Learn From the Dumb Guy

I keep really good financial records, as well as other things as you can see in the list below. This is not my financial stuff, just kind of a calendar that I use to jot down what I did, what I have for production, and some hours. Through the magic of Excel this gets tallied up so I get a list of sheep days, hours spent farming, and that sort of thing.

But one thing I have always struggled with is staying on budget. I know what they are, and can rattle off from memory what we average for monthly bills, on what and can find exact amounts going back a decade, but what does that really matter if the information you gather is not applied to life decisions today?

So this year I added two lines to my daily plotter. It is a section labeled savings and lists the item, then the amount. In only a weeks time, I can tell you this is a POWERFUL tool for frugality!

As you can see, so far in 2019 there has been (3) times when I wanted to spend money, but we refrained. Once I was super-hungry and almost stopped at McDonalds for lunch...another time we had nothing in the house to eat and we thought about getting Chinese Food, and the other day we were so thirsty that we thought about getting a soda. By charting those temptations, but resisting, we can see that we have already saved ourselves $44! That is in one week alone.

I really think this will be a powerful tool for my family to save money, so I share it here, in its entirely so other may be able to do likewise.

My husband used to get energy drinks every day. One day he realized how much he was spending and now instead of getting that energy drink he puts that money in his stock account. 3k so far and he just started. lol

I've noticed a huge difference too when I budget and actively try to save.

Otherwise the money just seems to disappear, and it gets spent so much faster when it's not budgeted somewhere!

elle sagenev wrote:My husband used to get energy drinks every day. One day he realized how much he was spending and now instead of getting that energy drink he puts that money in his stock account. 3k so far and he just started. lol

:)  I did the same.  I created my own "energy drink" for literally pennies on the dollar.  Half a caffeine pill, a b-complex vitamin, and a glass of water.

I have always tracked my spending, and always budgeted, but I never specifically assigned a value to what I did not buy and racked it.

Back before I retired, and I worked at the shipyard, I used to buy a breakfast sandwish off the Gut-truck for $2.25. At 5 days a week, 50 weeks a year, cutting out that one sandwish alone saved me $562. A person can do a lot with $562 a year!

Another trick I use to save, is to take every $5 bill and stuff it away in a jar. After a month see how many you have. I never missed the money, and yet it would net me $45 a month or so. It only works if you use cash, but that unto itself helps with spending too!

I like that idea! If you write it down whenever you don't spend money, it becomes a challenge to see just how much you can save! Adding to that, if you take that money you didn't spend at Micky D's or the Chinese place or whatever and put it aside, you can use some or all of it for a project, tool, equipment, etc. you really want and can use.

I have a habit of never, ever using change in a store. I always just use bills when paying cash. Each day I put all my change in a big container and never take from it. Once a year, I cash it in and treat myself to something I want/need. I just cashed my coins in about a month ago and got enough to buy a new wall mounted shop vac and a heavy duty miter saw stand for my workshop. Last year, I purchased lumber and plastic sheeting to make two 6 x 3 cold frames for inside my winter greenhouse.

Travis Johnson wrote:

It only works if you use cash, but that unto itself helps with spending too!

I believe that Travis has identified a subtle but valid point. Credit cards and debit cards remove the "real" from the money equation and somehow it is much easier for many people to blow their budget with a card than it is with actual cash. That doesn't mean there isn't a time and a place for cards - emergency situations or for large purchases that you've clearly budgeted for - but for everyday smaller things, I support the benefit of using cash.

One of my simple cash saving tips I started when young is to *never* buy drinks, alcoholic or otherwise, at a restaurant or from a vending machine. I'll buy restaurant food if that's what the plan is, but I'll just drink water. I can get much nicer tea if I wait until I get home. Many work places have a kettle for making hot drinks and if you bring your own tea or drink packages, there's no charge. You will be healthier as well as richer for your efforts. Pop has *no* redeeming qualities and supports multinationals and corn-growing.

