Expect Less

I haven’t been posting much lately because I’ve been out in the world, and living with much less while doing it.

Over the month of September I spent a total of 10 days at work. The first half of the month was spent biking through Iceland, and the last week was spent backpacking along the Superior Hiking Trail on the North Shore of Lake Superior.

The common thread of the trip was trying to travel as lightly as I could. My flight to Iceland was the first time I’ve checked baggage in years, but that was just to bring along my bike. As you can see in the picture above, I went with just two panniers. I also packed just a tarp and a sleeping bag, rather than a full tent. The sleeping bag provided the warmth, and the tarp protected me from the rain (which was nasty some nights). When I met other bikers on the road, they were all carrying at least twice as much gear as I had. Carrying a lighter load made it much easier to cover greater distances without getting as tired or needing as many breaks.

Camping on the Superior Hiking Trail was my first trip without carrying a big pack. I brought the bare minimum of food, which was a mistake, as I had enough for meal times but didn’t account for mental needs. The food plan will definitely be reevaluated before my next trip. Other than that, I brought just a hammock, sleeping bag, and tarp. Those, plus clothes, were all that I needed for 5 days of camping. Traveling lighter was fantastic; I could move easily and the strain on my legs and shoulders was noticeably less than other trips I’ve taken. I will definitely be continuing to explore ways to lighten my load.

No Spend Month ends tomorrow for me and not on the 31st because I am going to be traveling for the next 15 days. I’m heading to Iceland to bike, camp, and explore the countryside. I have no itinerary, no plan. Just a bike, a tarp, clothes, and some food. When I get back I’ll be doing a big write up, but until then there will be no activity on Expect Less.

It was hard, but I resisted making any puns about how you should “expect less” from me. Now I’ve gone and ruined it…

I haven’t spent anything since my last No Spend Month update, so it looks like I’m going to make it with $2 left.

I’ve already covered most of what I learned about how I spend my money - I need to eat out less and I need to drink at bars ever less. As I remove those temptations from my life and I become more willing to suggest alternatives, even if it means me cooking for or with friends, it’ll be easier and easier to keep my budget under control.

What have I missed during all of this? Not much. I ate pretty well, especially since I could get fresh veggies at the farmers markets several times a week. I also had a lot of food on hand already, which gave me an advantage over someone starting with nothing.

Of everything, I miss going out for a casual meal. Even if I limit myself to a few times a month, those meals out with friends are pretty great. I love trying new dishes, but I rarely take the time to cook something new on my own, so eating out is where I expose myself to new dining ideas. I also enjoy exploring new restaurants with my friends, and that’s something I don’t think I could give up completely. But I don’t have to give it up, I just have to keep it in check.

I didn’t miss going out to bars. I liked having a couple drinks at home with a few friends more than going to the bars. We’re usually just out to talk amongst ourselves anyhow, so why not just talk at home? We can open beers on our own, we can mix drinks ourselves. Again, an occasional trip is nice, especially when you do want a special ambiance. But most of the time, home is just fine.

I get paid every other Wednesday.

Before taxes my 401(a) gets funded by my contribution and the matching funds from my employer. I work at a university and they’re very generous with their match, it’s actually well beyond matching.

My check is deposited to my local checking account for a predetermined amount, based on a budget that I review every 3 or 4 months. Everything else is deposited in to my ETrade account where I get higher interest. Also, because I’ve decided not to get a debit card or checks for this account, the money is distant and feels untouchable. This is the part of the plan where I pay myself first.

Every bill that doesn’t fluctuate from month to month - internet, cell phone, insurance, rent, and student loans - is scheduled automatically. I’ve toyed with the idea of setting up a separate account for bills, but haven’t gone that far yet.

Other bills, if possible, are done electronically or scheduled to be paid the day the bill arrives in the mail using my bank’s bill pay service - power and water.

I don’t have any credit card balances now, but when I did I paid the balance off right away. If I can’t pay the balance or there is no interest I will schedule payments so that everything is paid off as quickly as possible.

My student loans are automatically withdrawn, which reduces my interest rate by 0.25%. My monthly payments were just reduced by $40 a month as part of the scheduled payment plan I am on. As soon as the payments went down I scheduled $25 payments of my own that are mailed every time I get paid. In my mind the money was already going towards the loan, so I’d rather have it keep going there (plus a little extra) than have it available to spend on something frivolous. Once the loan is paid off (years from now) that money will also be moved towards savings.

