How I cut my family’s grocery budget nearly in half

When I started the “Dave Ramsey thing” and created my first monthly budget, I settled on $300 a month for groceries, including cat food and household stuff like dish soap and toilet paper.

So, when I moved in with my co-human, I just doubled it to a budgeted $600. If $300 worked for one person, $600 would be logical for two. We wound up spending upwards of $700 per month on groceries. Yikes. To top that off, comment threads from favorite Facebook pages asking about budgets were showing me that many people were doing a whole foods budget for more people with less money than we were spending. Obviously something was amiss. I discussed this a bit in an earlier post in March.

What was jacking up the cost?

  • Lack of planning – buying haphazardly without a plan led to a lot of impulse purchases and even some food waste.
  • High standards – I buy only humane animal products and prefer organic foods.
  • Luxury purchases – Co-human was really digging some expensive cheese there for several months. Not saying that was the only thing going on (I was also addicted to almond meal cookies) but we were spending a lot of frivolous luxury dollars at the grocery store.
  • I was being snooty – I didn’t even LOOK at other grocery stores other than Earth Fare. I admit this was a personal flaw.

Bringing the cost down

Not only did I reduce our budget to below $600, I have even gotten it to a solid $400-$450 depending on the month. I think I can even get it down to $350 if I really put my mind to it. Feeding a whole extra person on only $50 more than I used to budget to feed myself… I shudder to think of what I could have been saving when I lived on my own!

I still shop mainly at higher-end grocery stores like Earth Fare and Heinen’s. I strategize my shopping trips so I only need to go once a week to either of those stores and can supplement if needed at Giant Eagle, which is a mile away and way more convenient. Marc’s has surprisingly come up as another low-budget source – organic sweet potatoes are a downright STEAL at the local Marc’s store.

I still buy whole food ingredients, fresh produce, fresh humane meat, and humane/organic dairy and eggs.

How the heck are you feeding two people your snooty food on only $400?

  • Buy in bulk when possible – Rice, beans, oatmeal, flour, nuts, etc. are almost always cheaper when you buy bulk. Bulk also helps you save on meat! This spring, my dad purchased a portion of a local steer and split it with me. I spent $80 on 30-40ish pounds of beef, some of which is still in the freezer. If you’ve got the freezer space and the up-front cash, this is a way to save some SERIOUS dough. I also buy chickens whole and cook them in the crockpot, which is cheaper than buying just breasts. I buy 2lb rolls of butter, divvy it up into mason jars for storage, and save lots of money over buying it in sticks ($8.99 for a 2 lb roll vs. 5.99+ each for a 1 lb box of comparable butter).
  • Buy on sale and know your price points – Earth Fare is pretty much the only store I trust for meat, because of their humane treatment policy. But I buy on sale. Grass fed beef is usually $8/lb – I stock up when it’s on sale for $4/lb with a coupon. Ground pork is usually $5/lb, so when it’s on sale for $3 or $4/lb, I stock up on that too. I buy chicken breasts or thighs when they are sale priced around the same cost as buying the whole chicken. Other items can be found strategically on sale too, whether you shop specialty stores or your average neighborhood grocery.
  • Compare stores – This requires some preparation and initial time investment. Make a list of EVERYTHING you commonly buy. Then go to several stores and compare the costs. Check online too – sites like Amazon and Vitacost can save you some money on grocery items. I am working on a pretty hefty spreadsheet comparing costs. When you find out which stores have consistently better deals or prices on certain items, strategize your shopping trips to make the most of your dollars.
  • Compare products – You need to be sure you are comparing apples to apples when you compare products in the store. You might opt for a bag of frozen organic berries because it’s only $3.29, but it’s eight ounces. That’s $0.41 per ounce. A pound of fresh organic strawberries at $4.99 is $0.31 per ounce. Ten cents an ounce is a lot of savings to buy fresh! Yes, there’s a little more work involved (you must wash and dry, then eat before they go bad or freeze them yourself) but if you have the five minutes to do the work yourself, you can save a bit of money. Same for lunchmeat – a packet of Applegate turkey is more expensive per ounce than getting it by the pound at the deli counter. It pays to do the math.
  • Dirty Dozen/Clean 15 – Some items are very important to buy organic. These fruits and vegetables have the highest concentration of pesticides on conventional produce. I always make sure to buy root vegetables (potatoes, sweet potatoes, carrots, etc.), berries, grapes, apples, and greens organic. I buy conventional melons, citrus, onions, mushrooms, bananas, pineapples, avocados, and frozen peas. Here’s a list of 48 fruits and veggies listed from “most pesticides” to “least pesticides.” I also purchase summer squash, zucchini, and corn organic or at least non-GMO, as these are common GMO foods.
  • Keep inventory – Knowing what you have on hand in your kitchen will allow you to plan better. If you have a bunch of broth, make soup. Beans and tomato sauce? Plan for chili. Don’t just keep buying things because you know you might cook with them someday. It can be very beneficial to have a no-spend week or month in which you use up the food in your pantry and freezer instead of buying additional groceries. There’s been a box of veggie burgers in my freezer for over six months… Oops.
  • Meal plan – Plan what you will cook for the week before you do your shopping trip. You can plan for leftovers or low-maintenance nights where you just make a sandwich or soup from a can. I won’t judge you, I do it too. There are “toast for dinner” nights in this house. There are also “cook three things to prep for the rest of the week” nights. Which brings me to my next point…
  • Cook smart – If you are cooking ground beef for spaghetti sauce on Monday night, and you’re having tacos on Wednesday, cook all the ground beef at the same time and set aside the stuff for Wednesday. Ta-da, taco meat is pre-prepped, you just have to heat it back up and add spices. Tonight, I made french toast and bacon for dinner. But I also cooked pasta with Italian sausage for tomorrow night. Or maybe the night after. Because…
  • Be flexible – If you go off the meal plan, it’s not the end of the world. Sometimes the weather affects my cooking plans (making the meal that requires an oven on a cooler day, for instance – I hate heating up the house in summer, ugh!), sometimes I just don’t feel like cooking, and sometimes I have a lot of leftovers we need to eat up before I cook something new (I hate wasting). It’s all good. Don’t totally abandon it, but be okay with moving some meals around and re-arranging your plans.
  • Budget – This is the most important thing. To save money on groceries, you have to plan out the money you will spend on groceries. If it helps you to separate meat, dairy, produce, etc. in your budget, do that to keep yourself on task. Otherwise just plan your trip and budget what you will spend for the month total and for each shopping trip. Use CASH instead of a card to keep yourself accountable – when the cash is gone, no more groceries. Spend wisely.

