After our expensive year in 2016, we set ourselves a goal to reduce our spending by 10% in 2017. We want to do this because it has a double effect. Firstly, it frees up more money to invest for our future. Secondly, if we can live on less, then it brings that future much closer. In 2016, we spent $80,000. To generate that using passive income and the 4% rule, we would need $2,000,000 invested!
How did we do for January? Our daily spending rate goal was $194.34. We only spent $131.40. One month down, but I’m not becoming too cocky – February only has 28 days, and we have some solid expenses due, along with an unexpected car repair. Anyway, let’s look at some detail.
Food is one area we identified with significant overspending. This is how our food spending for Jan 2017 ($838) compares with Jan 2016 ($1,318).
(If you are unable to see the graph, you can view it on Tableau Public.)
Based on the strong advice of Adventures with Poopsie (AwP), we have begun shopping at Aldi for our groceries. We are lucky to have a Woolworths next door, so whatever we can’t get at Aldi, we can pop across and top up. I have to say that AwP was right – it is much cheaper to shop at Aldi. Some weeks we can get almost everything at Aldi, others we have to do more next door. What I have noticed though, is that while we buy only 20% of our items in Woolies, we spend nearly as much as the entire Aldi shop!
We have also been better at avoiding items in the “Groceries Want” category. These are the high sugar, high fat (delicious) snacks that were often impulse buys. I’m still working on self-control, so it is better for my health to not have them in the house.
I was a bit worried about learning to shop in Aldi (you know how you get used to a grocery shop and know where everything is?) It didn’t take me long to get used to Aldi at all, and when I go into Woolworths now, I find the range of choice overwhelming. Aldi is the equivalent of uncluttered grocery shopping!
You’ll also notice that our alcohol expenditure has dropped ($36 vs. $89). We were having a glass of wine (Mrs. ETT) or a whiskey (Mr. ETT) nearly every day after work, and quite frankly that is a bad habit to get into. We don’t need to spend the money, and we don’t need the extra kilojoules. We haven’t given up drinking, we are just more judicious about when we do so. I even cancelled my Naked Wines subscription, which was difficult because I enjoyed the business model and the wine. Still, that will save us $480/year, or nearly $12,700 over 15 years according to the Latte Factor Calculator.
Last year, we spent $508 on eating out – this year, it has dropped to $335. Even so, it still represents just under 40% of our total food budget – we’ve actually increased a percentage point over 2016. Included in the “Both” category and two meals out together, and a takeaway after a particularly harrowing day.
Our monthly life insurance premium fell due, and it has increased slightly from last year as one of us moved up an age bracket. I’ve mentioned before that a goal is to review our life insurance. We are paying through our Superannuation as well as privately, which is a waste of money. By February I will have done my comparison and acted to remove one of the accounts. Please hold me to account on this, because it is NOT something I am looking forward to!
Gifts and Giving $130.50 each
Last year we spent a lot on gifts for people who want for nothing, and shamefully little on giving to causes that want for a lot. This year we are matching charity donations to whatever was spent on gifts for that month. Mr. ETT and I each chose 6 charities independently, then we draw one out of a hat each month to determine who is the recipient. (Because we aren’t spending evenly throughout the year it felt fairest to randomise). This month we donated to one of Mr. ETT’s choices, Guide Dogs Australia, I bought a couple of issues of The Big Issue magazine (this is an excellent magazine, I highly recommend purchasing it if you come across a vendor), and we went in a Rotary wheel draw. My number missed by one ☝️!
I did try to cheat on the daily spend rate a bit this month. I paid 50% of my HECS bill to the Tax department because I wanted to split it out over a couple of months, hoping the effect on the daily spend rate would be lessened! This may have backfired on me though, because my car broke on Australia Day when we travelled to the Blue Mountains to visit the Gnome Convention at Glenbrook. Have I ever mentioned how much I love the NRMA?
While I fall within the healthy body weight range, I actually weigh about 10% more than is normal for me, and I’m very unfit. Much like lifestyle inflation can negatively impact your financial future, succumbing to the dreaded middle-aged spread can impact your future health. At the end of last year, through some introspection, I identified that I ate too much. I ate because I was bored. I ate because I was stressed. I ate when something in the fridge or cupboard caught my eye. I couldn’t remember feeling hungry – I was constantly eating before my body had the chance to fully digest and process my last meal.
I decided to try to implement 3 small changes to habit:
No sugar in my morning coffee. Result A+
I have a cup of coffee every morning before work, and on the weekends. A few years ago I cut down from two sugars to one, and it wasn’t that difficult. I guess it’s kind of reverse hedonic adaptation. This year I have cut sugar from my morning coffee entirely, and again, it’s been fairly easy for me. I’m not giving it up altogether – if we go to a café, I will still order a delicious hazelnut mocha, with all that syrupy chocolaty goodness.
Go for a walk before work one day a week. Result A+
I don’t like the idea of exercise. I’d much rather be inside learning or reading or studying. Happy to exercise the mind, not so much the body. That’s why I started with only one day a week, and I hooked it onto a habit I already had. I’m very much a morning person. I study for 20 – 30 minutes each morning before I begin getting ready for work. I resolved that I would give up the brain exercise one day a week in order to incorporate some physical exercise. To make sure it happens, I prepare my walking clothes and my work clothes the night before. I’ve also tied it into a day I need to wash my hair anyway. That way when I come back all hot and sweaty, I feel good before I go to work.
Eat less. Result C
I’ve been doing well at work – taking only the food I need for the day, removing snacks from my “just in case” drawer, having lunch only when I’m hungry, even if that isn’t until 3pm. I’m also drinking a lot more water, because every time I get the urge to eat when I’m not hungry, I grab a glass, start drinking and usually manage to distract myself back in a task for a while.
Where I am failing fairly regularly is at dinner. I’m still serving up portions that are too large, and not giving my body enough time to send satiation signals before going back to get seconds. Even last night, I stopped half way through my dinner, said “I’m full”, then continued TO EAT THE REST ANYWAY! Then, I felt bad because I was too full. Small steps. Next time I will be more aware and force myself to stop.
While this has definitely been a good start to the year, the car repair has already affected February’s spending. Nothing we can do about that, so the focus will continue to be on our food.
What did you do on Australia Day?