Saving every penny and pushing frugality to its limit or spending every penny to live for today. How does the Route to Retire family handle their spending?
Good news! After a lot of prodding, I think I might have been able to convince Mrs. R2R to do some occasional guest posting.
Wrapping your arms around everything involved and choosing the right curriculum has provided her with some “fun” over the past few months.
In today’s post though, you’ll get an idea of her take on some of the spending in our family. Finding a balance between frugality and overspending can be a key to enjoying life without feeling deprived while still building toward your financial future.
Take it away, Mrs. R2R!
As far back as I can remember, Mr. R2R has always talked about retiring early. At the time, it seemed like wishful thinking.
How could we ever have enough money to quit work at an early age?
We had always saved a little and contributed to our 401(k) plans even before we were married. Once we got married, we still followed the same routine. We worked 40-plus hours a week and contributed what we could to the employer-provided retirement plans along with our savings account.
Then, Mr. R2R decided it was a good idea to automate everything. So once a month, a certain amount of money was taken from our separate checking accounts and deposited into our savings account and IRA accounts.
There were times when I didn’t think I could afford to have that amount taken out of my account. But because it was automated, it was almost as if that money didn’t exist and we figured it out with what we had.
I’ve always been a saver and frugality just seems to be natural to me. Even as a child, I saved my allowance for the time when there was something I really wanted. I would even go as far as charging my older brother interest when he needed to borrow money from me.
And unlike someone we all know (Mr. R2R), I have never had credit card debt. The only debt I had before we were married was a car loan and school loans, which my wonderful generous parents helped me pay off. So, when we needed to start saving more to reach FIRE (financial independence / retire early), it wasn’t that hard to make the changes we needed to. We were already doing most of it anyway.
There are things we have “given up” or cut back on to be able to reach FIRE, but we also still do the “fun stuff” and enjoy life. With a little planning, saving is easier than many people think. Yes, saving money still takes some work, but if you take a few extra minutes to plan, you’ll be able to put away a little extra money in the bank.
Combine that with a decent income and you’ll have the power to reach FIRE a little sooner. You don’t have to give up the “good life” that most people think you do.
Here are a few ways we’ve leveraged frugality over the years…
Frugality tip #1: Keepin’ it real with a house party!
As most young people do, Mr. R2R and I (me more than him) enjoyed the nightlife in our younger years. But if we didn’t have the extra money to go out, we would have a weekend in or have friends over and hang out instead.
Now that we are older and most of our friends have children, hanging out at someone’s house is what we do most of the time anyway. We all make something to share (like buffalo chicken dip or barbecue meatballs!) and it’s BYOB. It definitely saves on eating and drinking over-priced drinks at a bar or restaurant! And the kids all play well together so there’s no need to spend money on getting a sitter.
I’m not saying we never go out. Sometimes it’s fun to get out and away from the kids with friends every once in a while. It just doesn’t need to be a regular event.
Frugality tip #2: We all need to eat!
Groceries and food are one of the biggest expenses for people. In fact, according to the Bureau of Labor Statistics, the average American household spends $4,363 per year on groceries! But your grocery bill doesn’t have to break the bank.
Before our daughter was born, we used to eat out or get takeout a lot. If I had to guess, I’d say it was at least three or four times a week – maybe even more. Now we go out to dinner maybe once every couple of weeks (sometimes more if there is a special occasion, such as someone’s birthday).
When I’m planning the meals for the week and making a grocery list, I usually try to account for occasions when I know there won’t be enough time for cooking. But things come up and sometimes, to be honest, I just don’t feel like making dinner. For the most part, though, we’ve definitely cut back on eating out. Not only do we save money, but we’re also eating healthier in the process.
About five years ago, I started to do most of our grocery shopping at Aldi. If you’re not familiar with Aldi, it’s a discount grocery store that sells their own off-brand foods. They also have name-brand items sometimes at discounted prices.
Aldi has been growing fast over the past couple of years. They now have a large organic produce section and offer gluten-free products as well. Our grocery bill is now typically less than $100 for the three of us. When we were shopping at the popular chain grocery stores, our bill was an average of between $175-$200 or more – and that was before our daughter was born.
Frugality tip #3: Going out to play
If it were up to Mr. R2R, we’d probably stay home all the time. Unfortunately for him, our daughter and I love to go out and find fun things to do. Not only do we like to go out, but we also love to stop and get special treats such as ice cream and specialty coffees!
When you’re trying to save money and reach FIRE, going out all the time and getting special treats really hinders the saving process. So, we’ve found many ways to still go out and have fun but keep from spending too much along the way.
We’re so lucky to live in an area that has an amazing park system in Northeast Ohio called the Cleveland Metroparks. It’s over 23,000 acres – miles and miles of biking and hiking trails. So we take full advantage of that and the free activities the parks offer.
We also love to go to the zoo. My daughter and I go at least ten times a year so we buy a membership each year. That definitely pays for itself many times over.
The biggest component of the frugality that comes into play though is the planning. When we go to the zoo (or any amusement park), I pack us waters, lunch, and snacks so we aren’t stuck purchasing the over-priced refreshments at the parks.
And when there’s a movie we want to see in the theater, we generally go to the early showing to save on the admission.
Frugality tip #4: Bring it on home
As for those treats I mentioned earlier, we don’t give them up completely. We’ve found ways to enjoy them but spend less money on them.
I know I’m going to want a special coffee at some point, so when I’m grocery shopping at Aldi, I check out their flavored coffees and pick one that sounds good. I spend about the same as I would at the coffee shop, but I get 12 cups just by making it at home myself.
The same goes for ice cream. When we get a taste, we’ll stop at the store and pick a special flavor, take it home, and enjoy it on our balcony.
Being able to save a little more money just takes a little more planning ahead of time. Packing lunches and snacks beforehand and doing a little research for discounted times for activities – especially the free ones. Find parks in your area to enjoy the outdoors. These are just a few ideas that have worked for us along the way.
We’ve reached FIRE without giving up the things we love. We’re still enjoying life to the fullest just planning ahead of time so we can have the best of both worlds.
Any tips you want to share on balancing frugality versus overspending?