Sample meal plan and shopping list

Here’s my meal plan and shopping list for the week of 6/1/14:

  • Sunday: Italian sausage with pasta
  • Monday: Chicken breast, peas and carrots
  • Tuesday: Burgers and beans
  • Wednesday: Brinner
  • Thursday: Chicken nuggets, tater tots, beans
  • Friday: Chinese?
  • Saturday: Meatloaf, mashed potatoes

Shopping list:

  • Produce: Apples (3 lb bag), strawberries (1 lb box)
  • Water gallon refills
  • Dairy: Eggs (3 dozen), milk (1/2 gallon), yogurt (large container), cheese (1 pack)
  • Meat: Bacon (1 lb), chicken breasts (coupon for $2.99/lb)
  • Grocery: Pasta
  • Bakery: Sourdough bread (2 loaves)
  • Giant Eagle: Mushrooms, watermelon

That was my whole plan to cook for the week. We already had ground beef, italian sausage, pasta sauce, and chicken nuggets in the house. But… the chicken breasts were sold out and co-human wanted to try a new brand of cheese slices. We opted for bratwurst instead of chicken, and we got two packs of cheese instead of one. I still came in under-budget for the shopping trip.

What I have actually cooked this week:

  • Sunday: Bratwurst and bean casserole. My onion in the pantry had gone bad (note: Buy onion on Monday).
  • Monday: Bratwurst and bean casserole. Yes, I made it again. It was delicious.
  • Tuesday: Cooked myself french toast and bacon, made the man a sandwich. Cooked pasta and italian sausage for Wednesday.

What I expect to cook later this week:

  • Wednesday: Italian sausage and pasta (already made, just heat!)
  • Thursday: Chicken nuggets, tater tots, beans (weather says a high of 66, so I don’t mind turning on the oven)
  • Friday: Burgers and beans (it’s thawing in the fridge. I am cooking it).
  • Saturday: Brinner

For breakfast, we usually have eggs, bacon, toast, and coffee. I like orange juice too, but I make half a gallon last two weeks because I buy expensive juice – organic, fresh pressed, no flavor packets, all that jazz. I have switched to Uncle Matt’s organic brand because it’s a few bucks cheaper than my usual brand and has no flavor packets.

For lunches, I pack my partner a sandwich, fruit (bananas, strawberries, and pineapple are favorites right now, but he also enjoys apples), usually a small square of dark chocolate, and sometimes a bag of chips. He works close to home so sometimes he comes home for lunch and has leftovers. I usually have fruit and yogurt, fridge oats, or leftovers for my lunches. I sometimes get takeout on Fridays with other ladies in the office.

