s/o Oprah thread--frugality for the high income crowd - Mothering Forums

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Old 10-10-2008, 04:19 PM - Thread Starter
 
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This is a s/o from the thread about Oprah's "World's Most Frugal Family" show. I'd like to talk about the need for increased frugality and how to achieve it among those who are not low income. In particular, I am interested in those of us who have become accustomed to living a consumerist American middle-class+ life and are now trying to correct ourselves.

I'll start with my story, in the hopes there will be someone who relates: I'm in my late 20s (just barely!) partnered, no children. I make a good salary (right now about $55,000/year). My partner is a graduate student so he makes a much lower salary (about $22,000/year). We own our own home, and our mortgage is a pretty reasonable $1,300/month.

I have debt. I have about $5,000 in consumer debt, which I've been working on paying down since January (at which time it was over $11,000). I also have student loans, to the tune of about $34,000, on which I pay $300/month or so.

Somehow, though, we're always broke. Our joint account is always in single digits at the end of the month, and my personal account is in the red if I don't start using my credit cards again. Spending is a problem. Having high overall costs is a problem. Living in the way in which the media has taught me is the problem. And I am trying really hard to change.
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Old 10-10-2008, 04:39 PM
 
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Grace,

I am subbing with the hope of writing more later. We, too, would be considered "high income" and yet we are having a tremendously difficult time making ends meet as a result of a large (really large) debt load and a need to adjust our thinking about what we need and what's important.

I'll be back...

Leeann, mama to 3*magic*kids: DD 1/03 DD 9/04 DS 8/06
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Old 10-10-2008, 04:48 PM
 
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I am also in my late 20's and am trying to be better about finances also. We own our home but we have 3 car payments a month. Yes we need all cars and we can afford them but I just want to quit spending so much. My big money waster is groceries and Target trips. What I have done is listed all of our fixed expenses for the month and then listed our variable expenses. I make our money work how I want it to and when the money from the catergory is gone I have to cut back somewheres else in varialbe expenses or go without whatever it is I want.

What has saved me the most money is meal planning. I used to spend $100 every week at the grocery store and get home and not have food for meals. Now I decide what I want before I go to the store and I spend $60-$70 dollars a week on food and household stuff.

Maybe if you want to start saving more you could go to a cash only policy for variable expenses like eating out and clothes shopping.

Do you know where your money is going or are you not sure what you are spending it on?
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Old 10-10-2008, 04:53 PM - Thread Starter
 
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Oh, I know where it is going. To the dollar, almost.

Personal money
Take home pay: $3,200
To joint account: $2,000
To student loan: $275
To credit cards: $600
To medical expenses: $50
To eating out and going thrifting and swapping: $275+

Joint money
Monthly budget: $3,000
Mortgage: $1,300
Car payment: $400
City utilities (electric, trash, water): $100
Cable: $80
Internet: $60
Gas: $30
Cell phones: $80
Eating out: $200
Groceries: $400
Pet expenses: $150
Misc: $200+
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Old 10-10-2008, 04:57 PM
 
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Take a real hard look at where your money is going. We're a family of 4 living on much less than you are and used to have troubles making ends meet. Now we're much more careful about those "extras" and try to buy used whenever possible. I make much more of our food and choose free activities over those that cost money.

We've managed to save into the 5-digits this year by really thinking about our money and where it goes. Of course, we sometimes slip, but the trick is to get back on board and keep going.

Look at your bank statements. Write down every single dollar you spent last month. Where did it go? Target? Groceries? Entertainment? Clothes? What you find might just surprise you.

Welcome to the Real World she said to me, condescendingly, take a seat. Take your life; plot it out in black and white.
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Old 10-10-2008, 05:01 PM
 
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To the OP - what are you spending your money on? And what are you already doing to try to cut costs? There a zillions of ways out there to cut costs, but I don't want to waste my time writing them here if you're already doing them.
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Old 10-10-2008, 05:03 PM
 
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Just cutting out eating out (both accts), thrifting and Internet would save you over $500 a month. That's not including the 200 miscellaneous. Where is your insurance and gas put in on here?

Is this your budget or what you REALLY spent last month (line by line on bank statement)?

Welcome to the Real World she said to me, condescendingly, take a seat. Take your life; plot it out in black and white.
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Old 10-10-2008, 05:05 PM
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Quote:
Originally Posted by avengingophelia View Post
Oh, I know where it is going. To the dollar, almost.

