|Our Home school poster teaching|
money basics. It's from the thrift store ; )
I began to wonder after reading the Cable Savings Post where else I had saved a lot of money without noticing? I have to say that I while I enjoy being frugal -its a fun hobby- but I almost never cut back in a way that is uncomfortable or inconvenient. So, it was really a shock to me that I had saved $20,000.00 without realizing it - and I was intrigued. I started thinking back . . .
The Spending Diary Experiment
More than 20 years ago, I was young, single, and had a decent income - not wealthy, but made plenty of money to be comfortable. I had several friends with the same employer, and we all made about the same amount of money. One day it occurred to me that some of my friends had a sizable savings account. Some of my friends had some very nice purchases they had bought with their income. But, I had neither savings nor purchases. Why not? What were they doing that I wasn't?
I set out to analyze my spending patterns, and figure out where the holes were in this sieve of a budget of mine. For one month, I wrote down every penny I spent. Then, I sorted my spending into neat categories. What did I discover? It was quite surprising to me at the time . . . my money had ALL gone to things that only cost 50Cents - or a Dollar - or Five Dollars - maybe Ten Dollars at the outside. A soda from the machine at work. A sandwich from the snack bar. A taxi ride where I wanted to go. Admission to a movie. A casual dinner out. I had been "nickled and dimed to death" as the saying goes.
I started watching those little purchases that don't seem like very much at the time. The things that advertisers like to tell you that you can have for "only $1 a day!" And then, I eventually stopped noticing that I was doing it - it was just habit.
Which brings me back to my surprise discovery that I had saved $20,000 - and my curiosity about other savings that might have escaped my notice . . .
We'll start with the Cable entry, Above
|Our retired television. It doesn't get digital, and as you|
can see, it has seen better days!
Cable TV $20,000Figured at the rate of $1000/year for 20 years of no Cable TV. I originally cut it to save money, but over the years have been absolutely elated not to have that junk in my house, so after the original cut, it was completely painless : )
Beverages $20,000There was the day that I was talking to a sales lady at my house. She absolutely hated the fact that she had to work outside the home - she much preferred to stay home with her three kids, but just couldn't figure out a way to finance it. I offered her a soft drink from the fridge. She declined - she said she'd just drop by McDonald's on the way to her next appointment and buy one there. She said she did that about three times a day. I realized that she paid about $1000/year on Soda -above and beyond what I pay for my occasional grocery-bought soda or coffee (I have long avoided purchasing either Sodas or Coffee out - except on rare occasions). I am only including soft drinks and coffee in this calculation, not hard drinks - on which you can save substantially more. I was not raised with the habit of buying hard drinks out, so that has never been in my spending calculation. Over the last 20 years, had I saved another $20,000? Who knew?
Hair Care $20,000
There was the time I was speaking with a friend who told me what her salon bill was - and how often she went to the salon. I think her bill was probably pretty normal, but it was a shock to me. I haven't been in a salon in 20 years. I bought a clipper set, scissors & attachment 20 years ago, and watched a library video on how to do my own cut (which means it costs me $1/year for cuts!). When I began coloring my hair, I didn't even check salon prices - I started buying home hair color for about $8 a pop. (My hair started turning grey when I was 12 - so I'm not even mildly embarrassed to tell people I color it!) Which, as it turns out - saves me about $1000/year over the salon rate. Does my hair look as nice as my friend's? No. But I can live with that - it looks the way I want it to look. So, that was another overlooked $20,000.00
|My haircutting scissors. From the dollar store, of course!|
Student Loans $30,000
Then, there was the person I knew who took out student loans. She took $5,000. in loans, but when she graduated, could not get a job in her chosen field. But, she also didn't have the "luxury" of staying home to raise her children because the loans were due. The Federal government-imposed fines, penalties, and interest began accruing & compounding. The next thing you knew, she owed $50,000.00! (Which means, that she lost $45,000.00 with absolutely no benefit!) When I studied, I refused to take any government loans - partly because of this cautionary tale. I was determined to find ways to finance my education without participating in the government student loan program. I decided that for me, I would either get an education without student loans, or I would remain uneducated! I did incur some minor personal debt (the same amount accrued on average by students who DO take out loans) - but none affiliated with the federal student loan program -and it was all paid off quite quickly when I was done with school. When I was done, I had saved $20,000 in comparison to the national average! I had ALSO saved the average $10,000. in interest the average person pays (or $25,000 in interest the person with Extended payment pays - but I'll go with the lower number here.) I know someone else in a similar predicament to the first person I mentioned here. Except she owes $100,000.00 for student loans. She cannot be a stay-at-home Mom as she wishes because she has to work -not to support her family - her husband does that - but she works exclusively to pay her student debt.
