frugal | mindwi.se edit

Wasted money, Lottery, Consumables, To take for granted, How to save money, Two vehicles, two situations, Our downsizing, Expensive rent, Refuse

Being critic about any expense and the potential waste of money/resources is what brought me into frugalism. It helps me succeed in my goals, namely having more time for myself by working less because I spend less. At the very basic level is my obsession to kill recurring expenses like mobile phone plans and home insurance. At an higher level is the investment component.

In our increasingly fragmented, individualistic society that's focused on paying money as the answer to everything, frugality, conversely, encourages us to meet our neighbors and build connections. (Frugalwood)

Wasted money

Over time, when you're in the middle class (in a normal economy, pre-pandemic), I realized that the biggest expenses are not fixed ones (like housing), but rather the money available after paying your obligations. In fact, if you want to reduce your expenses, the easiest way is to see where the money is going. Even if like me you live in a place where the cost of living is high and where spending $1,600/month on housing is the norm, the truth is that if you are a couple earning $60,000 a year each, you still have more than $4,000 per month after paying the rent. It is from this point that things go wrong most often.

Between car payments, crazy and repeated expenses, creation of needs and trips, you sometimes have to make choices in order to plan for the long term. Instead of complaining about the high costs of living, why not stop thinking that we have to live like a king every day and that we are owed everything?

I myself have for a long time spent indecent amounts of money to pay myself for things that have not brought me anything in the long run, just because I thought it was the right thing to do. Finishing the basement of a house, finishing the landscaping, moving away from my places of interest and my work by filling the void by purchasing luxury vehicles, buying renovation or gardening tools, spending fortunes in restaurants and travel, etc.

However, when we get out of this infinite and vicious circle of excessive spending, we realize that very little is required to live a good life:
  1. Live in smaller space: We made the choice to live in a condominium despite the condominium fees instead of a house.
  2. Living around services, parks and places of interest: Being able to access all services without using a car was essential for us. The grocery store is nearby, as is the dentist, physiotherapist, family doctor, etc. The hospital is 10 minutes by bus or about 25 minutes on foot. We have access to car rental and car sharing. There are many parks and ubiquitous bike paths.
  3. Simple living: To dispossess what is not essential to us is a revelation and a relief. Selling something that we think is unnecessary can mean instant monetary loss. However, I have discovered over time that not owning also means not having to replace, repair, maintain, store, etc. The expenses that we are eliminating today have the power to be eliminated in perpetuity.
  4. Go deeper rather than wider: I now prefer to concentrate on a reduced number of hobbies in order to devote myself to them more deeply and not to be afraid to devote more time to them.
  5. Eat healthy: Avoid alcohol, fast food and focus on fresh, healthy and raw foods as much as possible. This allows me to reduce food expenses and pantry inventory. Instead of a variety of various small pots of sauce, it is more about a few essentials only for example.
  6. Exercise Daily: Even though I still haven't managed to get rid of the car, I try to cycle to work a few times a week and walk daily, in addition to training indoors.

In the end, you come back to basics and you really enjoy the little things in life, without pretension, without pressure and with less dependence on the financial aspect of the modern world.

Lottery

I hate that concept. Trying to convince people that winning the jackpot is the only possible solution to be totally free is wrong. In fact, what is proposed is a continuation towards a lifestyle totally based on consumerism, from luxury cars, excessive travel and luxuries that few can afford.

The whole idea of having a mass of people spending few dollars here and there to concentrate the wealth on few winners is the total opposite of a humane society, where everybody is treated equally. Making few rich ones by enslaving many in a false persuasion. In fact, it's like the childish mentality of Christmas gifts had carried on in the adulthood.

Consumables

There are way too many consumable products available. Window cleaner, all-purpose cleaner, shampoo, wipes, bags, detergent: take the time to reconsider their utility, financial cost, environmental impact and outright substitution or elimination.

Most of the time, a single homemade mixture (two portions of water and one portion of vinegar to which a few drops of essential oil are added) can advantageously and inexpensively replaces a large portion of cleaning products sold on the market.