I review my balances using Yodlee nearly every day. I make sure that there’s enough money to cover any bills being paid in the next few weeks, check performance of retirement accounts, and look for any charges I don’t remember making.

All of this helps me to make sure that I’m saving money, keeping everything balances, and staying aware of my financial status. The initial setup took a couple hours of my time, mostly in creating the budget, which I’ll write about soon. Now it’s largely a passive operation. The only thing I have to actively do is schedule payment for 2 or 3 bills a month and make sure that my regular spending doesn’t go beyond my monthly budget. The first takes moments, the second takes self control.

What’s your process for managing your finances? If you were in my shoes, would you do something differently?

Shane’s question about what percent I save each month made me realize that I hadn’t talked about how I set my own salary a few months ago.

I reviewed my monthly budget back in June, which is something I try to do every few months. I’ve always had an entry for “Savings” but I’ve never done anything proactive to make sure I was actually saving the money. Instead, I just assumed I’d transfer that money on my own once I had it. I didn’t apply the advice my Dad taught me years ago, “Pay yourself first.”

So now that’s what I’m doing. I set up my direct deposit to automatically split between multiple accounts, but if that wasn’t an option I could set up a scheduled transfer to move the money once it was deposited in to my checking account. Every paycheck, the amount that I had budgeted for myself goes in to my local checking account. Everything else, whether it’s $50 or $500, goes to my ETrade savings account. I never see the money, I never have easy access to it, and the path of least resistance is to leave the money at ETrade and let it accumulate interest.

I have just a few days left in August, and my $160 has been reduced to $2. I have enough food at home to make it to the 29th without issue, but this was definitely a challenging month.

There’s nothing wrong with eating well, and if you enjoy it and can afford it I think you certainly should, but it’s something to keep an eye on, or else things can quickly get out of control. I was fortunate in that I had a lot of food at home already - dry goods and frozen foods. I’m not sure how I would have gotten by otherwise, having those resources around really made things easier.

It’s mind blowing how much it costs to go out, especially for drinks. I went out 3 times this month, twice for birthdays and once with friends. I had a total for 5 drinks during that time, and that accounts for nearly $45 of my spending. That’s nearly 1/3 of my money for something unnecessary that I could have done just as easily at home or, more importantly, not done at all. Of course, the birthday events were a chance to spend time with friends on a day in their honor.

One of the biggest changes in my own attitudes was that I never suggested dining out. If someone wanted to get together, I would offer to cook for them at my place, offer a beer that I already had in my fridge, or offer to open a bottle of wine. Cooking for two or three people pretty much always cost me less than it would to join them out for dinner, and it was always a fun experience to cook together.

That said, I really miss eating out. I think, however, that I need to make a much stricter dining out budget for myself, and stick to it. Awareness of your spending is one of the best budgeting things you can do. Credit cards make it so easy to be detached from what you’re doing, so I plan to use them much less too. A few purchases here and there to keep the account active and maintain a credit history, but I’m planning to put more energy in to building up a reserve in savings and use that money to make purchases only when I can afford them.

I encourage everyone to try a No Spend month, and let me know if you do it. It’s a challenge in many ways - knowing where your money goes, turning down invitations out, letting go of vices that caused you to spend more than you realized when you weren’t actively aware of their true impact on your finances. But the end result, at least for me, has been a clarity about how I use my money and about how I want to use it in the future.

The end of No Spend Month is rapidly approaching and I’m doing alright at living within my $160 budget for the month. The $150 I’d originally planned to follow looks like it won’t be possible, but who knows how these next 9 days will play out?

I currently have $20 left in my wallet. For the most part I’ve been very diligent about keeping my spending in check; I’ve turned down invitations to go out with friends, and I’ve been very aware of what I spend on food when I go grocery shopping.

Farmers markets have been a boon for me, as long as I get things that are in season prices are usually pretty reasonable. I’ve been eating a lot of bell peppers, potatoes, eggs, onions, and tomatoes. There’ve been some interesting combinations, and I’ve been cooking in bulk so that I have leftovers to last me through the week.

