Living Frugally

Hi all,

Back on January 1, I made the traditional goal to save more and spend less.  So far it's been going okay.  That's it.  Just okay.  Honestly, I haven't made any HUGE difference in my life to really accomplish this.  I've decided to post my financial journey on the blog to encourage me in my new, more frugal lifestyle.

For any of you also struggling with this, know that you're not alone.  So many people struggle with debt, spending addictions, and not knowing anything about finance.  Reading blogs about how other people overcame or are working to overcome financial mistakes, debt, being ignorant of money, etc has been an enormous help to me in deciding to adjust my lifestyle and make a commitment to save.

First, a little background.  When I moved home from China, I had a little under $2000 to my name.  $860 of that was already set to be paid to my dad since he bought my ticket home.  That left me with $1100, no job, no car, living at my parents, and in desperate need of new clothes since I had left a bunch in China and the ones I did have were very worn out from traveling abroad, not to mention, they weren't very professional for any type of job interview.

I went about things in a bad way.  The good news, I found a job and was set to begin working only 5 weeks after I got home.  Here comes the bad though.

I immediately went out and got a whole new wardrobe since I would be working a "professional" job and needed to have the right clothes.  All of this went on my credit card.  Then I bought a car (before I had the job, mind you) so I would be able to get to interviews, and then to the train station to take the train into work.  I had previously borrowed more money from my parents before I had the job to pay for food.  My first paycheck went to them and trivial things that meant nothing.  My second paycheck went to Christmas presents.  By the time the holidays hit, I was back to broke.  As soon as my next paycheck came in, I bought a very expensive DSLR camera since photography had become my new obsession.

Things continued that way for a while.  Luckily, living at home allowed me to save enough to move out, however, my bad spending habits continued the same way, now with the addition of rent.  Slowly I began spending more that I was earning, went on a few vacations, and before I knew it, I was out of money and back in with my parents.

This time, I want to do things right.  Some of the changes I made have started me moving in the right direction, although there is still room for a lot of improvement.

1) I downloaded Mint onto my phone as a financial planning resource and an easy way to help keep track of my spending and my financial goals.  If you aren't using this, you should start.  It's free, easy, and very valuable if you actually use it.

2) I started contributing to my 401K.  Not only is this saving me money for retirement, it's also taught me a lot about the language and lingo used in the financial world.

3) I set up automatic deposits from my checking account into my savings, every payday.  I like it this way because I like to see the total amount come into one account and then control where it's going from there, rather than setting up my direct deposit to go into multiple accounts.  Either way is fine though.

4) I opened up two more high interest saving accounts.  I now have a dedicated savings account for emergency funds, travel and play, and saving for a deposit on a home.

5) I paid off my credit card.  Luckily I didn't have much credit card debt.  I only have one card with a low limit so it didn't take long to pay off.  Changing my mindset to not using my credit card though has been difficult.  It's been a struggle to stop the mentality of 'buy now, pay later.'  If I don't have the money now, I can't buy it.  Sometimes I still make a mistake with this.

6) I increased my tax withholding so I wasn't lending the government my money for free then getting a huge refund at the end.  Now I take home more each paycheck, use it more wisely, and get a smaller return instead of seeing a bigger sum coming back and spend it all at once on something stupid.

7) I stopped going to movies, to bars, to places that cost me money in general.  I've spent a lot more time finding things I can do for free and include my dog.  It's been great for us both.

Now for the things I still need to improve on.

1) Stop eating out so much.  I eat out a lot.  I don't like to cook at home because I am vying for kitchen space along with my parents and my younger brother and his wife when we're all trying to cook at the same time.  I need to get over this and just cook anyway.  The amount of money I'm spending at restaurants each month is absurd.

2) Only making the minimum car payment each month.  Now that my credit card is paid off, I need to start paying more on my car.  I don't want to have a car loan hanging over me forever so I'm increasing my payment amount by 35%.

3) Buying books.  I love books.  I like to own them, to see them on my shelf, to feel them in my hands, to write in them, and to reread them over and over.  But I can't do that right now.  The library is there for a reason.

5) Invest.  I need to research this more.  I am still learning about all of this and am hoping to begin investing in stocks by mid-year.

6) Gifts.  I like to give people nice things for Christmas.  Last year I cut down my gift budget quite a lot compared to the year before, but I'm planning to go homemade this next holiday season.  It will hopefully mean more to the recipients as well.

7) Commuting.  The weather is warming up.  Finally.  I want to start riding my bike to the train station rather than driving to cut down my gas bill even more.  That way, when Winston and I head up to the mountains in the car, I won't worry about filling up so much.

8) Using what I buy.  This goes mostly for food.  It seems like I am throwing away a lot of food that has gone bad since I haven't used it in time.  My eating out less should help with this, but I also need to start planning my meals more based on what I do have in the fridge so I stop being so wasteful.

9) Grow your own.  Since my parents have a huge back yard, I want to start growing a few things on my own.  It will have to be small because I don't actually own the land, but I don't think my parents will mind too much if I do a little gardening out back.

This is a really long post so if you read through it all, you're awesome.  I'm not an expert in financial planning by a long shot, these are just some of the ideas I've implemented in my personal life to get more for my dollar and plan for the future.  If you have questions, advice, ideas, or just want to chat about this stuff, feel free to comment!

-Leah