So - what do we have so far? $90,000?
OH - then there's the car. I've never driven a new car, or a car with a car payment. The average new car costs $26,000. After interest, you end up paying $33,000. And, lets assume a less-frequent than average new car replacement of every 8 years - meaning I would have bought 2 cars in 16 years of single adult life, for $66,000. In reality, my cars' purchase price AND maintenance has come in at well under $20,000. So, that's another $40,000.00 saved - without my even noticing. And, just for the record, maintenance on my used cars has not been the difficulty that new car buyers assume - it's generally been a pretty simple matter.
There were several years in which I did not choose to have a car - in those years I saved substantially more - probably thousands - but I'm not entering that into this calculation because it is a solution that may not work for everyone - depending on the quality of public transportation where you live and the walkability of your community.
Of course- then I went Vegetarian about 18 years ago. And Vegan about 4 years ago. I'll conservatively estimate that I saved $1. a meal on meat, dairy & eggs (I believe the actual savings are higher, not to mention possible lower medical bills which are really hard to estimate -but I'm being cautious here). I make it a policy not to replace expensive animal foods with expensive vegetarian imitations - I generally eat very inexpensive food. I'm guessing that's saved about $20,000.00 on food for one over 18 years. (not counting savings for the whole family, which is a more complicated calculation). For more information on saving money with a Vegan diet, check out this post!
|Vegetarian and Vegan meals can save a TON of money!|
Which brings us to $150,000.
Then, the other day, I read an article that said preschool costs about as much per year as college! By Homeschooling Preschool, we saved about $15,000.00 over two years. I pay about the same amount for books, materials, and supplies in a year as my friends do for their public school kids' school supplies. (My continued homeschooling saves the taxpayer an additional $14,000.00 per year if we selected public school, or saves us an additional $8 to $20,000.00 a year if we selected private schools - but I'll leave that out of this calculation). I did not choose to home school preschool in order to save money - I chose it for a myriad of other reasons - my Faith, my relationship with my daughter, a better quality of education, etc. The financial benefit was just a side effect.
So, we're at $165,000. - right?
For many years now, I have bought the lion's share of clothing & household goods at thrift stores. When I worked, I got my work clothes, including several business suits for $20. each that would have retailed at $300. As a housewife, I bought my Slow Cookers, Baby Equipment, Food Processor, Toys, Home school Equipment, Clothing, Luggage, Books, (those that weren't from the library, anyway), and many other items all at about 80% off retail (depending on the item). I think it is very safe to say that I've saved $10. a week this way (Of course, I could have saved even more if I had BOUGHT more! ; ) . So, there's another $10,000.
Books & DVDs $5,000
Which reminds me! The library! When I was young I didn't KNOW that the library carried cookbooks! It is so wonderful to be able to bring a book or video home and enjoy it. The ability to preview a book that I like, read it and THEN decide if I want to buy it has easily saved $20/month. Sure, I buy the occasional wonderful cookbook. But nothing like the HUGE collection I was amassing when I was unaware that the library offered this great service. Additionally, you can bring home magazines that are 1 month or more old, and enjoy them just as if you subscribed - if you want to be really seasonal, get the one from exactly 1 year ago. We also get most of my daughter's DVDs for viewing at the library - since we don't have a TV. So, that's about $5000. more.
|Want to read the latest title? Don't drop $30 until you've read it!|
Check it out from the library, and find out if it's worthy of your collection.
Meals Out $15,000
We enjoy going out to eat - and as I said, I don't often cut corners where it hurts. So, we do go out to eat when we want to. But only when we want to! I try to always keep a frozen meal or two in my freezer, and a quick-to-prepare meal or two (like pasta or bulgur) on the pantry shelf so that we aren't forced to eat out because of time or exhaustion - but only do it when it's fun. I also prefer restaurants that run about $5/ plate less than the going rate in our community. I'm not talking about fast food here, just a slightly less pricey sit-down establishment. If we skip dining out once a month because we have a meal in the freezer, and save about $30, and once a week we spend $10. less than we otherwise might, that's $70 a month savings, without inconvenience - for about $15,000. more savings.
If you'd like ideas for stocking your freezer, try these posts:
Greek for a Week
Indian for a Week
Make Sauce Tonight, Have Easy Meals for a Week
World Tour One
World Tour Two
I want to emphasize here: when you eat at a restaurant, the "food cost" of your meal is only 30% of the price you pay. That is a basic fact of restaurant management. The rest of the cost of the meal is for staff, overhead, rent, advertising, profit, etc. SO - EVERY TIME you eat at home, you save & 70% on food!
|Having a meal in the freezer can save you from going to a restaurant|
when you don't want to. Each time you avoid going to a restaurant,
you save 70% on your meal!
