I'm looking forward to January 1st. Not only is that one year closer to 2020 without the world blowing up, it is also the start of the Uber Frugal Month. This is a challenge hosted by one of my most favorite early ER/PF blogs, the Frugalwoods. The following is my take on the preparation exercises that Mrs. FW provided for those embarking on the challenge!

Step 1: Establish your goals

I spent a lot of time on this step in preparation for Uber Frugal Month (and the rest of my life)! In fact, I dedicated an entire notebook to the pursuit.

Mrs. FW provides the following goal-setting questions:

Why are you participating in this Challenge?

What do you hope to achieve?

The overarching achievement driving this challenge is to attain financial freedom within 15 years, thus allowing my partner and I to focus purely on our life goals.

What are your longterm life goals?

This is where I spent the most time. I have three goals. Two are shared with my partner. They are

1. Live where we love. We yearn to be on the sound or the peninsula where we have accessible ocean and mountains. We want land or access to public land (and trails!) right outside our back door. We also don't want to be too far from a small urban area to meet our more civilized needs.
2. Spend our life in nature. Hiking, kayaking, beach combing – this ties in to our first goal but has some special considerations of its own.
3. Be a scientist/botanist. This is my driving goal. I've been working toward it already, but it's not yet achieved.

Where do you want to be in 10 years?

Our goals pretty much sum up where we want to be. I should be done with school and hopefully working in the field of botany, hopefully in the region where we want to live (my major is somewhat dependent on PNW plant life, so shouldn't have to relocate). We should be nearly FI, if not already FI, and shopping for our dream land/home if not already in it. One kid should be a college graduate, while the other should be finishing college or entering grad school.

What about your current lifestyle might prevent those goals from coming to fruition and what can you do about it?

Ug, this is a hard one but necessary. Lets revert to the tried and true bullet point list:

• Entertainment costs. Freaking entertainment costs. Hundreds of dollars slip through our fingers monthly and into the tills of restaurants, movie theaters, bars, coffee shops and other sundry enterprises.
• Groceries. Same deal, even though I cook 90% of our meals at home, our grocery bills have creeped up over the years because of lazy shopping.
• Our savings rate is currently zero with nothing saved anywhere beyond a few hundred in the bank.
• We are self employed and not super high earners (around $55k annually). When mortgage is figured in, our savings rate isn't high enough for our FI target. Must increase income AND decrease expenses.
• Health may be a limiting factor. I have weight to lose to get back to the fitness level necessary to achieve some of my life goals.
• College funding. Although my undergrad is paid for via grants due to our income, I need to start looking for funding options for post grad.

Step 2: Review last month’s spending.

The second task set forth by Mrs. Frugalwoods is much easier for me, at least. This is because I have kept a detailed ledger for several years, so have every expense recorded and categorized. I even do a “year in review” and close out the books annually. Without further adieu, here are our November 2017 numbers:

group 1

Phones: $270

Internet: $80

Electric: $138

Water/trash: $95

Insurance: $76

Car: $500

Mortgage: $1050

group 2

Groceries: $633

Household: $98

Gas: $21

Entertainment: $398

Clothing: $31

Gifts: $300

School: $37

I broke these into two groups for now, just to look them over. We'll call the first group “bills.” Of the bills, the car category and mortgage payments are non-negotiable at this point in time. We could possibly bring down our water and electric costs, but we are already lower tier for a house and family of our size, so I am not going to look too closely at these numbers right now. We are stuck with one internet company, but it may be time to call and try to negotiate a better deal. Insurance and phones do need to be reviewed for better cost options, though.

Looking at group 2, we see where things get ridiculous. Fortunately, this is likely low hanging fruit. Almost $650 on groceries? Who do we think we are, Rockefellers? $400 on entertainment, holy fucking shit, man! Do you know what that entertainment mainly entailed? Dinners out, too much beer at bars, and other stupid crap I don't even remember less than a month later. Clothing isn't bad for a family of four – we mainly thrift these items. Gifts seem ridiculous, but that was the entirety of our holiday gift buying for the kids and a few selected others. This number is usually much lower. Household is our catch-all category: pet food, toilet paper, doctor copays, aspirin – anything that doesn't slide cleanly into another category. So $98 isn't too bad but there was some frivolous spending wrapped up in there.