Things that are life-changing and wonderful blessings to meal planning:

  • An eating partner who doesn’t mind eating the same thing multiple times in a week
  • An eating partner who is more thrilled about eggs and bacon for dinner than a complicated recipe that costs $50 to make

Things that I imagine are meal planning wild-cards:

  • Children – their picky days, fussiness, specific cravings, hunger strikes, and endless desire to turn meals into arts and crafts. I imagine that would be stressful.

 

 

Shopping smarter: Earth Fare vs. Heinen’s

It is said that ignorance is bliss. But ignorance about food can cause major health issues. However, being informed about food means that the pool of acceptable food choices grows ever smaller. Pesticides, GMOs, artificial dyes and flavors, growth hormones, and antibiotics are all chemical concerns from food. Then you add ethical issues of animal treatment, environmental hazards, and community impact. The more you know, the harder it is to just stop on the way home and pick up something for dinner.

My co-human describes my eating and food-shopping habits as “fussy.” I suppose they are, but I think I’m fussy with good reason.

My grocery budget living alone was $300 per month. Adding another person, it has grown to a budgeted $600 per month but winds up being more than that. It’s become a grocery budget black hole. Obviously this is driving me slowly insane as money leaks out of our combined income un-budgeted.

Between February 21, 2014 and March 3, 2014, I spent over $250 on groceries and supplements. One of the northeast Ohio Earth Fare stores was having a 30% off liquidation sale and I went a little crazy. The wellness inventory was a whopping 40% off so I stocked up on supplements, castile soap, and cold remedies because co-human and I were both fighting off some respiratory bug.

Ahem. Anyway. I shopped a bit stupid instead of shopping smart, and I am now more resolved to shop smarter and spend less at the grocery store. I think it’s ridiculous to be spending $700ish per month on two people. This has to be able to be done on a better maintained budget.

My first move was to suggest a no-spend March, save for fresh food items like bread, eggs, dairy, and meat. Nothing in a packet, jar, can, box, or bag. This way, we could deplete our stores of foods in the pantry instead of just buying more shelf-stable items that would likely sit around indefinitely. (Our first attempt at this limited-spend month was about 90% successful – we still ended up buying some condiments and a box of granola).

In an effort to shop smarter and cut the grocery bill, I also took co-human’s suggestion to try a different grocery store. I primarily have been doing the shopping at Earth Fare, a chain store based out of North Carolina with a food philosophy I feel comfortable with. At Earth Fare, there is no high fructose corn syrup, no artificial fats or trans fats, no artificial colors, no artificial flavors, no artificial preservatives, no artificial sweeteners, no antibiotics or synthetic hormones in meat or dairy, and no bleached or bromated flour. Earth Fare also has a humane treatment policy on all their animal products. When I shop at Earth Fare, I feel safe. It’s a big relief to know that anything I pick up in that store meets my bare minimum of food-fuss. I am aware that I pay a premium for that safety, though, and it’s possible to put in a little effort and find similar food in more affordable venues.

Enter Heinen’s, a regional supermarket chain in Ohio. Heinen’s has a selection of organic and natural foods similar to Earth Fare, though they also sell the conventional processed food items of the Standard American Diet. While I scoff at the fact that they sell GMO-Os next to the organic granola in the cereal aisle, I relent to my co-human’s growing frustration with my high maintenance shopping standards. Let’s give Heinen’s a shot. Note, there’s also a local Giant Eagle I have started casing for Caitlin-approved groceries. More research needed.

First, the commute. Earth Fare is roughly 18 miles away from home, and it takes around 25 minutes to get there. Heinen’s is about 10 and a half miles from home and the drive takes just under fifteen minutes. Point, Heinen’s. (Also a point for Giant Eagle, because it’s less than five minutes from home, but it’s not my top choice).

Second, the selection. Heinen’s has a decent spread of organic produce, a humane treatment policy on their house brand animal products, and select brands for sale that I trust. Selection is acceptable and comparable between stores, though at Earth Fare there’s less research involved because I already have a baseline of trust based on their food policies and philosophy. Point, Earth Fare, but Heinen’s an acceptable second. (Giant Eagle definitely third place in this competition but does have some acceptable selection).

Third, the price. I will readily admit that Heinen’s won on some price points, but Earth Fare does continue to have better deals on other items. Giant Eagle wins my heart with my preferred brand of ice cream at a serious deal ($3.99 per pint vs. $5.99 per pint at Earth Fare) but I haven’t compared prices on other common items with GE vs. the more natural-based stores. Overall, point to Heinen’s, but some items just make sense to buy at Earth Fare.

