I recently became interested in the topic of debt reduction… admittedly because I am in debt myself. It all started with a simple search of “how do I live off of <enter your income here> per year?” What I found was that there were a whole lot of people out there blogging about how to live frugally, minimalistically, and debt-free. Some of the articles I read were on the “crazy” side… like never buying condiments from the store and living off of the free packets you get at restaurants. (That one was a bit much for me… although I do save spicy mustard packets from Chinese restaurants because the store versions just aren’t the same.) But this simple search (eventually) brought me to Growing Slower’s post titled “How to Pay Off Debt Fast with a Low Income” and it was an extremely humbling read.
This was a family living off of one income (around what I make in a year), with one baby, (and another baby on the way), and they were able to not only get out of debt, but thrive in their own minimalistic ways. I finally realized that the problem wasn’t that I didn’t make enough money… the problem was that I was (carelessly) spending my money in all the wrong places.
My next search was “how do I get out of debt?” and that (somehow) led me to And Then We Saved where I learned about the “spending fast.” In this post the blogger and author, Anna Newell Jones, shares her intentions to only spend money on needs for an entire year. At first, it sounded crazy… but a part of me already knew I was going to do it. I had Audible credits just waiting to be used and happily bought her (audio)book “The Spender’s Guide to Debt-Free Living: How a spending fast helped me get from broke to badass in record time.” I, like Anna did when she first started this journey to debt-free living, needed to do something drastic if I was going to make any headway in my much needed debt reduction. So, I made my list of needs and put everything else in the wants (or will “not buy”) category. Here are my needs and wants lists… with justifications for some of the gray areas.
- Rent and Renter’s Insurance
- Utilities – water, sewer, electricity
- Cell Phone (justified below)
- Groceries – limiting to $400/month (this is a huge change since Josh and I easily spend $200 EACH per month now… goodbye filet, specialty chocolates and fancy nuts)
- Food/Beverages at Restaurants/Breweries – $70/month (justified below)
- Pandora – $5/month (justified below)
- Doggy Daycare – approximately $240/month (quick justification: hyper dog, busy work schedules, need doggy daycare)
- Dog Food
- Gas for vehicle
- Hulu and Netflix, but no cable
- Medical Visits or Medication, as needed
- Hair cut – only twice a year and no coloring/highlighting
- 2 Audiobooks/month – $25/month (justified below)
- Gifts – $300 for the whole year (justified below)
Wants… (aka things I will not buy)
- Clothes (even when they’re a great deal)
- Home Decor/Kitchen Items
- Community Events and Races
- Health Clubs or Workout DVDs (I have enough workout DVDs to last me a lifetime)
- Coffee at Coffee Shops
- Dog Toys (sorry Cooper)
- Movies (in a movie theater or renting… that’s why we have Netflix)
- New Music
- Specialty Foods (aka fancy dark chocolate or overpriced granola)
Justifications for the “Needs” Category
Justification #1 – Cell Phone: My cell phone bill (in my opinion) is outrageous! It is a big monthly expense. I looked into saying goodbye to my $20+/month iPhone for a $5/month LG phone. The issue… I have not had my phone long enough to make an upgrade (or downgrade) and it would cost me money to (yes) downgrade my phone. In about 6 months I will be able to downgrade (without any upfront costs or fees) and I plan to make the change then. As for data, I use up every last bit of my data and even have to watch myself towards the end of the month. I will make a big effort to use less data, but will only downgrade when I know it’s feasible and I know it won’t result in monthly overage charges.
Justification #2 – Food/Beverages at Restaurants/Breweries: I just can’t imagine life without it. Josh is a big foodie and we love to try new places and just enjoy food without having to do dishes. We use to go out or order food 3-5 times per week and would walk across the street to a local brewery here and there, too. Cutting back to $70/month is actually a pretty drastic change for me. Another big change, I can only go out if I can honestly pay for the meal with my debit card without screwing myself for rest of the week or month.
Justification #3 – Pandora: I teach yoga four to five times a week (weeknights/weekends). In my opinion, a class without music is awkward. I like for music to fill in spaces when I’m not speaking. Pandora has two stations that I use every single time I teach (Yoga and Yoga Workout). It is well worth if for me to keep paying $5/month to have a commercial-free playlist that I didn’t have to spend time creating myself.
Justification #4 – 2 Audiobooks/month: I love Audiobooks and 9 times out of 10 I buy books that will enhance my life… books on time management, leadership, finances, health, etc. I always listen to them in the car to and from work, and they make my after-work walks with Cooper (exercise) much more exciting and enticing. I can honestly say these so-called “self-help” non-fiction audiobooks make a positive difference in my life. Also, I re-listen to books over and over again so they actually get multiple uses. (I always feel like I take away something new when I re-listen to an audiobook.) Since I’ve limited most other forms of entertainment that cost money, this felt like a fair one to keep as a “need”. (PS… I use Audible.)
Justification #5 – Gifts: It just feels sleezy to go on a “spending fast” just before the holidays and announce that I will not be giving out any presents. I have, however, put a very modest limit on gifts… $50/person for birthday and closer to $30/person for Christmas and I’m only buying gifts for my direct family (Parents, Sister, Fiance). Sorry everyone else!
Expenses I had but have just recently cancelled…
- Spotify – I told myself I had to choose between Pandora and Spotify, and (for reasons listed above), Pandora was the better option.
- Time Warner Cable (Internet/Phone/Cable) – Until about a month ago, Josh was working from home so we justified the crazy fast internet with the crazy high price tag. Of course, bundled into our internet was cable with channels we never watched and a home phone that we literally didn’t own. When Josh changed jobs I was able to convince him that we just didn’t need it all. We actually have internet built into our rent so it made sense to use what we were being forced to pay for. It’s not the fastest or highest quality but it works… most of the time! As for Cable, we swapped it out for Sling which we used via our Firestick and Apple TV.
- Sling – When convincing Josh to cut out cable I ensured him I had an alternative. I downloaded Sling’s free trial and we both agreed it was almost equivalent. But…we also pay for Hulu and Netflix. Having all three suddenly seemed excessive when I was listing out my “wants” and “needs.” Josh agreed to give up his precious golf channel for one less bill each month.
One thing I purposely left off the list
Travel. Josh and I have decided to stay home for Thanksgiving as opposed to visiting our respective families in Florida and New Jersey since we will have just seen everyone at our wedding at the beginning of November and we will be out of PTO. We have, however, already made plans to go to New Jersey to visit his family at Christmas and to visit my family in Florida in March. We will keep our travel plans in check and seriously weigh the pros and cons of any future travel invitations.
So… what’s next?
With the upcoming wedding and honeymoon I have enough on my plate. I have become extremely mindful about spending money but I’m not starting the “spending fast” until after we get back from our honeymoon (Sunday, November 13th). Once I get back, I’m committing 3 months but my hope is to extend that out three more times to make for an entire year.