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!
August turned out to have some unexpected expenses. We paid to replace our clothesline, along with our microwave. We also had a medical bill not covered by Medicare.
Daily Spending Rate
I thought that by needing a new clothesline, microwave and MRI, we would have hammered our daily spending rate. However, in August we stayed below our target for the third month in a row, hooray! We didn’t have any big bills this month, that really makes a difference. Also, just because the expenses were unexpected doesn’t mean we didn’t have the money to pay. I regularly save into appropriate categories in YNAB to cover these types of eventualities.
As I reflected after one year of blogging, I want to be more transparent in reporting our numbers. This is the first step – everything we budgeted and everything we spent via our top-level YNAB categories.
Phew, we finally came below $1,000 again, to be just over our average for 2017, which is $937.60/month for all food and alcohol. I’d like to see this come down to $900 for 2017, and ideally $800 for 2018.
In order to accommodate the extra we want to invest over and above my pay rise, I reduced Groceries Want and Alcohol budget categories by $25/month, and Eating Out by $50/month. I also finally had a revelation. It’s something I knew in my head, and had erroneously assumed we were doing. I thought, that by having an eating out category, we were prioritising our values. I’ve spoken before about how we both value eating out at cafés and restaurants. I commented to Mr. ETT about the number of new cafés that have sprung up near us that we’d both like to try.
That’s when it hit me – we were doing it all wrong. We were getting to the end of the month, and if there wasn’t enough money in the eating out category, we weren’t going out. We should be putting aside money so we can go out once a month, and then if there isn’t enough left for Mr. ETT to buy his coffee and lunch, that’s what has to go. Duh! Who’dve thought I’ve been writing about personal finance for a year? Just assigning money to a category isn’t enough. We can still have priorities even within that category. We are sitting down this weekend to plan when we will go out to dinner.
(If you are unable to see the graph, you can view it on Tableau Public.)
Groceries Want went over the new limit, but only just. I’m sure we’ll adjust. By the last week of the month, we only had $80 left in Groceries Need. I think it’s because I topped up on our “Who Gives A Crap“* toilet paper. This is a socially responsible company that donates 50% of profits to build toilets (improve hygiene, water and sanitation in developing countries.) Mr. ETT is incredibly fussy about toilet paper, but he is willing to cede on this as long as I purchase the premium paper. We’re still fighting about the paper towels, though. I think they’re fine – you wipe something and throw it away, why does it need to be premium? Also, I’m trying to move to reusable cloths instead.
Anyway, distracted. We saw we had $80 left, so we designed our weekly meal plan around that – and we only spent $36.85! We had some ingredients at home and in the freezer, but this is HUGE for us. We’ve never done this before, and quite frankly I would have said that we couldn’t. Mrs. Frugal Ears is running a $50 groceries/week challenge now. I don’t know that we’re ready to commit to a permanent change, but I’d love to try for 1 week a month.
*Affiliate link. You’ll get $10 off your first order, I’ll get $10 off my next order.
Way over. Not only over the new $75 budget, but actually over the old $100 budget as well. My only contribution to this was a $6.99 cider for a recipe. It appears that many of Mr. ETT’s social activities involve alcohol, whether it is lunch or dinner at a pub or club, or taking alcohol to friend’s places. YNAB tells me that our average spending is $75/month, though. Hopefully next month we can balance this out.
We didn’t make it out together this month, but Mr. ETT tried taking his lunch each day to see what difference it made. It made a difference – we’ve had the lowest spending of the year, even considering I had a lot of opportunities to eat out this month. My colleagues and I went out to lunch for the first time since I’ve started, which was really enjoyable. We will go out for each of our birthdays. As there’s only three of us, that isn’t too bad.
This month I ran into a friend who is also an ex-colleague and was able to say “sure, I’ll go to lunch” on the spur of the moment. This happened again when I bumped into some friends in the major shopping centre after work. I was in a bad mood, so when they said “we’re going for coffee, do you want to join us?”, I jumped at the chance. After both of these occasions, I felt great. I think I need to be more open to accepting experiences as they come, rather than worrying about spending the money!
Gifts and Giving $100 Each
A couple of birthdays this month meant that I could donate to Big Brothers Big Sisters, one of my charities again. It had to happen, we did pick 6 each!
The clothesline saga continued, when we discovered our current line was concreted into the path. Mr. ETT sat and chiseled his heart out, but it was in too deep. Accepting we had given it a red-hot go, we purchased a new one with installation and removal of the old one, for $731. This included the nifty basket holder that I wanted, along with concrete drilling to remove the old one from the path.
It turned out to be easier to simply install the new line at the end of the current path, and fill the hole in. The company immediately refunded the $80 we had paid for core concrete drilling. I have to say, I’ve been really impressed with The Clothesline Store. Their support has been excellent, and they’ve willingly spent time on the phone helping me to figure out what we need. They were punctual, and their after sales follow-up is the best I’ve seen. I’m not being paid for this!
Our microwave broke, which peeved us. It wasn’t even that old. When we Googled the symptoms, we found out it was classic inverter failure, which this particular model became known for. Panasonic no longer makes this model. Mr. ETT did the research, and to save money, I ordered through the Good Guys Commercial. Unfortunately this time it wasn’t as quick as our previous orders. Now we cook and reheat meals, we realised just how much we rely on the microwave. It’s much less convenient to reheat in the oven, or on the stove top.
Mr. ETT needed an MRI. Medicare won’t rebate because of the location (his chest), so the scan cost $600.
I forgot to mention that back in June we also reduced our personal spends because we want to go to the UK sometime next year. We don’t have firm plans yet, because it depends on my project at work, but we decided we need to save $20,000. Yes, I know this is an insane amount. I don’t want to spend that much, but I’d rather have too much saved up than too little.
I was after something that I could add to my weekly walk, that would focus on core strengthening. I’ve decided to start with Poopsie’s suggestion of using the 7 Minute Workout app from Johnson and Johnson. It appears to incorporate some of the other suggestions (although, Lars-Christian, planking?! For a complete n00b like me, I will need to start with standing push-ups. Planking might be a 2018 goal.)
So, for the rest of the year, my goal will be to do the First Timer workout once a week in September, twice a week in October, three times a week in November, and four times a week in December.
Grow Fresh Herbs
I love using fresh herbs in my cooking, but the cost is outrageous, and we rarely use all of them. I’ve been freezing leftovers for our homemade stock, but I’d rather have something I can just pick. The problem? Up until now I’ve been a black thumb. I’m neglectful, I don’t understand what the living needs of plants are, and I kill them. Well, I’ve committed now! Unfortunately, both thyme and oregano require full sun, so I won’t be able to keep them inside to remind me to look after them. Knowing I’ll have to report back here is probably the only thing preventing their untimely demise!
My third goal is to contact one of my school friends once a month. It’s been around 25 years since we left school, but four of my friends and I have all kept in touch over the years. Unfortunately I’ve noticed that it’s finally starting to drop off, and I don’t want that to happen. If I call one friend a month, I will speak with each of them three times a year, which would be awesome! I know this shouldn’t need to be a written goal, but if that’s what it needs to make it happen, that’s what I’ll do. One of my friends has a birthday in September, so I will start with her.
I use, and totally love, YNAB to track my spends and budget. Mr. ETT doesn’t exactly love it, but he does use it – super important when more than one person spends money. YNAB offers a 34 day free trial period. If you try YNAB and love it as much as I do, then by signing up through this link, both of us will get a free month in our subscriptions!