UPDATE:

I think I found a way to make my idea even better. Yesterday I resisted the urge to save money, caved in and bought lunch in town after a meeting. I could have ate at home, but I was starving. That was $9.75 that I could have saved!

So today I added a column for missed opportunities. It works by adding up what I saved, but what I could not seem to resist temptation for, and thus calculates my frugality based on a per day/month/quarter/year basis.

So I had saved $44 so far this month, but because of lunch yesterday, that is now reduced to only $34.25. Shame on me!

So now I cannot only feel smug about what I saved by being frugal, I can shame myself when I cave to temptation. Gosh darn it, I will beat myself into frugal submission one way or the other!

Love it, Travis. I've started my own spread sheet based on your post. Yesterday, I was going to buy a sandwich on my way home from a delivery for $3.99. I resisted. Saved $3.99. Today, I went to the liquor store for a bottle of gin. Instead of buying my usual brand for $22.99, I bought a cheaper brand for $15.99. Saved $7.00 for a total of $10.99 so far. Now, also today, even though I have enough tomato seeds for this year, I bought a couple of new varieties for $3.25 each. So, I'm only $4.49 ahead so far....but, I plan to keep my spread sheet and see how well I can do. Off to a slow start, but I know I can do better.

Jim Guinn wrote:Love it, Travis. I've started my own spread sheet based on your post. Yesterday, I was going to buy a sandwich on my way home from a delivery for $3.99. I resisted. Saved $3.99. Today, I went to the liquor store for a bottle of gin. Instead of buying my usual brand for $22.99, I bought a cheaper brand for $15.99. Saved $7.00 for a total of $10.99 so far. Now, also today, even though I have enough tomato seeds for this year, I bought a couple of new varieties for $3.25 each. So, I'm only $4.49 ahead so far....but, I plan to keep my spread sheet and see how well I can do. Off to a slow start, but I know I can do better.

Not really Jim, averaged out, you have saved $2.24 per day. You are off to a really great start!!

If you were to continue your "slow start", based on that average, you still would have saved $814.93 by next year. On a homestead, a person can do a lot with $814.93.

I am glad you are doing this now because the earlier the better!

Averages can be tricky, because as you saw in the above post, only two sets of data, makes averaging tricky. But when you get to the end of a month, quarter or year, you can get some great data. It is called the Law of Big Numbers.

You can also MAKE MONEY with this information. Here is an example:

I have hay, my sheep eat hay, but all I care about is making sure they have enough hay to get to Spring pastures. Based on averages over the last ten years, I know my sheep go on pasture the second week of April, or 150 days of being fed winter feed. But here, every farmer I know starves their animals most of the way through winter, then end up with left over hay in the Spring. WHY???

I start with x-amount of hay, my sheep eat x-amount of hay per day per head, and so calculating that with an end date of April 15th, I can know if I am going to be short on hay for the year, or have excess. Now if I know I am going to have excess, I can sell that off...in the middle of winter, when it is worth a lot of money. Last years hay is worthless come spring. Even if it is only 5 bales of hay, at $50 a bale, that is $250...and all I did was track some numbers.

Most farmers do not do this. They hold onto their hay "just in case winter is a long one", BUT based upon averages, they are losing potential money. One year i came up short, and had to buy hay, BUT the amount of hay I sold off, exceeded the few bales I needed to get by. So I still made out better.

But I apply this same logic to firewood too.

I like the idea of the missed opportunities column.  I follow my spending and saving.  This would help me catch patterns of temptation and to be more aware to keep my money headed where I need it to go.

Thanks for the suggestion!

When our son was playing little league, I would often stay late after the games to drag the field, bag up the trash in the cans around the field, and lock things up.  My wife and I would often go through the large garbage bags and pull out all the plastic bottles from Poweraide or Gatoraide.  Often, we'd get a hundred or more.  Usually it was two large grey garbage bags full --- the size that you drop into a 55 gal. drum garbage can.  After a while, I thought, lets fund a Roth Ira with the proceeds from those bottles.  In California, the deposit on plastic bottles is 10 cents (the 24 oz ones, which were most of the bottles).

