frugal living

Living within your means: Is it possible anymore?

Is it possible to live within your means? Why would you even want to try?

Living within your means is a nice idea, right? Like staying married to one person your whole life, or working thirty years for the same company, or being able to fit into your old uniform at your fortieth reunion. Nice, grandma-approved ideas, all of them. They worked fine for her generation. And for most of the generations before them, honestly.

Eric and I want to live within our means, we really do. And we’re mostly successful at it, if you take a broad, modern-day approach to the idea. If you take my step-grandmother’s approach, we’re sort of huge failures.

This is what I mean:

Housing

Yes, we have a mortgage. We borrowed money to buy this house because we didn’t have $140,000 in the bank to buy it outright. We could have bought a cheaper house but we didn’t have $90,000 or $40,000 or even $10,000 in the bank, either. And if we hadn’t bought a house, we’d be paying the same amount in rent (for a far less pleasant living situation).

However, when we bought this house we crunched the numbers mercilessly to make sure we could afford not only the mortgage, but everything else that goes with the house:

  • taxes
  • utilities: heat, electric, garbage, water, HOA fees, internet, etc
  • distance to our jobs: car maintenance, gas, etc.
  • exterior stuff: gas for the lawnmower, a lawnmower, landscaping supplies
  • interior stuff: curtains (America! Stop using blankets as curtains! It hurts my friggin’ eyes!), furniture, etc.

This is important, because we’ve seen some friends who’ve forgotten about all the extra stuff, and it’s a huge shock when a person realizes a propane tank can cost $800 to fill, several times a winter.

Vehicles

We have about the same story here. We do borrow for cars, almost every time we buy one. But we stay away from the $50,000 land yachts and head for the $10,000 used section of the lot. Eric spends (literally) months researching each option until he’s happy with the engines, the frames, the recall notices, everything.

AND I MEAN EVERYTHING. And then we buy the car. To date we’ve paid off every vehicle loan years ahead of schedule.

Moment of transparency: As of this writing, we’re seriously considering buying a brand new car. We’ve never done that before. But we like the idea of buying something with no mileage on it, then taking excellent care of it, and driving it for a decade or two.

College

Once again, we borrowed. We could have done a lot better, but we could have done a lot worse, too. I left school with about $8,000 total in debt, and Eric graduated two years later with $22,000. Because we soon had babies and a mortgage, it took us the full ten years to pay Eric’s loan back. This grieves me still. But honestly, there are only so many ways you can spread the resources in early family life.

But compared to today’s graduates who are leaving with over a $100K in college debt and then finding jobs that pay the same amount Eric and I made at our first jobs, we had it easy. I am not at all comfortable with the automatic assumption that going to an expensive four-year school is the best way for most students.

I’d be a lot more comfortable if these kids were forced to do a mock budget for a $30,000 salary that includes a $700 monthly student loan payment.

living within your means, budget

Everyday Purchases

This is where Eric and I don’t do too badly. We track every penny, and I mean that. Thanks to budgeting software we can tell when we’ve overspent in our grocery, eating out, or gift budgets.

We’ve been married for eighteen years, and I can tell you this– it’s a combination of the very large purchases and the everyday stuff that keeps you living within your means.

Obviously, if w’ere going to go with the old definition (and probably the wisest definition), most of us probably don’t live within our means. If we did, we’d be living with our parents and walking to work until we had enough saved for a house and vehicle.


But if you use the broader definition, I think most of us could make it. If we’re able to save wisely and give generously each month, pay our bills, and then add in a few wants, I think we’re on track. It’s not easy, even with the looser definition of the term. But it’s possible with some planning and discipline.

Here are some of my favorite resources for helping me stay on track. I hope you find them helpful!

  • frugalwoods.com: The Frugalwoods have an amazing challenge going on in January of 2017! You’re going to be living within your means by February, if they have anything to say about it.
  • daveramsey.com: The ultimate king of debt-free living isn’t going to take your excuses. Rice and beans, beans and rice, until your debt is gone. Amen.
  • hisandhermoney.com: Tai and Talaat will have you cutting your expenses or growing your income with their podcast and blog.

 

The Tightwad Gazette: Timeless Financial Advice for Your Family

What financial advice stands the test of time?

Financial advice must go beyond simple math lessons. The important stuff doesn’t have anything to do with cereal coupons or BOGO sales at the QuickMart. The best financial advice starts in our minds and hearts, giving us the right motivations and perspective on how we’re spending our money.

Years ago I was a fairly hysterical young wife and mother. And I mean hysterical in the “hey, that lady in the library’s budgeting section should be medicated,” not the “ha-ha, she’s funny kind of way.” 

I had a lot of goals for our family and we didn’t have buckets of gold dropping from the clouds. I turned my energy to learning everything I could about frugal living, budgeting, and stretching our income.

The dream that keeps on giving, I tell you

And this is where The Complete Tightwad Gazette  (*affiliate link) came into our lives, for better or worse. I found a copy in our little bitty library, a giant, 959-page tome of light shining into our financial situation. Amy Dacyczyn was a woman not unlike myself– a mother who wanted to raise her family in a certain way, and she was going to require some ninja-level skills to achieve her dreams.