Personal money
Take home pay: $3,200
To joint account: $2,000
To student loan: $275
To credit cards: $600
To medical expenses: $50
To eating out and going thrifting and swapping: $275+

Joint money
Monthly budget: $3,000
Mortgage: $1,300
Car payment: $400
City utilities (electric, trash, water): $100
Cable: $80
Internet: $60
Gas: $30
Cell phones: $80
Eating out: $200
Groceries: $400
Pet expenses: $150
Misc: $200+
Dining out is in your budget twice.

I assume home owner's insurance and real estate taxes are included in your payment.

The following items are missing from your budget:
Car Insurance
Car registration/tags/parking stickers
Car maintenance (repairs, oil changes, tires, etc)
Home maintenance (garden/lawn, repairs, appliance repair/replacement, furniture replacement, etc)
Charity
Clothing (repair, replacement, dry cleaning)
Insurance co-pays
Life insurance
Cosmetics and hair care
Subscriptions/Memberships (magazines, web sites, Gym, etc)
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Old 10-10-2008, 05:05 PM - Thread Starter
 
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Quote:
Originally Posted by Lisa85 View Post
To the OP - what are you spending your money on? And what are you already doing to try to cut costs? There a zillions of ways out there to cut costs, but I don't want to waste my time writing them here if you're already doing them.
I posted my general budget a couple of posts up. As for what I'm already doing to cut costs, here are some things that have been suggested here that we're doing/already did:
1. I rarely buy new clothes, just used. I did recently buy a few new things, but they were at least at outlet stores.
2. I hang our laundry. Our dryer has been broken since April and we haven't had it replaced. My partner is insisting on replacing it, though.
3. I haven't had my hair cut in 18 months or so and have no plans to.
4. I don't wear makeup or get my nails done (well, I do get 1-2 pedicures a year as a treat).
5. My partner and I carpool to work, and when we aren't both going, we take the bus.
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Old 10-10-2008, 05:15 PM
 
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If I am reading your budget right you contribute 2000 to the household budget plus pay some of your own expenses from your own account. Correct?

I see way too much money going towards food whether it be groceries or eating out. If you watch what you buy at the grocery store and only eat out once a week you will save a ton. Is that possible?
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Old 10-10-2008, 05:18 PM - Thread Starter
 
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Oh, that was more or less top-of-my head budget. Line by line, this is last month for my personal account:

Income: $3,367.56

To joint: $2,000
To credit cards: $1,118.29
Thrifting: $101.42
Eating out: $44.74
Gym dues/Weight Watchers: $22.36
Magazine subscriptions: $6.11
Savings: $100
Cash withdrawal: $40
Student loan: $257.60
Clothes: $58.34
Craft supplies: $80.76
Postage: $61.99
Total spent: $3,891.61

Deficit: -$524.05

And honestly, it was a good month for me.
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Old 10-10-2008, 05:19 PM - Thread Starter
 
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Quote:
Originally Posted by grlpowers View Post
If I am reading your budget right you contribute 2000 to the household budget plus pay some of your own expenses from your own account. Correct?

I see way too much money going towards food whether it be groceries or eating out. If you watch what you buy at the grocery store and only eat out once a week you will save a ton. Is that possible?
Yes, that is correct.

Spending on food is a major bone of contention at my house. I know it is out of control, but we have actually cut way back. My partner is a gourmet cook, and we drink a lot of wine...
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Old 10-10-2008, 05:26 PM
 
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I suspect the trouble is that he has gourmet tastes/expectations and a grad student income. Can he (and you) reel it in until he's making more money?
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Old 10-10-2008, 05:31 PM
 
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I don't mean to sound harsh but if you want to keep your account in the positive you need to create a budget and stick with it until your cc debt is paid off and you then have a little more income free to play around with.

I would cut your thrifting in half, craft supplies in half, spend a lot less on postage, and not go into the negative to pay off cc debt. Also cut back on clothing purchases until the debt is paid off.