A breakdown of common items on my list below:

Bacon: Depends on who we’re buying for

  • Canadian Bacon (his favorite) – Earth Fare sells a brand called Garrett Valley, sold for $5.99 for an 8-ounce package. Heinen’s house brand Canadian bacon is thicker cut, has less annoying packaging, and is $5.75 per pound. Point, Heinen’s.
  • Thick-sliced bacon (my favorite) – Earth Fare’s house brand is $21.99 for a 3lb package. An 18-ounce package of Garrett Valley at Heinen’s was $10.99. Point, Earth Fare.
  • Applegate Uncured Sunday Bacon (his second place favorite) – Earth Fare, 6.99. Heinen’s, 5.59. (Target, $5.00!). Point, Heinen’s, unless we’re at Target.

Lunch meat: Earth Fare is ideal, Heinen’s is acceptable in a pinch

  • Applegate Turkey, prepackaged – Earth Fare, Heinen’s, and Giant Eagle, all around 5.99 or 6.99 per 6-ounce package depending on sales.
  • Applegate Turkey, from deli counter – 11.99/lb at Heinen’s, a much better deal per pound.
  • Deli counter turkey – Earth Fare’s house brand is 8.99/lb. I didn’t check Heinen’s house brand because I am waiting to hear back if it falls under the same ethical treatment policy as their other meat (it’s a different brand name, and I am still gathering data). I trust nothing from Giant Eagle’s house brand. Point, Earth Fare, especially when comparing to the Applegate at the deli counter of Heinen’s.

Dairy and Eggs: Earth Fare

  • Snowville Creamery milk – I can drink this, so it’s the winning brand. Snowville Creamery pasteurizes at the lowest possible temperature for the shortest possible length of time to be deemed legally pasteurized. As such, it still contains many of the beneficial enzymes available in raw milk. Raw would be my ideal, but I’ll take Snowville as a reasonable second place. Half a gallon is $3.89 at Earth Fare and $4.29 at Heinen’s. Point, Earth Fare.
  • Snowville Creamery yogurt – NEVER WITNESSED AT EARTH FARE. Comparable product pricing pending a visit to Earth Fare. $5.29 at Heinen’s. Point, Heinen’s, for the selection if not price.
  • Butter – Based on my cursory evaluation of the selection at Heinen’s, I give this point to Earth Fare. We didn’t need to buy butter this time around so I didn’t pay close attention.
  • Cheese – I didn’t get a good look at Heinen’s selection, so I am unsure if they carry my preferred raw farmer’s cheese. They do have Organic Valley American-style slices, however, at the same price as Earth Fare, $4.99. Tie.
  • Eggs – Grade A, Large, from happy chickens. $2.27/doz at Earth Fare. $2.89/doz at Heinen’s. Point, Earth Fare.

Bread: Earth Fare

  • Sourdough bread – I have found out that I can tolerate sourdough bread without any ill effects on my stomach, hooray! A boule (round loaf) at Earth Fare is $3.59, while a smaller loaf at Heinen’s is $4.29 and has questionable ingredients. A big sandwich-style loaf is $3.99 at Earth Fare, making sourdough a no-brainer win for Earth Fare.
  • Sandwich bread – Co-human does not dig sourdough sandwiches, so we often buy a softer bread like challah or “english muffin” bread. For price and ingredients, the points still go to Earth Fare.
  • Ezekiel bread – This bread is made from sprouted grains and is also tolerated by my digestion, woohoo. It’s far cheaper at Earth Fare and Giant Eagle than at Heinen’s. I didn’t look closely at the price, but I tentatively give this point to Earth Fare. Giant Eagle an acceptable second in a pinch.

Produce: Heinen’s

  • Apples: $2.99/lb at both Earth Fare and Heinen’s. Tie.
  • Mushrooms: $2.59 for a package of button mushrooms at Heinen’s. Similar at Earth Fare, $3.99. Point, Heinen’s.
  • We didn’t buy much else in the way of produce so I will have to evaluate more over time, but Heinen’s appears to have better prices on organic produce

Meat: Undetermined

  • We bought no meat this week, so this will require more research.

Overall impressions of Heinen’s are good, and I will be evaluating our actual receipt with a comparison of what we would have paid at Earth Fare for the same amount to get a better idea of how to prioritize our shopping trips. I really do want to get bread, dairy, and eggs at Earth Fare if possible but I am very optimistic we can reach a compromise on grocery shopping that makes us both happy!

Update: I worked out a comparison between a few staples so far.

