One of my fav FI bloggers Frugalwoods is leading the Uber Frugal Month Challenge. We have been very frugal people to start with. I am participating to learn some more frugal tips and share our knowledge with other people. If you would like to participate as well, you can join read all about it in the link above.
Mrs Frugalwoods left us homework, and I will be doing them here in ER Uncle.
Step 1: Establish your goals
- Why are you participating in this Challenge?
- Learn new frugal tips: there is always something new to learn from other people. We feel like we are very frugal people, but want to explore what are other ways to be frugal and still living happy life.
- Share our store with others: we want to contribute to the community to help others with our experience. We are younger couple in our 20s. I noticed most people in the FI community are older. We hope to bring some unique perspectives.
- Make new friends & Have fun: Being frugal can be seen as a tough chore. So we want to make it fun!
- What are your longterm life goals?
- Financial independence in the next five years. Having the freedom to pursue wherever our passion leads which can change and evolve overtime. Short term our passion includes exploring the world and creating new experiences together, getting a PhD, etc.
- What about your current lifestyle might prevent those goals from coming to fruition and what can you do about it?
My work can be stressful at times, and the idea of treating ourselves with expensive things is very prevalent in my work place. I have a very conflicting personality. By nature, I love very expensive things (I did not think they are that bad but ER Uncle constantly reminds me this is such a luxury) – designer handbags, trench coat, skincare, make up, MacbookPro, household items, etc. On the flip side, I am a minimalist who hates clutter. This really helps counterbalance my spendy nature. I am also a practical person as I want receive the biggest bang for the buck, so my philosophy is to splurge on some quality items on things I really care about that bring me happiness very time when I use them. I hate getting expensive things that do not get used, but am happy to treat myself to something that will get lots of use. So far this philosophy has served me well, but I can see how it may be a potential road block to our FI goal.
Step 2: Review last month’s spending
We use both Mint and Personal Capital. Mint is used for day to day expense tracking and Personal capital is for long term tracking on our wealth building. Below is our 2016 Nov spend.
*** forgot to mention that our water and electricity bill is bi-monthly. Also, we have a sewage bill every quarter ($180) that is not reflected on this chart.
Step 3: Categorize your expenses
I think I picked a hard baseline. November spend listed above is relatively low compared to others. I plan to do this again beginning of 2017 Jan to look at 2016’s full year spend in its entirety. The blue colored ones are what Frugalwoods called “Fixed Mandatory Expenses” and the rest are “Discretionary Expenses”. For the fixed mandatory expenses, our bills are slightly high due to HOA (:() and our Airbnb. I would love to hear your advice on ways to lower it further.
Step 4: What can I eliminate entirely?
Would love to hear your thoughts on lowing the discretionary expenses. We start to get into the mindsets that these spend are what it takes for us to live comfortably. We don’t want to be live miserable or be deprived. We rarely eat out as ER uncle is a good cook and I am decent. We actually enjoy eating at home. Maybe I could get rid of my iphone and get a VOIP. I find VOIP sometimes not working very well and frustrating. I thought it may be good to keep at least one “normal”phone (I think this is just me trying to justify the iphone I really love).
There are 7 more steps. Will continue to cover in the next post 🙂
Until next time,