You don't seem to have a lot of debt so if you work hard you can get rid of it. We live in a Need It Now society but honestly sometimes we have to wait until we can afford to buy stuff with cold hard cash. Plus it is more rewarding that way.
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Old 10-10-2008, 05:32 PM - Thread Starter
 
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This is the joint account last month:

Total income: $3,200

Banking fee: $6.95
Annual parking pass: $138
Mortgage: $1,248.51
Home repair/housewares: $119.20
Groceries: $359.49
Target (some groceries, some not): $321.71
Eating out: $275.68
Pets: $310.05
Entertainment: $71.97
Car payment: $300
City bill: $177
Cable: $88.29
Cell phones: $79.84
Internet: $56.97
Gasoline: $44.12
Postage: $9.80
Gas: $17.48
Total: $3,625.02

Deficit: -$425.02
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Old 10-10-2008, 05:33 PM - Thread Starter
 
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Quote:
Originally Posted by frog View Post
I suspect the trouble is that he has gourmet tastes/expectations and a grad student income. Can he (and you) reel it in until he's making more money?
Well, he has a grad student income, but as a couple we don't, you know?

The horrible part is that this IS reeled in...
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Old 10-10-2008, 05:35 PM - Thread Starter
 
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Originally Posted by grlpowers View Post
I don't mean to sound harsh but if you want to keep your account in the positive you need to create a budget and stick with it until your cc debt is paid off and you then have a little more income free to play around with.
You don't sound harsh. You are absolutely right.

Anyway, I'm sorry to make this all about me. I am happy to hear people's thoughts about my situation, definitely, but I also just wanted to sort of show where the money is going when someone in a higher income bracket is broke. Bah.
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Old 10-10-2008, 05:39 PM
 
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Well, he has a grad student income, but as a couple we don't, you know?
right, but, as a couple you also don't have a six-figure income like you would if you both had jobs like yours.

i make good income, my partner doesn't because she is trying to get a business off the ground (great time, huh?) Her low salary and my higher salary cancel each other out. Her belt tightening is my belt tightening.

And, you've both got a lot of tightening that could be done: thrifting, swapping, eating out...

If you stopped eating out, and were eating home cooked healthier food, you could probably cut both Weight Watchers and the restaurant stuff out of your budget. two birds with one stone.
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Old 10-10-2008, 05:41 PM - Thread Starter
 
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I already cut out the WW. I am keeping my gym membership, but it's only $10 a month and completely worth it.
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Old 10-10-2008, 05:47 PM
 
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I was in your situation not so long ago so I know how it is. And I still fall victim to the evil Target. In fact my husband and I managed to spend $80 there just this week on stuff we "had" to have. It is hard when you make enough to afford most things but then you just spend a little too much here and there and all of a sudden you are $800 over your budget for the month.

You really are not doing too bad but you might want to stay out of target for a little while. That was quite a high bill for a month, ya know? Between groceries eating out and target it was like $1000.00 for 2 people that is realllllly high.

I know you said that you have already made changes but just a few more and you could be debt free. How good would that feel?
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Old 10-10-2008, 08:08 PM
 
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Why don't you decide that you're going to knuckle down until your credit card and your car is paid off, and then you'll be able to start eating out again?

Mommy to kids

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Old 10-10-2008, 08:15 PM
 
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The absolute, most helpful thing that we did for our budget was to start paying CASH. I love the feel of having cash, and it's an absolute. When it's gone, it's gone.

FWIW, we used to waste money like nobody's business pre-kids in the early days of our marriage. Thus the debt accumulation (not all CC, some was a motorcycle and a car). When I look back now, my huge regret is wasting so much money on eating out and craft supplies that I never used.

I still sew and quilt and scrapbook, but at a much more reasonable level. Hope this helps!
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Old 10-10-2008, 08:38 PM
 
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We have a fairly high income, but live in a VERY high cost of living area. Yet we don't go into debt. Looking at your list, here some stuff we *don't* spend on:

No cable. No tv. No commercials telling us to buy stuff
Our internet is much cheaper. Can you find a better deal? Or even call and get them to lower it for you? Tell them you're going to switch providers if they don't...
No real eating out (dd's sensitive to everything) but we buy organic and local whole foods and cook some fancy stuff at home
not much shopping. In my family we say I didn't get the 'shopping gene.' But I am enjoying spending on things I *really* like and that will last a long time. For that reason alone, I avoid target and prefer to shop at craft faires.
I've been trying to work through my stash of craft supplies and only buy new with a specific project in mind *that I'm ready to start working on*

Also, you really are paying down the credit card, fast. Once that's gone, you'll have a lot more money to save and the deficit will go away.

allergy-nutrition mama, dh, 4yo dd, and March ds
Eating shouldn't be stressful!
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Old 10-10-2008, 08:50 PM
 
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We have a good income too, and while we are not in debt I sympathize with the OP because its so easy to let the little things slip if you have some cushion. Our weekly Starbucks trip, which we really enjoyed and looked forward to all week as time spent together enjoying coffee and conversation, started turning into an every other day Starbucks trip until we made a conscious effort to nip it in the bud.

