Freedom Tastes Better Than Ice Cream

After getting my head back in the financial game, I decided to take a hard look at our spending during the months that we were doing a “no-budget” budget. Being the big spenders that we are, most of our unplanned purchases during that time went to food. Not dining out. Just plain old groceries. Okay, maybe “plain old groceries” is a bit of a misstatement. We seem to have developed a serious penchant for high-dollar yogurts, fancy ice cream bars, and fresh cuts of salmon. And what’s with that $12 bag of “hand-crafted” chips we bought at the produce stand?? They weren’t even all that good!

After analyzing the data, I popped my head into the living room where Angie was reading a book.

“Did you know we’ve been spending more than $450 a month on groceries and household stuff over the past 3 months?”

“No,” she replied, and kept on reading.

Not to be ignored, I plopped down on the ottoman. “$450,” I reiterated. “Remember when we used to spend $150 a month on groceries in Florida?”

“Yes. And remember how we also spent $20 a week at the Amish market?” she countered.

“Okay, fine,” I said, doing the math in my head. “But that’s still just $230 a month. I know groceries aren’t that much more expensive here. And we ate red meat back then! Something has changed.”

That something was us.

Over the years, we’ve gone in a lot of different directions, all for pretty much the same reason – to live with less. We embraced minimalism and tackled downsizing. Then we paid off debt, which meant we could work less. Next, we took some time to travel. And then we settled in to try living more sustainably. Each of these directions has required us to be diligent with our budget. It gave purpose to our spending…and our saving.

We’ve been living a pretty comfortable minimalist life for quite a few years. If you were to look at us on paper, we’d look something like this – we’re a one income couple with no kids, no consumer debt, and no mortgage. We rent a mid-priced one-bedroom apartment in a growing suburb of Nashville, where the cost of living is 27% below the national average. We have one car, one cat, and one heck of a good time taking advantage of all the free outdoor activities we have nearby. In short, we’re doing all right. But we have no goals…which means there’s little reason to think about the difference between spending $230 on groceries and $450. Both are reasonable (one, I’d even call cheap) so why be concerned?

Because life is better when you have a direction.

I mentioned last week that the landscape of my employment is changing. Our CEO is leaving at the end of July. Generally, management changes mean little to me but this one is different. Over the past 8 ½ years, I’ve quit this job twice (or rather, tried to quit). Both times, the demands of family were my primary motivators and both times, our wonderful CEO made accommodations that allowed me to stay. I am the only remote employee of a community center located 1,200 miles away. I work 4 days a week and still receive all the benefits of a full-time employee. In short, it’s a pretty good job (as far as jobs go) and I do enjoy the work; but I mainly stay because of the relationship I have with the CEO. She is not a micromanager. She trusts me and I trust her. I always said that if she left, I’d leave too but I guess, I didn’t think that would happen this year.

I haven’t turned in a notice or set a quit date or anything like that. I’m simply exploring our options right now. You see, leaving my job is not so much a loyalty thing as it is a freedom thing. I felt compelled to stay because so much was done on my behalf, but my heart has always been in a different place – a place where I could wake up every day and choose what I wanted to do without the constraints of any one job.

Along the way, I’ve made contingencies for such a day. Though we had a bit of a falling out with finance this year, we’ve never stopped saving for (and dreaming of) this opportunity. That commitment to minimalism that I described above has put us in a good position where I could work even less than I do now – provided we stop buying $12 bags of chips – and the thought of finally being able to do that (without feeling guilty) is pretty exciting. So exciting, in fact, that it’s the main reason I started rethinking our budget this week. If cutting our grocery budget is what it takes to achieve our version of a “work optional” life, then bring on the beans and rice, baby! I’m all in!

Simply said – saving money makes so much more sense when it is in pursuit of something attainable. If I can own my most precious resource – time – then I don’t just want to toss money around carelessly, even if it is for food. That $5 ice cream bar may be delicious, but I don’t want to look back one day and find that it (and others like it) stood in the way of our achieving something truly rewarding.

A Look Inside Our Monthly Budget

Last week, a reader asked if we would be willing to share the details of our 2018 budget. Sure, I have no problem with that. We’ve shared our budget several times over the years as we’ve worked toward various goals. With that being said though, every budget is unique to the lifestyle and income of the individual or couple and ours is no exception. As you read this post, please keep in mind that the financial choices we have made, may not be right for you (and vice versa).

A few years ago, I read an article called “The 50/20/30 Rule for Minimalist Budgeting”. At first, I was excited. I thought I’d finally found a definitive guide to help me – a minimalist – create the perfect budget. Believe me, I tried to follow the rules:

  • 50% of your income for essentials
  • 20% to savings
  • 30% to personal

It wasn’t long though before I realized this budget did not fit our lifestyle. Don’t get me wrong, the 50/20/30 rule is a great guideline. I highly recommend starting with these percentages if you are new to budgeting or are having trouble getting your discretionary spending under control. For us though, 30% of our income seemed a rather large chunk to allocate to personal choices, even with our love of travel and fancy dark roast coffee beans included.

Trying the 50/20/30 rule led us to an eye-opening discovery though. We found that we could successfully live off approximately 65% of our (then) income, without compromising our savings or our personal goals. This was all the permission we needed to spend less time working.

Today, we are a single-part-time-income couple (with a cat). After taxes, insurance, and other standard deductions, we will bring home $29,778.72 this year (not including any proceeds from side hustles).  Our current budget is based on this income and follows more of a 72/18/10 rule:

  • 72% of our income is spent on essentials (rent, utilities, insurance, groceries and gas)
  • 18% is directed to savings, investments, and charitable giving
  • 10% is spent on fun (Netflix, baseball games, movie nights, etc. and funding our travel account)

Our monthly budget looks something like this:

Here are a few things to note.

  • Rent is our single biggest expense and that’s not likely to change this year. We’ve accepted that in order to have a safe place to live within a reasonable distance of my mother’s house (we moved here to care for her), we have to pay a higher rent. Believe it or not, this is the mid-range rent for our area. Other apartments start at $1079 and up for a one-bedroom. Who knows what next year will bring though!
  • I have 5 payments left on my last student loan. Woo-hoo!!
  • This budget shows a “zero sum” but sometimes we have a carryover balance between $40 – $160, depending on our actual electric bill and our flexible spending categories (gas, groceries, entertainment, and cash). It is a rare month that we actually spend $80 on entertainment since most of our favorite pastimes are either free or cheap. Any money left at the end of the month is allocated to general savings.
  • Side hustle income is not counted in our budget because we don’t always want to work a side hustle. Sometimes it’s fun, sometimes it’s a hassle. When we are saving for a specific goal, like a vacation, we hustle, but only up to the point in which we reach our goal. Our side hustle income has been about $4,000 so far this year, which is unusual for us, but it has allowed us to cover some unexpected expenses, like vet bills.
  • We use an American Express Bluebird card for groceries and household spending. This is a prepaid debit card that you can pick up at Walmart for $5. There are no annual fees or usage fees. We have $250 debited from our main checking account to the Bluebird account on the 15th of every month. This has been extremely helpful to us in staying within our grocery budget.
  • Our non-IRA investments include $5 per week in micro investing via Stash. Stash allows you to purchase stocks and ETFs (exchange traded funds) in increments of just $5 or more. Since 2016, we’ve earned a little over $110 on our micro investments (plus we’ve learned a lot about investing in general by reading their weekly tips).

For better or worse, this is the budget we created for the year and the one we are trying to stick to. It’s subject to change at any time though, as we’re always challenging ourselves to find new ways to live with even less.