We did this for about 10 years, as I still coached and had a role in the Little League even after my son moved on.

That Roth is now worth a little over $13,000.  It's all in one stock: Dover (symbol: DOV), and it's done well over the years.  Just because we took a few minutes 3 times a week to grab all the plastic bottles out of the trash cans and save them from the waste stream.  My wife would take them to the recycling center when we had enough bags to completely fill the bed of the truck.

A little bit, every day, and it adds up quickly.  We're no longer collecting Little League bottles, but I hope that that Roth will be work 25K or more by the time we retire (about 10 years from now).

One more story.  My Uncle used to come home from work every night and he'd empty his pockets on the dresser.  Before she'd go to bed, my Aunt would straighten things up in the bedroom, including sweeping all the spare change off the dresser that my Uncle had dumped out there.  She did this for years, and he never seemed to notice.  

After a couple of years she said, "I'm so tired of this snow and cold.  You know what I'd like to do?  Can we go to Hawaii this winter for a vacation and get out of this snow?"  

He responded, "Well I don't know if we'll have the money for that this year, honey."  

She'd say, "If I can come up with two thousand dollars, you think we can?"  

"Where are you going to come up with two thousand dollars?"

"Just answer, yes or no  --- If I come up with two thousand dollars, can we go to Hawaii in January?"

"Of course."

She proceeded to show him the boxes she had in the closet, filled with rolls and rolls and rolls of quarters, dimes and nickels that she'd been collecting off the dresser every night.  She got her trip to Hawaii.

Jim Guinn wrote:Love it, Travis. I've started my own spread sheet based on your post. Yesterday, I was going to buy a sandwich on my way home from a delivery for $3.99. I resisted. Saved $3.99. Today, I went to the liquor store for a bottle of gin. Instead of buying my usual brand for $22.99, I bought a cheaper brand for $15.99. Saved $7.00 for a total of $10.99 so far. Now, also today, even though I have enough tomato seeds for this year, I bought a couple of new varieties for $3.25 each. So, I'm only $4.49 ahead so far....but, I plan to keep my spread sheet and see how well I can do. Off to a slow start, but I know I can do better.

If you can invest that money and let it compound, it's even more gratifying.  An IRA, a stock with a DRIP fund (that will take small cash contributions without charging a brokerage fee), or a college savings plan . . . just once a month, send those savings off to be invested.  

Perhaps save the $15.99 and save your liver, all in one non-purchase.  :>)

I am not a huge fan of traditional investments myself, but in the interest of Paul and his Gert story, recommend people to invest in their own lives. I know I have.

My house illistrates my story well. I started building in 1994 and am still not done, yet the house today is worth $200,000. With trees, gravel, sawmills, and quarries I did not spend $200,000 on the home, but that is what it is worth due to equity. I probably have $30,000 in materials in that house, and so the remaining $170,000 can be divided over 24 years. That is $7100 a year in savings.

On some days I feel I have really let myself down, I am good with numbers, so I feel I should be better positioned financially then I am, but then as a Gert, am I that bad off??? I retired at age 42, then immediately endured 2 years of cancer and counting. It has not been easy, but maybe I am being hard on myself because I am not sure many people could endure that financial distress and survive.

So these are the numbers after the first 20 days of trying this...

By eating at home, not buying snacks at the store, and that sort of thing, we have saved around $137 so far this month. However, we have also fallen into temptation on $16.50 worth of items, like buying snacks for the kids, etc. That gives us a grand total of $120.50 we have saved over 20 days, averaged out...a savings of $6.02 per day.

BUT there are some difficulties:

1. It can be hard to calculate. Yes we might eat at home instead of going out to dinner, yet as the weeks progress, the temptation becomes harder. There are times we have avoided the temptation the night before, but what about the next night when Katie has got out of work late, kids are being taken here and there, etc? We would never go out to dinner back to back, so I cannot possibly put down (2) avoided dinners out. That can be hard to calculate because it is had to calculate what did not happen.