EF vs Heinens

Dreams and plans

Two things –

1. I will be going back to a twice-per-week update schedule!  Since I will be writing so much about my debt free budget plans, I’m not going to bore you with ONLY my finances to read about once a week.  So I’ll be going back to a twice weekly posting, once about my budget (because I love to talk about it, don’t judge me), and once about general minimalist stuff (the old “good stuff”!).  Please feel free to click my suggestion box and tell me what you’d like to hear about!

2. I found the below post in my drafts from JANUARY.  So I am sharing it now because I completely forgot to do it then.  It is a little bit about debt but also about happiness and five-year plans.  Enjoy!

 

When you announce to someone that you are a minimalist, there is a wide range of reactions from people.  Some don’t get it at all, some think it would be such a relief to unload their stuff, some might think you’re a nomadic blogger without a car, and everything in between.  Some minimalists quit their jobs to follow their passions, and that is fantastic.  For them.  Sometimes you can’t just up and quit your job, but if leaving your job in the corporate, retail, or other occupation-related world is a dream, you have the power to follow that dream.

My career (and debt) path

When I was very young, I wanted to be a farmer (please note that I have now successfully grown and harvested vegetables, bringing this dream full circle).  Then I wanted to be a vet , and then a teacher.  I fluctuated between those two until college, where I had a Life Science Education and Spanish double major.  I wanted to teach Biology in High School.  I changed my major twice and ended up a Psychology major, with the goal of being a high school guidance counselor.  Over my three-year college career, I had no fewer than six student affairs jobs – Residence Life, First-Year Programs, Campus Ministry, Dean of Students Office, Tutoring, and Service Learning Programs, just for starters.  I was in clubs up to my ears and found that I loved working with students.  So I went to grad school and got a Master’s – and $40k of loans – in Higher Education Administration.  Before starting graduate school, I got married and bought a car.  We had a crappy interest rate (7.75%)! While working on my M.Ed., I rounded out my resume to include Career Services and Academic Services, with an assistantship and three internships.  I embarked optimistically on a job search, submitting over 100 applications in a year.

I graduated from graduate school…and was my best friend’s nanny, taking care of her young son part-time while she went to school.  Then I was a temp at a real estate office, my $60,000 of student loans in “underemployment” deferment.  Then, after five applications per week as a condition of living with my mother while I was separated and then divorced, I got a full-time job.

I’m a Purchasing Manager at a chemical manufacturing plant.  This has nothing to do with my intended career path. At all. It was just one of those things that fell together perfectly, I knew somebody who knew somebody who knew somebody, etc.  The Universe opened up and said “Hey, take this!” So you bet I took it.

I started my job in March 2012 and spent the next three months paying off my credit card debt, refinancing my car (with a much better interest rate), and consolidating my student loans.  I moved into my first all-by-myself apartment in June 2012, which is the precise moment I realized I had way too much stuff, found a minimalist blog, got rid of half my belongings, and started my own blog.  That’s your basic minimalist life cycle right there.

Life is what happens…

In January of 2012 I also started freelance writing, making a bit of cash on the side.  As the months went on, I got better at writing, and got more assignments, and made enough money to take a trip to Spain with my mom, with no debt accrued for that vacation.  That was empowering!  I just up and traveled around the world because I could.

My freelance topics included a home office blog, and I was writing a lot about work-at-home-moms.  I was intrigued.  I thought, “Hey.  I want to be a work-at-home-mom!”  (WITH A MASTER’S DEGREE, BECAUSE WHY NOT?) I’ve got a lot of opinions about child-rearing for someone who’s never had a child, and one of those opinions is that I would rather be at home raising my kids than putting them in daycare.  No offense to daycares or people who send their kids to daycare – I was a child of daycare AND public school and I turned out fine.  But I am pretty sure – at least right now – that I want to stay home with my kids after they are born and possibly home-school.

I found myself enjoying the freelance writing work more and more and wondering if I could make it my full-time career.  Life is indeed what happens when you’re busy making other plans!  All of a sudden, I found myself a writer.

In 2012, I made a little over $2,000 from writing.  In 2013, I hope to increase those figures and continue to build a customer base until I can support myself wholly on the writing career.  I realize this may take a while; I have a five-year plan…which is, of course, in constant flux.  The goal is to settle down with a partner well before kids come along and supplement the partner’s income with my writing work from home.  I remain convinced that it would be a better deal than if I was working but we had to pay for daycare.

The moral of the story

My main point, after that long and winding diatribe, is that if you have a dream or a goal – working from home with your kids, for example – you CAN make that happen!  I am making my dreams happen right now.  There’s no need to be stuck doing something that doesn’t make you happy.

