Saturday, February 23, 2008

All-Time Lows

In order to meet my retirement goal, I need to cut my spending by about $400 a month. When I look at the numbers, it seems like it should be possible. I have very few fixed expenses, yet every month I'm mystified by how I manage to spend so much. I tell myself things like, "I won't spend anything on entertainment this month," or "I'm going to eat out as little as possible," but these vague restrictions don't seem to do anything to make my spending fall.

A few nights ago I was playing around with my Excel spreadsheets and decided to graph how much I'm spending by category. For example (click graph to enlarge):

You'll notice there's a big difference between the highest month, average months, and the lowest month. In every category, there's been at least a month or two when I've spent very little. If I can manage it in those months, why not every month?

So for the next few months, I'm going to try to beat my all-time lows in several categories. When I beat an all-time low, the amount I spend that month will become my new all-time low.

The numbers to beat are:

Food (including groceries and eating out)....$97.41
Should be possible. I used to spend $80 a month on groceries when I lived alone, and I was shopping at a more expensive store back then. My grocery bill now includes my boyfriend R, but doesn't include his lunches out or the frequent gifts of food his dad brings over. With almost a hundred dollars, I may even be able to splurge on a hamburger or two!

The actual low in this category is $0. Given my recent track record, that's expecting a lot. In addition, I have a sort of urgent need for new pants as I've been losing weight and all my old pants are hanging off me. I'll allow myself $75, to be spent only in thrift stores. I'm anticipating losing more weight, so better to buy a few "disposable" pairs at thrift shop prices until I get to my permanent weight.

Books.....$0, or $17.43
In the previous post, I challenged myself to not buy *any* new books until I've read all the ones I already have. I'm sticking to that. For the record, or in case I unexpectedly plow through all my books, the all-time low to beat is $17.35.

This'll be tough. Netflix costs $15.33 per month, and that's not going anywhere, which leaves me with only $6.00 to play with. I've been treating myself to the ballet and the opera lately, obviously not possible on a $6.00 budget. Guess I'll hit free museums, gallery openings, and author readings instead--but not buy the books.

In my budget, miscellaneous includes any category that I don't spend in every month, such as recreational travel, office supplies, household, makeup, and gifts. In January 2008, I spent $45.70 on all these things. That was freakishly low--my average is closer to $200. Since just one printer cartridge could make short work of a $40 budget, I'm going to give myself a little leeway for March and budget $100. If that's easy, I'll bring it down to the ATL in April.

March Budget Based on All-Time Lows

Rent $625
Food $ 97.41
Wardrobe $ 75
Books $ 0, or $17.43 if I finish all my to-be-read books
Entertainment $21.45
Spa Treatments $80 (a decided luxury, but for now it's staying)
Prescriptions $40
Miscellaneous $100

Total $1038.86

You'll notice a few important budget categories missing. R. and I split our joint expenses evenly, but we pay different categories, so I don't usually pay for electric, gas, or Internet. We track this and when it ends up uneven, he'll pay something towards the grocery bill or I'll pay for his half of a dinner out. It works well so far.


Jacob said...

Have you considered getting books only when they're used? I use amazon. Usually only get books from 95% seller and I opt for at least "very good".

Of course there's always the library :-)

Scarlett said...

I do try to buy used books, and I'm a *very* heavy user of the library. :) I tend to slip up (a) when I want to read a new book right away (i.e. Harry Potter) and (b) when I'm with friends at a book-related event. In fact, my last three new book purchases have been in category (b).

Not sure where that leaves me, but I'm hoping having the "no buying books until I've read the ones I have" rule will make me pause enough to prevent the purchases.

Kacie said...

Oh my goodness...$80/month on groceries?

Of course, that can vary depending on when you shop, since some months have four Saturdays (or whatever) and others have five.

I could do $35/week to feed two adults for awhile, but after a point, I started feeling really deprived and decided it was too low.

I'd love to see your menus for a $80-90/month grocery budget.

Scarlett said...


I better edit that! 80/month was when I lived alone, and I didn't mean to imply it was for both of us.

Nonetheless, I'll post what we bought if we get anywhere close to the $100 mark.

Just subscribed to your blog--your article on sales tax was very interesting!

D said...

I also think that $100/month is a very conservative budget for food.
My concern for Elizabeth is the "miscelaneous" part. You could have a lot of "new" purchases that don't fall into any other categiry but "miscelaneous". Your brain may sabotage you into buying those little things to reach than $100/month level. You might want to rething this after several months.
Good luck with achieving your goals.
I also plan on being able to retire when I am in my early 30s.

Scarlett said...

Dividend growth:

The things I spend money on regularly are accounted for by the other budget categories, but if I seem to be maxing out my misc. category for no real reason, I'll definitely reconsider it. Thanks for commenting!