Necessary and Unnecessary Expenses

Every dollar counts

This is part of a series called How We Saved Enough Money to Change Our Lives and How You Can, Too. Click here to get all the posts delivered directly to your email inbox or feed reader.  You’ll want the inside scoop on how we saved $75,000 for the adventure of a lifetime!

One woman’s trash is another woman’s treasure.  And what’s right for me may not be right for you.  But I think we can all agree that we spend our money on things that not only unnecessary, but impractical and not even satisfying.

Why do we buy this crap?

When you don’t have a plan for your big dream, it is easy to get distracted by bright shiny objects in your everyday life.  Check out yesterday’s video post from my closet to see evidence of my past misdeeds.

For example, instead of designing your life and your spending habits to coincide with your dream of writing a book, you keep working at a job that leaves you little free time to write and you spend your money on things to help fill the creative void.  Or maybe you want to buy your own home, but you keep spending money on things to decorate your existing rental to make it feel more like your own and have no money left for your house fund.  You get the idea.

We all do these things to ourselves, often without realizing it until much later.

What I’m asking you to do today is stop and think about what you really want and how your daily actions – money and otherwise – are contributing to that goal.

How we changed our spending habits

Below are some of the changes we made to our expenses in the couple of years leading up to our decision to travel as well as the fine-tuning we did after that to save big bucks.  Keep in mind that you can make minor changes every month or quarter instead of making one big leap and still see financial gains.  And of course, your mileage may vary.  What works for us may not work for you – the idea is to get you to think about freeing up some of your money to put toward your big dream.

Tip:  Think of everything as unnecessary at first and then add back what is necessary for you.  It may seem crazy to do this with expenses like the electric bill, but as you go through your expenses you’ll see how this exercise changes the way you think about budgeting.  It is a much more productive mental process to add things back than it is to take things away.  Trust me.

Housing

• We moved from the Boston suburbs to Seattle and exchanged a big house and yard with a townhouse.
• We saved money by eliminating landscaping/maintenance fees as well as snowplowing.
• Our utility bills (especially the oil we used for heat in the winter) went down considerably.  We don’t even have an air conditioner here.

Transportation

• We sold my car before we moved, and since then we’ve paid off Warren’s car.
• Warren took a job that had a shuttle service so he doesn’t have to drive, and I now work from home.
• Since we drive less than 10,000 miles per year, we lowered our car insurance to “recreational vehicle” to save money.
• We walk to most places and use the city bus system to get around (and avoid parking fees).  The bus costs $1.75.
• Since we rarely drive, we spend very little on gas.  We actually only fill the car up every couple of months.

Food

• Our grocery bill has actually gone up, but that is because we are eating in a lot more.
• Our dining out expense has gone way down.  We used to eat out 13 times a week (together and separately), so cutting this down has helped us save a lot of money.  It was hard to change the habit, though.   Keep track of how much you eat out each week and you might be as surprised as I was to see the number.
• We like to drink wine with dinner, so we did not cut this out.  However, we did lower our standards a bit and spend time looking for good wines at low prices.  When you make your budget, you have to leave in some luxuries, even if you change them up a bit.
• Last October I gave up my morning caffeine habit, and this also cut out my coffee dates with friends.  My main drink during the day is water, which is just about as cheap as you can get and why I don’t beat myself up too much for the wine in the evenings.  In fact, I just realized that my wine habit costs less than an equal amount of Starbucks coffee per day!