Even if it costs only $5, you have to look at the costs as a whole and in a long-term perspective to realize what you are spending to maintain your home. These costs are estimated to average $200 annually. When you add these to all the other consumables in a home, it's more like $800 annually. Over $70/month!

Every product has an impact, like it or not, despite the manufacturers' claims. The most respectful is to go without and use homemade mixtures with simple, non-toxic ingredients. However, not all consumables can be replaced. In these cases, it would be best to learn about the impact of a product by doing extensive research. For example, a cleaner containing microbeads pollutes the water and has an impact whose limits are difficult to define.

To take for granted

We say of this term that it is to think with certainty that something is attributed in a firm and definitive way.

While reading recently about the origin of climate change, I was researching the Great Famine of 1315-1317. These resulted from a cooling of temperatures which led from 1314 to an overabundance of rains, causing the loss of vast crops. Who these days says they are afraid of an imminent famine? However, by taking this food security for granted, we are changing our behavior: reserve food for only a few days, last-minute purchases for immediate consumption, consider the local restaurant as an easy alternative.

Our concerns are far away from those of 700 years ago. But why shouldn't a famine be possible these days? With worsening climate change, the risk seems possible.

How to save money

What can be done to round off your budget and at the same time adopt good habits in order to save money everywhere and avoid falling into abuse?

Food :

Travel

Responsible consumption

Housing

Personal finance and budgeting

Two vehicles, two situations

A massive recall of Volkswagen vehicles linked to the emission of TDI engines gave me an opportunity: to sell a vehicle bought at $20,000 and get a beater for a few thousand dollars and cut my car expenses.

Stats:

Initial situation:

Amended situation:

The new vehicle (a 2004 Volkswagen Golf TDI) will consume approximately the same amount of fuel (valued at $1,000 annually for 15,000 km at 5.5 L/100 km at a price of $1.20/L).

So annually, I made the following change:

Initial condition: $3,000 (depreciation) + $ 2,150 (insurance) + $1,500 (repair / maintenance) + $1,000 (fuel) = $7,650 / year = $637 / month

Amended condition: $1,000 (depreciation) + $1,800 (insurance) + $500 (repair / maintenance) + $1,000 (fuel) - $600 (investment income) = $3,700 / year = $308 /month

Even though the vehicle is older, just getting a full buyback from the manufacturer and betting on an older vehicle to avoid depreciation allows me to split my monthly auto costs in half!

Our downsizing

Housing:

Transport:

Consumption:

And in a more personal way:

Expensive rent

Everyone I tell about our hectic past year in 2016 is amazed at the high cost of rent in Vancouver. As in everything, we must relativize the simple monthly figure to all the other aspects that surround it.

Financial aspects to consider:

Non-financial aspects to consider:

With all of these numbers, it is clear that the current studio is much smaller than the house it used to be, but lifestyles are quite different and stopping at a single digit of $1,600 monthly for rent is not refelcting the big picture.

Simply put, I have never felt more financially secure than I do now, even though I live in the most expensive city in the country. Clearly, my two situations do not apply to all and we must accept not to obtain the same result (a studio which replaces a house!).

So yes, to use the expression of homeowners, I am "wasting" $1600/month on rent. And you, how much do you waste in a house which is too big and which limits you in your personal accomplishment?

Refuse

Joshua Fields Millburn wrote:
Cut cable TV, wrote more.
Drove less, walked more.
Cut credit cards, spent cash.
Stopped eating out, cooked meals at home.
Silenced satellite radio, meditated more.
Canceled gym membership, exercised at parks.
Lived without home Internet, used public Wi-Fi.
Sold large home, rented a smaller apartment.
Canceled magazine subscriptions, borrowed from library.
Ceased upgrading, found a détente with “outdated” tech.
Refrained from purchases, better utilized possessions.
Separated needs from wants, developed a comprehensive plan.

Thus, being frugal is to refuse stuff instead of blindly accepting anything and everything. No one need paid-for solutions for all "problems" in life. Free solutions are great and accessible to all.