Her dream was to have a big family (six kids!), live in the country in a charming old farmhouse, and not use daycare. This was a tall order, even back in the 80s and 90s.

The Complete Tightwad Gazette is a compilation of all her ninja-level frugal living skills, bound up for us today. But let’s be honest– we’re not living in 1992 anymore. Some of the advice in the book is now a bit laughable. For example, there are several entries on how to save money on stamps and envelopes. I can’t even imagine worrying about envelopes today. There’s also an article on saving money with CD membership programs, and some random advice on powdered milk.


So let’s skip all that and get right to the stuff that still applies to our lives today. Here’s the financial advice from Amy Dacyczyn that changed my life, and my family’s future. I’m confident this still applies for your family, too.

Set your family’s goals, then work relentlessly to meet them.

There’s no point to frugal living or budgeting if you don’t have a goal. Even if your plans are as simple as Save enough to pay off the last doctor’s visit, that’s fine. But the goals and the priorities are the place we all start.

It’s okay to live a counter cultural life to reach those goals.

Listen, it wasn’t normal to have a passel of kids and live in a huge old farmhouse in 1992, either. The Dacyczyns were weirdos even then. But they didn’t care. They were willing to wear garage-sale clothing and become DIY experts to live the life they envisioned. Nothing has changed in that regard.

It takes big and small sacrifices to reach the most important goals.

The most worthwhile goals require more than switching to the cheap toilet paper or using a coupon for coffee. We might have to severely limit our housing costs, our grocery bills, our insurance costs, and then still micromanage the tiny expenses.

It’s worth it in the end.

The Dacyczyns made their choices and lived with them happily. They got their big old farmhouse and raised their big old family there. They drank reconstituted powdered milk and ate produce from their own garden, exactly the way they wanted to live. Your goals might be completely different, but you can revel in your own success when you achieve what’s best for your family.

Those are my favorite bits of the Dacyczyn story. Sure, I benefited from their muffin recipe and giggled at the article on dumpster diving. But really, their life gave me the courage to set our own goals and then to be content with the sacrifices those goals required.

It’s what this entire blog is about, all these years later.

I hope you’ll pick up your own copy of the Tightwad Gazette, and let me know what works for you!


 

Super Cheap Cabinet Knobs

In a moment of frugal glory, I present to you my favorite new house project: cheap cabinet knobs.

affordable kitchen cabinet knobs

Twelve-cent kitchen cabinet knobs.

Yes, 12. Cents.

TWELVE CENTS. Okay, 12.5. They came in packages of two, and each pack cost a quarter. I needed hardware for twenty-five doors/drawers.

And if I’m going to be completely honest, I did have to buy a can of stain ($5) and a can of spray polyurethane ($7). If you add in the cost of supplies, then the total cost of the project was $15 and each knob cost sixty cents. That’s a cheap cabinet knob, right?

I won’t bother you with the DIY steps involved in the project because anyone can look up how to stain and protect wood (click here for the Minwax How-To site), and that’s not really the point of this post, anyway.

cheap cabinet knobs

The Point: Creativity and Flexibility for the Win!

My point is that creativity and flexibility can work wonders. It worked wonders in my kitchen, and I bet you have a spot in your own life that a little creative flexibility can solve. Most of us don’t have pots of money just sitting around, waiting to be flung at a project. Am I right?

Of course I am. Without pots of money, we either need to just deal with what we have or get creative. I had been dealing with what I had for six months, so it was time to get creative.

I repainted my kitchen cabinets this winter, and I was waiting for Eric to get his bonus this summer to buy the cabinet knobs. So I started shopping for the knobs a month early, trying to figure out exactly what I wanted.

After agonizing for weeks, I realized I really didn’t care what they looked like– I just wanted cheap cabinet knobs! The cabinets looked bare and it wouldn’t matter if the finish was oil-rubbed bronze, chrome, or brass. They just needed a little something.

When I realized it didn’t matter if I spent $100 on new hardware or $100,000, I headed down the the local ReStore to see what they had in stock. That’s when I found bags and bags of the little wooden knobs in a drawer. I scooped them up and dumped them out on the cash register counter, not knowing how much they would even cost.

Oh, I laugh in merriment at the counter

I think I laughed out loud when the girl told me each bag was twenty-five cents. Good grief! I wanted cheap cabinet knobs, but in my wildest dreams I didn’t think they’d be that cheap. Even if I hated the entire project, I’d be out pocket change. Eric agreed the risk was minimal and I should try it, although I strongly suspect he could not bear being forced to look at one more cabinet knob and pretend like he had an opinion. He just wanted the whole episode over.

Good news--it was a smashing success. It took a few days to get everything coated multiple times and dried, but I love those knobs to absolute death.

chandelier from the ReStore

Even more good news— while we were at the ReStore, I found a nifty chandelier to go over the kitchen table. It cost $25, which was money I now had because the knobs were costing a pittance. So I batted my eyelashes at Eric and we bought the chandelier too, and then the dear man hung it up for me that very same day.

Creativity and flexibility for the win!