Okay, I wasn't supposed to judge us on spending, just record the facts. I failed at that, but holy hell, that entertainment waste!

Step 3: Categorize your expenses

Here is where we divide things into “Fixed Mandatory” and “Discretionary.”

Fixed Mandatory

Mortgage

Car (sure, I could sell the car. But I won't.)

Electric (on a billing plan, it resets and we could lower it, but that won't take effect until the next annual review in a year.

Internet (necessary for school/work, not just fun!)

Discretionary

Groceries

Household

Entertainment

Gifts

Clothing

Gas

School (most is discretionary, not all)

Insurance (we have per mile insurance so we can save by not driving.)

Water

Phones

Step 4: What can I eliminate entirely?

Haha hahahahahahaha....uh yeah. I knew this was coming. Looking at the discretionary category, I think we can eliminate the following entirely or at least drastically:

Entertainment

Clothing (except for new shoes for one kid)

At least 50% of household spending

About 35% of grocery spending

Most gifts and school expenses

We can likely lower the following with some research:

Phones

Insurance

Step 5: Embrace the art of substitution.

This will be key to our success in January (and beyond). I'll be honest, that entertainment category likely won't be at zero on January 31^st, namely because we have a mini-vacation/life goal researching trip planned and already paid for. There will be some meals and drinks out. BUT, we can substitute for pricey entertainment the rest of the month.

Here's a few plans in a couple of categories:

1. Entertainment: Once school starts up there are three nights only when temptation calls. Night #1 is a Thursday. This will be a game night. We're going to bust out the Overpower cards and begin dueling. Friday night will be movie night. Frozen pizza and a library movie for the whole family. Saturday will remain date night, but we'll combine the “date” with our weekly grocery shop. We'll stop by the fancy deli at a local organic grocery and enjoy a dinner of $3 wraps (these things are amazing), then come home for homemade cocktails and darts. We've been cleaning up our basement wet bar to turn it into a romantic hang out spot away from the kids.
2. Groceries: I've already worked out a detailed grocery plan with the help of spreadsheets. (ah spreadsheets, you make everything better!) Plenty of budget friendly substitutions available for some of the pricey stuff that had been sneaking into our cart.
3. Household spending: Taking this on as a personal challenge – going to try to find free substitutes for any non-necessary items that we find ourselves shopping for. In other words, I'm still going to buy toilet paper, but I'll skip the new bath linens.
4. Transportation: I get a free bus pass through my college. Instead of paying for a parking pass and gas, I'm going to take the bus to school. It almost literally takes no extra time or effort – the bus stop is at the end of my block and there is only one or two stops between me and campus. As an added bonus, my campus is right off an awesome hiking trail that follows the river. I mapped out a short 3 mile segment that leads to another trailhead near a bus stop, so I can combine some of my fitness goals with my financial goals :) Plus, this is another form of free entertainment!

That's all I've come up with for now, but I expect the month will uncover more little substitutions.

Step 6: Reduce spending on discretionary expenses.

I guess I got a little ahead of myself, since I already began to address this above. Namely – groceries. A big part of this is moving our grocery shop to Saturday nights as part of our date night activity. No one around here shops Saturday night, the grocery stores are empty and easy to peruse. The weekend sales are going strong. With careful planning, we can have a nice evening out and about.

We will shop at normal and discount grocers, too. We had slipped into buying most of our groceries at the local organic hipster store, mainly because it's clean and has an awesome vibe. No more! Instead, we will still soak up the vibe by having a cheap date dinner in their deli on Saturdays. Added bonus? The deli part features free live music on Saturday nights, so it will feel a bit special.

Other places to save are things like phone, car insurance, and internet. I'm going to be making some calls and trying to find lower rates on all of these things.

Step 7: Empower yourself to insource!

