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Friday, December 3, 2010

Failing At Frugality

Frugality was heavily featured in 2010.  Getting out of the red is the new black, so to speak, and being frugal is hip, it would appear.  Far from being hip (far from it), frugality for us has been the status quo ever since we got married, which was in November of 2001.  The market had tanked since September 11, and there were many rumors of layoffs where we both worked.  We decided then to refinance our house, which was at 7.5%, and got a new rate of 4.75%, which when coupled with just paying the principle and interest only, cut the mortgage payments nearly in half.  We did this so that we could manage to keep the house if one or both of us were laid off, which we fully expected.    Steve and I have been living beneath our means for many years, and have a padding of a few months' living expenses should the very worst happen.  That's why when I lost my job in September of 2009, I was bummed, but I wasn't panicked.  I'm still not panicked.  In all honesty, I love being home, but I am starting to feel the strain of not being 'out there' because I should be.  I also don't love that Steve is pulling all the weight, and frankly, I'd like him to not have to work where he's working.  Things have not been great for him since the company was purchased two years ago, and the stress is starting to tell on him.  He actually woke me up grinding his teeth in his sleep the other night.  So I need a job so I can get him out of there.

I'd really like both of us to not have to work.  Early retirement, to my way of thinking, is a fairly noble goal.  Do what you need to do so that you can get out of the race and leave your job open for someone who needs it.  And unless you're a trust fund baby, which I am not, you have to be frugal and do what you can so that you don't have to put off retirement until you're too old or sick to enjoy it.  I'm reminded every once in awhile that my dad was diagnosed with brain cancer at the age of fifty-six and died when he was sixty-two. He didn't get to retire.

The conventional wisdom is that to be able to retire at a fairly young age, you need to be frugal, and whatever's left over you invest.  For more information, you might want to check out Early Retirement Extreme blog.  I'm not sure that at the late stage of fifty-one years of age, I could actually qualify for retiring early, especially since it will be awhile.  I would just like to retire at a reasonable age.  But I'd  also like my husband, who is six years my junior, to be able to retire with me, so he would be retiring early.  And to do that, we need to pay off the house and invest as much as we can, and to do that we need to be frugal.

Being frugal, I've discovered, is a lot like being on a diet.  I understand all the rational reasons for frugality, but like dieting, once you're committed, it's really hard to stick to it.  We'd planned to really cut back on spending starting in November, but I needed a new crown.  Steve needs a bite guard.  Then the car needed $510 of work this month, and next month it will need close to $1000, which needs to be done before we leave for Mom's for Christmas.  Today I had some blood tests done, although the bill probably won't show up until next month.  This is all stuff that we can handle without a problem (because we don't spend everything we make) so I'm not complaining about this stuff ruining my efforts at frugality.  Stuff happens.

But I didn't really need to hit three times this month.  The first time was to get an iron trivet for the wood stove so that I can keep a kettle hot on it without actually boiling all the water away.  The second time was for a DVD that I wanted for Steve.  The third time, I really tried not to buy The Girl Who Played With Fire, by Stieg Larsson, but there were fifty-six holds on the library's copy, and I can't wait until sometime next spring to read the next installment.  Besides, the neighbor from whom I borrowed The Girl With The Dragon Tattoo also has the third book, but not the second, so I should really return the favor by getting the second and lending it to her.  You see how I rationalize all this stuff?  Steve also purchased a false bottom for his mash tun, and I think he said he needs a length of heat proof hosing for it.  On some things you can't compromise.

I've already decided that with the beginning of 2011, I'm going back to recording absolutely everything we spend, which I haven't done since we left Florida.  I just got out of the habit and haven't gotten back in it, but it's time I did.  This also means that I'll have to set a budget for 2011, which I should probably get started on today.  Part of that budget is to earmark $2000 a month extra for paying down the principle.  If I can manage it, I can get our mortgage out of the way in a little under five years.  I may not be able to do that if Steve jumps ship and goes with another job, but I'll do it as long as I can, at any rate.

So going forward, I have to be a lot better about not spending online, or anywhere else, for that matter.  Books are usually in the budget- I mean, they've always been before, but I need to show a little restraint the next time.  I also need to figure out some other things to do.  Generally, we don't spend a ton on food because I'm a scratch cook, and we don't go out to eat that often.  We are going to the movies this afternoon (more on that later), but that's usually in the budget too.  I think the best way for me to watch it is to go back to recording everything.  I think I also need to do that little trick of writing down what I want and then waiting a month, and then if I still want it, then figure out how to do it.  Maybe part of the budget should be to set a goal of seeing how much cash I can hang on to every month.  I'm much more motivated when it's a game.

And since I started this post, I've received a letter from the State of Oregon indicating that my unemployment benefits have expired.  Boy! They sure didn't waste any time, did they?  Congress just let them expire and the State jumped on that bandwagon.