For the record: I am not actively unhappy at my current job.  I don’t like supporting the chemical industry because I am a crunchy granola hippie, but I’m good at my job and I like most of the people there most of the time.  The most important thing that keeps me satisfied at work – even if I don’t always like “the work” – is that I feel appreciated and valued there.  Job satisfaction is a very important thing.  So if you’re unsatisfied, see if you can change your situation!

Small ways to gain financial freedom

Now that you’re pumped up to quit your job and live a happy, passionate life of writing or repairing toasters or whittling, I’ll bet reality is settling in a little bit for you.  Then the questions come.

What about my house?

What about my car?

I have so many bills, how can I quit my job?

And so on and so forth.

I invite you to de-clutter your budget and see how much you can do with your money.  I do it.  Other people do it.  And you can do it.

Start small – don’t try to change anything the first month, just keep track of every dollar you spend.  If you go out for lunch, write it down.  Groceries, write it down.  Cable bill, car payment, new yoga pants, cat food – write it all down.  Keep track of every dollar.  Then take a look at where your money goes.

Make strategic cuts.  If you spend a lot of money eating out at work all week, spend half that amount on groceries and pack your lunch instead.  If you pay for cable but your family doesn’t watch all that much, consider canceling cable and get an $8 subscription to Netflix instead (all you really need in life is Doctor Who, anyway).  Or get rid of your TV entirely! Carry a reusable thermos or cup with you wherever you go so that you’ve always got something to drink and you are not tempted to buy an expensive beverage from a vending machine or gas station.  Eliminate food waste – keep track of how much you throw away and either buy less to begin with or take a week-long (or month-long) grocery-shopping “diet” so you eat what you have instead of buying more and letting the old go to waste.  Refinance and/or consolidate loans for lower payments. Shop around for car insurance.

Saving is important.  I set aside at least 10% of every paycheck for my savings account.  I also have a baby-step emergency fund of $1,000 set aside while I restructure my financial priorities and hack away at my debt.

Budget.  It’s boring but it’s helpful.  Set a realistic and attainable budget for yourself or your family, and stick to it.  Include all bills, “fun money” for entertainment and going out, and savings.

For the Really Serious, consider selling your house and downsizing to a condo, apartment, or even just a smaller house.  This step usually comes after a Minimalist Epiphany and the throwing out of half your possessions (like I did!) but doesn’t have to.  As you cut things from the budget, you may become more aware that you don’t need all these services and all these things to make your life happy.  You (and your family, if applicable) make your life happy.

There are tons of blogs and articles available on the Internet to help you.  Go read some and change your life.

Quitting your job is optional but encouraged if it would make you truly happy.

Ditching my debt

I’m ditching my debt.

I signed up for a debt management course called Financial Peace University.  I realize the irony in spending a hundred dollars to be told how to get out of debt, but I have a personal guarantee from a friend who recommended the program that it would be the best hundred I ever spent and that if I didn’t get any benefit she would personally refund my money.  Sounds good to me.  Plus, I can take the class as many times as I want for the rest of my life.

My mom and friends have expressed skepticism, saying that they’re sure I can just find this information online and do it myself.  Well yeah.  Obviously I know things about budgeting and debt.  I’m staying afloat.  The problem is that I have no one watching me and keeping me accountable, and that’s something I personally need when it comes to money.  I need a buddy.  This class is going to help me.

The local class starts September 16 but I am not wasting any time trying to get my finances under control.  I crunched some numbers and found that my biggest pitfall – no surprise – is food purchases.  I spend entirely too much on groceries and I eat out more than I can really afford to do so.  I know that the program uses a cash system, using cash instead of cards because people spend less when they have to buy with cash!  So, to start September off on this idea of using cash instead of cards, I will be taking $150 CASH out of the bank for two weeks in the end of August, to give me the entirety of September’s grocery budget.  My other biggest pitfall is not planning my money carefully.  All of my bills come due in the first 15 days of the month.  Naturally, those first two weeks are pretty tight.  When low on cash, I’ll transfer money out of savings (bad!) and then forget to put it back in (worse!), enabling me to spend more money LATER on crap I don’t need (Chipotle!).  So my savings is super low and disappoints me every time I look at my account balance.  NO MORE.

I’m paying future-me NOW (like it’s a bill that MUST be paid) so she can buy some groceries LATER.  I am very optimistic about this system. I think the cash will help a lot.  In college, I budgeted my cash using envelopes, and I was able to save up $1200 in a short amount of time.  Working 8 hours per week.  I can totally rock this!