Quote:
Originally Posted by grlpowers View Post

You really are not doing too bad but you might want to stay out of target for a little while. That was quite a high bill for a month, ya know?
I absolutely agree with this. Staying out of stores, and especially places like Target have been my number one money saver. Somehow there always seem to be things I "need" or things that are "too good to pass up." Even thrift stores can be dangerous.

What I do now is keep a list of things I actually need or want and write a target price. For instance I inventoried my son's clothing and found that I have tons of 2T pants (his current size), but no 3T. Since I have a year before he gets to 3T I set a maximum price of $1 per item of used children's clothing, or $2 if new or name brand. For anything beyond 3T I won't spend anything more than a $1 and it has to be perfect since I will likely have time to find petter stuff. So I write on the list:

3T pants, $1 used. $2 really nice.
4T+, $1 really nice.

So when I go shopping at the thrift store or yard sales I don't even look at the 2T, and only buy 3T or bigger if its a fantastic deal. I have more of a goal this way when I hit the store and even if I go over budget I know I'm at least buying things we really need/want.

I also have things that aren't needs, but nice to have on the list like: White linen tablecloth, Kitchenaid attachments, etc.

If it's not on the list it doesn't get bought period because obviously I didn't think I needed it until saw it. If it is on the list it only gets bought if its below the target price.

I find that this really, really helps reign in spending.

For groceries I just shop with cash and set a weekly budget. If my pantry is full then I can afford to spend some of the week's money on salmon or steak, but if I need to stock up on some basics then we eat simpler meals. We are wine drinkers too and my husband buys it by the case at wine festivals twice a year so we budget for that and then don't buy any the rest of the year. We also host a lot of dinner parties and people always bring over a bottle and we end up with extra this way While entertaining can be expensive, feeding an extra person or two can still be less than going out to eat at a nice restaurant especially if your friends reciprocate or bring wine/or dessert.
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Old 10-10-2008, 09:13 PM
 
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I was bored so here goes:


WHAT is your goal? Do you BOTH (you both have to agree or it will never work) want to be debt free? Retire early? Pay off mortgage early? Have 12 months bills saved up? Have $10,000 in your savings account? WHAT is your goal? With NO goal, you have no reason to truly change anything.


As you have stated you are in debt, and spending more than you earn. This last month you were nearly $500 in the red and you said this "was reined in" AND that it was a "good month for you".



You have to either spend less money or make more. Period.



Get a joint goal and put it on paper, both sign it, give a time frame.... and post it everywhere so you BOTH can see it!







First off the red flags...

$310.05 Pets... is this normal??

$101.42 on thrifting.... WHAT exactly are you buying each month? Are you boredom shopping?

$80.76 craft supplies... what are you buying? That's alot for a hobby.

$71.79 postage... what are you spending so much postage on?

Groceries + eating out + Target = $1001.62 for the month for TWO people.




Here is another way to look at your spending (shake it up and look at it differently):


True Bills:

Banking fee: $6.95
Annual parking pass: $138
Mortgage: $1,248.51
Home repair/housewares: $119.20
Groceries: $359.49
Car payment: $300
City bill: $177
Cell phones: $79.84
Internet: $56.97
Gasoline: $44.12
Postage: $9.80
Gas: $17.48
To credit cards: $1,118.29
Savings: $100
Student loan: $257.60

-$4033.25





Not true bills:

Thrifting: $101.42
Eating out: $44.74
Gym dues/Weight Watchers: $22.36
Magazine subscriptions: $6.11
Cash withdrawal: $40
Clothes: $58.34
Craft supplies: $80.76
Postage: $61.99
Eating out: $275.68
Entertainment: $71.97
Target (some groceries, some not): $321.71
Pets: $310.05
Cable: $88.29

-$1483.42





I left cell phones and internet as a "bill"... we all have them and you can afford them. Pets was not put on true bills as it is a choice (not trying to debate care for animals... I have them too, but having a pet is a choice to be "technical").