2. This strains our marriage. While we are maximizing our frugality, Katie and I (with 4 daughters) often used to go and have breakfast out, or a dinner, just to be alone together. Taking that away leaves me feeling we are placing money over our marriage. (This however could just be the effects of trying to break the habit of dinner together. It is hard to break old habits after all)

At this point I like the concept, and it holds us accountable for our spending actions that is for sure. $6.02 per day does not sound like much, but it adds up.

Great job wih tracking the savings!

With the kids, you do need the seperate time with your wife. I personally dont think that should be a ding against you in your accounting. You are trying to keep your marriage strong so that is an asset.  Maybe find less expensive options. Maybe late breakfast (if Katie has flexible hours) after kids are off to school. Meet her at the job for her lunch break with a picnic lunch and if you bring a flower, you will make the coworker envious😀

Another idea is keep your date schedule and just reduce it slightly and see how it works.  Maybe going out twice a week instead of three times.  However it works for you.

Tina Hillel wrote:Great job wih tracking the savings!

With the kids, you do need the seperate time with your wife. I personally dont think that should be a ding against you in your accounting. You are trying to keep your marriage strong so that is an asset.  Maybe find less expensive options. Maybe late breakfast (if Katie has flexible hours) after kids are off to school. Meet her at the job for her lunch break with a picnic lunch and if you bring a flower, you will make the coworker envious😀

Another idea is keep your date schedule and just reduce it slightly and see how it works.  Maybe going out twice a week instead of three times.  However it works for you.

She got put on a new shift so things are better/worse. They are better because she is working 8 hrs per day now instead of 10, but her lunch breaks are only 1/2 an hour too. Her facility is quite nice though so in the summer I could meet her at the Gazebo. She said it is funny, they have a running track, woodland hiking trails, etc all well maintained, and the first day she used it a groundskeeper way out in the back forty was jumped by her because, "he never saw anyone out there."

But I have to admit that our marriage has really suffered lately. It is NOT in trouble or anything, but our old house was big, but had 3 bedrooms. This house has 4 bedrooms, but they are small. Our four daughters did not want to move out of the other house where they shared bedrooms, so we told them they could each get their own bedroom her. That works for them, but leaves katie and i without a bedroom. We sleep on the couch/recliner. That means having no privacy either. Not just in terms of "relations", but in having a place too retreat. We cannot just go and have a place to talk, to give comfortable back rubs...and yes...relations as well.

We willnever go back to a big house, no way, but being without a bedroom has been tougher than I thought. I might add on at some point, but I really hoped to keep this house small...which of coure is the point of Tiny Houses. If we can hold out a few years, the kids will eventually leave and we can take one of their bedrooms!

Tina Hillel wrote:With the kids, you do need the seperate time with your wife. I personally dont think that should be a ding against you in your accounting. You are trying to keep your marriage strong so that is an asset.  Maybe find less expensive options. Maybe late breakfast (if Katie has flexible hours) after kids are off to school. Meet her at the job for her lunch break with a picnic lunch and if you bring a flower, you will make the coworker envious

I know sometimes I come across as being a true jerk...and I can be for sure. But I can be romantic as well. One thing we have done a few times is, have a nice meal at home. By that I mean a restraint quality meal!

I will make a nice dessert of ice cream and berries or something, draw a nice warm bubble bath and have Katie soak in the tub while I am cooking dinner. As she is doing that, I put a towel in the dryer so that after she is ready to get out, she has a warm towel to dry off with! I am a writer, so as I finish dinner, I have her read a romantic story or poetry (yes I write that too), and then cook and serve her dinner. By that I mean really nice meals with really great ingredients. Typically I finish up with giving her a nice massage.

It is a little more expensive then an average meal, but is typically not as expensive as eating out. Sadly, I just do not do that nearly enough. :-(

Update:

So the first month I have been trying this, I have managed to keep myself from spending $153.01....Yeah!!

However, I was hardly perfect. I could have saved myself $37.26 if I had been diligent on a few more things!

Had I been REALLY diligent, I could have saved $190.27 for the month of January.