My grocery budget is $300 a month, which is more than average but we all know I am very persnickety when it comes to food.  I have allotted $100 for meat and eggs (assuming 8 dozen eggs, 2 steaks, 2 pounds of ground beef, 3 pounds of bacon, and two whole chickens).  Another $100 for fruit and vegetables.  The third $100 for nuts, fats, grains, and “other” or overflow spending (like if I want to get salmon, which isn’t in the standard meat budget).  My goal is to spend not a penny over $300 for the month’s groceries ($75-80 per week).  My hope is to spend around only $200 (about $50 a week), by using coupons and strategic meal planning. (And probably buying less meat than that, I just estimated big).  I will be paying close attention to the grocery budget for September to see what I can realistically budget.  I know that $300 is a very liberal budget for a single person (with a cat).  It should also be noted that the grocery budget includes cat food, cat litter, and non-food things like toilet paper.

I also figured that if I do six hours per week freelancing and apply that income to debt repayment, I can afford to pay off my smallest student loan (which is loan B, if you’ve been following along since I paid off the first smallest loan in my “snowball” plan) in ONE YEAR. One year! Not four! ONE!

The average family participating in Financial Peace University pays off $5,300 in debt and saves $2,700…

in the first ninety days of the program.

Being single and not a “family” I am sure those numbers will be different for me, but I am very optimistic about this program’s ability to help me wade through the chaos of debt management.

I’ll be updating weekly about the classes once they start.  I hope you’re ready to learn a lot about money. I know I am, and I hope to impart wisdom to my readers experiencing the same things!

Have you ever used FPU, read Dave Ramsey’s books, or done another debt program?  Tell me all about it, I want to know everything!

Minimizing my student debt

Being a minimalist is great for budgeting.  I can afford to spend ridiculous amounts on organic hippie food because I don’t care about how many pairs of pants I own.  (Oversimplification, I admit).

Another thing I can afford to do is pay down my student debt faster than I would normally be able to.  I make enough money to pay double the minimum payment on my smallest loan.  I decided that the following plan would be my method of attack, on loans #1 (balance: $1,339), #2 (balance: $7,835), and #3 (balance: $49,365). Yes. $49,365.  I call that loan, “I regret grad school.”

Here’s my plan:

  1. Pay off Loan #1 quickly by paying more than the minimum payment ($40 minimum, I am paying $80/month).
  2. Add $80/month to Loan #2 payment ($96 minimum, I will be paying $180).
  3. Pay off Loan #2 years ahead of schedule.
  4. Add $180/month to Loan #3 payment ($340 minimum, I will be paying $520).
  5. Pay off Loan #3 YEARS AND YEARS ahead of schedule.

I will have Loan #1 paid off at the end of this month after I get my tax refund – how exciting!  I will then begin the snowballing process of attacking the bigger ones.

UPDATE:

The greatest birthday gift!  I paid off Loan 1 today!

The greatest birthday gift! I paid off Loan 1 today!

Back to original post.  I was just so excited I had to interject with the good news.

I have been having a love affair with repayment calculators lately.  I really like this one.

I found out the following information:

  • Paying my minimum of $96 on Loan #2, I would repay the debt in a little under nine years, for a total of $10,247. 
  • Paying $180 on Loan #2, I would repay the debt in just over four years, for a total of $8,920.

Paying the exact same amount per month that I pay now, I can cut my debt repayment time in half with this snowball effect of repayment.  I’m impressed already – I just gained four years of my life back from debt repayment.

Let’s look at Loan #3.

  • Paying the minimum $343 on Loan #3, I would repay the debt in 25 years, for a total of $96,015. 
  • Paying $520 on Loan #3 (if I could do it starting right now), I would repay the debt in a little over 11 years for a total of $69,500.

To be perfectly honest, I can’t figure out how to calculate what the balance of this loan would be after paying $343 for four years until I could snowball up to $520 for the rest.  If anyone has the know-how to crunch those numbers, let me know.

Until then, I can still see that snowballing the payments on this loan can cut the repayment time in half and significantly reduce the interest I pay over my lifetime.  Sticking with the minimum would mean I end up nearly DOUBLING the debt over the repayment term – from $49,000 to $96,000.  Unacceptable.

My ultimate dream would be to be debt-free before I have children.  Kids are in my five year plan — while I can safely say that two loans and my car will be paid off, I don’t think I can kick Loan #3 out that quickly.  That won’t stop me trying!

I do have a small amount of other debt.  I have a car payment, refinanced from 7.75% down to 2.25% a year ago, and I believe I only have two more years of payments on it.  I’m comfortable with that low interest rate, and I believe I will probably roll that amount of money into my loan repayments as soon as the car is paid off.

My goal is to be debt free in ten years.  By my 35th birthday, I want all these loans paid off!

Look out loans, I am coming for you.