Tell me about your life. Where have you been creative and loved the results?

The Complete Tightwad Gazette: Money vs. Time

Welcome back to our series on the Complete Tightwad Gazette!  Today we’re going to discuss the delicate balance between saving time and saving money.  Most families find it impossible to save both and simultaneously keep their sanity.  Yes, we could work full-time jobs while growing all our own food, but most people need to sleep.  This is why we invented grocery stores, thank you very much.

In her book, Amy Dacyczyn wrote about this very problem.  She and her husband solved the problem by coming up with a formula and a chart to determine if a chore was worth the time and money it saved.  I will let her explain in her own words:

I often time how many minutes a job requires to determine how many times I could, in theory, complete the job in an hour.  I then calculate how much money a job saves.  I multiply the times per hour by the savings per job to determine the hourly value.  For example:  A 10-minute task saves $2.  The task could be done six times an hour.  The hourly worth is $12 per hour (page 103).

She then took that hourly wage and added two other factors:  1) other values that add to the chore, like environmental impact or family time, and 2) personal enjoyment.  For example, I could keep a cow, and then make my own yogurt from the milk.  My daughter eats a ton of yogurt, so this could save me $4 a week.  Also, I’d be saving the environment by not buying yogurt in those plastic containers.

However, I have no idea of how long it takes to make yogurt when you start with an udder and a pail.  Days, I’m guessing.  And we can’t ignore the cost of keeping the cow; that’s not cheap.  And then we have to add in the fact that I hate taking care of animals, so my enjoyment factor would be about -10.  Added all up, that $4 a week for yogurt is becoming a bargain.

On the other hand, I do bake my own bread.  I love to do this, Eric loves to eat it, and I can churn out gourmet loaves of bread for about 50 cents each.  It takes a bit of time, but it’s totally worth it.

I rarely find it worth my time to run around town finding all the best deals.  I know other people who do this, coupons in hand, and make out like bandits.  This whole experience usually makes me so crabby that I am unfit company for the rest of the day, so I have given up.  But I do keep my eyes peeled for good deals, and I snap them up when I see them.  Today I found nuts on clearance at Wal-Mart for $1 a canister, so I grabbed four.  It took me about twenty seconds to save $12, and I think that was well worth my time.

If I use Amy’s formula, this gives me an hourly wage of $2,160.  And as I sit here typing this post with cashew-breath, my enjoyment of the experience is about a 10.  Win, win, win!

What are your favorite ways to save money, and how much time does it take each time you do it?

The Tightwad Gazette: Best Money Book Ever

Let’s do a quick show of hands–who out there is a huge fan of The Complete Tightwad Gazette?

Anyone?

Well, my friends, you will be after this post.  Welcome to the best money book ever written. Back in the day when our kids were small, our income was small, and our debts were huge, this book was my financial lifeline.  Written by Amy Dacyczyn about twenty years ago, the book is actually a compilation of six years of her very successful newsletter.  Yesterday I realized the obvious–this is an early version of a blog!  She wrote quick, simple articles from a personal point of view.  Except the poor woman didn’t have a smart phone to upload her pictures in a flash–she actually had to draw them all.  And then she had to print the whole thing out on real paper and mail it out each month.  I promise this blog wouldn’t exist if I had to mail it out.  I am that lazy.

As you can imagine, some of the ideas Amy Dacyczyn (pronounced “decision”) printed have fallen out of circulation since 1990.  For example, page 342 contains a reference to Breck shampoo, which I don’t think even Wal-Mart sells anymore.  And of course the internet and technology have moved past what anyone could have anticipated 22 years ago.

I will also admit, and Amy admitted herself, that some of the ideas are a little far out.  Not every money-saving idea will fit every family.  In one article she discussed how her family bought a large amount of canned goods with no labels; then they spent the next few months guessing at what the cans contained and making up meals once they opened them.  Think ongoing “Dinner Surprise” and you are on the right track.  There is no way on earth my husband would agree to that, and it takes a lot for him to put his foot down.

But when you get past the twenty year old time gap and some unusual approaches, the woman and her contributors had the right idea.  Amy’s basic desire was to have a large family, a large old farmhouse, and to stay at home with her children.  She then arranged her finances to fit until she and her husband could manage those dreams.

I’d like to share some of her principles that changed our family finances, so off and on I’ll be sharing some ideas from the book.  Today we’ll start with a foundational article called “Seeking the Minimum Level” (pg. 87).  Amy challenged her readers to think about what they were doing and buying, and why.  Do we really need all those shoes?  Do we really need the pre-packaged snacks?

Find one small thing to cut back.  Use less dish soap.  Don’t buy the new shoes yet. Go one extra day before you wash the towels.  Then continue to cut down your use until you find a level that is uncomfortable for your family.  When you’ve hit an uncomfortable point, then go back up one notch.  Just one.  Not back to the way it used to be.  Repeat this over and over with various expenses, and soon you’ll have trimmed your family’s finances with little stress.

How simple, and how beneficial!  Thinking differently will have you spending money more wisely.  What are your financial dreams?  Are you willing to try anything new to reach them? Let me know what you think!