I’ve started buying store brand bagels at Target now, because a 6 pack is $1.50, rather than the $2.50 at the bagel shop. Since I can’t guarantee that I’ll get the buy one get one free deal each time, this seems to be much more reasonable.

My two biggest expenses have been going out for birthdays with friends. Two of my very good friends had gatherings for their birthdays, and I went to both. Normally I’d be thrilled with only spending $15-$20 on a night out, but now the $35 I spent between those two nights is almost 25% of my initial $150 budget!

In more general budgeting news I can’t begin to explain how satisfying it is to look at my account on Yodlee and see $0 of credit card debt. I haven’t needed my cards for anything, and while I expect to use them on my trip next month, I’m going to try to live my life without putting all of my expenses on credit cards. Now if I can knock out that student loan I’m going to be in fantastic financial shape.

One week in to No-Spend month and I think I’m doing fairly well. I’ve spent $35 on food so far, and nothing else. Most of it went to vegetables at the grocery store, though I also got a few peppers from a farmers market last night.

Last night I also got together with a couple of friends and we made pizza, entirely from scratch. They brought the dough and some toppings and a cheesemaking kit, so I got some milk and we made our own mozzarella. For a first attempt, I think we did pretty well, though it still needs some refinement. I think we kneaded it too much, for too long.

Other than that I bought my usual Monday morning bagels, but this week they told me to grab an extra half-dozen because they had a lot sitting there that probably wouldn’t sell anyhow. So I ended up with a dozen bagels for $2.50! There are 3 left now, as I’ve been having my lunch on them instead of the usual tortillas. It’s nice to have the variety, but it’s also much more filling, so I’m less likely to eat two of the veggie burgers for lunch.

I still think that this is going to be a very manageable month. I don’t know if I could live under these restrictions every month, but I think coming out of this I’m definitely going to be more aware of where and how I spend my money.

On a side note I’m just a few days away from going for a month without using my credit card, and actually receiving a bill with a positive balance on it. It hasn’t been hard at all, and there aren’t many purchases I’ve considered making that I’ve had to turn down now that I’ve told myself it’s just not an option.

For the first day of my No Spend month, I didn’t spend anything. I’ve been buying a half-dozen of “last night’s” bagels at the bagel place near work on Monday mornings, microwaving one a day for breakfast, for the past two weeks. It’s filling enough, and it’s a cheap way to eat since I can get 6 for $2.50. On days when I’m hungry for more a bowl of oatmeal supplements breakfast nicely.

Lunch was two frozen veggie chik’n patties on tortillas. I bought a good supply of tortillas and veggie burgers/chik’n patties when Simon Delivers went out of business, so I’m pretty stocked on those. MOst days I’ll eat two of them, one around noon and one around 1:30. Spacing out the times I eat lets my body process the food better and keeps my hunger on more of a level throughout the day, rather than fluctuating from stuffed to starved.

Dinner was a couple of the veggie burgers with some tomatoes, mushrooms, and cheese. This was the last of the vegetables I had on hand, so I’m going to need to make a trip to the grocery some time this weekend. I also need to get ingredients for some of the recipes I’m hoping to make, and for salads.

Entertainment for the evening was reading a book, watching some videos I had, and reading online. I cleared out a few saved items from my RSS reader, and just enjoyed a pleasant evening at home. I also turned down an invitation to meet some friends out at a bar.

One day in it’s hard to say how this will all play out, but I’m enjoying myself so far. I like these challenges and seeing if I can meet them. I just checked my credit card balance to make sure I hadn’t accidentally charged anything to it online, and I was pleasantly surprised to see that, since my last statement, I have a positive balance. A refund was posted to the card for more than I’d spent on it before deciding to hide it away for a month. Quite a nice little bonus.

After work today I swung by the ATM and got my money for the month. $160, cash. I had to do multiples of 20, so I ended up with $160. I’m still going to try to keep myself to $150, though.

I also picked up a few recipes online that I should be able to make in bulk to feed myself for several days without spending a huge amount of money. This weekend I’m thinking about making lentil tacos and Zen Habit’s Best Soup Ever.

So far I’ve spent nothing today, and I have no plans to go out tonight, so I think I’ll be alright for day one. I even went to the ATM that doesn’t charge any fees, so no $2 was taken from me before I even began.

And so we begin what I expect to be a very interesting month.