This just means that I have to redouble my efforts at frugality, and at finding work.  Failure isn't an option this time.


Miriam said...

It sounds like you're on the right track - every suggestion I thought of you wrote about a few sentences later. I definitely find writing down everything I spend, and trying to delay purchases as much as is reasonable, both work for me.

One thing I have found since Kim and I quit our jobs, is that being self-employed (I work as a Math tutor 10-15 hours per week) means I make more per hour than when I was in the classroom. Plus I have control over how much and when I work. Is that an option for you - any kind of home-based business you could set up?

I read "Your Money or Your Life" by Vicki Robin a few years ago, and it really changed my thinking. I certainly don't follow the whole program, but the process of figuring out how much I actually made (after deducting for travel expenses, someone to clean my house because I was too busy and tired, special work clothes, and all those meals out) was a real eye-opener for me.

Good luck!

Tamar@StarvingofftheLand said...

Since I haven't had a real job for over 10 years, and my husband's never had one, we've always been careful about spending. When you don't know what's going to be coming in, the best plan is to spend less.

My single best strategy for doing that is going to estate sales. Not only do we find much of what we need at a fraction of the price -- from little things like kitchen utensils to big things like power washers -- it ruins us for retail. Once I got the LL Bean barn coat for $4, it's become nigh on impossilbe to shop from the catalog.

You're unlikely to find the false bottom for the mash tun, but you'll probably find lots of books (usually for $1 or $2 each), clothes, garden tools, building materials, kitchen stuff, and even ordinary supplies like plastic bags and canned goods.

It takes time, of course. We often spend a good part of Friday or Saturday morning driving around (which takes gas, of course) to a couple of sales. But one advantage of not having a job is that you often have time.

As for movies -- we have a Roku box that hooks up to our TV (we don't have actual television), and it's gotten so that I don't even enjoy going to the theater anymore. Someone's always eating those disgusting nachos that smell so bad.

Now that I've outed myself as a cheapskate curmudgeon, all that's left is to wish you luck!

Paula said...

Miriam- I have been racking my brain for many months trying to figure out if I could do some sort of home-based business, but I haven't come up with anything good yet. I haven't given up on it yet though, because the jobs news for November was pretty bad and I'm not expecting to find anything soon. Maybe January will be better. But I'll keep thinking.

Tamar- the estate sales are always a good idea. I really want a fondue set (I haven't met a cheese I didn't like yet- oh wait, yes I did: jalapeno jack. Nacho cheese doesn't qualify as cheese, in my book) and have mentioned to Steve a couple of times that I want one- and the first thing he said the first time I mentioned is that we're not buying a new one and that those are always being thrown out in second hand stores. And don't worry about outing yourself as a cheapskate curmudgeon- I'm married to a grumpy cheapskate curmudgeon, so evidently I have a soft spot for them.

Joleen said...

Like Miriam, I read 'Your Money or Your Life' last year. I need to get back to practicing it again too. Paula - make a list of the things you love to do and your talents and then try to figure out how to make money doing them. Even it it's 'driving' - how many mom's need someone to pick up their kids after school and take them to after school care, or seniors who need a ride to the market, etc. . .

Jennifer Montero said...

I was going to add my considered comments about frugality and the joy of controlled consumerism, then I read Tamar's comment...You guys can get NACHOS at the MOVIES?!?!

Then I remembered one of my favorite jokes: what do you call cheese that isn't yours? Not'yo cheese! Geddit??

I'm so sorry about all that...I did just eat half a bag of doritos for the first time in years. I think the chemicals are making me a bit mental, and processed cheese-obsessed.

I was made redundant in 2009, just after our accident. Mike wasn't able to work without my help for nearly another year. We had to be frugal, not knowing if Mike would ever get well again or if I could get another job in this economy. And our house was tied to Mike's employ. It was a frightening time.

But we've never lived beyond our means, and I knew I could tighten my belt, and that I was employable. And we have socialised healthcare - a BIG relief.

But living frugally doesn't feel like a punishment; just the opposite. I get a kick out of repurposing things and finding creative solutions to a problem that someone else might simply throw money at to fix.

The more problem solving skills I develop, the more capable I feel. The more capable, the more self-reliant. And it's the self-reliance that makes me feel safe, content even. You can't buy that in any store.

I can take care of myself. I can make or fix a lot what I can't afford. And I'm forever surprised by how much I don't need.

I'm going to join you in writing down my expenditures, just to see how we're doing. In 2011, staying out of the red will be the new black for us. That was a great post.

Again I can only apologise for the cheese outbursts...

Toni aka irishlas said...

I think every little step you take is a step towards frugality. Even the smallest step. Hopefully, all those little steps make a leap and add up to a personal goal.

Early retirement. What a glorious goal that would be. Me, I'm shooting to retire at the "legal" government age of 66 years and 10 months. Seems like another lifetime away....

Great post, Paula. Lots of things to think about.