Stop pinning, start doing

We live in age where knowledge about nearly everything is at our fingertips.  We are plugged in and constantly connected, and “I don’t know how” is no longer a valid excuse for anything.  If you can type it into Google, you can learn it.

I recently made myself a degree from the University of Google to display on my wall.  I think I have learned more from Google than I did at college.  I don’t have a problem with that.

I have noticed, however, the phenomenon of learning without follow-through.

Pinterest is the most obvious offender.  On Pinterest, you can soak up a ton of information in the form of pictures and links and recipes and how-to guides, stick them on a board (perhaps entitled “Craft ideas” or “DIY” or “Recipes” or “Must do this!”), and then never, ever look at them again.  I am guilty of this.

For instance, the following pins are ones that I pin with the intent to read later and execute but then forget about:

But look! These are things I have actually utilized:

Some other pins are things I can’t follow through on until I have a house or kids, so those are okay to wait on.

I’m making a new goal to learn something new, or follow through on some project, each month. In this age of information, there is no excuse not to learn something new!

What have you learned lately?

Minimize your budget with Gillian

Today’s post is a guest blog by Gillian at Drop that Debt!  I also wrote a post for her blog today, which you can read here.

Hey all! I’m Gillian and I blog about personal finance over at Drop that Debt. It seems that Caitlin and I both started blogging and reading each others blogs around the same time, and I’ve been hooked ever since! Her Not-so-Minimalist Bathroom post was so eerily similar to my own experiences I just had to read more. I graduated school with a college diploma and a university degree like most young people do these days– in loads of debt. After a bit over 6 years in school, I was over $60,000 in debt with no real job prospects immediately leaving school. I was lucky enough to get a job serving a month after leaving school, which is not in my field but it is enough to pay the bills and it will do for now.

I got smacked by the reality train pretty hard after graduation. I realized that no, it is not as easy to pay off student loans as I thought it would be and yes, it will take me years to pay off my loans, even if I put over $1,000 per month towards them. I had been overspending during school, coupled with not earning enough to pay my tuition and living expenses and I decided I needed to finally get real about my finances so that I could throw any and all extra money at my student loans. Over the past 6 months, I have learned a lot about personal finance, what works, and what doesn’t work so well. Here are some things you can do if you find yourself not knowing where to start with getting your finances in order:

Create a budget. This is hands down the most important thing that got me on track when I started. You need to figure out approximately how much income you earn each month. Once you figure out how much you are bringing in, you can figure out how much you can afford to spend in each area. I had a set amount for rent, car insurance, car payments, and student loan payments (minimum monthly payments the institutions require) and everything else was under my control. I started by deciding how much money I wanted to dedicate for repayment of my loans. I decided on about $1,000 / month as an ultimate goal; and it’s slowly been climbing to reach that number.

Pay off your highest interest loans first. Both of my loans have fairly small interest rates. One is about 4% and the other is 4.5%. However, if you have a big credit card debt (18% +) or something else with higher interest rates, pay that off first. Make the minimum payments (or a bit above) and throw the rest of your extra money at the highest interest loan first. Once you pay the first loan off, you can add that payment onto any other loans you have.

Don’t discount anything. Even “fixed” costs can be cut back. It can be tough but often people end up living far outside of their means. If your rent is taking too large of a chunk of your budget, you should find a new place as soon as you can that is cheaper. If your mortgage payment is too big, it’s time to seriously consider selling your house and buying one that is worth less. The same thing goes for cars. It kills me that some people are making car payments that are $600 or more per month! I didn’t have too many high fixed costs but I still cut back where I could. I got my cell phone bill down from $73/month to about $33/month. Every $40 counts and can be used towards loan repayment, savings, or somewhere else.

Think before you buy. There can be many temptations when you are cutting back on spending, especially if you aren’t used to being careful with your money. Cute clothes, new gadgets and the like can be hard to ignore. I don’t deprive myself of anything (within reason), I just make sure it’s really worth the chunk of my budget before I buy it. Many times I’ve tried on clothes, left, then decided I didn’t need them after thinking on it for a day. Occasionally, the item really was worth it and I would go back the next day and make a purchase. Taking that extra time away from the store and the immediate gratification of the purchase often gives you the clarity to see that you don’t really need the item.

Since making these changes, I have consistently brought in far more money than I have paid out. My student loan payments are always high, generally in the $700 range each month and with some work I plan on increasing that number in 2013. These methods are surefire ways to get your finances in order.

If you would like to write a guest post for Born Again Minimalist, or if you would like me to write a guest post on your blog, please contact me via the suggestion box link above, or email bornagainminimalist@gmail.com.  Thank you for reading!