We don't really hire anything out, except for our oil changes and car repairs. In other words, we pretty much insource everything already. I'm not sure if we will be tackling oil changes/car repairs ourselves. I will research what the oil change entails on our model before I rule it out though. Same with brakes. (Interesting aside: I once replaced the brakes on a car when I was 8 months pregnant and before YouTube, using nothing but a photocopied page from a library Chilton's manual.)

Our home also needs some repairs before it is ready to sell or rent out in a year. I'll go through and make a list of these repairs so we can begin researching how to go about them. Hopefully we'll find that we can insource most of them!

Step 8: Examine your habits

Good news is that it appears I've already begun to do this! Cases in point:

1. Changing up our grocery routine and combining it with our previously spendy date nights to create savings in both categories.
2. Switching to public transportation for school, which should completely eradicate the habit of “running errands” on the way home from class. (Which usually entailed purchasing things we didn't really need. Harder to do if I don't have the car!)
3. Developing a routine and traditions that are free to replace boredom/temptation to go out and spend.
4. Friday night prepared junk food. Fridays are the day when I am likely to stop and pick up something pricey from the grocery store or some takeout because I don't want to cook. Well, I'm giving myself permission, but I'm planning in advance for it. I can get a month's supply of frozen pizzas for less than $15 at a local discount grocery chain. Friday is now officially frozen pizza (a kid favorite) and library movie night.

Step 9: Plan ahead.

This is what I've been doing above, right? I'll lay out a basic week plan. Simply a guide, not written in stone!

Monday: School, work, homework.

Tuesday: Repeat

Wednesday: Repeat

Thursday: Repeat but add in a game night so not tempted to go out and “relax.”

Friday: Work, go on a hike (yay fitness goals!), and have a pizza/movie night.

Saturday: Weekly catch up day – house chores, any work/homework, meal prep. Also – groceries and date night!

Sunday: Visit mom, homework, laundry, relax before school week starts over.

Things to prep:

• Meal plan weekly so dinner is simple when it needs to be.
• Use my grocery spreadsheet combined with a major shop at the cheapest but furthest away bulk store. This way we only need to get perishables on a weekly basis.
• Queue up a free yoga video before I go to bed. This way it will be buffered and ready to play first thing in the AM.
• Keep a running list of wants/needs on my phone or in a spreadsheet (phone accessible) so we can put off buying and instead look for free/cheap deals.

Step 10: If you do buy stuff, get it used.

Another thing we do right! At least 90% of our stuff is used. In truth, thrifting is sometimes a real problem and a place where we overspend.

So, going forward, I'm enacting the 30 day rule. We'll keep an ongoing list of wants/needs. If they haven't been found for free within 30 days and they are still on the list, then we will begin sourcing them used. 90 days before we even consider buying new (depending on the severity of the need and the specific item, of course).

For January, I'm staying out of thrift stores (except on our trip – but I'm setting a budgetary limit. There are a few items I've been specifically putting off looking for simply because the area is more likely to yield amazing thrifted deals on these items compared to our local area. Most of the items are camping/outdoor gear).

Step 11: Banish excuses.

Yeah, I have a few excuses. Not in the low hanging fruit categories like entertainment and groceries. Yeah, those are going to be freaking hard, but not impossible! No, my excuses are in the categories that really don't require much more than a phone call or a visit to a website. Why? Because I hate dealing with people trying to sell me policies, phones, whatever. I hate the hassle of switching companies. Pain in the ass!

So yeah, I'm making excuses about the phones. The insurance. Even the car expenses, which I could likely get lower.

No more! They are all on my list to tackle in January!

We have a pretty hard core financial goal. At this point, our income isn't really enough to achieve it. But, no excuses. First we cut back and optimize our savings rate. Then we look at how much we are still falling short so we can create a game plan to optimize our earnings and close the gap. This might mean renting instead of selling our house. Or, it may mean taking on one or more side hustles in addition to school. But for January, our main focus is going to be on making the most of our current income and getting these goals off the ground!