or allow three more to expire. This will also cut down on paper we need to recycle. The fifth magazine is Consumer Reports, which we refer to frequently. But you can access everything online, so maybe I’ll see about an online only subscription. I do enjoy reading magazines, and I am only slightly embarrassed to admit that I occasionally look in the recycling bin next to the mail bins at work to see if there are any interesting magazines the doctors didn’t want. You can’t really beat free.
I know it’s a good idea to see if there are any benefits your employers offer that can save you some money. My employer gives me a free train pass, so if I take the train to work, there is absolutely no cost to me, other than a little extra time. Well, it’s $30 a month to park at the Caltrain station, but I couldn’t possibly drive for that little. I have been driving to work far too often lately, which started when I hurt my back last summer and didn’t want to chance getting stuck at the office with a limited shuttle schedule to the train station if I really needed to go home. It is ridiculous not to be taking advantage of the free transportation every day, so from now on, I am resolved to take the train unless I have a doctor’s appointment or need to go to our main campus. With my improved back situation, there isn’t any reason not to do this.
Another great benefit my employer offers is up to $800 a year for classes. If I take the classes from Stanford Continuing Studies, they don’t even have to relate to my job. For some time, I have been considering applying to grad school in creative writing at San Jose State, because it offers evening classes and wouldn’t interfere with work. However, Stanford Continuing Studies has an excellent writing program and I don’t need a degree – I just want the training. So I’ve decided to just make sure that I use up my tuition grant every year because if I don’t use it, I lose it. This will only allow for one class a year, but that is certainly better than no classes a year. I am signed up for a novel writing class that starts on Monday.
One really important thing is to be aware of where you really don’t want to cut expenses. The two non-essential areas where we tend to focus our disposable income are technology and travel. We have a Netflix subscription for a little under $20 a month. When they started charging a premium for people that rent Blu-ray movies, I changed our subscription from three discs at a time to two at a time, but we’ll keep the service. We rarely go to a movie in the theater and as I said earlier, we don’t have cable (or any network reception for that matter). When I hurt my back last year, being able to lie in bed and watch Netflix streaming content on my laptop was wonderful. Now we can even stream to our tv through our PS3, so we are hoping that Netflix continues to add to the movies and television available for streaming, even though the quality isn’t as good. We also watch the tv shows Bones and Flash Forward on Hulu, which has been great, and the advertising is extremely minimal.
We also debated a lot about whether to order an iPad, but finally decided to do it (as a birthday present for me). Because we use Macs and iPhones, the iPad is well-integrated with our other technologies. Stephen really wants me to cut down on the huge number of actual books in the house, which means an e-reader will be useful for me. I already have lots of other content for the iPad, in terms of music and video. The iPad is not cheap, but I have to admit that the amount of enjoyment I am going to get out of it probably far outstrips the price. I do know what I like! I am however trying to decide on a reasonable monthly iTunes budget, because my current unlimited budget concept isn’t working! But I do want to be able to download a new album from one of my favorite artists when I feel like it.
Cutting costs also won’t have much of an effect on Stephen’s photography related purchases. He makes enough money from his photography to pay for equipment, so coupled with the huge amount of satisfaction he gets from it, there really isn’t any reason to make cuts here. Again, the amount of enjoyment he gets far exceeds the cost.
The other area of importance to us is travel. We try to take at least one two-week vacation every year. We’ve gone to some pretty amazing places, and we have so many more that we want to see. However, because one of the reasons we want to retire early is so we can travel more, we still try to be as frugal as possible when we travel. We are not the fancy hotel types. Often we go overseas, but this year we will probably take a driving trip somewhere in the U.S. Our driving trip in the American southwest a couple years ago was amazing. We haven’t yet narrowed down our choices for this year, but we know we’ll remain west of the Mississippi.
I am sure that as Stephen continues to track expenses, other areas to cut will become obvious. It’s just important to strike a balance between keeping expenses low to reach our goals and allowing ourselves to indulge in some of the things we enjoy now. I’d love to find out what other people are doing to cut expenses. If you have any creative (or mundane for that matter) ideas, please comment below and share them.