Gas & Electric $5,000
I have to be honest here - I really ENJOY having utilities, and I don't scrimp the way some people do. I'm chronically cold by nature, and don't enjoy turning down the thermostat and throwing on an extra sweater. I can wear ten sweaters and still be cold! I think "room temperature" should be about 78! But, I am able to keep the thermostat at a slightly more reasonable level by using an electric blanket at night, an electric throw blanket in the daytime when at my computer, and, yes, wear an extra layer in winter. The rest of the family is naturally comfortable at a temperature below 78, and this allows me to comfortable, too. But, we employ a few simple changes that help our bill a lot. Our house has walls that are shared with the neighbors - so we only have to combat the winter wind on two exterior walls instead of four. That is HUGE. In fact, I have a friend whose utility bill on a stand alone house is three TIMES what mine is. We have a programmable thermostat, so that we can turn the heat down or off when we're not home (although more often we just manually switch it when we leave for several hours). In the summer, we try not to turn on the oven to combat the air conditioner (and since I'm always cold - we don't turn the A/C as cold as some do). I put the slow cooker outside to cook on the porch! And we close the blinds to keep the summer sun out of the living room in the afternoons. They're small savings, but over many years, they add up! We actually save about $70 a month over the average for our city (you can easily google the average utility costs for people in your city, if you'd like to see how you measure up. Here's the link for Ohio's PUCO).
Things I didn't include here
There are lots of places that I have saved huge amounts of money, but had absolutely no desire to spend in the first place! Sporting goods, sporting events, ski vacations, dance lessons, costumes & uniforms, video game systems & games, trips to Disney, upscale home decor & furniture, pricey mall outfits. A "smart" phone (which doesn't seem to make people any smarter at all! ; ) These, to be honest, are things that simply don't interest me, but that many people spend a lot of money on.
As we walked through Pottery Barn at the mall the other day, and glimpsed some of the prices, a friend (who knows me well, and knew I was drafting this post) joked, "Just think how much money you've saved by not EVER shopping here!"
I never started smoking - but you COULD count that as a savings of $5,000 a year! I didn't.
I also didn't include those areas of spending that I can't quantify - even though I am sure they add up to substantial additional savings. Like when I choose the $1 hand lotion instead of the $6 kind, make my own cleansers, or get a small toy at the dollar store for my daughter instead of splurging at the toy store.
The Moral to the Story
If you scan these savings, nearly all of them were savings on small, everyday, habitual purchases. Only a couple of them were "big ticket items." But the small things REALLY add up. I think this is a good lesson for many areas of life.
Just as a constant dripping of water will wear away a stone - but a bucket full of water thrown all at once will not (as many ancients observed), a little habit adopted regularly often has more impact than a big change.
The truth is, our relationship with God is the most important area of our life. It doesn't matter how much money we save if our Spiritual life is a shambles. But, of course, how we use our money is an important PART of our relationship with God. If we buy a sandwich for a poor neighbor instead of a fancy coffee for ourselves, that IS a Spiritual decision.
In areas of our Spiritual life besides finances, If we want to improve our Spiritual health, doing a couple of "little" things faithfully - every day - really adds up. A few minutes of prayer, a few minutes reading our Bible, a few minutes helping the poor, a couple of hours in Church, a small daily abstinence from an addiction, passion or vice. None of these things seem huge by themselves, but they do add up over time.
|Spiritual growth is stimulated by doing small things regularly.|
Reducing our intake of unhealthy food, and replacing it with healthier food - one meal at a time - will, over time, improve our overall health. Most of us (including me!) are tempted to go on drastic, fad diets or periods of extreme abstinence when we see our health or our weight sliding out of control. But, most of us cannot sustain such changes, and it doesn't last. In fact, the drastic diet may well harm our health. We want to loose 50 pounds in a week! If we ONLY lose a pound a week, we get discouraged. But, if we lose a pound a week for a year (or a half pound a week for two years), it will ADD UP to 50 pounds! If we can keep the little changes in place, we CAN improve our health, slowly, surely.
and, of course,
Keeping your eye on little purchases will often add up to big savings - without you even noticing it! : )
But, it's your decision what you save money FOR. Perhaps you want to pay off debt, help the poor, give to the Church, be able to afford to stay at home with your kids instead of holding a paying job, have a nice vacation, or finance your kids' college. Whatever your goals, the method is the same.
Keep a spending diary, and discover where you're spending money that you're not really ENJOYING what you get for that money, or where it doesn't really mesh with your values in life - and cut those areas first.
The fact is that I didn't know I had "saved" $200,000 precisely because I didn't SAVE all of it in a bank. Most of the saved money went to my other priorities. And that's a good thing : )
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