Travel and Entertainment

• As I said above, we love to go out for dinner!  But we had to cut back on that as well as dinner dates with friends.  We’ve made it easier by encouraging potluck gatherings with friends, eating out for lunch instead of dinner, and socializing at a happy hour instead of dinner.  It is still very important to keep the things you like in your life – you just have to be a bit more creative.  Our latest endeavor is “Soup Kitchen Night” where we invite a few friends over to share an inexpensive pot of soup with us.  They each bring a bowl and bread or wine to share and we all have an evening that costs very little.
• We used to take one fabulous trip every year and several smaller ones.  Now we only take local trips or long weekends when we aren’t visiting family.  It has been tough to be home so much, but considering I’m soon going to be able to see the world full-time for 3 years I can’t really complain, can I?
• We cut our cable completely this summer and saved big bucks.  We started a Netflix account and kept our television, so we can watch DVDs when we want.  I like that our television watching is more purposeful now, and it has been much easier to give this up than I thought, though not without pain.  Instead of watching TV, we read, talk, cook together, learn Spanish from Rosetta Stone and get together with our friends.
• We still have a Wii, but we have not bought any new games.  Thankfully I’m content with Wii Fit and Warren is happy with Tiger Woods Golf.
• We got rid of our books through Craigslist (a homeschool father bought our whole collection at once!).  We were gifted with a Kindle and we enjoy reading The New Yorker on it for a couple of bucks per month and books that range from $7-10.  Before the Kindle we switched to shopping from the used bookstore so we could trade books back.

Clothes and Personal Care

• I used to go shopping for the heck of it.  A new pair of shoes, an outfit, or a hat were regular purchases for me.  But since we cut back, I’ve learned to rethink my wardrobe and use my accessories more.  I have bought a few things, but only a fraction of what I would have bought before the budget.  For added inspiration, check out The Uniform Project to see how one woman can wear the same little black dress for 365 days straight (thanks to my friend Paula Russell for the tip).
• Like many women, I am slightly obsessed with my hair.  I want it to be shiny and healthy and without any grays.  I used to pay quite a bit for this to happen every month, but now I color it at home and only invest in a good haircut.  We could probably save more money if I went to a different salon, but again, you have to keep some things in your life or you’ll feel deprived.  I also buy cheaper shampoo and conditioner than before.  Warren gave up professional haircuts altogether and switched to a buzzed cut that he can do himself at home.
• In keeping with my desire to live a simpler life, I’ve also cut back on makeup – both wearing it and buying it.  Sure, I still put on a little powder and lipstick/chapstick most days, but the everyday mascara/blush/eye shadow/foundation is a thing of the past.  My skin is radiant due to all the water I’m drinking, and I don’t really miss the chore of daily makeup.
• Once we got close to hitting our savings goal, we decided to treat ourselves a little and schedule monthly massages.  Warren has since stopped getting his, but I’ve become addicted to mine.  This is an indulgence that makes me feel better, sleep better, and grind my teeth less at night.

Shopping in General

• Stop going to stores and malls when you have no reason to be there.  If you are “just looking” you will always find something to buy.  At first this is weird, but you’ll see how much easier it is to save when you stay away.
• Eliminate magazine subscriptions that tempt you to buy things or live up to a lifestyle you can’t meet on your budget.   Advertising is more powerful (and pervasive) than you think.
• Shop with a list and stick to it.  I actually buy my groceries online and it saves me both time and money (no last-minute temptations to throw in the cart).  I could save more by watching ads and driving to several different stores, but because I want a walkable lifestyle this is a great solution.

One thing I want to stress is that we started our simplification process a few years ago because we wanted a better life with less stuff.  That decision led to all the other decisions, and finally we were in a place to entertain the idea of traveling the world.  We would have never been able to consider this idea had we not taken that first step to start living a life truer to who we were. That first step may be small, but in terms of your future it can be huge.

The decisions you make today about getting out of debt and saving money will open doors and spark ideas that you may not even be able to comprehend right now.  Isn’t that exciting?

In our next post we’ll talk about how to have a social life on a tight budget.  Saving for your big dream doesn’t mean that your life right now should be meaningless – far from it.

Do you have any questions about this post or how we saved money in general?  Just ask me via comments or email at btalbot (at) marriedwithluggage (dot) com and I’ll cover it in a future post.  Don’t be shy!

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Betsy Talbot writes about carving the lifestyle you want out of the life you already have. When she’s not writing, she’s paring down, saving up, and getting ready for a year of travel with her husband Warren.