Also at this rate of $100.00 per month, you will only save $1200.00 per year. In retrospect you spent $1001.62 on groceries/Target/eating out for the last month.




It would be best if you made a firm on paper budget for a goal you both agree on. Your "real" bills need to be paid FIRST. Your savings needs to come next. And then your "wants" come last out of what is left... not what you want to spend.





Eating out could be reduced by agreeing on one or more of the following:

Only eating out once a week or once a month.

Only eating out if you have a coupon.

Only eating out if it is under $xx.xx amount.

Only eating out within "set in stone" eating out budget.

Only eating out by using personal allowance.




Groceries can be reduced by having a set budget each week and using cash. Allow $xx.xx each week for gourmet ingrediants. You will feel less deprived. But when you eat them, they are gone until the next week.





Stay out of Target. Make it a personal challenge to go XXX many days.

Stay out of the thrift store. You can't possibly need $100 + month in clothes/trinkets/antiques/junk. Don't spend more on "stuff" until you can budget and not go red each month.

Suspend craft purchases until you have a real budget and do not go red each month.


Crafts and thrifting are more than you save each month. If you are boredom shopping or "deprivation" shopping, or addiction "but I am saving so much money" shopping... try to find something else to fill that hole.



You can't afford to do these things if you are red each month.



You make enough money to do them, but you have to budget them WISELY and not "impulse" shop. When you have a good working budget and are saving MORE than what you are "blowing"... budget in a weekly allowance for each of you and all misc spending comes out of that.


It's the best of both worlds!






We have BTDT too. It's harder to be "diciplined" when it's not a daily struggle to just survive and eat!








.

Resistance is futile Matey
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Old 10-10-2008, 09:24 PM
 
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Are you on Etsy? That crafting supply/postage bill is crazy. That has GOT to go down.

I'd stay clear of target. We used to do that too...never leave with less than $80 each time. Now if we need TP or something, I just get it at the grocery store and save the gas and temptation.


What are you thrifting on, as well? That's high, too.

May I ask why the pet costs so much?

I'd go balls to the wall to get out of this debt. No cable, no internet. You have internet at work? Him at school? Public libraries or places around town with wi-fi? That's $60 a month. Heck, if you're nearing the end of your phone contract, drop the cells. We did and saving even more $ a month.

We used to make 60k a month (2 incomes) and had that same problem...just didn't have enough. Looking back, man, I wish I knew then I what know now.

Change your habits, change your life.

Welcome to the Real World she said to me, condescendingly, take a seat. Take your life; plot it out in black and white.
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Old 10-10-2008, 09:24 PM
 
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I won't say what our income is, BUT I find it so hard to stick to a cheap food budget. Organics can be expensive, and I feel guilty when I don't buy them, but it is just too much sometimes even if you cook from scratch.

I am trying to convince dh to get netflix instead of cable. We don't watch much tv anyway.

We are going down to eating out once a week which I think is helping. But then our washer broke, and set us back a bit.

That is great that you are paying off the CC. Go you!
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Old 10-10-2008, 09:46 PM - Thread Starter
 
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OK, lots of good comments. I'll try to address everything:

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Originally Posted by whoMe View Post
Our internet is much cheaper. Can you find a better deal? Or even call and get them to lower it for you? Tell them you're going to switch providers if they don't...
I've looked into this before and not been able to find anything similar (high speed with wireless) that's cheaper, but I should probably look again. High speed at-home internet is necessary both for my freelance work and for Mark's working at home for school. It's pretty necessary.

Quote:
Originally Posted by Thystle View Post
I was bored so here goes:
WHAT is your goal? Do you BOTH (you both have to agree or it will never work) want to be debt free? Retire early? Pay off mortgage early? Have 12 months bills saved up? Have $10,000 in your savings account? WHAT is your goal? With NO goal, you have no reason to truly change anything.
My immediate goal is to get out of consumer debt, then my goal is to have a comfortable amount saved. Not sure how much. But those are personal goals. In terms of us as a couple, we're sort of counting on selling our house for a profit in a year or so to build some joint wealth. We don't really have joint savings goals, aside from not spending down our home emergency account (currently about $4,500) unless we have to.

Quote:
Originally Posted by Thystle View Post
$310.05 Pets... is this normal??
Not exactly. We have extra foster dogs right now, so we're buying extra food, and we had to refill an expensive three month prescription for our elderly dog this month. But pet expenses run about $125 month for food/vet insurance generally, plus $600/year meds and $400/year minimum for vet care, so it's pretty close. However, unless we were seriously starving or about to lose our house, we wouldn't feed our dogs and cats cheap food or stop their vet care, so...

Quote:
Originally Posted by Thystle View Post
$101.42 on thrifting.... WHAT exactly are you buying each month? Are you boredom shopping?
Not boredom so much as joy--I LOVE to thrift shop. This amount includes some clothing items for both my partner and I, some gift items, and lots of things I just wanted. Thrift shopping is my #1 hobby. I've been meaning to start keeping a record of exactly what I buy/how much I spend. I should probably do that.

Quote:
Originally Posted by Thystle View Post
$80.76 craft supplies... what are you buying? That's alot for a hobby.
This is honestly high. I ran out of several needed things this month (I make bath products). I usually spend more like $25/month, if that.

Quote:
Originally Posted by Thystle View Post
$71.79 postage... what are you spending so much postage on?
Swaps. Almost entirely.

Quote:
Originally Posted by Thystle View Post
We have BTDT too. It's harder to be "diciplined" when it's not a daily struggle to just survive and eat!
That's the thing that blows my mind--I never ran into debt at $18K, or as a student with almost no income. And I don't remember feeling particularly like I was missing out on anything then, either.

Quote:
Originally Posted by Savoir Faire View Post
Are you on Etsy? That crafting supply/postage bill is crazy. That has GOT to go down.
I am on Etsy, but I sell almost nothing. Mostly I make bath stuff for myself, for gifts, and for swaps. Right now mainly swaps.

Quote:
Originally Posted by Savoir Faire View Post
What are you thrifting on, as well? That's high, too.
See above. But honestly, I need to start keeping a complete record, because it doesn't quite even add up to me.

Quote:
Originally Posted by Savoir Faire View Post
May I ask why the pet costs so much?
This is the breakdown for the month:
$120 prescription arthritis medicine for elderly dog (90 days worth)
$80 dog food (two 30 lb bags)
$60 insurance for dogs (beginning of the year--it's usually only about $30/month and it has paid for itself many times)
$20 shelter fee for foster dog (will be reimbursed)
$30 cat food (one 15 lb bag)

There is actually also about $15 worth of cat litter mixed in with my Target spending.


Quote:
Originally Posted by Savoir Faire View Post
I'd go balls to the wall to get out of this debt. No cable, no internet. You have internet at work? Him at school? Public libraries or places around town with wi-fi? That's $60 a month. Heck, if you're nearing the end of your phone contract, drop the cells. We did and saving even more $ a month.
See above re: Internet. We don't have a land line, so I don't think canceling our cell phones would work, and we're not at the end of the contract anyway.

Ug. Writing this out honestly makes me feel sick. Not so much because I feel unstable in my situation, but because I feel like such a bloated, wasteful American a**hole. Yuck.
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Old 10-10-2008, 09:51 PM
 
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When I read your title I thought this would be a thread for high income folks cutting back, but your income isn't what I would consider high income. DH's is higher than what you've stated, but we consider ourselves solidly middle class, and I am a SAHM. I'm not sure exactly how to say this, but I'll just present it as our experience. My parents and DH's parents do fall into the solidly high income category. There is very little cutting back that they do because they have never been anything less than cautious and level headed about their money and investments. Maybe it was the generation, but eating out, shopping trips, huge homes, always the new or best of things just wasn't on their radar screen. For some in the wealthy category it's almost a badge of honor to see how realistic and frugal you can be. I personally think our generation-those of us in the 20's to 40's age range would do well to emulate them. I know we're trying, and it's a mindset that you just adjust yourself to. Not always easy, but it's worth the effort.
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Old 10-10-2008, 09:51 PM
 
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I thought of two more things. We started going to the library instead of the bookstore. This year we are not sending professional pictures of the kids for christmas cards. I'm getting cards at the dollar store and putting pictures in them that I photographed myself.

Don't get too down on yourself. Pick one or two things to cut back on. You already cut back on groceries so pat yourself on the back for that.
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